Finance: Research, Policy and Anecdotes

Brexit - the crisis is here

One of the most insightful bloggers on Brexit, Chris Grey, titled his last blog entry “The August serious season before the September crisis”. His timing was off by only one week, as the crisis started this week, before the end of August, with Boris Johnson’s decision to prorogue parliament for five weeks.  The reaction was furious, to put it mildly, though observers should not have been surprised by this move.  It is clear now that this unelected government, made up to a large extent of opportunists (who previously came out strongly against proroguing parliament), is dead-set on delivering Brexit by any means possible, most likely by a Crash-Brexit on Halloween day. It seems that they are even willing to undermine the long democratic tradition in this country.

 

Will taking the initiative away from parliament to prevent a Crash Brexit make it more likely that the EU gives in to the demands of Boris Johnson to drop the backstop?  I simply cannot see this!  Even if they did, there is no guarantee that there won’t be enough ERG members that would vote still against a new deal. And if the EU gave up on the backstop, it would basically agree to putting up a border in Ireland, once the UK leaves the Single Market and the Customs Union. But wouldn’t they have to do it anyway after a Crash Brexit?  Yes, but in this case the EU would not be complicit in violating the Good Friday Agreement and in stoking a new wave of conflict in Northern Ireland. And a Crash Brexit would force the UK back to the negotiating table at some point and the three preconditions for a free trade agreement are obvious – money, citizen rights and backstop.  One future possible compromise, which could be included in the political declaration now, but in case of a Crash Brexit will certainly come up later, is a referendum in Northern Ireland on whether the backstop and thus avoiding a border on the Irish island would be acceptable (as also suggested in this letter to the editor in the FT).  Polls suggest that there is currently a clear majority for the backstop in Northern Ireland.  Given that NI has voted clearly in 2016 to stay in the EU and given that the majority of elected representatives in NI are in favour of the backstop, this would be the most democratic solution.

 

But back to Westminster: There are some options left for the majority in parliament that wants to prevent this Crash Brexit though the legislative path seems more and more difficult. A vote of no confidence can also succeed if there is a clear majority for a new prime minister, but Jeremy Corbyn certainly does not have it – and in this case Boris Johnson could just hold on and run the clock down. One of the remaining options that Tory rebels have is to cross the aisle and sit with one of the opposition parties (be it Lib Dems or be it Change UK) or as independent, making it clear that the Tories plus DUP have no longer a majority.   But this is only necessary not sufficient, as the opposition parties would have to agree on a PM candidate who is not Jeremy Corbyn.  But there seems a small hope and the more radical the government gets in its actions, the more it might push the opposition within the Tory party towards radical solutions.

 

It is sad to consider how far the Brexit debate has pushed the UK towards a constitutional crisis. And while everyone seems to have marked Halloween day as the decisive end day, it is clear that it will be just the starting point of the next season of the Brexit tragedy.