Brexit: Full Amputation or Gentle Separation?

A year ago, 37% of the total number of registered voters in Britain cast their ballot in favor of leaving the European Union.

It was a hard-fought campaign, with accusations and insults hurled freely. The anti-European side sought to present its case as a popular revolt from below, going up against a pro-EU establishment.

Protecting only the right flank

It doesn’t exactly fit this pattern that just five of the richest men in England paid for 61% of the expenditures of the Leave campaign. That’s quite a “popular” revolt.

In the end, the vote wasn’t that much of a surprise. After all, the ground had been nurtured with non-stop negative coverage of Europe in most of Britain’s mass circulation papers for many years.

Despite all the constant droning, the outcome of the referendum vote was still narrow. Mrs. May decided not to care, opting solely to protect her right flank, not the middle ground, after she became prime minister.

Her choice of adopting most of UKIP’s(!) hardline approach meant ignoring the 48% who voted to stay in Europe.

These voters recently took revenge on her, when Mrs. May’s hardline Brexit manifesto was effectively rejected by voters.

UK in a stalemate

Now the UK is in a stalemate. The fact that people are just beginning to realize that Brexit has many layers and is not a singular concept will not advance any sense of clarity.

The available options range from the full-on rupture of access to the Single Market (which was the big enticement for 1,000 Japanese and other foreign firms to set up in the UK) to a more nuanced, intelligent form of Brexit.

The latter approach would return legislative sovereignty to the House of Commons, but that shift – like Norway or Switzerland – would be sensibly negotiated to ensure there are no economic barriers.

A zombie prime minister

The real trouble for May is that there are as many basic options for Brexit as there are party factions inside her Conservative party. And that party is, in effect, more fratricidal now than Labour (in its bad days).

No wonder then that Mrs. May is now openly treated as a zombie prime minister. She has no authority over her party and parliament. Tory MPs now speak of Theresa May openly with a venom they once reserved for the leftist Labour leader, Jeremy Corbyn.

But while the knives are out and constantly being sharpened, there is no agreement on a possible successor. She will limp on for the time being.

Key worries already rectified!

It does not help the Brexiteers’ cause that many of the (legitimate) key worries which they had articulated have already pretty much been rectified in the real world.

Take the issue of European citizens working in the UK. They have stopped coming. Just 26,000 European came to work in the first three months of 2017, compared to 40,000 for the same period last year (and 110,000 a quarter in 2007).

As it turns out, there are many ways of slowing down migration – without any Brexit needed. For example, one can use internal labor market measures. In addition, the EU itself exempts state employment (such as the NHS) from freedom of movement obligations.

Economic lies about more benefits from sovereignty

Britain currently ranks 15th in the EU league table of exports on a per capita basis. Last year, the UK exported $18 billion of goods and services to China. Germany exported $85 billion. Germany manages to achieve its export success from inside the Customs Union and Single Market. Why can’t Britain?

Under those circumstances, the real danger is that yet another hoax will be created. There is little in the economic record to suggest that the UK’s trading fortunes are really shackled by the EU.

Export and economic success is largely a function of a country’s productivity. And that — entirely domestic — issue is indeed a matter of concern in the UK.

The pursuit of more sovereignty (by implementing strict labor market restrictions) can have the opposite effect. And indeed, according to experts, UK productivity is bound to suffer as fewer jobs will be filled with (skilled) staff from other EU nations.

Thus, there is a strong likelihood that the rosier trading fortunes – once the UK can pick its trade partners “freely” – will vanish, just as much as the much-hyped “savings” from exiting the EU that could instead be deployed to strengthen the NHS proved an empty promise as soon as the referendum campaign was over.

Moreover, the key ingredient for a nation wishing flexibility in its international economic relations – control over the exchange rate – is something which the UK has reserved for itself, whether or not it is in the EU.

And on that score, the Brexiteers who so eagerly claim that Brexit is an economic power potion will soon learn that much of that exchange rate “sovereignty” benefit has already been harvested. Not much further economic boost can be expected from this front.

A potential Pandora’s box

Leaving the Customs Union means every good or component or agricultural product entering or leaving the UK, including Northern Ireland, has to be cleared at customs.

Putting back Custom control posts on the border between Northern Ireland and Ireland is not just an administrative nightmare. It is also a recipe for bringing back to life all the sleeping demons of Northern Ireland enmities.

Now that Article 50 negotiations have started, a sober-minded nation (and its political leadership) would recognize that the time has arrived to move beyond the rhetoric and exaggerated claims of the referendum campaign last year.

Brexit is the biggest challenge and potentially the biggest economic and geopolitical disaster Britain has faced since the 1930s.