Opinion

The EU needs a Brexit endgame

Britain and the EU must try to preserve the longstanding economic, political, and security links and, despite the last 31 months spent arguing over Brexit, they should try to follow a new path toward convergence.

By: Date: January 31, 2019 Topic: European Macroeconomics & Governance

This opinion piece was also published by Project Syndicate

Project Syndicate logo

After 31 months of the United Kingdom and the European Union arguing over Brexit, the truth is that neither side knows what it wants.

This sad reality is most obvious in the case of the UK, whose ruling Conservative Party has consistently been at war with itself over the actual meaning of the June 2016 Brexit referendum. After a series of strategic mishaps and tactical blunders by Prime Minister Theresa May, the Tory infighting came to a head in mid-January when Parliament voted down her negotiated exit agreement. It made clear that May lacks support within her own party for a realistic compromise with the EU.

At the same time, a majority of MPs and British voters oppose the ‘no-deal’ exit advocated by hardline Tory Eurosceptics. That scenario would put the UK in breach of legally binding international commitments, jeopardise the 1998 agreement that ended violent sectarian conflict in Northern Ireland, and result in immediate economic costs and job losses. At a time when US President Donald Trump is hastening the demise of the post-war global order, it is frankly stunning that Brexiteers still believe in the fantasy of a thriving, free-trading Global Britain. And yet here we are.

The EU finds itself in a rather different situation. Since the referendum, the 27 remaining member states have displayed impeccable unity; and their chief Brexit negotiator, Michel Barnier, has made skillful use of his mandate. The EU has steadfastly rejected Britain’s demand for an unbundling of the single market, as well as of any scenario that could result in new customs checks on Irish soil. Throughout the negotiations, the contrast between the UK’s amateurish muddling and the EU’s show of clarity and consistency could not have been sharper.

Still, the EU has demonstrated a remarkable lack of strategic perspective, focusing wholly on rules and processes instead of results. True, its steadfast rejection of à la carte solutions reflects the fear that a favorable deal for the UK will whet the appetites of other Euroskeptic member-state governments. But that does not excuse the failure to develop a strategy for structuring the future UK-EU relationship.

Although Britain is a major European power whose global outlook, financial clout, and security capabilities remain unique, the EU has done very little to engage with British civil society, political constituencies, and businesses, or to foster a productive conversation about the future. This is especially unfortunate at a time when Europe, to which Britain still belongs, is facing proliferating economic and geopolitical threats.

This week, MPs from both the Conservative and Labour parties attempted to build an alliance and seize control of the Brexit process from May. In the event, their effort failed, and the prime minister successfully rallied her camp around an amendment giving her a mandate to go back to the EU and negotiate unspecified ‘alternative arrangements’ for the Irish question.

The EU’s immediate and legitimate reaction was to refuse to re-open negotiations that were concluded in November. But it should not wash its hands of Brexit. It is not for it to choose for the British people, but it cannot escape its responsibility for the choice they are being offered. De facto, it must decide whether to let the UK choose between the existing agreement and no deal, between no deal and a second referendum, or between no deal and a revised exit agreement. Whatever position the it takes will determine the binary question that the British must ultimately answer.

The EU’s first option is to stick to its guns. Many on the continent think that enough is enough, and that it is time for Britain to decide its fate. But if the EU does assume this uncompromising stance, it will further weaken May, embolden the hard Brexiters, limit the space for parliamentary initiatives, and leave no time for a second referendum. The UK will have to choose between crashing out or accepting the deal it rejected a few weeks ago. This hardball strategy might work; but it would also increase the risk of an acrimonious no-deal Brexit.

The EU’s second option is to remain firm on substance, but to accept an extension of the March 29 deadline if the UK holds another referendum. This would strengthen the position of those in Britain who are calling for a ‘people’s vote’ on the country’s options. ‘Remain’ would gain traction, and a no-deal scenario would become less likely.

The EU’s third option is to express openness to a marginally amended deal. It could either offer a concession that would help Theresa May save face on the Irish question, or reach out to the would-be alliance of Labour and Tory MPs that favour a soft Brexit by accepting a short extension of the March deadline in order to hold a substantive discussion on a future partnership agreement. Either option would foreclose a second referendum, and a revised deal would gain an edge over a ‘hard’ Brexit.

For Europeans who were rightly shocked by the demagogy and outright lies of the UK ‘Leave’ campaign, creating the conditions for another referendum (the second option) is tempting. The problem with it is not that Leave could win again, but that it could lose by so narrow a margin as to render the UK incapable of engaging with EU partners in any meaningful way. Such an outcome would only add to the danger of deeper paralysis for Europe, just when it needs to reinvent itself.

Given the obvious economic and political costs of the first option, the third now seems like the best way forward. The EU should stand firm on principles, but consider either a softening of the negotiated deal or a short deadline extension for talks about the future, if there is trans-partisan appetite for it.

