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25 August 2017

Letter from March 2019 – one week before Brexit day

The deal was coming along. Then Ireland vetoed it. 

By Mark Rowney

It’s 22 March 2019.

With just one week to go until Britain’s exit from the EU, things could look better. Our decision in 2017 to seek a transitional arrangement has backfired. We may be about to take better control of our own destiny, but our European neighbours have ensured we will begin from a diminished position.

It all started shortly after that decision was taken. Leo Varadkar, the newly appointed Irish Taoiseach, made a series of public statements. Realising that under Article 50(3), Ireland (and each of the other 27 remaining states) had a veto over any transition agreement, Varadkar made it very clear that the future design of the border was the Brexiteers’ responsibility. The mess was not Ireland’s fault.

Varadkar anticipated a Bill in the Irish Parliament on a future border and other arrangements. This transpired late in 2018 and was quickly determined by recently re-elected Irish President Higgins to be of the upmost “national importance”. This triggered a constitutional requirement for a referendum on the use of Ireland’s veto.

Through a combination of a desire to “stick it to the British” and a more moderate desire to draw a line under the uncertainty Brexit was causing, Eire narrowly voted to use its veto. With one nation having a democratic vote on the issue, pressure arose in others to follow suit. Theresa May refused one in the UK, but others including Denmark, France and Lithuania held referenda. In the end, seven nations exercised their veto. The deal ground to a halt. 

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Now we’re nearing the end of March 2019, and no other deal is on the table.  At least the government got that one right. Now the UK faces a stark choice: either withdraw its Article 50 notice; or continue with a hard Brexit on World Trade Organisation terms without any replacement trade deals in place.

The signs now look ominous. First was the announcement by an airline that it is pulling most of its planes out of the UK in the coming week. Withdrawal from the European Common Aviation Area means that there will be no guarantee planes in Britain can leave after Brexit. They are likely to be stranded. As Britain’s aviation arrangements with the US are through the European Common Aviation Area, both European and American carriers have followed suit.  Thousands of Brits are cancelling outbound travel plans. Return flights to Britain and our nearest neighbours this week are already sold out; thousands abroad are slowly returning by sea and by land. Eurotunnel is contemplating letting people walk through its maintenance tunnel.

The loss of the freedom of movement of capital only complicates this. Because of complex payment chain for the travel industry; journeys can’t be accurately priced at present. That loss has also prompted several banks to issue press releases expressing serious concerns. The first run on a British bank began this morning as its customers (wrongly) feared that their money might go abroad and never come back. Other banks nervously await.

It doesn’t stop there. Business after business across the UK has been informing EU workers that technically, they have no right to work here anymore after next week. EU businesses have told British employees the same thing. Recruitment agents have reported unprecedented levels of demand for temporary work while millions wonder if they can go to work next Friday. A few across the EU, fearing forced deportation, have already packed their bags.

Major employers including in the automotive, aerospace, defence and pharmaceutical industries, have issued statements of concern and supporting analysis. A huge increase in their supply chain costs due to WTO tariffs means many products may now be economically unviable to manufacture in the UK. Workers across several industries wonder if they will be in a job next month.

The disruption to the UK economy and society currently underway is almost endless; and Brexit still hasn’t happened yet. Sensing the opportunity, veteran Labour leader Jeremy Corbyn is relentlessly bashing the Tories for their failure to secure a transition deal. Remainers in all parties are calling for the PM to withdraw our Article 50 notice arguing that the public will now understand. Brexiteers are calling this the last gasp of Project Fear; we all expected a bump now and we Brits will persevere.

All eyes are on Theresa May and we await with baited breath. One thing is clear though. The Brexit process might have begun with a democratic vote in the UK; but it is the democratic processes of the rest of Europe that dictate the terms on which we might leave.

Mark Rowney tweets at @markrowney

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