The BREXIT deal

Nick Sitter

Referendums are a notoriously risky tool for policy making and party management, writes professor Nick Sitter.

The deal that UK Prime Minister David Cameron and his EU counterparts hammered out on Friday February 19th 2016 was an important step in defusing the crisis over the UK’s potential exit from the European Union.

But it paved the way for more – and more serious – crises than it actually resolved.

Read more: The danger has passed in tje United Kingdom - for now

Cameron’s gamble

In the short term, Cameron’s gamble paid off. The deal he secured was longer on symbolism than on substance, but it gave him just about enough to justify campaigning for the “Remain” option in the much-vaunted referendum, now set for Thursday June 23rd 2016.

In contrast to many of the other crises the EU has been through lately, the crisis thus (at least, temporarily) averted was eminently solvable. The Prime Minister had indicated that without a deal, he would not campaign for the UK to remain in the EU.

As resolving the crisis was far more important to all the participants than any of the substantial policy issues at hand, the outcome surprised no one. But potential crises now loom for the Conservative Party, the UK and the EU as a whole.

Until February 19th, the BREXIT debacle had primarily been a matter of party management. Cameron took on the risk of a referendum in order to appease the party’s Euro-sceptic wing, and defuse the threat of the UK Independent Party.

Referendum is a risky business
But party management by referendum is a risky business. In 1975, Labour presided over a referendum that kept the UK in the then EEC. It then spent the next two decades out of office.
In 1972 (and again in 1994) its Norwegian sister party divided badly over a similar referendum, which kept the party more or less intact – but the country out of the EU.

On June 23rd, the ideal result for the UK’s ruling party would presumably be a resounding “remain” vote that killed off the question for a decade or two. This, however, is highly unlikely. Instead, Cameron’s gamble might well precipitate other crises, whatever the outcome of the referendum.

Potential crisis
The first, and least serious, potential crisis is the party political one. Even if Cameron wins the referendum, he might still lose the party.

Again, Norway offers useful insights. There, Labour managed to keep the party together after a divisive referendum, because the leadership could accept defeat and can take the issue off the agenda. Even so, it lost members and supporters to a Eurosceptic party, the Socialist Left (SV). It took more than three decades for the two parties to be able to cooperate in government.

The situation in the UK is comparable: win or lose, UKIP is likely to remain, either to defend a “leave” result or overturn a “remain” vote. The same holds for about half of the Conservative MPs And in the event of a “remain” vote, there is no reason to expect faster reconciliation among UK Conservatives in 2016 than in the Norwegian parties in 1972.

Exit the EU
The second risk of a new crisis is linked to the possibility that the referendum might oblige the government to exit the EU and negotiate a form of “EU membership light”.

For all the differences between Norwegian (access to the Single European Market though European Economic Area agreement) and Swiss (market access through a series of bilateral treaties) models, this basically all amounts to the same: paying a hefty fee for access to the Single Market, both in the form of cash transfers and in the shape of accepting all relevant SEM laws, existing and new – without any formal influence.

If someone wanted to develop a formula to split the Conservative party and boost UKIP, surely it would look something like this.

Moreover, although Norwegians, Icelanders and Liechtenstinians might be forgiven for hoping that bringing the UK into the EEA might strengthen that organization as a counterweight to the EU, it is worth bearing in mind that the EEA can be brought to a standstill by any one of its members.

The difficult part is ahead
The third risk, both to the UK and the EU, is that the UK might reject a Norwegian-style “membership light”, and base trade merely on a free trade agreement or on World Trade Organization rules – with all the tariffs and technical barriers to trade this involves.

Fourth, and finally, even if everything goes according to Cameron’s plan, there is a very real danger that the Prime Minister’s gamble might inspire others to play similar games, whether for reasons of domestic politics or to secure a better deal from the EU.

In France, Marine Le Pen has already hinted at the possibility of a similar FREXIT game, and Viktor Orbán’s Euro-sceptic rhetoric in Budapest is echoed in several other capitals, notably Warsaw.

In short, while the past few weeks’ developments give cause for cautious optimism, referendums are a notoriously risky tool for policy making and party management – and not just for the leaders that calls them. The difficult part is yet ahead.

First published on the web-pages of the TransCrisis Horizon 2020 Research Project, 4.3.2016.
Link: http://www.transcrisis.eu/the-brexit-deal-out-of-the-frying-pan-and-into-the-fire/

Published 15. March 2016

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