Response to Bloomberg

Today, an article appeared on the Bloomberg website discussing their predictions for Brexit talks in the year ahead. Several interesting scenarios are discussed, with some possibilities more likely than others.

In one scenario:

“it proves impossible for May to satisfy her three most difficult audiences: the Irish government, which is backed by the EU; the Democratic Unionist Party, which is propping up her government; and the ardent Brexit-backers within her own party.” 

As a result, a General election is called. As Bloomberg further outline in their scenario:

“On election day, the first in the fall since 1974, voter turnout is down. Labour manages to mobilize the youth vote while elderly Conservatives stay at home on a damp autumn day. Shortly before dawn, Corbyn is declared the winner and becomes prime minister with a small majority of 20. Once in government, Labour’s policy moves toward closer ties with the EU.

By December, the time for talking is over as Brexit day looms. At an emergency negotiating session on Christmas Eve, the U.K.’s chief negotiator, Keir Starmer, accepts the EU’s offer of membership of the European Economic Area.

It means Britain will maintain full access to its biggest market for goods and services, but now has to accept rules it has no say in making. It has also failed to “take back control” of immigration, a major issue in the Brexit debate.”

We would agree with some of this – namely that Mrs May has painted herself into a corner in 2017 (most notably in the Florence speech) by ruling out EEA membership, Customs Union membership, ECJ oversight or anything that resembles the Swiss or Norwegian models. 

As a result of ruling so many things out, Mrs May has reduced her potential for negotiation flexibility at exactly the time she has asked the EU to come up with ‘imaginative solutions’. 

There is no way that Mrs May can negotiate a deal with the EU that satisfies the DUP, the Irish government and the Legatum-influenced Hard Brexiteers in her own Cabinet. 

Mrs May therefore has two options left – (SEP) someone else’s problem or Soft (smart) Brexit.

Mrs May could make it someone else’s problem by resigning or triggering a General Election in the hopes that Labour win and the  poison chalice passes to someone else. 

Alternatively, she could use the planned upcoming reshuffle to sideline and demote the Legatum-inspired hard Brexiteers and replace them with allies who will see the advantages of a smooth, Soft Brexit. 

One key advantage for Mrs May of an Iceland style Brexit would be that there would be no need for a complex two year transition period in which we would have BINO (Brexit In Name Only).

Mrs May could announce this Smart Brexit policy in a speech that would reconcile both leavers and remainers.  

Where Bloomberg are mistaken in their article is their assertion that a ‘Norway’ or ‘Iceland’ style Brexit would mean accepting rules it has no say in making and no controls over migration. 

As we have discussed in previous blogs and reports, the EFTA/EEA countries do indeed have a large say in the rules they abide by, and exemptions from most of the contentious EU policies

We have also described how the UK could indeed regulate EU/EEA migration better as a member of EFTA/EEA.

But Bloomberg’s journalists aren’t the only ones who have made these errors.

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