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Will the exit come from Brexit? The devastating record of leaving the EU


The London government wants to relax its relationship with Europe. Therein lies an opportunity, also for Brussels.

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Prime Minister Sunak

Photo: Daniel Leal / AFP

Sometimes, as Margaret Thatcher once observed, "retreat is a necessary tactic."

It seems that her successor Rishi Sunak has now also understood this.

Three months after taking office, the conservative British prime minister is apparently willing to vacate the untenable Brexit positions of his predecessors.

While Boris Johnson and Lizz Truss followed the maxim that only a hard Brexit is a good Brexit, Sunak has been sending other signals to the union of states for weeks.

In the years-long conflict over customs controls in the Irish Sea, its negotiators recently agreed to a data-sharing compromise that could resolve one of the biggest issues with Brussels.

Under his leadership, the London government plans to rejoin EU programs for scientific exchange and wind power expansion.

And soon the Prime Minister wants to meet with French President Emmanuel Macron for the first summit between the two countries in five years.

The question is, is Sunak preparing to exit the EU?

Brexit – a trade war against your own country

Five and a half years after the Brexit referendum, even Conservative partisans can hardly deny that their “take back control” rallying cry has become one of the greatest wealth-destroying programs in recent economic history.

This is indicated not only by the occasional pictures of empty supermarket shelves and closed gas stations, but also by the hard data from the statisticians.

No other leading industrial country has fared as badly in cross-border trade and foreign investment as the UK in recent years.

Nowhere has growth been so low after Corona.

Adam Posen, head of the well-known Washington Peterson Institute, believes that by leaving the EU, the United Kingdom waged “a kind of trade war against itself”.

His analyzes show that before Brexit, the country was one of the most open economies in the world - and a kind of gateway to the European single market for numerous global car, pharmaceutical and financial groups.

Five years later, Britain is an isolated trading fortress on the continent's fringes where talk of "Global-Britain" has turned out to be "magical thinking," as London's Economist scoffs.

The promised trade agreement with the United States will not come about because the United States has sworn off such deals for the foreseeable future.

The few agreements that London has since concluded with distant trading partners such as Australia or New Zealand are mostly copies of the EU treaties.

And at the same time far too insignificant to compensate for the losses in trade with the nearby continent.

Brexiteers might have known if they had looked not to the nostalgic British Empire but to Adam Smith, the father of liberal Anglo-Saxon economics.

The professor not only developed the theory of the “invisible hand”.

But also pointed out the beneficial effects of a large, competitive internal market on the division of labour, prosperity and growth.

A realization that has prompted countries like Norway and Switzerland to link themselves closely to the European single market and the EU customs union, but to stay away from the confederation of states itself.

The decision by Sunak's predecessors to keep as far away as possible from the Brussels institutions was the wrong decision at the worst possible time.

The idea of ​​the Brexiteers, for example, to turn Great Britain into an ultra-liberal "Singapore on the Thames", contradicted the need for regulation after the financial crisis of 2008. And while economists realized that the pace of globalization had recently slowed noticeably, the Tories continued to dream Dream of free world trade for a free Great Britain.

At the same time, the studies showed that the new age of geopolitics is also an age of regional trading blocs.

Brussels should welcome the change of course

The realization has already changed the political mood on the island.

A clear majority of voters now consider Brexit to be a mistake, and those who do not consider every agreement with the EU to be a pact with the devil are also gaining ground in the parties.

Labor leader Keir Starmer has declared rapprochement with Brussels to be part of his programme.

Prime Minister Sunak himself is flirting with the Swiss model, it was said a few weeks ago, that is, a contractual link between his country and the customs union and the internal market.

The party leader had reports immediately denied after the Brexit fanatics in his party had, as expected, gasped.

But the tone is set.

A so-called soft Brexit was still considered heresy until recently,

European politics should welcome the change of course.

After Brexit, many in Brussels called for toughness towards London to prevent imitation.

Since it has become obvious that Brexit was an exercise in economic self-mutilation, no one expects a wave of exits based on the British model.

The EU leadership should be all the more aware that closer ties with the second largest economy in Europe would also be economically advantageous and politically conceivable for the confederation of states: After all, the British voted in 2016 for leaving the EU, but not for leaving the internal market and Customs union voted.

"If Great Britain wants a connection to the EU based on the Swiss model, we would not oppose it," says Bernd Lange, head of the influential trade committee in the European Parliament.

"A rapprochement is in the interests of both sides."

Or, to paraphrase Margaret Thatcher, sometimes a retreat isn't just a tactical gain.

Sometimes he also paves the way for a new peace order.

Source: spiegel

All business articles on 2023-01-17

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