EU and Britain: Pinnacle of paradoxes

Rationality will win the day

Once again, Theresa May’s enemies are riding in droves to her rescue. A deal now looks probable for Britain to leave the European Union (with a transition period) at the end of March or soon afterwards. The machinations of the opposition Labour party and of myriad adversaries within her own Conservatives have combined to strengthen a prime minister whose greatest defence is her palpable weakness.

The tactical U-turn by Jeremy Corbyn, the Labour leader, supporting a second referendum on the UK’s membership (which could take place only after a further delay of around a year) is unlikely to lead to another vote. Corbyn – a long-time anti-integrationist who suspects the EU could scupper his vision of British socialism – has not changed his mind on Europe. His ploy, however, narrows the options of the hardline Brexiteers in May’s own party. The financial markets have been sending sterling higher for some weeks. They are a far more accurate signal for political developments than pundits predicting British Armageddon.

May is a mediocre leader with little chance of standing out in history for anything except immense stubbornness. Taking over in July 2016, three weeks after the EU referendum, she had little chance to shine. Yet she is a survivor. The splits over Europe in both Labour and Conservative ranks, if anything, support her position. Seemingly ensnared, she holds others in a tighter grip. If, as is probable, she lasts in 10 Downing Street until the autumn, she will have lasted longer than two Labour prime ministers of the past 40 years, Jim Callaghan and Gordon Brown. By spring 2020 she will have outstripped Edward Heath, who took the UK into the European Community in 1973. There is a strong chance that May as prime minister will outlast German Chancellor Angela Merkel.

The country, ruling party, parliament and government are all vociferously divided over withdrawal. May is an appropriately ambiguous guide along a zigzag path: a lukewarm Remainer who confides only in her spouse and whose true views on any subject are masked in mystery. She is the central will-o’-the-wisp figure in an elaborate charade of bluff and counter-bluff where the sole criterion for the outcome is that no one is in control.

May is bereft of anything more than token support for the withdrawal treaty theatrically finalised three months ago. Her tactic has been to win adherence for a result nobody greets with enthusiasm by threatening friends and opponents alike with alternative adverse consequences from options they vehemently oppose. Both Conservative and Labour Brexiteers fear that parliamentary gridlock, and a possible second referendum, could block exit altogether. This explains the softening of Conservative headliners’ conditions regarding the ‘backstop’ arrangements for the customs, trade and border status of Northern Ireland.

Conversely, those who wish a sensible regulated exit with no ‘cliff edge’ lurch into World Trade Organisation terms for dealing with the EU are dismayed by the possibility of ‘no deal’. As has been clear for months, the UK has made no serious preparations for departing without a treaty. It would face disruption to international trade, further decline in investment, deep-seated economic downturn and possible social unrest. Yet, remarkably, in the UK, among other European governments and in the European Commission, there is sufficient belief in Britain’s willingness to enter into reckless adventurism to make the threat of ‘no deal’ still viable as a last-resort bargaining ploy.

May sits at the pinnacle of these paradoxes. The barrenness of her negotiating position makes her a formidable negotiator. Disarray over Brexit buttresses her. She has withstood no-confidence challenges from all sides. Since last month’s record 230-vote parliamentary defeat for her withdrawal treaty, she has never been stronger. As Meghnad Desai said in the House of Lords three months ago, she will get her withdrawal deal through the Commons. ‘This is the best the country can do.’ Britain’s most potent bargaining strength has been its apparent irrationality. Yet, in the end, rationality will win the day.

David Marsh is Chairman of OMFIF.

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