by Frank Schnittger
Tue Oct 17th, 2017 at 06:49:41 PM EST
Helen and others have expressed scepticism as to whether a "no deal" Brexit could actually happen in reality. Surely the leaders of the UK and EU couldn't be so incompetent or irresponsible? I have been gaming out the possible outcomes in my mind for quite some time now. The most plausible "no deal" scenario runs something like this:
The Brexit negotiations plod on for almost two years sometimes making progress and sometimes getting stuck. Some specific areas are almost put to bed, but as always, "nothing is agreed until everything is agreed". The negotiators home in on the outstanding areas of disagreement where the gap between the two sides seems bridgeable. Other areas, where the gap appears impossible to resolve are abandoned altogether. The ambition to craft a deal covering all areas of major mutual interest is ditched in favour of agreeing on what we can, while we can. "Nice to haves" are abandoned in favour of focusing on the absolute "must haves" of any deal.
Keeping some form of "Blue skies" agreement in operation is vital if planes are to be able to fly between the UK and EU. Mutual recognition of regulations and their enforcement is vital if non-tariff barriers are not going to stymie efforts to keep trade and just-in-time multi-national production processes flowing.
Deadlines are set and pass without full agreement.
The EU27 leaders are called in to knock negotiators heads together. Everyone gets nervous as Brexit day end March 2019 approaches. The window of opportunity to ratify any deal done before Brexit gets narrower and narrower. Negotiators are keenly aware that a Brexit deal requires weighted majority support on the EU Council. They can afford to upset one major and a few smaller EU members, but any more than that and a "blocking minority" on the Council can stymie any agreement.
But worse than that, if no deal is agreed by March 2019, unanimity between the EU27 is required to agree an extension of the A50 deadline or any deal thereafter. Some EU27 members have already signalled their unhappiness with aspects of the deal that is emerging. Whatever chance there is of winning a weighted majority vote on the Council, the chances of gaining unanimous support are slim to non-existent. Huge pressure is exerted on the UK to agree something - anything - before the March deadline if any sort of deal is to be reached.
Meanwhile, back in the UK, Parliament is getting restless. Members are upset at being kept in the dark about highly sensitive and secretive discussions. All sorts of back channels are employed to try and put pressure on the EU negotiators on specific issues. President Trump offers to help and is politely rebuffed. Rumours abound about all sorts of unthinkable concessions being made. Ministers threaten to resign if such and such a concession is offered. The Prime Minister calls for third party arbitration and is quietly told that the UK is about to become a third party, as far as the EU is concerned.
Finally, just before March, Merkel and Macron present some breakthrough proposals that has the media marvelling at their ingenuity in tackling certain thorny issues. A special judicial panel will be set up to deal with trade disputes made up of members from both the UK and EU, perhaps with a WTO chairman. There will be continued mutual regulation and enforcement recognition unless regulations diverge. Worker migration will continue provided the worker has a job and work permit, but only immediate family will be allowed to stay with them. Some social welfare benefits for migrants will be curtailed. Northern Ireland will become a Special Economic Zone with customs controls only at Irish air and sea ports.
Cue enormous relief all around.
The draft agreement is debated in the UK and EU Parliaments and in national parliaments throughout the EU. Numerous "missings" and ambiguities are uncovered which threaten existing rights and relationships. Clarification as to how these issues will be resolved is hard to come by, beyond assurances that "common sense" will be applied. All downsides are highlighted and the agreement is generally compared unfavourably with the status quo. Some governments wobble in their support for the deal.
Meanwhile in Westminster Remainers are horrified as it becomes clear how much power and influence the UK will lose. London MPs are shocked that the City will lose access to EU financial markets. Labour, the SNP and the Lib Dems declare their opposition as the deal is clearly much less favourable than the status quo, and even when compared to membership of the Single market and Customs Union. Business friendly Tory Remainers shift uneasily in their seats and no one is quite sure how they will vote.
Hard line Leavers are outraged at how much the UK will have to pay in a once-off financial settlement and ongoing payments for Single market access. They rightly point out that it is not all that much less than the UK currently pays for full EU membership. They argue that the UK should reject the deal and refuse any payments. Germany and other member states will soon come begging for access to the UK market for their cars and others exports. Business leaders eyeing opportunities for their businesses to replace EU exports to the UK declare their support for the Leavers' position.
