Tuesday, 22 January 2019

Remember, chaos suits Corbyn - but no deal suits others as well

While many commentators have been disparaging about Labour's unwillingness to enunciate anything like a clear policy on Brexit, or to embrace a second referendum, things are actually going well for Messers Corbyn and McDonnell. I suspect the last thing they wanted when they called the vote of confidence was to win it and precipitate a General Election. At least, not yet.

And the chaos - or at least uncertainty -  continues though, as I predicted, May has tacked towards her Brexiteer wing, not towards the soft middle group of MPs pushing customs union, Norway plus etc. None of which, of course, really amount to Brexit, so she can't head that way.

The games to see if the legislature, in the form of the backbench and opposition MPs, can wrest control of  the Parliamentary agenda from the exectutive, i.e. the government, still have to play out. But Wolfgang Munchau* says these shenaningans might not prove to be of significance and that the risk of a no-deal Brexit is higher than many think. His reasoning is that no deal is not the worst outcome for several major players. For May and the Tories no Brexit is worse. Corbyn might personally take that view as well, but more importantly a deal doesn't lead to the chaos that people like McDonnell have often advocated as a vital precursor for the revolutionary change they want to see. So no deal has more attraction for Labour (or at least the Labour leadership) than no Brexit.

Surprisingly, Munchau adds Leo Varadkar, the Irish Taoiseach to the list for whom no deal isn't the worst outcome. Now as no deal would probably be worse for the Irish economy than anyone else I was surprised by this. But I guess Munchau means for Varadkar personally, for political reasons. I can see that, if there has to be some kind of border, he could blame it on no deal. I'm not sure I see why that's not a worse outcome for Varadkar than no Brexit or a deal, unless it's a deal that the EU force on him. But the EU has been totally supportive of Ireland so far, why should that change?

No deal would be bad for the EU. Maybe not worse than the UK but still bad: many commentators have predicted that it would push the slowing eurozone economy into recession. Bad enough for German car makers and French wine and cheese producers - so not good for Merkel and Macron. But I could also imagine the Greeks, Italians and Spanish, who have suffered now for years in the vice of the euro, being very angry at Germans and French for messing it up if there is no deal. Munchau has said many times that the EU hasn't prepared for no deal because, in the EU, there's always a deal, even if it's at the last minute. Or a fudge, kicking the can down the road.

But there's no fudge available this time. Or is there? Muchau says that some pundits think that keeping the UK locked in the Irish backstop is contrary to Article 50, which says we can leave in 2 years. Indeed we do leave in 2 years, unless we withdraw Article 50, or there is an extension. The ECJ could even rule the backstop to be contrary to Article 50. Which would mean the other 26 could apologetically ditch the Irish.

I doubt this assessment is right. Keeping us locked in does seem against the spirit of Article 50. But if we have signed a new agreement of our own free will surely that creates new legal circumstances.

So it's not clear how the EU could pull a cat out of the bag at the last minute. And they haven't shown any inclination to do so at any point in the negotiation so far.

Which is why the default legal position, from both a UK and EU perspective, is no deal. Unless something happens between now and 29 March.

* Munchau's post "Groundhog Britain" was in his EuroIntelligence blog on 20 January

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