Mark Gongloff/ Bloomberg: Brexit solution:
It's time for a second referendum
Theresa May walks away.
The best outcome is not leaving the EU at all.
Time to Head for the Brexit Exit
Watching the Brexit debacle is like watching a horror movie where one obvious smart move — don't go into the basement! — would save everybody a lot of trouble/death, but the characters keep doing the wrong thing.
The Brexit horror show was action-packed today, with Prime Minister Theresa May barely clinging to her job after cabinet members quit in protest of her tentative Brexit pact with the EU. Now she faces long odds in getting Parliament to approve that deal. She argues it's the only alternative to a no-deal Brexit, which would be economically apocalyptic. But there is actually a third, far better alternative — neither fleeing to the spooky attic of no-deal Brexit nor the dangerous basement of bad-deal Brexit, but to the blissful freedom of not Brexiting at all, Bloomberg's editors write. May, or her lucky successor at 10 Downing, should admit the Brexit dream must die and allow a second referendum; Europe should give the U.K. extra time to work it out, the editors write.
And make no mistake: May's Brexit deal is bad, at least for Britain. It's great for the EU, writes Leonid Bershidsky , but that only makes it far less likely to pass parliamentary muster. And that makes a disastrous no-deal Brexit more likely, which would hurt the EU, too. It might want to bend a little more, Leonid suggests.
Ousting May would make some Brexiters feel better. But it won't solve the U.K.'s main problem , Therese Raphael writes, which is that Brexit itself is a dilemma with no good solutions. Even the referendum do-over is fraught with obstacles and potential risks, Therese notes. But as it is, Britain is being hacked slowly to pieces.
Bloomberg Editorial Board: May's Brexit deal is not the answer
U.K. Prime Minister Theresa May announced Wednesday that she has secured her cabinet's support for her plan to leave the European Union. The choice now, she said , is her deal, “or leave with no deal, or no Brexit at all.” Put that way, the right choice — the only sane choice — is more obvious than she perhaps intended: no Brexit at all.
The terms of May's deal prove the folly of the whole endeavor. Support for Brexit in the referendum of 2016 was narrow; for months, emerging details about what quitting the EU would mean have been changing minds. May and her cabinet have kept going regardless. This sleepwalking to disaster needs to end. Parliament should reject the plan, and, with or without May as prime minister, press for a second referendum to reverse this historic error.
Few dispute that May's deal would damage the economy, in particular by removing services (by far the country's biggest economic sector) from Europe's single market. It would also burden businesses of all kinds with persistent uncertainty, by leaving longer-term trading arrangements with Europe unsettled. To justify these and other losses, Brexit supporters had hoped for greater control over the country's affairs — but the deal provides the opposite. Even limited membership of the single market, which the agreement includes, involves EU control across a wide range of policy — and after March next year, Britain would lose its say in what those policies should be.
Diminished economic prospects and diminished sovereignty: The combination enshrined in May's draft agreement looks indefensible. It's no longer just Remainers who think that staying in the EU would be better than this. Many Brexiters agree.
The toxic compromise that May has extracted from Europe's negotiators has only one justification — that it's better than no deal at all. To be sure, avoiding the calamity of a chaotic no-deal Brexit next March is essential . But this can be done without May's plan, if Britain's government steels itself to admit that Brexit was an error, and Europe plays its part in allowing that mistake to be corrected.
If Parliament rejects the plan — as it should, and as it seems likely to — May or her successor ought to declare Brexit a failure and call a second referendum to confirm the country's wish to remain in the union. Crucially, Europe's leaders would then need to say that they'd welcome this development, that they'd grant the time it would require, and that they'd impose no hard Brexit on schedule next March. Even if it were too late to prevent the U.K. formally exiting at that point, transitional arrangements could be made to ensure no interruption to trade, pending the U.K.'s resumption of membership.
