€-Vision

Commentary & analysis with a focus on European economic policy

Pages

  • About Andrew Watt
  • Contact
  • Media and videos
  • Privacy Policy
  • Publications

Search

€-Vision

RSS Feed RSS - Posts

Powered by Genesis

The UK after the draft agreement with the EU27

November 14, 2018 by andrew36 Leave a Comment

The situation is in flux, but here is a short analysis of the situation in the UK (as of 1700 CET, 14.11.18), written primarily for a non-British audience.

The British government and the European Commission have – finally – reached an agreement, at technical level, on how Brexit is to be managed. Details of the almost 500 page document have yet to be released. But the cornerstone is a decision to keep the whole UK within the customs union for the foreseeable future, with partial acceptance of the single market rules for the province of Northern Ireland.

We are far from being out of the Brexit woods, however.

Theresa May will gain the support of her cabinet, despite likely ministerial resignations. The EU27 will almost certainly support the draft.

The next hurdle is daunting, though: May needs a majority in the House of Commons. To say the least that is highly uncertain in view of the divisions that run through both major parties, Conservatives and Labour. The Conservatives government has been relying on the backing of the Ulster Unionists. This will almost certainly be denied, however. Avoiding any special status for NI is the raison d’etre of the DUP. Plus it is likely that hardline Tory Brexiters will also withhold support, arguing that the deal ties Britain too closely to the EU, notably eviscerating its ability to run an independent trade policy.  Moreover, some hardline Tory Remainers are also expected to vote against. Smaller opposition parties are also opposed, so May must rely on a considerable number of Labour MPs defying their leadership and, faced with the threat of crashing out of the European Union, opting for the lesser evil of a comparatively soft Brexit. My assessment is that sufficient numbers will not vote with the government, even if it is true that Labour, with serious internal divisions, has failed to articulate a clear alternative negotiating strategy and plausible outcome.

It is probably fair to say that no-one likes the deal that has been reached. It does, though, promise to “get the job done” in terms of formally leaving the Union, while limiting the economic and political damage: that would be in accordance with the narrow Leave mandate given in 2016. Yet, there is considerable evidence that, since the referendum, the Leave majority has given way to a – small – majority for Remain. More fundamentally, the agreement indisputably puts Britain in a worse situation than the status quo of membership – the only debate is over how much worse. For the foreseeable future Britain will be a rule-taker not a joint rule-maker. And it is very hard to detect where Britain will gain greater “sovereignty” in return – possibly regarding the freedom of movement, but this is unclear.

The question in the coming days and weeks will be: which of these perceptions gains the upper hand. Minimizing certain losses. Or pulling the emergency brake, voting down the deal and throwing the issue open once again, opening up the full gamut of options from crashing-out to – via a general election or second referendum – calling the whole thing off.

In a sense, despite all the debates, little has fundamentally changed since the situation immediately after the June 2016 referendum.

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to email this to a friend (Opens in new window)
  • Click to print (Opens in new window)

Filed Under: Uncategorized Tagged With: Brexit, Conservatives, customs union, EU27, Labour, Northern ireland, referendum, single market, Theresa May, UK

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Brexit, the personal and the political
  • Macron and Kramp-Karrenbauer: vive la difference!
  • The UK after the draft agreement with the EU27
  • A balanced wage policy is not what it seems
  • Output growth less important than structure for the environment
  • Is the troika responsible for the Greek fire tragedy?
  • Debt rescheduling and the power of exponential growth
  • Merkel and Macron in Meseberg
  • Analysis of the proposal „A constructive approach to Euro Area reform“
  • Unemployment in the Euro Area passes a milestone

Archive

Categories

Tags

Apple austerity Brexit ECB economic governance economic policy elections Emmanuel Macron EMU ESM EU EU Commission euro Euro Area Eurogroup European Commission Eurostat fiscal capacity fiscal policy France GDP Germany globalisation Greece Guardian inequality inflation interest rates Ireland Jean-Claude Juncker Juncker Leave Macron Merkel neoliberalism public spending Pulse of Europe QE race to the bottom Remain Schäuble tax competition UK UK referendum unemployment

Links to content I am involved in

  • My articles on Social Europe
  • IMK (EN pages)
  • iAGS - independent Annual Growth Survey
  • FMM - Research Network Macroeconomics and Macroeconomic Policy
  • Hans-Böckler Stiftung

Recommended links

  1. Mainly macro (Simon Wren-Lewis)
  2. Paul Krugman
  3. econoblog101 (Dirk Ehnts)
loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.