Thursday, October 24, 2019

The EU wants to get this deal over the line. They may yet come to the PM's rescue with a short extension

Published in The Daily Telegraph 

Whether they like it or not, EU leaders have been firmly dragged into British politics. It is now up to them to decide the length of any membership extension granted to the UK.

Boris Johnson and his team would, unsurprisingly, prefer a short extension to put pressure on Parliament to ratify the deal, which now has a majority, at least on its second reading. By being seen to give the Prime Minister what he wants, however, the EU fears wading deeply into national politics, which can easily backfire.
At long last, the EU appears to have given up hope that the UK will remain after all. The result of the European Parliament elections was a decisive factor in this; it became apparent how politically unsustainable it would be to ignore the result of the 2016 referendum. Boris Johnson’s threats to obstruct the EU machine sealed the deal. The PM and the EU are now on the same team: get Brexit done.  
Johnson has gained credit among European leaders for succeeding where Theresa May failed: convincing a majority of MPs to back the deal EU leaders painstakingly negotiated with him and for which they made considerable concessions. One is that Northern Ireland will remain a part of UK customs territory, not only legally, but also practically, as the Northern Irish will be able to enjoy potentially lower UK tariffs for 100%, even if business – not citizens – will face more bureaucracy when trading between Great Britain and Northern Ireland. To its credit, the Irish government conceded to a unilateral exit mechanism for Northern Ireland.
France is currently the main obstacle to granting a longer extension until the end of January, even if this were a “flextension” allowing the UK to leave earlier if the relevant legislation passed. Though French officials have intimated that France would only consider a purely technical Brexit extension of "a few days", pressure is growing for them to accept January 31 as the new deadline.
However, No Deal may actually become more likely if the EU offers a long extension that would give the Tories enough time to call a general election. If this election occurred before Britain's departure from the EU the Conservatives would come under renewed attack from the Brexit Party and the DUP, likely to drive the PM to positions that may make it harder to get the deal through Parliament.
He could, for example, be forced to promise not to request an extension of the transition period until 2022 or 2023. Otherwise, this period, during which the UK would align with all EU rules and tariffs in return for unrestricted trade, would end in January 2021 and the UK would need to negotiate an extension before 1 July 2020 if it wants one.
Such a threat may be helpful in bringing the EU to the table, but it would be wildly ambitious to negotiate by January 2021 – let alone July 2020 – the extent of Britain's EU market access. It took Switzerland and the EU at least five years to work out such a deal, after a referendum whereby the Swiss voted against taking over all EU rules. Switzerland then agreed to take over selected EU regulations in return for selected market access.
Whatever people may say: such a “pay to play” scheme is the only realistic way to preserve trade between two heavily regulated economies that trade intensely, in case one wants to issue its own, divergent regulations.
In an ideal world, of course, both the EU and the UK would deregulate their economies and grant mutual recognition to each other, but this is simply not realistic. To preserve trade, Britain will probably have to align with heavy EU regulations that cover car manufacturing and chemicals. These kind of issues would in any case come up in an election campaign in which Boris Johnson promised to rule out an extension of the transition period.
The current state of British politics necessitates a general election – and soon – but the timing will make a huge difference. If Brexit has not happened yet, the debate will once again be about 'deal' versus 'no deal', even if the 'no deal' exit would then take place in January 2021, given that Boris is unlikely to drop support for his own deal and threaten 'no deal' at the end of January. In an election that occurred after Britain's EU departure, the Brexit Party would lose much of their influence, and this would be to the EU's advantage. 
It’s also possible that in a hung parliament scenario, the Lib Dems might succeed in forcing through a second referendum. This could very well end up yielding a Remain result, in a two-way choice between Remain and some kind of “vassalage” arrangement. Many Brexiteers would simply boycott the vote.
The EU realises this, and fears that the UK would be a far more difficult partner to deal with than before 2016. Britain is the second greatest contributor to the EU budget, with considerable diplomatic clout, something Boris Johnson has once again confirmed by successfully renegotiating a deal many claimed was a fait accompli.
This explains why the EU is now trying to help the PM get his deal over the line. A short extension, avoiding what may turn out to be an unpredictable and heated election campaign, would be the best way to achieve that. 

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