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Ireland's political and cultural magazine
7 8 September 2016
INTERNATIONAlINTERNATIONAl
B
rexit will probably never happen. The
news narrative has become one of
delay, with the odd Brexiteer keep
-
ing the flag flying in the Daily
Telegraph but a lot of stasis. Next
year, there will be many stories about the major
problems that Brexit will cause. Negative eco-
nomic effects will loom. Village editorialised in
its last edition that no one who understands
history or economics could vote Brexit and cer-
tainly it does undermine fundaments of what
many regard as political imperatives.
There will be surprise at the huge range of
problems involved in taking EU law out of UK
law given that an integration of laws has been
underway for over forty years. Gradually, a
wide-ranging complex vista of Brexit problems
will emerge across British social and economic
life; for instance, residency, travel, employment
laws, training, education, research, and also in
business, whether trade, competition, employ-
ment or any of the recesses into which the EU
has long delved.
The probable break-up of the UK following
Brexit will inevitably continue as an issue in the
media background, because, very probably if
Brexit happened, Scotland would become inde-
pendent and join the EU. Democrats could not
ignore if 5.3 million EU citizens in a separate
national area, were expelled from the EU
against their collective will.
Furthermore, there must be a significant
chance that the court challenges to unilateral
UK Government action on Brexit will succeed
and force an early vote in Parliament on the
issue, causing further delay and uncertainty
about Brexit.
But behind the scenes, there are other unre-
ported factors. We don’t know what Theresa
May and Angela Merkel said to each other and
it would be very hard to guess.
We can be much more confident about what
the current American Government from Obama
to the State Department to the military are
saying: don’t leave the EU. While Brexiteers will
brush off the partisan advice of a lame-duck
administration, the US will have a new Presi-
dent-elect on November 9th next. Assuming it
is Clinton, she will reiterate in private the insist-
ence of the current administration. British
Government Ministers, officials and army gen-
erals will be left under no illusions by their
American counterparts that Brexit is a no-no
from global strategic and security perspectives
and will have to be averted by whatever means.
Initial post-Brexit reporting in English lan-
guage media emphasised how the UK was in a
strong negotiating position because of its trade
deficit with the rest of the EU and that Germa-
ny’s Angela Merkel wanted a reasonable
agreement for the UK, partly because of German
exports to the UK. In fact, Brits will continue to
buy their BMWs. In reality, the dominant market
focus of big German exporters is growth of their
Asian sales, especially China. More seriously
for the UK, Germany, including Chancellor
Merkel herself and her closest political allies,
is increasingly indicating that it will take a
tough negotiating position with the UK on Brexit
and that it strongly supports a united EU posi-
tion towards the UK. Merkel indicated this twice
recently including at a high-profile meeting with
France’s Hollande and Italy’s Renzi.
Even more ominously for the UK, Merkel
appears to be supporting an EU strategy to
restrict the ability of City of London financial
services, especially banks, to operate in the EU
after Brexit. That is by far the UK’s most impor-
tant exporting business. Michael Fuchs, deputy
leader of Merkel’s CDU party, said recently that
banks operating in the EU must be subject to EU
supervision and can’t be run out of London
when the UK is no longer a member. “I really
think this is something that’s not negotiable,
the so-called banking passport”. Germany and
France greatly resent the extent of the economic
gains and influence that the City of London gets
from selling financial services throughout the
EU. In the event of Brexit, they would try and
repatriate as much financial business activity
as possible to Frankfurt and Paris. Moreover,
the issue makes a powerful bargaining chip.
There will probably be an often lengthened
delay before the UK triggers Article 50 and
formal Brexit negotiations, if it ever does trig-
ger it. Even if it does, Brexit is still very unlikely;
mostly because it would cause too much
damage to the UK economy and disruption to
social and economic life in the UK. The end
result will most probably be an agreement that
the UK will remain in the EU, with the UK’s best
hope being to maintain the favourable agree-
ment that David Cameron negotiated in
February 2016. In reality, internal British, Euro-
pean and global politics all mean that Brexit is
a madness that will have to be averted.
Brendan Lynch is an Economist and former
stockbroker. He is the author of 'EMU: Ire-
land's Dream Start - The Political and
Economic Impact of EMU on Ireland' (2008).
Bremain
Brexit poses so many
practical difficulties that
it will not happen
by Brendan lynch
There will be surprise at the
huge range of problems
involved in taking EU law
out of UK law given that
an integration of laws has
been underway for over
forty years
