Brexit Deconstructed: Cracking up? EU’s problems make Brexit even tougher

PUBLISHED: 06:00 08 June 2018

Mariano Rajoy was ousted as Spanish prime minister in a shock no-confidence vote last week Picture: PA

Mariano Rajoy was ousted as Spanish prime minister in a shock no-confidence vote last week Picture: PA

AP/Press Association Images

Negotiating a smooth exit from a fragmented EU is even more challenging, writes JAMES BALL.

Once again the EU is reportedly in crisis and this time it hasn’t been caused by us.

Italy’s new populist government almost collapsed before it had begun after its president rejected the appointment of a finance minister who wished to leave the euro.

As new elections seemed inevitable, a compromise was found – but the new coalition partnership of the Five Star Movement and Lega Nord plan to introduce a flat tax which would bust the eurozone’s strict rules.

And some of the new administration’s senior figures will have Brussels in a blind panic. New deputy prime minister Matteo Salvini once described the euro as a “crime against humanity”.

That would be headache enough for the European Commission, but it’s just one of a series of challenges the EU is facing. It is currently in the weeds of trying to fix its next budget, which would reallocate funds from Eastern Europe – which is already facing an anti-EU backlash – to Southern Europe, clearly a contentious process.

Spanish PM Mariano Rajoy was ousted in a shock no-confidence vote last week, leaving Europe’s principals with a new figure, Pedro Sanchez, to get to know at short notice. And the EU still faces the rise of populist parties in countries across the zone, perhaps best typified by Hungary’s Victor Orbán.

On top of all that, the bloc is struggling to work out a coherent response to new trade tariffs issued by Donald Trump.

These troubles seem to have brought a degree of Schadenfreude to many of Brexit’s cheerleaders: this kind of division shows why we should leave, they argue, and also mean the EU’s apparent unity in negotiations is an illusion – this will only strengthen our negotiating hand.

Predictably these arguments have taken up plenty of column inches and have had no shortage of airtime but they have very little merit – Europe’s new divisions and struggles will make negotiating a smooth exit from the EU harder, not easier.

The UK’s woeful inability to work out what it’s asking for from Brexit means the timing of any exit agreement will come down to the wire: hopes for the June summit, which was supposed to be crucial, have faded almost entirely as Theresa May has failed to secure even her own cabinet’s agreement as to what kind of customs relationship the country wants.

That leaves just one summit – October – left for the UK and EU to agree solutions to the Irish border issue, which courts will govern future UK and EU deals, what future trading relationship the UK and EU should have and every other unresolved Brexit matter.

Most experts think the prospects of that being sorted in one short summit are remote, meaning that the EU would need to find more time for an unofficial summit (or an extended one) to try to thrash out a deal. But as other urgent issues – its budget, eurozone stability, a potential trade war – crowd out Brexit, time becomes a premium. We are no longer the only issue on the EU’s agenda, and the clock is turning against us.

That’s far from the worst-case scenario, though. Let’s take the hypothetical situation in which the UK and EU have somehow managed to thrash out an exit deal. This by no means would mark the end of the process: the deal would then have to be ratified by the EU parliament, and by the parliaments of the member states.

This means every single one of the 27 EU nations, some of who we trade with far less than others, would have an opportunity to derail the deal – or try to use it for political leverage in another EU-wide dispute. A fractious and divided EU in the middle of numerous other squabbles is not one that can be relied upon to give us any unpopular concessions: the EU can’t afford to give the UK a too-generous deal which some of its members would not back.

The truth is division is business-as-usual in the EU. The UK tactically exploited this for decades – it’s why we were one of the main cheerleaders for expanding the bloc: we used the new Eastern European states as a political counterweight to the traditional Franco-German alliance. By making the trading bloc larger, the UK boosted the bit of the EU it has traditionally liked, while also slowing political integration. There was an era when we were quite effective at EU politicking.

That means the unity of the bloc in the Brexit negotiations is not business-as-usual but rather something completely exceptional: and that unity is still holding 15 months after the triggering of Article 50, and as the countries struggle to agree on virtually any other issue.

This should be a serious red flag to anyone hoping to exploit the current situation: a group of countries that can barely agree on what to have for dinner have held a line for more than a year. Any hopes that we can exploit the divisions in place are remote indeed.

What the current situation really does flag, though, is how hollow the scaremongering of an EU super-state was: members of the Eurozone are lobbying for less central control of their budgets. Eastern European countries are resisting any calls for further integration. Macron’s plans for greater EU cooperation were shot down at birth by Angela Merkel. The EU still (at the time of writing) hasn’t managed to retaliate to US tariffs, thanks to French and German divisions.

The EU is still working as a trading bloc, a defender of rights – the ECJ extended same-sex spousal privileges across the free movement bloc just this week – and as an enabler of movement of people and services: all the things the UK wanted from it. It is not moving in the direction of further political unity. So why, we should keep asking, do its cheerleaders want to leave? What is to gain?

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