Granted, rejecting May's plan involves risk. There'd be further delay and uncertainty; the Tory government might fall; new elections might install a Labour government whose views on Brexit aren't clear; and referendums, as the Brexit farce has proved, don't always go as expected. Even so, the main point stands: May's universally disliked plan is not the only way to avoid a chaotic Brexit. As the prime minister herself said, there's another option.
Leonid Bershidsky: The Brexit deal is just too good for Europe
If the British parliament throws out the deal that Prime Minister Theresa May's government has negotiated with the European Union, it will be most regretted in Brussels, because the deal in its existing form essentially insulates Europe from most of the Brexit fallout.
There's a reason Donald Tusk, the European Council president, hurried on Thursday to call a meeting of EU leaders for Nov. 25 before there was any clarity on whether the deal will survive attacks from all sides in the U.K. As Tusk said, it's always been the position of the EU that Brexit is a lose-lose proposition and any negotiations can only be about damage control. But the draft agreement isn't at all bad for Europe.
The deal is built to make sure European companies, notably German carmakers, don't lose an important market and don't need to revamp their supply chains. According to the documents released on Thursday night, business gets a triple guarantee.
First, there's the transition period until the end of 2020, which can be extended indefinitely and which essentially keeps the U.K. in the EU for all purposes except decision-making.
Second, there's the backstop to avoid a hard border in Ireland, to which U.K.-EU relations revert if the transition period isn't extended. It's almost the same deal as the one Turkey has with the EU, imposing on the U.K. pretty much all the bloc's goods trade rules plus some 25 pages of “level playing field” regulations that make sure Britain doesn't try to out-compete its former partners by setting lower environmental, labor, state aid, antitrust and other standards.
Third, there's the future economic relationship that's supposed to “build on the single customs territory” between the EU and the U.K. No version of a customs union is dangerous to goods producers.
Brussels' losses from the deal are limited. Unless the transition period is extended, it stands to lose some 13 billion euros ($14.7 billion) a year in U.K. contributions and save about 7 billion euros a year it's been investing in the U.K. Other than that, it's not so terrible. For example, fishing fleets from EU countries will have less opportunity to fish in U.K. waters (although they probably won't be kept out entirely). Equal access to U.K. public procurement will be lost to EU firms, although that might be temporary. Europe also stands to lose some of the close law enforcement and security cooperation with the U.K., although new arrangements will almost certainly be made.
There are gains, too. More precarious access for U.K. finance firms to the EU will force them to build strong continental bases. The end of the free movement of people between the EU and U.K. can also benefit Europe. With less opportunity to emigrate, eastern European nations could get a respite from debilitating population outflows. Latvia would like to lose fewer people to the U.K., and so would Poland. Germany, with unemployment at historic lows and a shortage of qualified workers, could benefit if migrants go there instead.
But perhaps the best thing about the deal for the EU is that any member country can look at the Brexit documents and not find a single reason why it might be worth the trouble to quit the bloc. Europe's chief negotiator, Michel Barnier, has crafted an effective deterrent to copycats.
The problem, of course, with the documents being so good for Europe is that they're so bad for the Brits. Guenter Verheugen, who served as a European Commissioner for more than a decade, wrote on Friday that playing to win every point in the Brexit negotiations wasn't necessarily the best strategy. “Anyone who presses the British into an EU corset that is too tight today will lose any chance of their coming back voluntarily,” he wrote .
So tight is the corset that there's an extremely high chance of May's deal being shot down by U.K. lawmakers. Yet her deal would be nigh on impossible to renegotiate for any other British prime minister, given the EU's position. As such, there's still a real danger of no deal at all (unless the advocates of a second referendum score an unlikely victory). In a no-deal scenario, losses for European businesses would be immediate and brutal.
Should that happen, Barnier will have to shoulder his share of the blame, along with the EU leaders who gave him such a rigid set of instructions. There's an old wisdom about playing poker with a fixed group of partners: If you win all the time, eventually no one will want to play with you. That's the trap EU negotiators have set for themselves.
Therese Raphael : The problem isn't Theresa May. It's Brexit
If not Theresa May's Brexit deal, then what?
