After the Brexit-Referendum

Georg Boomgaarden: After the Brexit-Referendum

Translation from the original German text

Conference in the International Club

in the Auswärtiges Amt (German Foreign Office)

July 19, 2016

What has happened ?

The Referendum on June 23, 2016 resulted in 52% of the Brits voting to end the membership of the United Kingdom in the European Union. Participation stood at 72%. Nearly 2 million Brits living or working abroad could only vote if they travelled home. Citizens of all Commonwealth countries with a legal residence in Britain were allowed to vote, while EU-citizens with a legal residence in Britain had no right to vote.

Leaving the European Union is explicitly foreseen in the Lisbon Treaty. EU-membership is voluntary, leaving the union is not immoral. There is no reason to be outraged about that. When somebody cancels his membership in a British Gentlemens‘ Club he will always be treated with friendlyness, however using the swimming pool is no longer allowed. That are the rules.

What was outrageous was not the decision to leave but the campaign full of lies and propaganda of the Brexiteers.

The campaign against the EU was very emotional and had unsavoury xenophobic elements.

The EU as a bureaucratic monster, a superstate, drawing each week 350 million pound from the British people, money that would better be used for the NHS, the EU is responsible for useless regulation and forces the British to go to war in a common EU army, the accession of Turkey would be imminent and millions of Turks were waiting to overrun the British isles. EU workers especially Poles were raping social benefits and taking away British jobs. That were the slogans, mostly based on lies.

Boris Johnson reclaimed that in case of Brexit the Brits could eat the cake and at the same time keep it., meaning that access to the single market could be preserved while the country would close borders for so called EU-immigrants. He would even avoid to invoke Article 50 of the Lisbon Treaty that says Brexit has to be notified to the EU. Boris Johnson said he would negotiate from inside with all rights of membership until he got the best deal for Britain. The other European partners would give in to British demands under the pressure from business, exporters and investors.

UKIP and the party leader Nigel Farage won a lot of votes in the last European elections with a campaign against immigrants. The leaders of the LEAVE-Campaign, Boris Johnson and Michael Gove, jumped on that winner‘s theme and became indistinguishable from UKIP. The migration crisis in the EU and especially the words of Chancellor Merkel saying that we are anyway unable to protect our national borders, were picked up and answered with the slogan: „we want our borders back“. This is pure nonsense because Britain never became a member of the Schengen Treaty. Westminster has always been responsible to protect the borders.

The Brexit-campaign has been supported by tabloids like the Sun or the Daily Mail, generally by all Murdoch papers, partly by the Daily Telegraph. All of them were fighting a press campaign against European Integration for at least 30 years.

Pro-european newspapers were much less widespread. TV stayed „neutral“ and invited the two sides for a Question and Answers round that took several hours.

The REMAIN-campaign was bloodless, without enthusiasm.

For some years before the referendum Prime Minister David Cameron threatened that he would campaign for Brexit in case he would not get additional special arrangements for Britain: no more reference to an „ever-closer-union“, no social benefits for EU citizens during the first four years of their stay in the United Kingdom and some more topics. Then campaigning for REMAIN he suddenly found out that Brexit would be very bad for the country. Supported by the City of London and big business he painted the consequences of Brexit for the economy and security of the UK in darkest colours. Citizens were supposed to vote Remain out of fear, positive reasons were absent. That campaign lacked credibility .

The great majority of the Labour Party was in favour of Remaining in the EU. But Labour leader Jeremy Corbyn led a very weak campaign. Everybody knew that he was an eurosceptic who only campaigned for REMAIN because of party discipline.

Now the people have decided

The people ? – The people includes the 48%, who wanted to remain in the EU, the Scots, who with a big majority voted for remaining, the Northern Irish who do not want that the open border between the Republic of Ireland and Northern Ireland becomes a closed border with custom‘s controls. And the people includes the cosmopolitan Londoners who voted to remain with an impressive majority.

But in Wales and in England – outside London – the result was clear: We want to leave the EU !

Referenda: that is democracy without the safeguards of parliamentary procedures, the hour of demagogues– but that is irrelevant now: The vote was legitimate, the result has to be respected.

By no ways the majority can be reproached to have voted erroneously, the majority means it, the question on the ballot paper was absolutely clear. Voters would feel fooled, if the result would not be executed.

In Britain there is a tradition at horse-races or elections that the winner takes all“ – who has an advantage of one vote has won. The narrow result is no reason to question the outcome.

Scottish nationalists have a different position: they view the majority of the English nation forcing Brexit on the majority of the Scottish nation wanting to remain in the EU.

