In the 1935 classic movie “A Night at the Opera,” Groucho (alias Otis B. Driftwood) is dining in style when the waiter brings him the bill. “Nine dollars and 40 cents? This is an outrage,” Groucho explodes, passing the check to his blonde companion as he walks away from the table. “If I were you, I wouldn’t pay it.”
Britain’s EU partners are quietly preparing for the possibility that the U.K. government may walk out of negotiations on divorce from the European Union within the next year, once Brussels’ chief negotiator Michel Barnier presents a politically toxic exit bill between €50 and €60 billion and refuses to discuss any future trade relationship until London commits to paying its dues.
In this scenario, May, who has done nothing to prepare British voters for the idea that the U.K. faces large financial liabilities, might kick over the table and seek a parliamentary confidence vote, putting divided opposition forces on the spot, then possibly use public anger at the EU’s demands, whipped up by Euroskeptic media, to trigger an early general election.
Opinion polls suggest her Conservative party would romp to a landslide win, while the opposition Labour party would be split over its leader Jeremy Corbyn’s order to support Brexit. Few politicians are likely to pluck up the courage to argue that it is right for a departing U.K. to hand over billions to Brussels to meet commitments made long ago on long-term investment programs, regional aid and the pensions of British EU employees.
Pro-EU forces would be weak except in Scotland, where the Scottish Nationalist Party’s grip on power would likely be cemented. The prime minister might then have a stronger domestic hand, though less time, to return to the talks.
“If we are still at loggerheads at the end of this year or shortly afterward, with Brexit supporters railing against the bill, a walkout is highly possible,” said a senior Brussels diplomat close to preparations for the negotiations. “We have to be ready for that. We need to start preparing politically and economically for the possibility of an exit without a deal.”
A national diplomat who attends meetings of so-called sherpas of Britain’s 27 EU partners said there had been informal discussions among some of those senior national officials about the possibility of a British walkout, though not yet active contingency planning.
“Michel Barnier has softened his opening position to try to avoid such a clash by seeking agreement first on the principles underpinning the divorce settlement before any numbers are put on the table,” the diplomat said. “He also intends to make an early start on the rights of EU citizens in the U.K. and British citizens in the EU, an area of strong British interest.”
Diplomats involved in preparing for the Brexit negotiations are not authorized to speak for attribution because of the sensitivity of the issue.
With the talks set to start in late April at the earliest, British officials say any idea of a walkout is just speculation. But they pointed to May’s statement in her Lancaster House speech to EU ambassadors in January that “no deal for Britain is better than a bad deal for Britain.”
Whether that is a bluff or a growing expectation, Brexit Secretary David Davis told the cabinet this week to start preparing for what he called the “unlikely scenario” of leaving the EU without any agreement, a Downing Street spokesman said.
Astonishingly, the government’s white paper on Britain’s exit from the EU makes no mention of any legacy financial liability. While May understandably does not wish to show her hand in detail before the negotiation, the failure to acknowledge any charge for ongoing programs and commitments is setting the public up for a shock. All the more so since Brexit campaigners infamously promised voters that £350 million would be coming home every week to bolster the ailing National Health Service.
The only reference to payments in the 79-page official document comes in paragraph 8.51 on page 49: “As we will not be members of the single market, we will not be required to make vast contributions to the EU budget. There may be European programs in which we might want to participate. If so, it’s reasonable that we should make an appropriate contribution. But this will be a decision for the U.K. as we negotiate the new arrangements.”
That’s a far cry from expecting a multi-billion-euro bill for ongoing liabilities, some of which Brussels calculates will last another decade or more, involving investment projects which the U.K. approved in long-term EU financial plans well before the June 2016 vote to leave.
As former Prime Minister John Major said on February 27: “The bill will be substantial. Billions, not millions, and very unpalatable. It will come as a shock to voters who were not forewarned of this even in the recent white paper… When you leave any club, you’re obliged to settle your debts, and that is what the EU is going to expect the U.K. to do.”
Restaurant or club analogies have their limits, of course. After all, Britain partly owns the club, and diplomats say Barnier is now willing to accept that the U.K.’s share of EU assets should be offset against its left-over liabilities in the exit bill, which could be paid off over several years.
But some member states are pushing back against this approach ahead of a decision by the other 27 EU leaders in April on his negotiating mandate. “On this point, Barnier is not the toughest guy in town. He understands that money is a very sensitive issue and if you overdo it, you’re running quite a risk of a walkout,” one senior continental diplomat said, noting that British public reaction to the reported exit bill had been muted so far.
May, who endorsed the Remain camp in the referendum but kept her head down, appears to be cornered politically by supporters of a hard Brexit in her Conservative party and the media. She has been unable to stop Foreign Secretary Boris Johnson gratuitously offending her negotiating partners, as he did before an audience of international policymakers at the Munich Security Conference by depicting Brexit as a “liberation” from the tyranny of EU customs rules.
Johnson’s comment, and his previous comparison of French President François Hollande to a Nazi prisoner-of-war guard inflicting “punishment beatings,” illustrate the degree to which nationalist one-upmanship has blinded the British to the realities of the negotiations.
After six months of inwardly focused wrangling on the U.K.’s Brexit wishlist with scant reference to the legal and political reality across the Channel, the British government is set to start the talks with delusional public expectations of a best-of-all-worlds trade deal at little or no cost, with strict immigration controls and no role for the European Court of Justice.
Things are unlikely to go smoothly. After a few months of shadow boxing and deadlock at the table, May will have to choose between admitting to the British people that she and the Brexit campaigners misled them on the bill and on future trade ties — or creating a political firestorm to disguise the unpalatable choices facing the U.K.
Like Greek Prime Minister Alexis Tsipras, who used national pride to persuade his countrymen in a 2015 referendum to reject the creditors’ bailout terms, only to turn on a dime and accept a climbdown within weeks with a fresh electoral mandate, May might need her moment of hollow defiance before she writes the inevitable check to Brussels.
Author: Paul Taylor