Britain Has Lost Its Bearings on Brexit
The leaked U.K. government forecasts of Brexit's impact on the economy discusses several scenarios, none of them favorable. But the scariest takeaway was that London still isn't clear on what kind of deal it's capable of getting, or what it wants. Almost 600 days have passed since the referendum.
Tick, tick, tick.
Daniel Leal-Olivas/AFP--Getty Images
The three scenarios discussed in the assessment dated January 2018, are the only ones on the table, according to the EU:
- A no-deal exit on World Trade Organization terms.
- A Canada-style free trade agreement.
- The U.K.'s membership in the European Economic Area, also known as the Norwegian option.
All three slow down U.K. economic growth compared to remaining as an EU member, the report said.
Opposition politicians have seized on the government's failure to publish the forecasts as an attempt to keep the parliament and the public in the dark. But, unpleasant as the numbers might be, the British public defied even more dire predictions from experts to vote for Brexit (and the pro-Brexit part of it doesn't necessarily care about slightly slower economic growth if it means more sovereignty and less immigration). If the government published the forecasts, these voters wouldn't get cold feet.
The real problem is the absence of the scenario the U.K. government ostensibly wants: a bespoke trade deal with the European Union.
On Tuesday, a spokesman for Prime Minister Theresa May claimed the leaked document was "initial work, not approved by ministers, which only considers off-the-shelf scenarios." But why wouldn't any initial work cover the U.K.'s preferred option along with the "off-the-shelf" ones?
German Chancellor Angela Merkel reportedly provided a good explanation during an off-the-record briefing for reporters in Davos. Robert Peston, the political editor of ITV News, quoted her description of recent talks with May in a column published on Monday:
Mrs. Merkel said that when she asks Mrs. May what she wants the shape of the U.K.'s relationship with the EU to be, Mrs. May says, "Make me an offer." To which Mrs. Merkel says, "But you're leaving -- we don't have to make you an offer. Come on, what do you want?" To which Mrs. May replies, "Make me an offer." And so, according to Mrs. Merkel, the two find themselves trapped in a recurring loop of "What do you want?" and "Make me an offer."
This is unlikely to be idle gossip. Speaking at Bloomberg's London headquarters on Monday, Liam Fox, the U.K. international trade minister and a keen Brexiter, called on the EU to send a clear signal "to global investors that not just Britain is open for business but that Europe remains open for business" after Brexit. Without specifics, Fox, too, appeared to be waiting for the EU to "make an offer."
The EU has a lot of reasons to refuse to do so. If it comes forward with a compromise, that deal will become a precedent for any other nation that may want to leave the EU in the future. What it voluntarily offers to the U.K. today would be difficult to deny to others tomorrow. If it makes any concessions at all, they must look hard-fought to discourage any Brexit copycats.
The EU was the first to lay out a range of items to be discussed -- citizens' rights, the Irish border, the U.K.'s financial commitments, the jurisdiction of the European Court of Justice. At the same time, it refused to commit on any of them without a preliminary deal for all. It has exuded an air of confident expertise, coming out first with policy papers and methodically talking through the agenda. Meanwhile, the British negotiators fell into reactive behaviors, looking uncoordinated and emotional. That impression endures as the U.K. government appears eager to salvage anything it can from the talks rather than project a clear vision of the final deal -- and an economic scenario to match it.
By this point, May appears to be hoping against hope for an unexpected gift from Brussels. That gift, however, is not coming. French and German leaders are bent on a closer union, while anti-EU forces are about to do well in Italian elections and eastern European nations are increasingly stubborn in resisting western European rules. This is not the kind of environment in which the U.K. can get off lightly. It's time for May to spell out her own offer or let hard Brexiters take over a process that leads to a no-deal exit -- and take responsibility for it.
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Dithering.......