Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

The Mistake Countries Repeatedly Make When Dealing With the EU (New Republic)

21 October 2018


New Republic title: The Mistake Countries Repeatedly Make When Dealing With the EU

New Republic subtitle: Greece with its bailout, the UK with Brexit: The European Union is the reigning champion in this game of chicken.

“There isn’t even a one in a million chance that Merkel will say no.” These were the words of Alexis Tsipras shortly before becoming Greece’s prime minister in 2015. He was talking about his alternative negotiation proposals for Greece’s European Union bailout agreement—clearly in the EU’s interests, from his perspective, and vastly more palatable for Greece.

Populist politicians excel at presenting an effortless route to a rosy future. In the run-up to the UK’s referendum vote in 2016, Boris Johnson—then London mayor, now ex-foreign minister, and perennial prime ministerial hopeful—expressed his certainty that, after Brexit, the EU would surely agree to a tariff-free trading deal, just like the one the UK enjoyed by being in the EU: “Do you seriously suppose that they are going to be so insane as to allow tariffs to be imposed between Britain and Germany?” Both Tsipras and Johnson saw the future negotiation results as a done deal, bound by the EU’s own economic interests. All the people had to do was vote the right way.

Greece found out the hard way that simply voting for the future deal you want isn’t enough when negotiating with a transnational institution representing 27 other democracies. It also found out that Tsipras and his government had been too arrogant in claiming to know what was in the EU’s interests. Angela Merkel, Germany’s chancellor, was not so taken by Tsipras’s alternative proposals, and insisted instead on the “austerity and reforms” recipe that Greece had been following.

Meanwhile at the EU summit on Wednesday, more than two years after the country voted for Brexit, and with less than six months until the UK’s deadline for leaving the EU, the UK is still negotiating its withdrawal agreement and the terms of the future EU-UK relationship. The UK’s Brexit vote resembles that of Greece’s vote for Tsipras not only in terms of the political naiveté of the populist promises, but also in terms of the strategies pursued in the subsequent negotiations with the EU. Both the Conservative government and the Labour opposition in the UK seem to be repeating Greece’s mistakes. The result is unlikely to be any more successful.

Prime Minister Theresa May is wedded to the withdrawal proposal her government arrived at after much deliberation: the so-called Chequers plan. May sees this as the best compromise possible, given the internal politics of her own government. Pro-EU members of parliament (MPs) want as close a relationship with the EU as possible, whereas pro-Brexit MPs want a relationship that gives the UK as much autonomy as possible. As a result, the Chequers plan is a patchwork that has been described by two confectionary analogies: “having your cake and eating it” and “cherry-picking.” It involves enjoying some of the benefits of EU membership, such as the free movement of goods, but without many of the commitments that come with it, such as the free movement of people.

The problem with Chequers is that the EU has signalled many times, including in a mocking Instagram post by EU president Donald Tusk, that the EU will not accept it. This has led to a stand-off. After the Salzburg summit last month, when the Chequers’ plan was once again rejected by the EU, May restated that Chequers was the only credible proposal the UK was prepared to make, and that the EU should offer an alternative, if it cannot accept it. Of course, the EU has offered the UK the alternatives: membership of the European Economic Area (EEA), or a Canada-style trade deal. May in turn finds those proposals unacceptable. Staying in the EEA would involve the continued freedom of movement of people, and a lack of autonomy when it came to striking new trade deals, making a mockery of the Brexit referendum result, according to May. A Canada-style deal, on the other hand, would amount to a trading relationship between the UK and the EU involving customs checks at the borders. In order to respect the Good Friday Agreement’s peace-promoting guarantee of no border between Northern Ireland (part of the UK) and the Republic of Ireland (part of the EU), however, that would mean that the customs checks would take place somewhere between Norther Ireland and the rest of the UK, undermining the country’s unity. It would also profoundly destabilize May’s government, which is propped up by the votes of MPs belonging to the DUP, a Northern Irish party, who would not tolerate such a solution.

The similarities with Greece’s negotiating strategy are striking.

May seems to be engaged in a game of chicken. The assumption is that the EU would have just as much, if not more, to lose from a no-deal Brexit. Hence May’s mantra: “no-deal is better than a bad deal,” aimed at convincing the EU she is not afraid of the former. The similarities with Greece’s negotiating strategy are striking. After the 2015 elections, the leftist Syriza-led Greek government’s negotiation tactic to gain more favorable bailout terms was based on the assumption that if the sides couldn’t agree, Greece’s inevitable exit from the Eurozone would have been even more damaging for the EU than for Greece. The EU called Greece’s bluff, and the Greek government eventually capitulated.

May’s game of chicken will probably end in a similar way. The EU is unlikely to budge; 27 countries, speaking with one voice, and with less to lose in the case of no deal, are in a much stronger position than a single country, with a divided government, and which could face serious shortages with its EU trade disrupted. And even if the EU were to back down, accepting some version of Chequers, the deal would have to be approved by parliament. Labour and pro-EU Conservative MPs have said they would vote such a plan down. On the other hand, if May accepts a variation of the Canada-style trade deal on offer from the EU, the same MPs, including the DUP, will again probably reject it in parliament. This all makes a no-deal result seem rather likely. At that point, it is unclear how May’s government can continue, and a Conservative party leadership contest, a general election, or a second referendum, become plausible.

This brings us to the strategy of the opposition, the Labour party. Its plan is that if enough pro-EU Conservative MPs vote down the deal May brings to parliament, a general election could be triggered, which Labour assumes it would win. If that happens, the argument goes, Labour would proceed to renegotiate the terms of withdrawal from the EU, and get a better deal than May. This was in fact also Syriza’s and Tsipras’s plan when they ousted the prior government and came into power in January 2015. They believed that their fresh democratic mandate gave them the opportunity to start negotiations from scratch—only to be told by the EU that the Greek bailout was a national affair greater than any one party, and that the country was bound by what had already been discussed and agreed to.

A hypothetical Labour government in the UK would likely face a similar predicament. Labour would again have to choose between variations of the currently available options: staying in the EEA, or going for a Canada-style trade deal. More importantly, unless there was a pause to the withdrawal process, and the UK remained within the EU for longer than originally planned, there wouldn’t be enough time to re-negotiate. The Brexit date is March 29, and even if a general election took place in January, a couple of months are hardly enough time.

The UK is suffering from the same illusions as Greece was in its negotiations with the EU: overestimating its power, and believing that a shift in domestic politics, either by a change of government or Prime Minister, can yield a better result. Brexit, ironically, was sold by the likes of Johnson as a way for the UK to gain sovereignty and autonomy. It was also sold on the promise of continuing to trade with the EU as if nothing had changed—all that was needed was the right democratic mandate. Instead, what the UK is finding out is that in leaving the EU, it has much less say over its future than it did before. A single national democratic mandate is not all powerful against the interests of several other democracies organized together—a valuable lesson for those who advertise a return to national politics in a supranational era.”

Alexis Papazoglou writes on philosophy, current affairs, and politics. He previously taught philosophy at the University of Cambridge and Royal Holloway, University of London.



Framework Posts


Submit a Comment

Your email address will not be published. Required fields are marked *

Pin It on Pinterest