Show Hide image

Brexit will leave Britain poorer and smaller – but Europe will feel the hurt just as much

The EU has been pummelled by crises for years and these days the mood in Brussels is appalling. What lies ahead could be even worse.

I’ve visited about a dozen European countries since 23 June, and only twice has it been suggested to me that Brexit was a good idea. The first occasion was when an aide to Viktor Orbán said the Hungarian prime minister thought that quitting the European Union would work out well for Britain, if not for anyone else. The second came when a friend and I hitched a ride to the beach during a holiday on a Greek island. “Brexit means Grexit!” the couple who picked us up exclaimed, before launching into encomiums on the virtues of Yanis Varoufakis, the former finance minister who drove Greece’s economy into the ground.

Even Britain’s allies are starting to marvel at the daily horrors across the Channel. “The Tories are in the hands of nutcases,” a UK-friendly EU official told me after the Conservative party conference. “Poor Britannia.” The antics of the cabinet’s Three Brexiteers are monitored with morbid fascination. A senior German politician told me he emerged from an hours-long discussion with Boris Johnson staggered by the Foreign Secretary’s ignorance of Britain’s possible exit paths. If David Davis’s Commons performances have become useful for brightening up dull days, a special degree of scorn is reserved for Liam Fox, known to many European politicians as a swivel-eyed figure they would encounter at think tank events, wittering on about the UK joining the North American Free Trade Agreement.

Britain’s withdrawal from the EU began long before the referendum. Opt-outs rendered Downing Street invisible in discussions of migration and the eurozone. Even building a single market in services, an obsession for every prime minister since Margaret Thatcher, withered as David Cameron lost interest. A couple of years ago a veteran French diplomat told me how much he missed sparring with the Brits in Brussels.

If Britain was once regarded with a blend of irritation and awe across Europe, it is rapidly becoming something else: an example of how not to handle populist outrage, and, more worryingly, a potential source of EU instability. As Donald Tusk, the president of the European Council, likes to argue, the political forces that drove Brexit are alive elsewhere in Europe, albeit in different forms. While governments assemble Brexit task forces and appoint negotiators, their gaze is largely fixed inwards. The EU has been pummelled by crises for years and these days the mood in Brussels is appalling.

It will not be helped by the difficulty of what lies ahead. Brexit is starting to resemble a fractal pattern in which zooming in on each segment of the relationship shows fresh complexities. The divorce settlement under Article 50 will be complicated enough, not least because Brexit will blow a hole in the EU’s budget. Snowballing accruals could leave Britain with a departure bill much higher than the €2.1bn surcharge demand that turned Cameron’s face a vibrant shade of puce at a Euro summit in October 2014.

The deal that governs the relationship to come will be even more difficult. European officials are steadfast in their defence of the EU’s principles, unmoved by the legitimate British argument that in some cases the four freedoms (goods, services, capital and people) remain aspirational at best. In the long term, the club is probably heading for fracture, with “core” groups of countries pursuing their own projects of integration; the internal strains are too great for the machine to lumber on as a whole. Officials confess under their breath that freedom of movement looks unsustainable in the long run. But carve-outs cannot be countenanced for Britain, for fear of encouraging cherry-picking among les autres.

What keeps Berlin up at night, a German official recently told me, is not the UK-EU relationship, but the question of whether European integration has run its course. “Everything else is peanuts,” he said. European politicians, led by Angela Merkel, will take a tough line on Brexit not because of devotion to the EU’s founding principles, nor out of some atavistic urge to “punish” the Brits – but for fear that the project they have spent years assembling will decay if they don’t fiercely defend it. If that means politics must trump economic self-interest, so be it; some might argue that Britain started it.

Everything points to a bumpy few years. True, calls for No 10 to trigger Article 50 instantly, from the likes of Jean-Claude Juncker, the European Commission’s president, have yielded to an understanding that the government needs time to get its Brexit ducks in a row. But Britain has done little to endear itself to partners whose goodwill it will need. Europeans have been shocked at the spike in hate crime in Britain: Juncker lamented the attacks on Poles in Harlow in his recent State of the Union address.

Even worse are signs that Britain may try to stall the efforts of the 27 remaining members to demonstrate there is life after Brexit. Michael Fallon, the Defence Secretary, sparked fury when he warned that Britain could thwart any EU moves towards military integration. Such developments strengthen the hand of those in Europe who just want to say “F*** it” to the Brits, says a senior German MEP. If the Brexit vote gave licence for xenophobic behaviour in Britain, developments since have exhumed anti-British grievances in Europe. When the Brexit talks sink into acrimony, as they inevitably will, expect some grandstanding European politician to declare that the EU is well shot of the tiresome Brits.

Hardly. Brexit will leave Britain poorer and smaller, perhaps literally so. But the EU will feel the loss of its second-largest economy and one of its few members with a real foreign policy. “The effect of Brexit is underestimated everywhere,” the EU official told me. “We look at Westminster and laugh, but we’ll all be hurt by this.”

Tom Nuttall writes the Economist’s Charlemagne column

This article first appeared in the 10 November 2016 issue of the New Statesman, The Trump apocalypse

Photo: Getty
Show Hide image

PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

0800 7318496