(Brussels) The UK prime minister hopes the EU will crack now he’s spending £2.1 billion preparing for a no deal. But the EU will not be impressed.
All that can be seen from Brussels are temporary measures to try and ensure the flow of medicines and foods across the Channel, to alleviate the prospect of the M20 in Kent becoming a very long parking lot for heavy trucks, and to provide guidance notes for businesses to prepare for the renewed red tape at the border crossings. But this is just short-term technical stuff, that entirely misses out on what a no deal Brexit would really mean.
The prime minister so far is heard shrugging it off with “some negatives to begin with”, but these will be sorted out, giving way to a “new golden age for global Britain” (to use his words).
Those concerned with European affairs in the EU divide between those consider the idea of a no deal to be so crazy that it would never happen, and those who try to think through what it would mean. With the arrival of Boris Johnson at No 10 Downing Street, the second approach increasingly prevails, attached to the following kinds of likely consequences for the UK.
Economic damage
Apart from short-term logistic difficulties on which the government seems to be working, the main expected economic consequences are:
a. WTO tariff levels will be applied to UK exports to the EU, mostly around 5%, but 10% for automobiles, which will render UK production in this sector uncompetitive, and lead to plant closures. But also devastating 40-90% tariffs facing exports to the EU of sheep and cattle farmers.
b. European enterprises that include parts from the UK in their supply chains will switch away from the UK. Airbus has already warned of this, and there will be many others.
c. The UK as a location of choice in Europe for foreign direct investment in the manufacturing industry will be ended, in favour of many other attractive locations on the continent.
d. There will be increasingly serious labour shortages in the UK, for example in the NHS, agriculture and construction, with mobile intra-EU migrants choosing other locations in the EU.
e. There will be a further, already ongoing depreciation of the pound, reducing UK living standards.
f. There will be no transition period, like the two-year standstill foreseen in the withdrawal agreement. Impacts on the UK will therefore be brutal and immediate.
g. Scrapping the backstop will trigger Irish-sympathising US Congress to block a UK-US free trade deal.
h. In sum, there will be a long recession in the UK, cutting budget resources, leading to painful cuts in social services and on into the defence budget.
It’s not just economics
Apart from these economic hits, the expected roll-call of damage is:
Litigation
The EU might sue the UK in international courts for £33 billion of damages with the scrapping of the withdrawal agreement, pending which there would be no negotiations over a free trade agreement or many sensible sector cooperation agreements. There has been no official and public position, or legal opinion published on this hypothesis, but the thought is in circulation. Failure to ratify the withdrawal agreement would itself of course not be illegal, but the damages inflicted by a no deal withdrawal would still be there.
Broken aspirations of young Brits
Young Europeans take for granted their rights to travel, study, work, and live anywhere in Europe. Observers of the UK scene see that British teenagers and university students are appalled at being deprived of these rights. However bright young Brits have easy access to the global anglo-sphere, and one can expect a resulting brain drain emigration to set in.
Undermining the Good Friday agreement
A no deal would require physical frontier posts to be established at the Northern Irish border. These could become a sitting target for renewed sectarian violence. The EU is amazed at finding itself now apparently valuing peace in Northern Ireland more than the British government. The “backstop” is a mechanism to protect the peace, not a trap for the British as some in London suggest.
Damage for “Brand UK”
The UK has benefitted from enviable respect worldwide as a place of common sense, governmental competence, a sound legal order and trustworthiness. This will be shattered, in favour of an alternative image that has long been lurking in the background, that of “perfidious Albion”. The UK’s continued occupation of one of the five permanent seats at the UN Security Council, compared to the claims of Germany, Japan and Brazil, will come under increasing attack, with no support or sympathy to be expected from the rest of Europe on this account.
Risk of disintegration of the UK itself
The warnings are already there. Support for a second Scottish independence referendum will grow with a no deal. Support for the reunification of Ireland will also grow as a no deal Brexit leads to renewed border controls. The EU is amazed at how Johnson’s London can be so cavalier in its attitude towards Scotland and Northern Ireland, after a year in which Spain experienced a real crisis over the secessionist demands of Catalonia.
This list of disastrous consequences is so impressive, that even if only half of them happen, the view is that the prime minister has to be bluffing, since he is neither stupid nor uninformed. Both Jean-Claude Juncker and Frans Timmermans – the European Commission’s president and his deputy – have said in public that Johnson is playing a game. He seems to be trying a Trump-like tactic, to walk away from the deal to get the other side to crack, but without the power of the US behind him.
The EU can see that a majority in Parliament may well prevent him from doing a no deal. The calculation of the prime minister seems then to be willingly forced to hold a general election, which he denies, but no one in London or Brussels believes him. The EU will not play his games.