The deal is rejected by the House of Commons despite a three line whip. Some Tory members on both sides vote against the deal - Leavers because it makes too many concessions, and Remainers because it has too few benefits. The DUP are angry because they see N. Ireland being treated differently to the rest of the UK and see "Special Economic Zone" as a euphemism for a first step away from the Union and towards a United Ireland.
Theresa May calls Merkel and Macron asking for more time and further negotiations to fix some of the defects in the deal - as seen from the UK point of view. They have taken considerable flak at home for some of the costs the deal will impose on their economies and are in no mood for further concessions. Furthermore, the debates in national Parliaments have gone so badly that EU27 member governments cannot afford to take another hit by making further concessions. Unanimity cannot be achieved and so a no deal Brexit beckons at the end of March.
In desperation, and in order to head off a "heave" against her by her own MP's, Theresa May calls a snap general election. She says she will campaign for a new deal which fixes some of the flaws which have been identified in the old by both the Leave and Remainer camps. Observers point out that many of these demands for changes are mutually contradictory and cannot all be accommodated even if the EU were to agree. May assures the electorate she will deliver "a better deal for Britain".
The EU is left in a quandary. Some national Parliaments have approved the deal and will not be too happy if it is subsequently changed to their disadvantage. The UK general election date is at the very end of March and leaves no time for further negotiations even should these be agreed. However Corbyn promises a radically different approach, including continued membership of the Single market and Customs Union which would solve many of the problems created by the old agreement. He is silent on what net contribution the UK is prepared to make to the EU, as this would be the subject of further negotiation.
The EU Council decide it would be impolite not to await the result of the UK general election and see what any new UK Government might have to say. It takes a lot of arm twisting, but eventually the EU27 agree, unanimously, to a two month extension of the A50 period: Enough time to give the new Government a hearing, but not enough time to enable any major revisions of the deal.
Corbyn wins the General election to the great relief of even the business community. He declares a new dawn for the UK and a more cooperative attitude towards the EU. He asks for a two year extension of the A50 period during which all existing arrangement will apply. He looks for a new relationship with the EU which does not include "Tory restrictions" on the free movement of workers or the jurisdiction of the ECJ and ECHR. He proposes some reforms of the EU which would make it more of a fiscal transfer and social Union.
Progressives everywhere rejoice.
However Germany, Holland, and some Nordic and eastern members are alarmed at talk of a more "Socialist Union". No one wants to be the one to pull the trigger but all sorts of back channel discussions take place. Eventually, to the supposed shock of all, Hungary declares it is not prepared to vote for a further extension of the A50 period unless a whole range of outrageous (and often unrelated) demands are met. Putin is alleged to have been involved in their discussions.
The EU Council baulk at the Hungarian demands and no further extension of the A50 period is agreed even though all other states vote in favour. The UK leaves the EU at the end of May 2019 with no formal Brexit deal in place. The one concession the rest of the EU27 members are able to wring from Hungary is that the original deal, ratified by a weighted majority of the EU Council but rejected by the House of Commons remains on the table after Brexit as a "take it or leave it" offer.
The House of Commons eventually agrees that deal as planes stop flying between the EU and UK, and as trucks queue for miles on the approaches to Dover and Calais. Britons declare they are being blackmailed by the EU and say they are so happy to be out of a Union that would treat any country in such a shoddy way. A war of words is declared and EU migrants and tourists in the UK are assaulted and abused. Corbyn declares he will negotiate a better deal than the "Tory" deal he has been forced to accept, but relations between the EU and UK go downhill so fast that the political will is lacking at almost all levels.
Travel and trade between the EU and UK goes down dramatically despite the original, limited, deal being in place. London loses much of its EU related financial services business and many EU emigrants to the UK leave claiming harassment or reduced benefits due to the rapidly devaluing £ Sterling. The UK is hit by a severe recession and the EU by a milder one. The business community blames Corbyn's socialist policies and leaves in droves. Ireland picks up quite a lot of business from the UK and is surprisingly unscathed by the resulting recession. The DUP are licking their wounds in Northern Ireland having lost their pre-eminence as the largest party there.
No one is happy, and everyone else is to blame.