Open Europe‘s simulation of post-Brexit negotiations seemed friendly enough at first. Former British chancellor Lord Lamont, playing Britain for the “wargame”, even offered some sweeteners to get an “amicable” divorce if the Brits voted to leave the European Union: payments to offset the “not inconsiderable” burden on other EU states post-Brexit, and a “very special” contribution from Britain’s security forces to European defence.
Things started to go wrong when Lamont outlined what trade deal he wanted in return. Forget the Norwegian and Swiss models, which once seemed the Promised Land to eurosceptics but the flaws of which are becoming increasingly apparent. Lamont pointed to the EU’s freshly negotiated free trade agreement (FTA) with Canada – known as CETA. But Lamont wanted to bolt on “a financial services chapter in our FTA” to benefit the City of London. This would “seek to ensure the UK was not considered just another third country, but could get as close to …. access to the single market in financial services [as possible].”
Britain’s erstwhile European partners were having none of it. Noëlle Lenoir, a former French minister of European affairs, offered “a completely banal trade relationship with the UK and nothing more”. Former German deputy finance minister Steffen Kampeter warned Britain’s “cherry picking” would not go down well with the German public. Spain’s Ana Palacio, former minister for foreign affairs, outright rejected “Canada but with better terms”.
Karel de Gucht, a former EU trade commissioner who was representing the EU institutions, pointed out a deal like CETA would take much longer to thrash out than the two years allowed under Article 50 of the Lisbon Treaty, which would get activated if the UK notified the EU that it planned to leave. However, unlike more bitter wargamers, de Gucht did admit negotiations with the UK would be a priority.
The debate then descended into a theoretical carving up of Britain’s largest industry, the City of London. Lamont had said he was “confident that London will remain a major financial centre”. Kampeter’s riposte was that an offshore financial hub for the EU wouldn’t fly in Germany, and naturally suggested Frankfurt as an alternative. The Dutch proposed Amsterdam for consideration. And once former Taoiseach John Bruton made his emotive case for the damage Brexit might do to Ireland, other Europeans supported Dublin as Europe’s new financial hub.
While London would remain an important centre post Brexit, it is hard to see how it could avoid considerable damage unless Britain did manage to secure the sort of deal Lamont was after. And Open Europe’s wargame suggests that won’t be on offer.
This was, of course, only a game. But the sheer level of emotion felt very real. Ireland’s devastation was palpable. Lamont didn’t help matters by telling the others that it was widely incontestable in the UK that “the euro is a disaster”. They responded with dark talk about divorce. Brexit could get very nasty.
Edited by Hugo Dixon