BOTTOM-LINE BREXIT – PART XI

What business needs to know about how Brussels sees the process of Britain leaving the European Union, as related to BCW by senior EU sources.

Don’t ‘sell in May and go away’

The old City stockbroker’s adage, dating back to a leisured age of top hats and spongebag trousers, has had an airing in Brussels since the pre-Easter summit which pushed Brexit back as far as Oct. 31. But beware. Plenty can happen in the coming months, and probably will. “Now it gets ugly,” warns one top EU diplomat closely engaged in the negotiations with the United Kingdom.

Not only can we not rule out developments in London, where Parliament is creaking back from a break and Prime Minister Theresa May is still pushing to get her three-times rejected deal with the EU ratified in the next few weeks, so that Britain might launch a transition out of the bloc on July 1. But the reluctance of the other 27 governments to trigger an abrupt departure, on display at the April 10 summit despite some impatient grandstanding by French President Emmanuel Macron, is a symptom of some renewed deep thinking about how far they may be prepared to go to hold the door open for Britain. That could see divisions start to open up over how and when to end the Brexit agony.

The EU 27 and the Commission are standing united behind a line that, deal or no deal, the British must get on with getting out. Impressive lists of “Brexit preparedness” legislation can be read here. They are aimed at mitigating disruption if Britain snubs the transition period that is tied to UK acceptance of the withdrawal treaty. In theory, if May’s deal dies, the UK is due to bounce out into “hard Brexit” at midnight on Halloween.

Yet the peek over the cliff edge as initial Brexit deadlines were passed, combined with May’s reluctant agreement to hold a European Parliament election in the UK that might give hope to those Britons trying to remain in the EU, has prompted new soul-searching behind the scenes on the continent. If, like Charles de Gaulle in the 60s, Macron can see benefits for France of a uniting Europe without the pesky Brits always trying to hit the brakes, his counterparts can see the corresponding downside of a Europe they may find too French, or too dominated by France and Germany.

Even German Chancellor Angela Merkel, while insistent that British dithering and special pleading must not wreck the single market, does not relish being “left alone with the French”, the words of one senior German diplomat. Nor does Berlin want its undoubted economic and demographic influence over its neighbours appearing too obvious. It is no coincidence that it is the EU summit chair Donald Tusk who remains a consistent public champion of the UK’s right to change its mind. As a Pole, he is well aware that a Franco-German duopoly is distasteful to his fellow easterners.

As things stand, if May’s deal remains unratified, Britons will elect MEPs on May 23. Once the rest of Europe has voted by May 26, the month of June is likely to see renewed debate on whether the UK might halt Brexit – and whether that should be encouraged. National leaders meet in Sibiu, Romania, on May 9 – Europe Day – to reflect on the Union’s long-term future. Many may reflect that it would still be better with Britain inside. When they meet again for the European Council in Brussels on June 20-21, they may well be faced with another decision on whether to amend the Brexit deadline again. Macron blocked a push in April for the UK to have another year to think. But Tusk may have another go.

 British flavours in Strasbourg

Watch out for the side-effect on the EU legislative processes of Britain sending MEPs to the European Parliament which will convene in Strasbourg on July 2. It may seem surreal, though there’s a real irritant for many countries whose plans for getting more seats in the slimmed down post-Brexit chamber have been put on hold. British lawmakers are likely to be frozen out of plumb roles they have often held. But their presence, even if brief, will skew the party balance in the parliament during the key period for appointments to the incoming Commission.

The centre-right EPP is deeply annoyed. Since David Cameron took the Conservatives out of the party a decade ago, it will take none of the 73 British seats. Polls are all over the place as Britons slowly wake up to the fact they will be voting. But Labour could get at least 20 seats, helping the centre-left S&D narrow the gap and even threaten the EPP’s primacy. Nigel Farage’s new Brexit Party, along with his old UKIP outfit, may get up to a third of the UK seats, bolstering the already growing and noisy populist and Eurosceptic side of the chamber.

Look out, too, for the British Greens, along with Scottish and Welsh nationalists, bolstering the Greens bloc in Strasbourg, potentially strengthening its hand in shouldering into any grand coalition as the EPP and S&D appear unlikely to be able to hold on to their combined majority.

The British government has given a pledge not to use its voice in the Council before Brexit to swing key decisions on the Union’s leadership and long-term budget. But British MEPs can be held to no such position – as the Commission and Council presidents told Parliament at its final plenary of the outgoing legislature last week. Surreal it may seem, but the UK’s EU election may have some very real consequences.

 

Leave a Reply