Tuesday, December 11, 2018

UK Plan to Leave EU Collapses in Pool of Recrimination

As I write this, the plan for the U.K. to leave the EU lacks support in Parliament. Vote-counters estimate that two thirds of Parliament would vote against the plan. The vote that had nearly been placed on the schedule has been canceled. A vote on a “softer” alternative plan has also been called off. As of today, the government has no plan at all. It is probably too late to approve any measures to manage the UK exit from EU before the date that is scheduled to happen. How did we get to this point?

Looking at it one way, this is a situation set up by the laws of the EU. The law does not make it easy to negotiate a phased withdrawal. In practical political terms, this requires a consensus among EU members and enabling legislation passed by the leaving country. That is a broader base of agreement that politicians are used to dealing with.

Looking at it another way, you can place all the blame on the British Prime Minister. There is only one game for leaving the EU: prepare a consensus plan from the beginning, then persuade all parties involved that it is the only possible plan. The British government did the exact opposite. It delayed for a year with no plan at all and no serious study of the issues, then presented a plan intended to abuse its position to gain advantage. By some miracle, this plan was approved at the EU level, but there was never an effort to sell it to voters or Parliament. People are just now learning the details, and when leaders ask why certain things were done a certain way, there is no explanation. That is not the way you persuade stakeholders that your plan is the only possible solution. Doing so requires being able to explain why any possible alternative would create terrible problems somewhere that no one has a solution for. If you intend to pass a plan by decree without the ability to defend it point by point, it will go badly.

I don’t think anyone knows where the “Brexit” process goes from here. There is no constructive dialog going on in Parliament that could work out the issues involved. Some observers believe that the U.K. will remain in the EU, not just because it is too late to fix the plan, but also because the referendum that approved the U.K. exit from the EU might not be legally valid. Some who support the EU exit or who worry about the EU coming apart at the next global economic crisis now think this is the wrong time. Such a complicated maneuver should not be done without leadership, and there is no real leadership in the U.K. right now.

But the other alternative is the “hard Brexit” suggested by EU law, followed by piecemeal measures after the fact to try to undo some of the damage. This remains a very real possibility, but the human impact would be severe. A large number of workers, on the order of a million, would be affected directly. These are workers with jobs in foreign countries. They could lose their jobs immediately or lose access to their jobs as soon as they travel between countries. There would be a recession in London and possibly in all of Britain as a hundred large companies move offices to other countries. The main reason this scenario remains a possibility is that under the law, “hard Brexit” is what happens by default if British policy continues its current drift and no further formal action is taken.

The statement below from EC President Donald Tusk is indicative of the state of affairs as of last night. No one knows what to do.