Theresa’s magic money tree, broken promises and the boomerang, preaching Brexit and sucking at the teat in Europe: Two years after the referendum, smoke and mirrors still obscure the Brexit view.
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This is Brexit anniversary week. Two years ago on June 23, 2016, a small majority of British voters decided to leave the EU and thereby inflict upon their country the most spectacular act of self-harm since the Suez crisis, as historically minded Remainers are wont to point out. The prime minister who oversaw the referendum has since been consigned to history himself: David Cameron went, Theresa May came in. She inherited the so-called will of the people and assured everyone that "Brexit means Brexit."
But, so far, she has yet to expand on that initial definition. May contrived to almost lose an unnecessary snap election intended to strengthen her hand and is still caught in an endless loop of false starts and denials. Her Cabinet is split between Brexiteers and Remainers, a sure recipe for a sustained lack of progress. Brexit Minister David Davis is reported to have had all of two meetings with EU chief negotiator Michel Barnier since Christmas. Davis is not a details man and seems bored by the intransigence of the bloc on regulations and contracts.
All we have as of today is the outline of a divorce settlement that is now stuck behind the impasse of the Irish border question. Either condemn the Irish to live with a border between the Republic and Northern Ireland or accept a border running though the Irish sea or accept something like the Norwegian model and enter the European Economic Area. All of which May and the Brexiteers deem unacceptable.
For months on end now, May has let her cabinet play with two solutions for a future customs agreement, neither of which the EU thinks acceptable. A Brexit White Paper will only be published in July, conveniently after the EU summit in Brussels and in the midst of the summer vacation. Anyone expecting any viable solutions may be sorely disappointed.
The whole process is a game of smoke and mirrors. Some attest Theresa May with a clever strategy. Others say it is simply chaos reigning. Only eight months till Brexit day and Britain does not know how food will be imported, medicines will reach hospitals, factories will receive the necessary materials. "The clock is ticking," Michel Barnier likes to repeat.
There's a spectrum of options on Britain's future relationship with the EU, each with a distinct set of advantages and disadvantages. While euroskeptic purists favor a clean "hard Brexit," others favor a softer landing.
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Hard or soft options
It's essentially a choice of a harder or softer Brexit. Harder prioritizes border control over trade. UK firms would pay tariffs to do business in the EU, and vice versa. The softest Brexit would see access to the single market, or at least a customs union, maintained. That would require concessions — including the payment of a hefty "divorce bill" — to which the UK has provisionally agreed.
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A leap into the unknown
Businesses have expressed concern about a "cliff edge" scenario, where Britain leaves the EU with no deal. Even if an agreement is reached at the EU bloc level, the worry is that it could be rejected at the last minute. Each of the 27 remaining countries must ratify the arrangements, and any might reject them. That could mean chaos for businesses and individuals.
If there is no agreement at all, a fully sovereign UK would be free to strike new trade deals and need not make concessions on the rights of EU citizens living in the UK or pay the financial settlement of outstanding liabilities. However, trade would be crippled. UK citizens in other parts of the EU would be at the mercy of host governments. There would also be a hard EU-UK border in Ireland.
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Divorce-only deal
The EU and the UK could reach a deal on Britain's exiting the bloc without an agreement on future relations. This scenario would still be a very hard Brexit, but would at least demonstrate a degree of mutual understanding. Trade agreements would be conducted, on an interim basis, on World Trade Organization rules.
Image: Fotolia/Jens Klingebiel
Limited arrangement, like with Canada
Most trade tariffs on exported goods are lifted, except for "sensitive" food items like eggs and poultry. However, exporters would have to show their products are genuinely "made in Britain" so the UK does not become a "back door" for global goods to enter the EU. Services could be hit more. The City of London would lose access to the passporting system its lucrative financial business relies on.
Under the Swiss model, the UK would have single market access for goods and services while retaining most aspects of national sovereignty. Switzerland, unlike other members of the European Free Trade Area (EFTA), did not join the European Economic Area (EEA) and was not automatically obliged to adopt freedom of movement. Under a bilateral deal, it agreed to do so but is still dragging its feet.
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The Norway way
As part of the European Economic Area, Norway has accepted freedom of movement – something that no Brexit-supporting UK government would be likely to do. Norway still has to obey many EU rules and is obliged to make a financial contribution to the bloc while having no voting rights. Some see this as the worst of both worlds.