A partnership between Britain and the EU would preserve the close economic, political, and security links built over decades. And the EU would be better able to address the challenges of its own differentiated integration. Perhaps in a decade or two, the EU and the UK will have undergone comprehensive reforms that put them on a new path toward convergence. Brexit should be managed in a way that makes such a future possible.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to communication@bruegel.org.

View comments
Read about event More on this topic

Upcoming Event

Apr
29
12:30

The emerging new geography of financial centers in Europe

What shape is the new financial continent of Europe?

Speakers: Rebecca Christie, Valerie Herzberg, Nicolas Véron and William Wright Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event More on this topic

Past Event

Past Event

Spitzenkandidaten series: Frans Timmermans

The sixth event in the The Road to Europe - Brussels Briefing Live: Spitzenkandidaten series. The series features the lead candidates for the European Elections of six parties and is jointly organised by Bruegel and the Financial Times in March and April 2019.

Speakers: Mehreen Khan, André Sapir and Frans Timmermans Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 11, 2019
Read about event More on this topic

Past Event

Past Event

Spitzenkandidaten series: Manfred Weber

The fifth event in the The Road to Europe - Brussels Briefing Live: Spitzenkandidaten series. The series features the lead candidates for the European Elections of six parties and is jointly organised by Bruegel and the Financial Times in March and April 2019.

Speakers: Anne-Sylvaine Chassany, Manfred Weber and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 9, 2019
Read article Download PDF More on this topic More by this author

Working Paper

Europe in the midst of China-US strategic competition: What are the European Union's options?

With the trade conflict between the United States and China bringing China-US strategic competition into the open, the European Union faces an urgent question: how to position itself in the competition.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: April 8, 2019
Read about event More on this topic

Past Event

Past Event

Spitzenkandidaten series: Jan Zahradil

The fourth event in the The Road to Europe - Brussels Briefing Live: Spitzenkandidaten series. The series features the lead candidates for the European Elections of six parties and is jointly organised by Bruegel and the Financial Times in March and April 2019.

Speakers: Jim Brunsden, Maria Demertzis and Jan Zahradil Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 4, 2019
Read article More by this author

Opinion

Europe and the new imperialism

For decades, Europe has served as a steward of the post-war liberal order, ensuring that economic rules are enforced and that national ambitions are subordinated to shared goals within multilateral bodies. But with the United States and China increasingly mixing economics with nationalist foreign-policy agendas, Europe will have to adapt.

By: Jean Pisani-Ferry Topic: Global Economics & Governance, Innovation & Competition Policy Date: April 3, 2019
Read about event More on this topic

Past Event

Past Event

Spitzenkandidaten series: Luis Garicano

The third event in the The Road to Europe - Brussels Briefing Live: Spitzenkandidaten series. The series features the lead candidates for the European Elections of six parties and is jointly organised by Bruegel and the Financial Times in March and April 2019.

Speakers: Luis Garicano, Mehreen Khan and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 3, 2019
Read about event More on this topic

Past Event

Past Event

Spitzenkandidaten series: Bas Eickhout

The second event in the The Road to Europe - Brussels Briefing Live: Spitzenkandidaten series. The series features the lead candidates for the European Elections of six parties and is jointly organised by Bruegel and the Financial Times in March and April 2019.

Speakers: Bas Eickhout, Guntram B. Wolff and Rochelle Toplensky Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 2, 2019
Read article More on this topic

Opinion

Brexit: When in doubt, slow down

Uncertainty over Brexit remains high despite looming deadlines. Here, the authors argue that the UK should take the necessary steps to make time to build consensus around the final shape of Brexit, and that the UK population should be consulted.

By: Maria Demertzis and Nicola Viegi Topic: European Macroeconomics & Governance Date: March 29, 2019
Read article More on this topic More by this author

Opinion

Takeaways from Xi Jinping’s visit to France and Italy and ideas for the EU-China summit

The author appraises China's strategy towards Europe ahead of next month's EU-China summit.

By: Alicia García-Herrero Topic: Global Economics & Governance Date: March 27, 2019
Read about event More on this topic

Past Event

Past Event

Spitzenkandidaten series: Yanis Varoufakis

The first event in the The Road to Europe - Brussels Briefing Live: Spitzenkandidaten series. The series features the lead candidates for the European Elections of six parties and is jointly organised by Bruegel and the Financial Times in March and April 2019.

Speakers: Maria Demertzis, Martin Sandbu and Yanis Varoufakis Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 26, 2019
Read article More on this topic More by this author

Blog Post

The shadow of Brexit: Guessing the economic damage to the UK

Under a set of assumptions, this post concludes that UK real income and investment would have been 4% and 6% larger respectively had it not been for the shock of the Brexit referendum result. With somewhat audacious assumptions, the damages already incurred can be scaled up to guess the negative macroeconomic consequence of each of the three possible Brexit outcomes: no-deal, deal or no Brexit.

By: Francesco Papadia Topic: European Macroeconomics & Governance Date: March 21, 2019
Load more posts