Nicola Sturgeon, the First Minister of Scotland, believes that the contract is frustrated. The referendum of September 2014 over Scottish independence took place under the condition of Britain remaining a member of the EU. Now the First Minister demands a second referendum on the independence of Scotland.

The Prime Minister as well as the Labour Party will try to delay this issue as long as possible. The Westminster parliament has to agree before such a referendum could take place. However the future of Scotland in the United Kingdom has once again become uncertain.

In Northern Ireland the republican Sinn Fein demands a referendum on uniting with the Republic of Ireland. The leaders of the Protestant Unionists campaigned for Brexit, but many of their followers voted for remaining in the EU. After the Good Friday Agreement of 1998 peace was upheld in Northern Ireland – by the way the EU strongly supporting the peace process. But the walls in Belfast still separate the communities. New tensions may arise from the new situation.

Theresa May is firmly decided to keep the Union with Scotland and Northern Ireland. When negotiating Brexit she has to be extremely careful not to deepen the rifts between the different parts of the United Kingdom.

 

The relationship between Britain and the Continent has always been ambivalent. When Winston Churchill proposed the United States of Europe in 1947, he did not think about the British Empire being part of that Europe, he rather could imagine Britain as the arbiter of Europe.

When the EEC was founded, the UK did not want to participate. The competing free trade zone EFTA did not really flourish. Twice, 1963 und 1967, French President Charles de Gaulle rejected the British applications to join the EEC.The German Social Democrats and later chancellors Willy Brandt und Helmut Schmidt massively supported the accession of the UK.

At a lunch in the German Embassy residence in London in 2013 Helmut Schmidt told me in his always very laconic way: „That was an error“.

In 1972 Great Britain joined the EEC. Only two years later, the Labour Party won an election and immediately demanded renegotiations. The following referendum in June 1975 brought a two thirds majority for EEC-membership.

Prime Minister Margaret Thatcher then reclaimed: „I want my money back“, further integration was answered with: „No, No, No“, in 1988 she made a speech in Brugues, that became the bible of the eurosceptics.

The „Black Wednesday“, on September 16, 1992, when Britain had to leave the European currency mechanism, led to a clear swing of the Conservative Party against Europe. With that crisis George Soros made very high speculative profits that cost the British people so much money that he is still admired for his coup in the financial circles of the City of London.

It was the Labour leader Tony Blair who started the fatal mechanism of preferring referenda to the traditional Westminster system of parliamentary democracy. On April 20, 2004 he announced to hold a referendum on the European Constitution worked out by an all-european convention before. This exerted much pressure on France and the Netherlands to follow up – with the result that the constitution failed. Only in Britain the referendum on the constitution never took place.

Now the Conservatives demanded a referendum on the Lisbon Treaty that replaced the failed constitution. Prime Minister Gordon Brown rejected this demand. In 2008 I asked the shadow foreign secretary William Hague, why referenda were preferred to the democratic Westminster Parliament. He said that for decisions like that the legitimacy of Parliament was no longer sufficient in the eyes of the people.

When in 2004 the EU was enlarged by ten new member states, the Labour-government of Tony Blair immediately opened the British borders for workers from the new member states while Germany used the possibility of a seven year transition period before opening the borders. The British government seized the opportunity to show its generosity in opposition to the German position especially towards Poland.

EU-workers have always been a net profit for Britain. They pay far more taxes in the UK that they receive social benefits. But with the decision in 2004 Tony Blair triggered a massive immigration especialy from Poland. This als triggered fear about jobs in some parts of British society

The former Prime Minister John Major speaking at Chatham House in 2013 warned of some of his Tory friends who are „Tory in their head but UKIP in their heart“.

At that time polls showed that Europe was far behind many other topics on the priority list of the British people. Europhobic positions were an internal problem of the Conservative Party. John Major knew the problem very well: after him the Tories wore out three more leaders over euroscepticism: William Hague, Iain Duncan Smith and Michael Howard. The fourth, David Cameron, won the leadership contest with a eurosceptic manifesto.

Shortly after becoming Prime Minister he wooed the eurosceptic part of his party by leaving the European People‘s Party group in the European Parliament, joining with some strange bedfellows like a party from a Baltic state which is closely linked to veterans of the Waffen SS.

In the coalition with the LibDems a new law was adopted that makes a referendum in Britain obligatory in case of substantial changes of the EU Treaties.

Even in times of the coalition with the EU-friendly Liberal Democrats David Cameron was proud to come back from Brussels telling Parliament that he said „NO“ against all the other partners. And he loved to be celebrated like a hero by howling Tories in the House of Commons when he successfully stopped the Banking Union becoming a common project of all EU partners, with the only effect that it became an intergovernmental project.