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A Turkey-style customs union
Turkey is the only major country to have a customs union with the EU, as part of a bilateral agreement. Under such an arrangement, the UK would not be allowed to negotiate trade deals outside the EU, instead having the bloc negotiate on its behalf. Many Brexiteers would be unwilling to accept this. It would, however, help minimize disruption at ports and, crucially, at the Irish border.
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Theresa's magic money tree
The most devastating headline of all appeared in the usually harmless Metro. Thousands of Londoners pick up in the free paper in the mornings at their local stations. "Magic Money Theresa" screamed the front page. That hit home because during her election campaign last year, May had proven particularly tone deaf to the plight of voters. When a nurse complained about her low salary, Theresa answered: "I don't have a magic money tree." But one seems to have grown in her garden now.
Just this weekend, May promised GBP 20 billion ($26.3 billion, €22.8 billion) additional funding for the ailing National Health Service (NHS). And she suggested that part of that money could come from the so-called Brexit dividend. That is truly magic money. Because countless economists and the official Institute for Fiscal Studies in London have definitively stated: "There is no Brexit dividend."
Whatever Britain might save in EU contributions in later years will be swallowed by increased border controls, falling growth, production slow-downs and so on. Even the the conservative Times ran with an editorial saying that the statement about the Brexit dividend was "as mendacious as the lie on the big red bus."
The money for the health system will simply come from a tax rise. But that is unspectacular and rather bad propaganda.
Broken promises usually come back to haunt you, as the prime minister discovered at great cost. Last week, she only managed to avert a defeat in parliament, because she promised the Brexit-rebels in her party a meaningful vote on the Brexit deal. That secured their last-minute loyalty and they towed the government line. A day later, however, May could not remember what she had promised. Or had the rebels totally misunderstood her? The prime minister simply denied everything.
The rebels were furious because they felt duped. And they managed to get their revenge with a little help from the Lords in the upper house. They again added a clause to the EU-Exit law, which would give parliament the final say on the Brexit deal or no deal. Lawmakers should not be in a position to tie the hands of government, the PM asserted. The Brexit rebels argue that it cannot be trusted to do the right thing for Britain because of sectarian warfare amongst the Tories.
Jacob Rees-Mogg is the leading Brexiteer and a constant thorn in Theresa May's side. He is also being talked up as her possible successor. At the same time, he seems to have been outed as a blazing hypocrite as a man who does not let his politics interfere with his money making. The MP earned his fortune on the financial markets, even though he cultivates the image of the 18th century landed gentry. Now it was revealed that one of the city firms that he has helped set up has established an investment fund in Ireland.
"Somerset Capital Investment" fears for the earnings of future clients and explicitly cites Brexit as a cause for concern. It is the honorable Rees- Mogg however, who fosters that particular risk with a vengeance. As the front man of the "European Research Group" he stands for the cleanest possible break with the EU. Why does Britain need a customs arrangement with the EU at all? We can go it alone, is his credo.
But preaching this and placing your money where your mouth is, are two different things. The new SCI fund in Dublin states in its prospectus: "During, and possibly after (Brexit) there is likely to be considerable uncertainty as to the position of the UK and the arrangements which will apply to its relationship with the EU and other countries after its withdrawal." That sums things up pretty well one year after the start of talks. The fund also warns its clients about the consequences of a hard Brexit, which would "increase costs" and make it difficult to achieve its objectives (i.e. earn money).
But Jacob Rees-Mogg fended off all accusations of hypocrisy. The language was just legalese and setting up the fund had "nothing whatsoever” to do with Brexit. When in his career has the Moggster lost the capacity to blush?
Most of the online comments upon publication of this story are not fit to print being too heavy on four-letter words. "Odious” is one of the few quotable attributes.
Britain is leaving the European Union, but who exactly is directing the drama? DW takes a look at the people involved in the messy divorce.
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Britain's embattled skipper: Theresa May
May became prime minister after David Cameron resigned from the post in the wake of the Brexit referendum vote in June 2016. Despite her position, she has struggled to define what kind of Brexit her government wants. Hardliners within her Conservative party want her to push for a clean break. Others want Britain to stay close to the bloc. The EU itself has rejected many of May's Brexit demands.
