Ancient Rome begets Rome, Rome begets Christian Europe, Christian Europe begets renaissance, renaissance begets enlightenment, enlightenment begets political democracy and industrial revolution. These are the famous words of famous Austrian historian Eric Robert Wolf, which resembles the glorious heydays of the Great Britain as a Great Power in Europe. But those glorious days have gone long time ago because Great Britain was stripped off from the super-power status by the United State after the world war II and as regional power by Russia, Germany and France during the cold war. Since the establishment of European union via Maastricht treaty in 1992, Great Britain has become the third leg of stool with Germany and France upon which the stability of Europe relied.
But, now the third leg of this stool is about to break. The blame goes to the economic meltdown of 2008, that has wiped out billions of dollars and fired a million of jobs from the continent. The situation further deteriorated, when the southern European economies went under severe recession and began to demand for bailout packages from the Western economies that were least hurt from the crises. Moreover, the increasing demands for Eurozone stability and more bailout packages fueled the political polarization across Europe and gave birth to ultra-nationalist parties, which manipulated the situation in the name of defending national sovereignty.
Unfortunately, Britain became the first victim of polarized politics, where a small chunk of far-right politicians pressured then conservative government of David Cameron to hold referendum on whether to stay in the European union or exit from the bloc. The referendum resulted in about 51.89 percent of Yes vote, who gave their popular decision to leave the European union that became to be known as “Brexit”.
With tumultuous referendum results, then prime minister David Cameron resigned from his post and Theresa May was elected as new in charge of the 10-downing street, to hold the Brexit talks with the European Union. Since then Theresa May is suffering from pre-Brexit and post-Brexit schizophrenia.
Theresa May’s engagement with the European union for nearly two years has failed to bring any swift solution to the mounting Brexit crisis. Her proposal on Brexit deal was rejected after the five days heated debate in the house of commons by 432 votes to 202, in which even her own conservative backbenchers voted against her by three to one. If the new proposal deal is not initiated by March 29, which is due date of Britain’s exit from the European union then Britain might leave the bloc without any deal.
The increasing demands for Eurozone stability and more bailout packages fueled the political polarization across Europe and gave birth to ultra-nationalist parties, which manipulated the situation in the name of defending national sovereignty
The no-deal might bring the two severe consequences that can steal Britain’s chance of new trade deals with strong economies of the European union based on its own terms. Firstly, Britain will lose the control over rules and trade terms especially while dealing with the strong partners. Secondly, if the proper rules are not defined, then the country might plunge into political chaos, smearing anger protests and large-scale demonstrations like Gullet Jaunes in France. Moreover, the no-deal with the European union will cost Britain a net worth of $150 billion, which Britain is obliged to pay to the European union on the wake of no-Brexit deal.
On the other hand, European Union will set-off its own economic policy towards Great Britain that could further inflamed the post-Brexit situation in Britain. For instance, if the European union decided to impose tariffs and restriction on British companies will reduce their net profits. Likewise, if the European decided to impose tariffs on imports, then it will increase the prices that could cause inflation in Britain. Another issue is the issue of borrowing because Britain borrows more than it saves; its current account deficit is equal to the 4 percent of its GDP. Thus, higher interest rates would cause a severe blow to the businesses borrowing money from the European banks. According to IMF estimates, Britain will lose 5 percent of its GDP by the end of five subsequent years. Moreover, if Britain leaves the European Union without any deal both European Union and World Trade organization would enforce hard borders between republic of Ireland and six counties of the North Ireland.
Although, on January 29, parliamentary vote on Brexit, there have been some breakthrough as the liberal newspapers across Britain hailed it “May’s victory” but that breakthrough came with a critical condition that Theresa May must persuade the European Union negotiators to remove “Irish backstop”. Consequently, the conditions set by the British MPs made the Brexit negotiation much chaotic because the European negotiators after scratching their heads for nearly two years will never agree to this condition. Basically, it is the backstop, under which Britain will remain part of European custom union that will keep the borders open for trade.
In a nutshell, the dream of Brexiters was to see Britain as only a part of the European single market by crushing the Free movement in order to defend Britain’s national sovereignty was just a dystopia while Theresa May’s dream for Britain to remain part of a European custom union is simply a schizophrenia-Brexit-Schizophrenia.
Published in Daily Times, February 12th 2019.