I have been hearing a lot of pundits talk about how the UK election changes the outlook for Brexit. And a lot of this stuff is misguided because the election doesn’t change the outlook in any discernible way. Here’s why.
First, let’s look at EU goals and negotiating strategy. Now, whatever you think of Yanis Varoufakis as a negotiator, his account of his EU negotiating experience is instrumental in understanding how this will play out. A recent interview with economist Steve Keen gets the broad strokes exactly right. He says:
It just shows the brutality of European Union officials. Not only do they dismiss what happens in elections over the whole European Union and say we’re going to go on with our programme regardless of what people vote, literally at one moment Wolfgang Schaueble says that elections or politics cannot be allowed get in the way of economic policy. In other words, you cannot hold a vote that impedes the programme we have chosen to implement.
Conclusion: The UK vote won’t change the EU negotiating position because the EU’s first goal is to make Brexit as onerous as possible in order to dissuade others.
Given that first goal, the only logical basis of negotiating is to understand what is feasible and what is not. Under EU law, there are four freedoms that are synonymous with access to the single market. And EU officials have said repeatedly that they will not sacrifice the inviolability of those freedoms, even in the short term. We’re talking about:
- The free movement of workers.
- The free movement of goods
- The free movement of capital
- The free movement of services
Conclusion: You can’t have one of the single market’s Four Freedoms without the others – even in the short term, even in an interim agreement. They are a package deal.
So the most binding constraint to negotiation is simple, really. Either you accept all four freedoms in full or you don’t get access to the single market. This is true irrespective of what happened in the UK election last Thursday. And so the mandate Theresa May was seeking had nothing to do with the EU and everything to do with internal party politics and opportunism in trying to extract a bigger majority at a time she believed Labour was vulnerable.
Bottom Line: Talk of a soft Brexit is rubbish. The UK Brexit vote last year was all about restricting the first of the four freedoms. That is wholly incompatible with access to the single market on both a permanent and interim basis. Either the UK accepts the four freedoms and unrestricted immigration from the EU and the single market countries or it forfeits access to the single market.