international analysis and commentary

Divorce English-style

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A Great Britain split down the middle and in danger of losing Scotland would mark the end of the United Kingdom, and that would be the most serious consequence of David Cameron’s massive error of judgment. While Europe, for its part, is reeling from shock and having to fight off two kinds of contagion: preventing the money markets from plunging into a downward spiral, and averting a political domino effect, with calls for referenda to leave the Union being heard in The Netherlands, in Denmark and in France.

The day after Brexit is marked by dramatic uncertainty, and the truth of the matter is quite simply that neither side was prepared for it. The British Government deliberately chose not to devise an exit plan, British officials with whom I have spoken telling me that the idea was to avoid giving the impression that a “remain” win was in any doubt and to reaffirm the will to stay in Europe. And it is now paying an extremely high price for it:  London is showing up for its rendez-vous for history late, rent in two and with a splitting hangover.

Nor is Europe any better off.  Commission President Jean-Claude Juncker keeps saying really unhelpful things. Now he is ruling out an “uncontested divorce,” as though Brexit – i.e. a key country such as Great Britain quitting Europe – could have even aspired to a friendly separation. It is far more correct to say, as the Financial Times put it, that it is going to be the most complicated divorce in recent history on account of the timing involved, the stakes involved, and its overall impact on the European system.

So let us take a quick look at these three points.  The British Government (or rather, what is left of it) is in no hurry to set the ball rolling; but the Europeans, for their part, have no time to waste. So basically, the first dispute is over blowing the whistle, over kicking off the exit process.  In theory, Article 50 in the Treaty on European Union defines all the phases: it is up to the country planning to leave the Union to notify the European Council of its intention. But the real kickoff is political. Outgoing premier David Cameron plans to leave the burdensome task to his successor. In short, the British are tempted not to invoke Article 50 at once, so as to give themselves time to develop a genuine post-Brexit strategy. But Brussels has replied the exact opposite to this divorce English-style. In a joint statement, the presidents of the Community institutions have urged Great Britain to move rapidly down the path mapped out by the referendum.  From the EU’s point of view, any delay would be a source of damaging uncertainty.  So for Europe it is a matter of issuing a clear and sufficiently firm signal in the knowledge that it is Britain’s responsibility to activate the so-called “exit clause.” After the consultative referendum, the ball is now in the court of the House of Commons, where the political majority does not reflect the majority of the electorate’s will, but is going to have a say in the mandate to negotiate Brexit. In conclusion, if London shilly-shallies for too long, tension is going to rise considerably and Europe is going to start acting with increasing frequency as a 27-strong team. It will be a Europe without the British even before the divorce proceedings get under way.

From that point on, the European Treaty gives the parties two years to conclude a complex separation. But is two years going to be enough? Probably not, among other reasons because it is not clear how the two different negotiation channels – one concerning Great Britain’s actual exit from the European club (British Commission Lord Hill’s announced resignation is only the tip of the iceberg in a mammoth problem); and the other (informal) concerning future ties between the EU and the UK – are going to dovetail.  In this instance too, the British would like parallel negotiations (in an attempt to win the best possible terms for the post-Brexit era), while Brussels, which will receive a negotiation mandate from Europe’s ministers, will aim to keep the two tables separate. Again: according to Article 50, only exit will be on the table. However, France, Germany and Italy, in their new post-Brexit format, could favor a comprehensive agreement involving a fairly rapid start to the whole process and parallel negotiations. An approach of that kind would be in everyone’s best interests: the British and the Europeans alike. And it would also mark a compromise between different positions within the EU itself:  Angela Merkel, in particular, appears to be in favor of a more “relaxed” approach to Brexit in the dual belief that Britain’s position may well develop further (the markets, too, are going to make the difference) and that it is in the continent’s economic interest to achieve an association agreement with London.

Which brings us to the second point. The stakes are extremely high for both sides. For Great Britain, internally divided as never before and in danger of shedding bits and pieces, one negative scenario is that it might find itself outside the EU yet still with no agreement with the European single market, because at that point the country would have to tailor its commercial conduct to the conditions dictated by the World Trade Organisation, thus losing any kind of preferential access to the European market. The political risk being run, on the other hand, by the 27-strong Europe, whose businesses in their turn have an overwhelming interest in a new trade agreement being forged with the UK, is that it could find it impossible to “isolate”  the case of Britain and thus be faced with a spate of “exits.”  It is of crucial importance that the European governments finally send out the right signals, overcoming the dual crisis of confidence of recent years:  the crisis of confidence among the governments themselves (triggered by the financial crisis and compounded by the migrant emergency); and the crisis of confidence between the European institutions and the man in the street. Brexit does not necessarily mean that the whole of the EU is going to start falling apart, but what it does mean, if we read our “English lesson” with a balanced approach, is that the European Union can no longer hope just to bumble nonchalantly along, lurching from one postponement to the next while not really taking any decisions. Its internal world and the world around it are moving far too fast for that.

Post-Brexit Europe will have a future if the European Union is seen and felt by the people to be a tool necessary for their security:  economic security, a common defense, and immigration.  Europe as an end in itself is no longer a crowd-puller. The era of “permissive consensus” with the people placing blind faith in their political elites is a 20th century concept well past its sell-by date.

That means – and this is the third point –  that in the aftermath of Brexit, the European countries are going to have to build the coalitions needed to make real progress on these issues:  the understanding between Germany, Italy and France will make sense only if it allows that to happen, if it allows us to emerge from the paralysis caused by the prospect of the numerous election deadlines looming. The meeting of the six founder members’ foreign ministers in Berlin yesterday was a first step down that path, albeit without papering over the divisions existing in a Europe that is tending at this juncture to get structured around differentiated forms of integration.  The outcome of the English divorce is also going to be important in connection with the formation (or not) and the characteristics of an inner circle within the Union.

At the same time, the EU has to forgo a part of its pointless regulations and superfluous areas of authority: that, too, will be an important signal in the wake of the English referendum.

London’s exit, but a reawakening for those remaining? We shall have to wait and see whether 2016 marks a new beginning in Europe’s history, or the beginning of the end.