That's the question British lawmakers face if they reject the divorce agreement the prime minister negotiated with the European Union. MPs may find some answers — but none will be satisfying, and it's unlikely any would command a parliamentary majority.
On Wednesday night, May announced that her cabinet had collectively agreed a deal that would ensure Britain's orderly departure from the EU. The agreement would allow the country to limit immigration, one of the Brexiters' key demands.
By Thursday morning, the deal was on its deathbed.
Brexit Secretary Dominic Raab slept on it and then became the second holder of that office to resign in protest of a deal he supposedly helped to negotiate. That was followed by a cascade of other resignations lower down the ranks. There is a good chance now that her deal will be rejected by Parliament and her leadership challenged by members of her own party. May herself hasn't conceded anything: She spent some three hours in Parliament Thursday defending her agreement and calling on MPs to act in the national interest.
Her plan is undeniably flawed, the timing awful, and the prime minister herself made mistakes along the way. And yet the chief problem here isn't any of these. It is that the country's lawmakers can't agree about how they should honor the 52-48 percent referendum vote to leave the EU.
Saying “no” is tempting. Each group of opponents can say they stood firm at their red lines.
For the Democratic Unionist Party, the small Northern Irish party that has propped up May's minority government, the fact that the deal allows Northern Ireland to be treated differently from the rest of U.K. is unacceptable as they see it as a violation of the country's constitutional integrity.
The opposition Labour Party complains the deal is too great a compromise to be acceptable. It doesn't guarantee access to EU markets sufficiently, or protect workers' rights for starters.
Brexiters in May's own party are unhappy that the EU will have a veto over whether Britain leaves the backstop arrangement keeping it in the customs union and that the European Court of Justice will remain the final arbiter of EU law.
But none of these complaints amount to a positive proposal for anything on which a majority of MPs could agree. Those who reject May's deal need to have a better idea with which to replace it.
There were always two alternative routes, but neither commanded a parliamentary majority. The one preferred by Brexiters is a free trade agreement, with some enhancements to reflect the closer U.K.-EU relationship, using the European Union's trade deal with Canada as a base. And yet that option doesn't solve the Irish border question and imposes more costs to the U.K. economy than the closer arrangements on offer.
Another alternative was closer cooperation in the form of a Norway-style arrangement by which Britain remains inside the single market, but outside the customs union. It would be free to negotiate its own trade deals. This, the least economically damaging form of Brexit, had several insuperable problems, not least that the U.K. voted to leave Europe in part to regain control over immigration and the single market requires accepting the free movement of labor.
Neither of those options is any more feasible now. Crashing out of the EU without a deal would be unconscionable and it is unlikely Parliament would allow it. That leaves two further outcomes: Allowing a popular vote, or making amendments or concessions that might make the existing agreement palatable.
May was repeatedly asked about a second referendum in Parliament on Thursday — and rejected it. There is growing support for the idea, but it presents several obstacles: Should voters be asked if they want to remain in the EU as one option? Brexiters would consider that a betrayal of the original referendum. What happens if the vote is in favor of staying by a similar margin? And what if voters favor no deal?
Surely Parliament would be unlikely to accept the latter; but neither will Brexiters accept a vote between a deal they hate and remaining in the EU, something they hate even more.
May hasn't quite run out of options: She could make further concessions, such as allowing Parliament a say over the treaty governing the future trade relationship with the EU, something which will be negotiated after March 29, 2019. That might buy some time and may satisfy some of the softer opponents to her deal. But her position of leadership is in jeopardy.
There are no easy ways out. Whatever Britain decides, it will have to do so by consensus, and that's what all sides have yet to come to terms with. Replacing May might give some Brexiters a degree of satisfaction; that's why someone invented punching bags. But it won't help. They will still be faced with an uncomfortable truth: The problem here isn't May or her agreement; it's that Brexit forces some uncomfortable choices on the country.
Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal. Petroleumworld does not necessarily share these views.
Editor's Note: This article was originally published by Bloomberg, Nov. 15, 2018. All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld.
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