Eddie Hobbs


Do a deal or remain? Brexit crash out is a bridge too far

Irish and British General Elections could yet run in parallel before the end game, most likely a Customs Union deal, writes Eddie Hobbs

Do a deal or remain? Brexit crash out is a bridge too far

Irish and British General Elections could yet run in parallel before the end game, most likely a Customs Union deal, writes Eddie Hobbs

Brexit now looks binary, it is do a deal or remain. The Prime Minister’s line of red pins on her map of Europe made no provision for anything to go wrong. Her blunder was to plan badly and underestimate the opposition. ‘Brexit means Brexit’ was a bridge too far, crash out an epic bluff and the retreat to a Parliamentary vote on No Deal, inevitable.

Back in 1944, Montgomery’s blunder was to pin everything on invading the Ruhr by taking the bridge at Arnhem. Despite the monumental failure to do so, the Field Marshall still clung to the nonsense that Operation Market Garden was 'successful'.

Montgomery sacrificed Britain’s crack 1st Airborne Division and the 1st Polish Independent Parachute Brigade and left much of Holland to wrath of German retaliation until the war ended. His arrogance prompting Bernhard, Prince of the Netherlands to declare “My country can never again afford the luxury of another Montgomery success”.

It is equally clear that the UK centre will also refuse to label crash out a success even if Hard Brexit leaders will never admit to their blunder. They will blame everyone but themselves, just like Montgomery did after the war. But the centre ground, both blue and red at Westminster this week inflicted a double defeat on them. There is to be a vote on the No Deal option on March 13th if May’s deal fails March 12 and, Corbyn has bowed to pressure. He has stitched a second referendum into Labour policy. No wonder the extreme right wing of the Tories is in a snot. Their bridge is gone but was it really ever there?

In a crash out, the UK would emerge as a third country, outside the club but economically bound to the EU’s regulatory rules and standards. The idea that the UK, as a modest-sized economy, suffering from subnormal economic growth for 15 years after Brexit would be afforded a fast track to better deals, was a delusion. Negotiators for the other side are duty bound to leverage UK desperation to free itself from being a rule taker within the Eurosphere, an impossible task in itself without towing the island to the mid-Atlantic.

As a third country, the UK would face a united EU front on any matter that affects a member, the Backstop merely the beginning. In the trade negotiations to come the UK will find 27 member states backing France and Spain on fishing and backing any member on any matter that might otherwise diminish the EU. The EU as a Single Market will exercise its raw economic power as it is mandated to do by members. The UK will be in a constant state of negotiation in a lopsided relationship that ignores British exceptionalism.

It was never logical that the UK must extract itself from the deepest and largest free trade zone in the world in order to negotiate better deals elsewhere, but this was the argument made. Neither was it logical to argue that freedom to do deals somehow bolsters sovereignty. Trade deals by their nature cede sovereign control, reduce or eliminate barriers and diminish protectionism. If it is now distilling down to Deal or Remain, the big question is what kind of a deal and how will it unfold?

May could secure sufficient support in her second ‘meaningful vote’ but I can’t see how. She has been forced to immediately follow a second failed vote with one to remove No Deal, where a Tory whip will be ignored. This will lead to delaying Article 50. It will be difficult for the British political centre to resist a multi-year bridge which the EU will dangle to the British rear as a means to retreat over, to think again.

The base case looks like extended delay ending in a Customs Union but within the new window is the possibility of a General Election, perhaps as a precursor to a fraught second referendum. If so, that puts Irish and UK general elections in the same timeline, both leading on the relationship between our islands and with the EU.

Interviewed on Bloomberg TV Tuesday morning, the Spanish Minister for Economy and Business, Nadia Calvino was bluntly asked if the Irish price for EU support on the Backstop will be to shed its low Corporation Tax policy. The Spaniard did not fall into the trap of conflating both items but clearly hinted that the Brexit chips will be called in when she advocated for harmonisation of tax during the next EU Parliamentary cycle.

Much is at stake. The Irish General Election will be backlit by our more isolated position at the EU socio-economic board table where the menu will include Franco-German allergies like Federalisation and Tax harmonisation, so the big question becomes, who is the best Taoiseach for the next game, Leo Varadkar or Michael Martin? The better strategist, bridge builder and repairer is the right answer, a haughty Monty the wrong one.

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