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Brexit

Don’t call Brexit a divorce – it will be much, much worse

Niall Ferguson expects an acrimonious, protracted British withdrawal from the EU that will rival the schisms of the past

PUBLISHED : Monday, 03 April, 2017, 2:32pm
UPDATED : Monday, 03 April, 2017, 8:49pm

Thank God. Never again will those impossible people on the other side of the Channel be able to interfere in our affairs. Now we can take back control and sit back and watch their union fall apart. Those, of course, were the sentiments of European leaders last Wednesday as they opened the envelope containing Theresa May’s notification of Britain’s intention to withdraw from the European Union.

Publicly, Donald Tusk, the president of the European Council, expressed his regret. Jean-Claude Juncker, the president of the European Commission, called Brexit a “tragedy”. Privately, however, I suspect they both punched the air when the letter from London arrived, just as Boris Johnson did when he inadvertently won last June’s referendum.

Until now, nearly all the debate on Brexit has focused on what it means for the UK. But I begin to think the real significance of Brexit may be what it means for the EU.

Brexit is a huge blow – for the UK, not the EU

“This is my first divorce,” said Tusk on Friday, “and hopefully the last one.” I drew the same analogy back in June, but I think it has outlived its usefulness. Last month, May said she would “prefer not to use the term of divorce from the EU because very often when people get divorced they don’t have a very good relationship afterwards”. I take a different view. We should stop talking about divorce because Brexit will be much more protracted and expensive than the worst imaginable divorce.

“Schism” is in fact le mot juste for Brexit, recalling as it does the great division between Western and Eastern Christianity in 1054, as well as the period between 1378 and 1417 when there were rival popes in Rome and Avignon. The defining characteristic of schisms is that they are drawn-out and bitter – and the more arcane the points at issue (such as when Easter should be celebrated, or the precise wording of the Nicene Creed), the deeper the schism becomes. By comparison with a schism, even the most acrimonious divorce is amicable, because the points at issue are quite simple: custody of young children, shares of property.

Countdown to Brexit: how Britain’s divorce from Europe could play out

As Rome was to past schisms, so Brussels is to this one. It has the upper hand because it made the rules. Article 50 of the Lisbon treaty was drafted quite deliberately not merely to deter countries from leaving the EU but to make sure that if any tried to do so, the effect would be to discourage others. Observe how this works.

The EU is now freed from what has long been the principal obstacle to further integration: Britain

Contrary to last year’s theory that Britain would be the first of many dominos to fall out of the EU, the precise opposite is happening. Contemplating Britain’s predicament, continental voters are backing away from full-blown secession from Europe. I predict there will be no Nexit, Frexit, Grexit or any other form of exit. Quite the opposite. For the EU is now freed from what has long been the principal obstacle to further integration: Britain.

It is easy to forget that Britain was always a thorn in the side of the European federalists, most obviously during the Maastricht negotiations. But now Britain is leaving, which means not only that the brake on federalism is removed, but also that the EU27 can unite in giving the UK a hard time.

On the latter issue, I fear, the Brexiteers have always been overly optimistic. May’s letter last week proposed that talks about Brexit proceed simultaneously with talks about the new “deep and special partnership” she would like Britain to have with the EU.

But the draft European Council guidelines released on Friday rule this out. There will be no discussion of the future relationship until “sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal”. The EU will insist on collecting 60 billion (HK$497 billion) from Britain to “cover all legal and budgetary commitments as well as liabilities”. Any transitional arrangement on trade will require the UK to accept “existing union regulatory, budgetary, supervisory and enforcement instruments and structures”.

‘Very well, alone’ is a fine Churchillian phrase. I only hope we can live up to it

Meanwhile, the “rEU”– a silly abbreviation for the rest of the EU – resumes the march to “ever closer union”, at least for the members of the euro zone. The European Systemic Risk Board, led by the European Central Bank’s president, Mario Draghi, is already working with Valdis Dombrovskis, a commission vice-president, on a plan for European “sovereign-backed securities”, the first real step towards EU-backed bonds. If Emmanuel Macron wins the fast-approaching French election (likely) and Martin Schulz manages to topple Angela Merkel in Germany (possible), it will be full speed ahead to the United States of Europe.

Will the federalist project ultimately fail, as British eurosceptics have long predicted? Maybe. Juncker personifies a decadent political elite that certainly deserves to fail. But it is hard to believe that a more federal euro zone will be worse than the halfway house of monetary union without fiscal union.

What would further continental integration mean for Britain? The optimists envisage an economic version of 1940, with a global Britain striking new free trade deals with the world. “Very well, alone” is a fine Churchillian phrase. I only hope we can live up to it. If those trade deals do not materialise, I have a nasty feeling that the real domino effect will be here, beginning with a Tory battle over the arcane details of the great schism and culminating in a narrow Scottish vote to dissolve the union and a return of the Troubles in Northern Ireland.

Mutual understanding key to smoothing Brexit talks

Those who argued for Brexit promised that the schism from the EU would lead to heaven rather than hell. Having argued against Brexit before the referendum, I said in December that I now understood why so many British voters had opted for it. The EU had performed so dismally in recent years that “Get me out of here” was a legitimate response. But, even as I recanted, I also said that I still expected the process of Brexit to be drawn-out and bitter. Nothing that happened last week has changed my mind about that.

It took 39 years to resolve the split between Rome and Avignon. The split between Roman Catholicism and Orthodoxy persists to this day. Schisms are like that. We have now begun the process of exiting the EU. Who knows when we shall exit the schismatic process that is Brexit itself?

Niall Ferguson is a senior fellow of the Hoover Institution, Stanford