On January 23, 2013 Prime Minister David Cameron held a decisive speech at Bloomberg‘s in London. He announced that in case of winning the next general election there would be a referendum held about leaving or remaining in the European Union.

Cameron praised the EEC and the EU as a Peace Project, but that function being obsolete now because it had been successful and peace in Europe were no longer a problem. Now the goal of the EU was the prosperity of the people and for that the EU was too inefficient, too centralistic and over-regulated. There were a danger of the EU becoming a superstate.

Immigration“ was not a central point of his speech. However he already promised in his manifesto that immigration should be reduced to no more than 100.000 in a year. He was not successful with that up to today.

Cameron said that Britain could not remain in an EU, such as it is today. That sounded very much like threatening with Brexit. But he did not say what precisely he wanted to change. However he was clear about the more symbolic point that an „ever closer union“ must be given up.

The debate in Britain that followed Cameron‘s speech suffered from the fact that there were a lot of ideas how to get more from the EU to serve British interests, but never how to serve the common European interest – this category remained unfamiliar for British politics during all the 43 years of EU-membership. So it was not even tried to develop a plan how to reform the EU and how to win allies for that purpose.

Pro-Europeans in the City of London or in the industrial sector, and also the cosmopolitan London cultural world, when speaking in private showed great concern about the gambling of the Prime Minister, but hoped that the referendum would never come or if it came that remaining would be the natural result because common sense would in the end prevail at the ballot box.

In 2015 Cameron won an absolute majority of seats in the House of Commons with 36,9% of the votes. Now he had to deliver what he had promised: the referendum. We know the result.

How will the procedure go on ?

To observe the result of the referendum is not obligatory. Therefore immediately speculations sprang up about ways how to avoid Brexit, how to get an exit from Brexit. It was said that Parliament could be the voice of reason and decide for remaining in the EU reflecting the opinion of the majority of the MPs. But I think this is unrealistic, because 17 Million voters would feel betrayed.

No party can afford to do that – certainly not the Labour Party which is paralyzed by a chaotic internal power struggle. We should assume that Brexit will come.

Before and after entering Downing Street Nr.10 Theresa May has declared „Brexit is Brexit“. There is no doubt about her decision. Whether this decision by the Prime Minister is sufficient to endorse the result of the referendum or if Parliament has to vote on that is not clearly defined in the unwritten constitution. So the courts may be asked to decide that question.

It would only be fair to give the new government some weeks to define the goals and the strategy for the negotiations on Brexit with the EU. However in the moment the British government is able to negotiate it is also a rule of fairness to notify immediately the will to leave the EU.

Article 50 of the Lisbon Treaty gives some rules on how to leave the EU. Some – in Britain and in Germany – interpret Article 50, as if it would allow a kind of protracted bancrupcy. I beg to differ. To notify as early as possible is not only fair play but it is also an obligation under international customary and written law which prescribes to negotiate in good faith and not using dirty tricks to avoid due process and the essential meaning of a ruling. Any interpretation that overrules the core purpose of Article 50 that is to allow a smooth and rational transition from membership to non-membership, is not only against reason but also against the law.

Should the British government embark on such an unfair strategy then the other 27 should insist that the Prime Minister has already notified in fact by publicly declaring the will to leave – in case Parliament has to decide this decision must not be delayed. So the 27 could let the two year period of negotiations on Brexit start with this declaration. This position may possibly be juridically controversial. In that case Britain could go to the European Court to decide on the interpretation of Article 50. However I am quite convinced that Britain will not go to the court in Luxemburg.

What will be negotiated ?

This are not „renegotiations“ as is sometimes said, but the liquidation of membership, financial problems have to be solved, projects must be finished orderly, the question will also be when Britain will be responsible for all costs. Article 50 also rules that negotiations have to take into account the future relationship which the United Kingdom wants to have with the European Union.

At the end of the negotiations the result is non-membership of the UK in the EU. These negotiations have to be finished within two years after the notification of the will to leave the EU. This is independent from which future status for the UK towards the EU will be negotiated. It would be ideal if a new status for the UK is already found and can be taken up when the negotiations on Brexit are accomplished. But this is not necessarily the case.

There is a danger that both sides loose trust by tactical behaviour. If one side looses patience there is the danger of political short-cuts. What one side believes to be a clever negotiation may poison the climate for the whole negotiation and future relations.

I really hope that Prime Minister Theresa May whom I knew as a very wise politician will do everything to keep a good climate for the negotiations. The negotiators of the 27 should also do this.

If she now confronts us with Brexiteers like David Davis and Boris Johnson this has some inner logic. These were the politicians who fought for Brexit and should now prove that they did not promise too much in their presumptous campaign.