The leader of the British Labour Party has no formal role in the Brexit talks, but he is influential as the head of the main opposition party. Labour has tried to pressure the Conservative government, which has a thin majority in Parliament, to seek a "softer" Brexit. But Corbyn's own advocacy has been lukewarm. The long-time leftist voted for the UK to leave the European Community (EC) in 1975.
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Britain's boisterous Brexiteer: Boris Johnson
Boris Johnson's turbulent two years as UK foreign secretary came to an abrupt end with his resignation on July 9. The conservative had been a key face for the Leave campaign during the 2016 referendum campaign. Johnson disapproves of the "soft Brexit" sought by PM May, arguing that a complete break from the EU might be preferable. He became the second Cabinet member within 24 hours to quit...
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Britain's cheery ex-delegate: David Davis
David Davis headed Britain's Department for Exiting the EU and was the country's chief negotiator in the talks before he quit on July 8, less than 24 hours before Downing Street announced Boris Johnson's departure. Davis had long opposed Britain's EU membership and was picked for the role for this reason. Davis was involved in several negotiating rounds with his EU counterpart, Michel Barnier.
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Britain's former Brexit secretary: Dominic Raab
Raab replaced Davis in early July 2018. But he only lasted four months, resigning a day after Theresa May presented a draft withdrawal plan to her cabinet. Raab previously worked for a Palestinian negotiator in the Oslo peace process and as an international lawyer in Brussels advising on European Union and World Trade Organization law.
Jeremy Hunt was Britain's Health Secretary until he replaced Boris Johnson as foreign secretary in early July 2018. The 51-year-old supported Britain remaining in the European Union during the 2016 referendum, but said in late 2017 that he had changed his mind in response to the "the arrogance of the EU Commission" during Brexit talks. He has vowed to help get Britain a "great Brexit deal."
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Britain's firebrand: Nigel Farage
Nigel Farage was the leader of the United Kingdom Independence Party (UKIP) until July 2016. Under his stewardship, the party helped pressure former Prime Minister David Cameron into calling the EU referendum. He was also a prominent activist in the Leave campaign in the lead-up to the vote. Farage still has some influence over Brexit talks due to his popularity with pro-Leave voters.
Image: Getty Images/AFP/F. Florin
Brexit's banker: Arron Banks
Businessman Arron Banks is a friend of Nigel Farage, and donated a significant sum to the former UKIP leader's Leave.EU campaign – making him the group's biggest financial backer. He had several meetings with Russian officials ahead of the referendum, but has denied allegations of collusion with Moscow in the Brexit vote, branding the claims a "political witch hunt."
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Europe's honchos: Jean-Claude Juncker and Donald Tusk
EU Commission President Juncker (left) and EU Council President Tusk (right) share two of the bloc's highest posts. Juncker heads the EU's executive. Tusk represents the governments of the 27 EU countries — the "EU 27." Both help formulate the EU's position in Brexit negotiations. What Tusk says is particularly noteworthy: His EU 27 masters — not the EU commission — must agree to any Brexit deal.
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Europe's steely diplomat: Michel Barnier
The former French foreign minister and European commissioner has become a household name across the EU since his appointment as the bloc's chief Brexit negotiator in October 2016. Despite his prominence, Barnier has limited room to maneuver. He is tasked with following the EU 27's strict guidelines and must regularly report back to them during the negotiations.
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Ireland's uneasy watchman: Leo Varadkar
The Irish PM has been one of the most important EU 27 leaders in Brexit talks. Britain has said it will leave the EU's customs union and single market. That could force the Republic of Ireland, an EU member, to put up customs checks along the border with Northern Ireland, a British province. But Varadkar's government has repeatedly said the return of a "hard" border is unacceptable.
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Europe's power-brokers: the EU 27
The leaders of the EU 27 governments have primarily set the EU's negotiating position. They have agreed to the negotiating guidelines for chief negotiator Barnier and have helped craft the common EU position for Tusk and Juncker to stick to. The individual EU 27 governments can also influence the shape of any Brexit outcome because they must unanimously agree to a final deal.
Image: picture-alliance/AP Photo/J. Macdougal
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Brexit quotes of the week
What will you do with your Brexit dividend? Personally, I'd open a flying school for pigs…. Smo180
Brexiteers are like people who fly twice around the world and still pay an annual subscription to the flat earth society… Jason Beattie, Mirror