Brexit Briefing No.80: Kicking the can down the road

Can

There is nothing quite like a European Council summit to get the Brussels bubble excited, and once again this week, the summit was all about Brexit.

This meeting had been set up three weeks ago, when the EU had given the UK a new cliff edge deadline of the 12th April, and an ultimatum to either get the withdrawal deal approved by Westminster or offer an alternative credible plan by that date, otherwise the EU was prepared to reject a future extension and ensure a no deal Brexit followed. 

This meant that the UK faced another cliff edge this week as the deal had not been approved by Parliament and Westminster had also failed to come up with any alternative plan in the intervening weeks. 

In reality, the EU got it wrong by offering such a short extension. It was abundantly clear that neither of its demands were going to be met in such a short period. 

That meant that all 27 EU leaders had to return to Brussels and repeat the all nighter that they had pulled only three weeks earlier.

The British Prime Minister Theresa May had asked for an extension until the 30th June, with the possibility that it could be ended earlier if the withdrawal deal had been approved by the British Parliament. 

The EU was never going to reject the extension but in the run up to the summit, the key question was how long an extension would the EU demand. All the speculation was that they would demand a far longer extension than would be comfortable for the UK. 

However, solidarity was already cracking between EU member states.

France wanted the extension to be as short as possible, while most others, including Germany & the Netherlands, were pushing for a very long extension. 

For the UK the grim reality was that it would have to accept whatever extension the EU proposed, as the alternative was to leave the EU without a deal, even though that had been rejected by the British Parliament which feared that the UK was not yet ready to deal with such a scenario. 

The end result was a classic EU fudge, halfway between the French and the German demands. As it stands, the UK is now set to leave the EU on Halloween - the 31st October, with a review set for the 1st June. If the EU has not held European elections by the 1st June then that will be Brexit day, however the British government has already made it clear that it will hold those elections. There is also the possibility for the UK to leave earlier if the withdrawal deal gets adopted by the British Parliament. 

So the Brexit date has been reset, and on the surface it seems to be a victory of sorts for the Prime Minister, as she managed to keep the extension much shorter than many had expected. However politics on both sides of the Channel seems to have changed after this week. On the UK side it seems difficult now to see how any of the divisions can be bridged. Proponents of a no deal will now see an opportunity to prepare the UK for a no deal at the end of October, and are therefore unlikely to compromise before that date. This is particularly true within the Conservative Party as there is a credible likelihood that the party will have a new leader and therefore a new prime minister before the end of October, who may be prepared to try go for a no deal rather than another delay at that stage.

BrexitDemo

Those who want the UK to remain in the EU, or to have a referendum, will see a relatively long six month delay as a first step to achieving those goals, with further extensions highly likely. 

So on the UK side it is hard to see what the extension achieves, other than entrenching existing positions and delaying a possible no deal Brexit by six months. The UK is likely to be back in Brussels at the end of October asking for another extension and at that stage it could start to look as if Brexit might never be delivered. 

On the EU side, this week’s summit saw the beginning of the breakdown of the Franco German relationship. This axis has traditionally driven EU politics but this week it looks increasingly weak. France broke rank, not just from Germany, but from the vast majority of countries, to demand a short extension. This was clearly against the interests of most other countries and of the EU itself, but it played well to Emmanuel Macron’s domestic audience, who on the whole don’t want to see any special favours for the UK. 

France broke from the traditional European solidarity and in doing so has put the EU in a tricky spot. If the UK comes looking for another extension in October, it will only be because this extension wasn’t long enough to bring about a resolution in the UK. 

However the EU has granted two short extensions, whilst demanding very few concessions from the UK. 

Many commentators in the UK had wrongly suggested that this would never happen, but they misunderstood how the EU works. The EU does not want a no deal, and ultimately will find a way to avoid it if it is at all possible, whilst putting the focus fully on the UK. From their perspective, if the UK decides to go for no deal then so be it, but if there is a route out of it they will encourage the UK to take it. 

But the big question is what will the UK do with this extra time that has been granted? On Wednesday, an EU leader from a central European member state was overheard outside the European Parliament telling one British parliamentary assistant that “no-one (from the EU side) understands what is happening in the House of Commons.” Therein lies the problem. While MPs have gained more influence over the direction of discussions domestically, they have achieved very little with it. Therefore the EU27 have little trust that anything will change any time soon. 

Meanwhile, cross party talks in the British Parliament appear to have stalled. The opposition Labour Party’s main demand is for a formal customs union with the EU. It is possible the party will also move towards backing a referendum or confirmatory vote on the deal. Such a move could in theory give the government a majority for the deal, but probably not without seriously disabling the stability of the government and the Conservative Party. 

The shadow of a general election also looms large over Westminster, meaning neither main party is likely to make very risky moves in order to get the deal over the line.

Polling

Yet the PM’s goal remains getting the withdrawal agreement ratified before the UK has to hold European election on May 23rd. If she can do that then the elections can still be avoided. 

However, the longer the delay goes on, the risk of Brexit never happening increases. The postponement gives both sides of the debate some breathing space to reassess their strategy, but the fundamentals will not change. 

The EU remain wedded to the mantra that the Withdrawal Agreement itself will not be reopened. This makes any resolution much harder and goes against how the EU normally works. 

In normal circumstances negotiators agree a deal, if it subsequently transpires that one side is struggling to get that deal through their institution, normally the negotiators get together and tweak the wording in such a way to smooth its passage through. That is how the EU works and it does this in its internal trialogue negotiations between the European Parliament, Commission and Council, and when it negotiates deals with third countries. 

It is unusual for the EU to not at least offer this in this scenario, as some changed wording on the backstop, and some flexibility, would almost certainly ensure that the deal passed. 

That combined with the error of demanding that the UK gave concessions on the Irish border without being able to discuss the future trade arrangements that could keep that border open, suggest that the EU have also made significant mistakes in this process, which have led us all to the current impasse. 

So where will this all end?

Short of the PM managing to conjure up a majority for her deal before the end of May, we are heading for European elections and probably another extension after October. 

The only other options are :

  • a general election, which may or may not change anything and which is unlikely to come about anyway given the Fixed Term Parliament Act which demands a two thirds majority in Parliament in favour of a general election.
  • A change of Conservative leader which could push the government position in favour of no deal. However Parliament will remain opposed to no deal and the government would probably be brought down if it went ahead with no deal against the will of the Parliament.
  • Parliament votes positively for a softer form of Brexit, either by way of a customs union or by demanding a referendum on the deal. And the Government agrees to deliver that.

All of these lead ultimately to the same impasse. There is not an option which Parliament and the government can agree on. Until that changes the uncertainty will remain. 

Yet the options also remain unchanged. It’s no deal, the PM’s deal (or a slight variant) or no Brexit at all. It will take a titanic move from someone to change that impasse and definitively move behind one option. It is likely to be politically terminal for whoever does make that move. 

With the imminent deadline now relaxed, it is likely that nothing will be resolved soon.