May be Theresa May wants that the 27 to reduce them to a normal measure and put them on the ground of the hard facts of reality. But that may be expecting too much from EU partners. To trust David Davies or Boris Johnson will not be easy for any of those who will negotiate with them on whatever topic.

The British government basically has explained what it wants for the future: full access to the single market and at the same time no free movement of labour for citizens of EU member states. The problem is that this model is not on offer.

The model of EEA-countries like Norway or Switzerland had been praised by Brexiteers until some time ago they started to read the texts of the agreements. Since the Brexit-campaign was mainly an anti-immigration campaign, the way to such a solution will be stony and bumpy – but in my view membership in the EEA with all four liberties will also be the best solution for British citizens and for keeping the United Kingdom together. We should do everything to make such a solution possible.

This goal would have better chances if a strong public campaign for it inside Britain would develop. However the crisis inside the Labour Party makes this rather difficult.

Could‘nt the EU just give in to British demands, because there is a strong will to keep the UK as near as possible to the EU ?

I do not think so. The EU wants to give no incentives to other partners to repeat something like Brexit. Membership must stay clearly privileged compared to non-membership.

Theresa May did explicitly not guarantee the status of EU-citizens now working in the UK, but made this a point for the negotiations. I think this is not a very strong position. Without a considerable number of European workers some services including the NHS or financial services would at least for some time not function properly. At the same time the EU would have to cancel residence permits for around 2 Million Brits on the continent. Such an exchange of populations would lead to lasting resentment and sustained bad relations.

Nobody should bet on the old Soviet theory of state-monopolistic capitalism saying that especially German companies would certainly force Mrs. Merkel and the 27 to make concessions.

If there is no way to come to terms on free movement of workers from the EU, and therefore EEA membership will be impossible, then a Free Trade Agreement regulating mutual market access could be concluded.

However I wonder what Britain can offer in exchange for access to a market with 400 million consumers. The British options on what it can offer positively or threat negatively are rather overestimated.

But even as a Third Country under WTO rules Britain can certainly survive. I trust that the British people are able to do make great efforts to engage more strongly on global markets. However this has a price.

Customs duties could be balanced by tax reductions, but the money will then no longer be available for the social balance inside the UK. Duties on any products needed by British industry to produce goods would deter investors. And on global markets the EU of 27 will be a strong competitor.

The City of London would have to change its business model. May be this can be used to modernize, especially in the FinTech sector. But the passport to do any financial services in the EU will not be available for non-members. Even then the continent will still be one of the most important markets for Britain, as it is for the US or China.

What will be the consequences for Great Britain ?

Prophecies are a question of good guesses – no more, look at weather forecasts or economic forecasts over a longer period. Whatever is said there (including during the campaign) is pure speculation – be it predicting flourishing meadows, be it announcing the doomsday coming soon. We can only wait and see.

Bad governance does not need the EU. It can be perfectly done directly from Westminster.

The British crises just before joining the EEC in the sixties and seventies give us good examples for such bad governance. The difference will now be that Great Britain or even Little Britain without Scotland and Northern Ireland will be responsible for all risks on its own. Brexiteers think this is sovereignty and see this as a great advantage.

It will be very difficult to overcome the political and social divisions in Britain. Theresa May was right to give this point a prominent place in her first statement when entering 10, Downing Street.

We need creative solutions for a flexible Europe

The idea of a core Europe, a Europe of different velocities or of different geometries has been debated for a long time. This issue will stay on the agenda. The member states of the EU are too different to progress in step with each other. Waiting for the slowest ship is paralysing the union.

But up to now I do not know any way how a core Europe could work in a way that could find a consensus and is at the same time feasable. A core of the founding countries does not fit politically, the core is a question of political will, not of geography or history. However any core Europe without its geographical centre France, Germany AND Poland is in my view not possible.

May be it would be better to find a different path to resolve the existing problems and reform the EEA in a way, that it gets closer to the EU and at the same time offers even more flexibility, which is so important for its members. Flexible rules should only be offered if in each single case a balance between privileges and duties can be found without putting the single market in jeopardy.

This could also be a solution for member states which for some time or even permanently want to exit from further integration steps hoping to fare better. Before the whole union fails because of too much rigidity I would prefer a flexibility in the EEA that can preserve everything that is acceptable.

Wherever EEA member states accept an obligation to fully apply some EU-rules more participation in the decision making on just those rules could be an option to be looked at carefully. The more a country integrates into the EU system the more co-decision should be practised, the less integration takes place the less participation can be possible. If any member country does not wish any deeper integration for example in the Euro-area such membership in a reformed EEA could become an option.

This is not a ready-to-go concept but just throwing a stone in the water. However it should be worth thinking about it.