Brexit is viewed with grave apprehension here in Ireland – and with good reason. It would leave the Republic a member of the EU – bound, theoretically, on a journey of “ever closer union” with the other EU members – while our closest political ally in most EU matters and our greatest trading partner, the UK, departs on a radically different path.
A kind of political and constitutional San Andreas Fault would begin to open along the land boundary with Northern Ireland – with the Good Friday Agreement left straddling that fault-line. But it is not so clear that a gaping economic and trading gap would suddenly emerge – for reasons I will elaborate here.
It could, of course, be argued that the “Remain” deal done by Cameron, which exempts the UK from the process of “ever closer union”, will in any event create that fault-line fracture at the Border even if the UK votes to remain in the EU.
But Brexit would turn that hairline settlement crack into a gaping political divide that would be difficult to camouflage or paper over.
Some UK bookmakers are, however, offering quite long odds (as much as 9/4) against a “Leave” vote and very short odds (as short as 2/7) on a “Remain” decision on June 23rd.
If the “Leave” voters turn out in greater numbers on the day than “Stay” voters, what will happen? Let’s look at that question.
Article 50 of the Treaty on European Union (“TEU”), as amended by the Lisbon Treaty actually envisages a Member State deciding to leave the EU of its own accord. There is, since Lisbon, an express constitutional right of State secession in EU law – we are not like the USA in that regard.
A Member State that decides in accordance with its own constitutional legal requirements to leave the Union is obliged to notify the European Council of its decision. There follows a period of two years at the maximum in which the Union negotiates the terms and conditions for the exiting State including its future relationship with the Union.
On the EU side any such exit deal must be negotiated by the Council acting on a QMV basis, with the prior approval of the European Parliament. This means that smaller states will not have a veto. Failing such an agreement, the Treaties cease to apply to the exiting Member State two years after the original notification.
The two year negotiation period can be extended by mutual consent, but only with the unanimous consent of the Council.
This means that those remaining Member States with a QMV majority are working against a deadline beyond which every member state can veto an agreement.
The issues that have caused most acrimony in the UK’s Brexit debate are those relating to the subsequent relationship between the UK and the EU. Scare stories and self-conscious whistling past the graveyard rhetoric abound on either side of the debate.
Of course it is in the interests of the “Remain” camp that the blackest possible picture of a post-Brexit EU-UK is painted.
Some in the “Remain” camp make Cassandra-like predictions that the EU would try to discourage any further secessions by Member States by offering the UK a punitive “rotten deal”.
While avoiding simplistic optimism, there is, I think, every reason to believe that both the EU and the UK would wish to negotiate the closest possible post-Brexit relationship in relation to trade, travel and security matters.
To avoid a new and immediate economic downturn or depression, both the UK and the EU would badly need and want to maximise mutual access to markets, trade and economic activity. The “Remain” may wish to downplay that reality for now. But a new realism and pragmatism based on the self-interest of the EU states would force such an outcome if the “Leave” side wins on 23rd June. In any event, most of the EU acquis that is part of UK domestic law would facilitate very close trading and economic ties post Brexit. Those Leavers itchy to light a regulatory bonfire for the acquis about which they can dance will find that it could be an expensive conflagration.
Likewise, there is a total political imperative for both Ireland and the UK, neither of which is a Schengen member, to renegotiate a Common Travel Area for these islands. There will in reality be no Border posts on this island. There might be a paper barrier to trade, depending on the exit deal negotiated. The EU will not want to punish Ireland for a UK Brexit. So pragmatism will dictate common-sense solutions. And since Ireland’s consent to any extension of the two year period for an exit agreement, we will not be without leverage in the case of protracted negotiations. I predict no major difficulty in maintaining the substance of the status quo.
None of this is to imply that there is no serious economic risk for Ireland; but the economic consequences could be double edged. Some UK-based businesses might migrate to Ireland to remain within the EU. Ireland’s biggest risk is on the non-economic, political and constitutional issues.
Three further points need to be made.
Firstly, the requirement for Council unanimity under Article 50 of TEU for any extension to the two year period for negotiating an EU/UK Exit Agreement could result in other Member States advancing self-interested national demands as the “price” of that unanimity”. That is a known “unknown” which cannot be ignored. Issues such as Gibraltar and the UK sovereign base areas in Cyprus might pop up as road-blocks in that scenario. So the pressure will be on for an early agreement.
Secondly, the rising tide of disillusionment with the EU across Member States may yet create a demand for more widespread reconsideration of the “ever closer union” clause in TEU.
The actual wording of that recital in TEU is:
“RESOLVED to continue the process of creating an ever closer Union among the peoples of Europe, in which decisions are taken as closely as possible to the citizen in accordance with the principle of subsidiarity”.
Is that somewhat contradictory gobbledygook really any mandate for a federal super-state? What does it mean? The principle of subsidiarity is supposed to mean that decision-making is centralised only where absolutely necessary.
If the UK already has the right to have an opt-out on “ever closer union” incorporated in the next Treaty, will other countries join the queue or amend the clause to suit everyone? How can there be “ever closer union” at all, if some of the component parts of the Union are not involved?
Thirdly, the current quite dishonest process of pretending that Turkish admission to the EU is still on the cards for geo-political and migration reasons may be finally exploded. A “Turkey In, Britain Out” EU is a very different concept from the expanded EU of 2004 and will not attract huge support – especially in Northern Europe.
Lastly, the curious thing about the present bookies odds on Brexit favouring a “Stay” outcome is that far more individual bets (83%) are being laid on Britain leaving than staying. Is that ominous? Or are the odds being offered against Brexit too generous? Or is “big money” going one way while “small money” goes the other way? Is “Remain” the wish of the wealthy?
The size of your wallet doesn’t affect the weight of your marked ballot paper. But care for your wallet may yet decide the issue.