Bloomberg: Britain is still dithering over Brexit

Bloomberg View

In her Brexit speech last week, British Prime Minister Theresa May faced three main challenges. She met one and fell short on the other two – and as a result, the threat of a disorderly Brexit continues to mount.

The best part of May’s speech was its tone: Positive and friendly, she offered Europe a close future partnership, stressing modesty and mutual interests. Given the acrimony that has marked Brexit negotiations thus far, this is no small achievement.

When it got into specifics, however, the speech faltered. Brexit negotiations, which face a deadline of March 2019, have been paralyzed by a dispute over exit liabilities. May told Britain’s EU partners they would not be forced to “pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The U.K. will honor commitments we have made during the period of our membership.” This acknowledges that a substantial sum will be due, but it’s still too vague. One man’s “commitment” is another’s misunderstanding. And the reference to “the current budget plan” is another bone of contention – an offer on that basis will fall far short of the number that the EU has in mind.

The other sticking point May failed to address adequately was a transitional deal that would freeze existing EU arrangements until a new EU-U.K. pact can be concluded. May talked not of a transitional arrangement but of an “implementation period.” That implies there will be a plan to implement at the moment of exit. There won’t be.

In March 2019, Britain exits, and at that point talks on the long-term future partnership may not even have started. The two years May proposes for “implementation” of the new deal will probably be insufficient for the difficult negotiations to come, let alone for the subsequent execution of what, if anything, is agreed.

She did acknowledge that during her so-called implementation period, “access to one another’s markets should continue on current terms,” which is good. There’s no time for anything more complicated. But even just extending current arrangements is far from simple, and – given how slowly the EU makes decisions – the real deadline for agreeing the terms of exit is now only a year away.

What’s missing is a sense of urgency. Guided by her main political concern – to reassure her country’s Brexit hardliners that they aren’t about to be betrayed – May is still in the realm of big themes and broad ambitions. By now, she should have moved the U.K. past that.

The exit terms need to be settled at once, or else referred to independent arbitration – and British citizens must be persuaded to accept a number they will not like. A freeze of the current arrangements then needs to be agreed with no set limit on its duration. Many Brits won’t like that either. With all this done, the focus can shift to talks on the future partnership.

For now, making Brexit work is a matter not of big ideas but of small details. To avoid inflicting unnecessary damage on Europe and a shattering blow on Britain, May and her government need to move much faster.

© 2017 Bloomberg View

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