Is there a de facto impossibility for the Brexit to kick-start?

European Council - June 2016. EU Heads of State or Government met on 28 June 2016 in Brussels. Over dinner the Heads of State or Government discussed the outcome of the referendum in the United Kingdom with Prime Minister Cameron (first from right). Here Cameron is pictured with the German Chancellor Angela Merkel and the Prime minister of Luxembourg Xavier Bettel. (Shoot location: Brussels – Belgium. Shoot date: 28/06/2016. Copyright: 'The European Union').

European Council – June 2016. EU Heads of State or Government met on 28 June 2016 in Brussels. Over dinner the Heads of State or Government discussed the outcome of the referendum in the United Kingdom with Prime Minister David Cameron (first from right). Here Cameron is pictured with the German Chancellor Angela Merkel and the Prime minister of Luxembourg Xavier Bettel. (Shoot location: Brussels – Belgium. Shoot date: 28/06/2016. Copyright: ‘The European Union’).

Quite understandably, the European Union leaders including of course the German Chancellor Angela Merkel, the French President Francois Hollande and the EU Commission leader Jean-Claude Juncker, want a swift and stern Brexit. The reports about a Franco-German split, with a fictitious Berlin tolerance and the Paris harshness, do not hold water. The France-Germany axis must presently appear stronger than ever, if the EU is to endure without vital losses, relating to the unthinkable before first exit of a member state of the size of Britain.

The 27+1 EU leaders in last Tuesday’s meeting of the European Council told the British Prime Minister David Cameron who typically attended only the first day, that his country has to be quick in resolving the political and financial calamity the Brexit vote has triggered. Merkel, Hollande and Juncker, although in differing wording, were adamant that the chaos has to be confronted and it’s Britain that has to start the ball rolling, by applying for a Brexit along the lines of the article 50 of the Treaty of the European Union.

Hard pressed Britain

This is the only legal and orderly way for a country to quit the EU. After Cameron left the meeting room for London, the 27 continued their meeting on Wednesday and they cemented what had already been clarified; that the ball is in the British court and London has to be quick and punctual in implementing swiftly the people’s decision for Brexit. Of course, the issue is much more complicated than that. Let’s check where things stand now.

The two sides have actually started the divorce negotiations, by throwing the ball to each other’s court. Not at all an unusual reality, even for the simplest uncoupling. As mentioned above, the EU side is pressing for a swift start of the separation procedure and solemnly demands that Britain now signs  the ‘leave’ epistle. In the British side, things are much more complicated though, to say the least. Last Monday, Cameron told the House of Commons that no British government can ask for a break-up with the EU, before having secured a clear agreement base, about what kind of relationship will follow the separation.

London in dire straights

Obviously, this is quite the opposite the mainland Europeans are soliciting from London. Paris, Berlin and Brussels insist that no negotiation can start about shaping the future relationship between Britain and the EU, before Brussels gets the divorce letter. The French government is the most unbending on that. Francois Hollande coming to Tuesday’s Council went as far as to say that “I can’t imagine any British government would not respect the choice of its own people.”

This is a hit below the belt, because it implies that the British government is actually considering the option not to respect the outcome of the referendum, at least for quite some time. In a way, Hollande tells Cameron not to act like the Greek Prime Minister Alexis Tsipras, who last August did exactly the opposite than what 63% of the Greeks had endorsed some days before in the July referendum. Jean-Claude Juncker issued similar threats last Tuesday speaking in the European Parliament, by clearly stating that “no notification (for Brexit) no negotiation”. The Dutch PM Mark Rutte went even further and brandished a doomsday nightmare for Britain, by saying that “England had collapsed politically, monetarily, constitutionally and economically”. Mind you, he spoke about England, not the UK, with an obvious reference to the possibility of Scotland and Northern Ireland leaving the UK.

The UK in chaos

It’s pretty clear then that the Europeans are currently demanding something that London is unable to deliver, at least not in the foreseeable future. There are two insurmountable obstacles to that. For one thing, the Cameron government is a kind of caretaker administration, until the Conservative Party elects this fall its new leader and of course a new Prime Minister.

The second overwhelming problem for London, if it was to send the divorce letter, is that the British political scenery has fallen to pieces. The old divisions between left and right or Labour and Conservatives, is now transformed into ‘pro’ and ‘anti’ EU. This new division has not only profoundly divided the two major political parties, but it has deeply penetrated  into British society. To be noted, that Jeremy Corbyn, the leader of the Labour Party, has lost a confidence vote within the party’s parliamentary group but refused to resign.

The House of Commons cannot deliver

Let’s see what are the odds about the Cameron government introducing in the House of Commons a draft law, that is the famous divorce letter the EU demands, to energize Article 50 of the European Treaty for the Brexit. The first problem is that a caretaker government cannot take such a historical decision. Even if it did though, the House of Commons would surely be unable to pass it, because it is made up by an overwhelming majority of pro-EU MPs. The pro-EU political ‘party’ is now by far the largest force in the Parliament, horizontally crossing the old political regions, except Nigel Farage’s UKIP. This is in direct contradiction with the 23 June vote, further escalating the absolute political confusion in the country.

But still, even if the majority of the Labour and the Tory MPs decided to capitulate to the will of the people, as expressed in the 23 June referendum, there would be unseen before implications, coming from the Scottish and the Northern Irish MPs. Both ‘governments’ of the two constituent but ‘independent’ parts of the United Kingdom have declared, that they will definitely remain in the EU, if Britain decided to leave, if needed by breaking off from the UK. Understandably, the MPs representing these ‘countries’ would not participate in a procedure of the House of Commons that may lead to a Brexit. It’s not clear what those MPs will do in such an eventuality.

The EU to pay a great cost also

All those problems are of course known to the main land European dignitaries. However, they cannot adopt a soft and perceptive policy stance towards Britain. This is so, very simply because a mild attitude would strengthen the Eurosceptic political forces in the national level and support the centrifuge tendencies in the EU27.

On top of that, the mainland Europe political leaders have observed over the last few days, that the capital markets in this side of the English Channel are paying a higher price for the Brexit vote, than the London financial platforms. Even the yield of the British government bonds, the Guilds, has dropped to 1%, as if investors are queuing in order to lend more money to Britain. Even the fall of the GBP in relation to the dollar and the euro is seen as an extra support to the British exports of goods and services.

No wonder then why Hollande is the most fervent advocate of a swift solution to the chaos caused by the Brexit vote. For many reasons France is more exposed to related risks than Germany. Unfortunately, the prospects for a quick and swift Brexit are nonexistent and Europe is to withstand and pay the price for a lengthy and totally misty phase of negotiations. Even worse, it’s completely vague how those discussions can be kick-started. Not to forget that the results of the 23 June referendum bind the government only politically not legally, to implement the Brexit.

 

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