Wall to wall coverage of Brexit has understandably given way to our urgent need to defeat the coronavirus pandemic. But as the 30 June deadline to extend the negotiations on our future EU relationship rapidly approaches, the fallout from Brexit is again rising up the political agenda.
The UK faces a likely double whammy, one a public health and economic crisis, and the other an entirely unnecessary government-made fiasco. Government machinery is now almost entirely consumed by the urgent effort to defeat COVID-19. We simply cannot afford to crash out of global arrangements, notably trade, without an EU agreement, whilst at the same time as trying to defeat the pandemic. As former Chancellor Alistair Darling stated “It’s madness to contemplate shooting yourself in the foot on an entirely man-made political decision at a time when you don’t need to do that”. Sir Ed Davey and others have accordingly called for an extension to the negotiations.
The COVID-19 crisis though provides excellent cover for the Conservative Government and ideological EUphobes to progress their dream of the hardest of Brexits. The adverse effects of crashing out without a deal could fairly easily be confused with and be blamed on adverse effects of the pandemic, rather than attributed to the Government’s damaging EUphobic policy itself.
Chief UK negotiator, David Frost, tweeted on 16 April:
Extending would simply prolong negotiations, create even more uncertainty, leave us liable to pay more to the EU in future, and keep us bound by evolving EU laws at a time when we need to control our own affairs. In short, it is not in the UK’s interest to extend. 2/2
— David Frost (@DavidGHFrost) April 16, 2020
In reality, Brexit itself is the source of business uncertainty. We shall have to be bound by internationally agreed rules anyway, particularly on trade. Continued access to the Single Market far outweighs the costs of paying into the EU budget. The Treasury predicted 15 years after a hard Brexit, UK GDP would be 9.3% smaller than if we stayed in the EU. The damage of a hard Brexit would be on top of that from the coronavirus pandemic: Morgan Stanley has projected a 5.1% GDP fall for all of 2020.
Public opinion increasingly supports an extension. A 19-20 March 2020 YouGov poll found a majority (55%) supported an extension to the transition period (with 24% opposed). A Parliamentary petition to extend the transition had gained 53,400 signatories as of 23 April.
The deadline to extend is 30 June, not the end of 2020, so the matter is increasingly urgent. Although 30 June is not a point of no return, an extension is more legally and politically difficult thereafter.
Defeating the pandemic should be the Government’s sole focus for months to come. To compound it with a hard Brexit would be sheer reckless folly. Questions surrounding the Government’s slow response to the pandemic and the UK’s above average national pandemic death rate should add pressure on the Government to abandon its reckless and irresponsible insistence on completing negotiations this year.
We need to campaign strongly for a two year extension to the transition period to help ensure we defeat coronavirus as soon as possible.
* Nick Hopkinson is South East representative, Liberal Democrat European Group (LDEG) and a former Director of Wilton Park, the Foreign Commonwealth and Development Office policy forum.
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23 Comments
The damage done by Brexit is trivial compared to the damage done by the coronavirus, so it is really pointless to extend the negotiations. Also the way some countries in the EU closed their borders, or threatened to close them, makes a mockery of FOM, the biggest plus point for me so as a Remainer I can’t be bothered with the EU any more!
We need a leader NOW who can point out whilst the COVID-19 is all on the news MORE problems are just around the corner ( Brexit, climate change). We ,as a party should be shouting loudly that carrying out rabid political ideology is NOT what we want at the moment. To push on with it ,to me, will give Cummings his destruction of the country for his dreams of social change. We must not leaves the country ,AND ITS PEOPLE adrift in a World that could turn out with a pandemic, 1918, mass unemployment 1920s, and depression, 1930s.
good thinking Frank – we are going to be hit, hard, by the corona virus, so why not add our own self inflicted economic harm on top of it. Then everyone can pretend it was all the fault of the corona virus, and very few will understand the impact of Brexit. Just what the current lot of Tories want. It could be argued that Brexit has already made the crisis worse – the report that we were under prepared came out in 2016. Why was no notice taken? Could it be that everyone was too taken up by Brexit? And the decision not to participate in the EU procurement scheme was clearly ideological. They put their ideology before people’s lives. As for FOM – can you not understand that in unprecedented times you have to do unprecedented things?
Completely agree and, as you say, Sir Ed Davey and others have called for an extension to the negotiations. The government appears to be acting like a child who puts his hands in his ears and sings “la, la” hoping that a problem will go away if he just doesn’t listen. We need to make sure they get the blame if it all goes wrong.
I suspect the government view is:
“Of course an extension would make sense. But we can’t afford to ask for one, because those horrible Remoaners would exploit it. They would say that Brexit isn’t working. They would try to convert a temporary extension into a permanent decision not to leave. Let’s face it, sooner or later Starmer and friends will succeed in pinning the blame on us for tens of thousands of deaths, and then where will we be? Will we get away with throwing another leader to the wolves, as we did with Cameron and May, or will we be forced into an early election? Let’s hope a Boris sacrifice will be enough, otherwise those Remoaners might really get back into business.”
“And to coin a phrase, let’s get Brexit done. It will be a disaster of course, but we can hide that bad news behind the coronavirus disaster. So from our Tory Party point of view, which of course is all that matters, now is the perfect time to press ahead with Hard Brexit.”
The question is, how could we fight against that? An answer might be, don’t make it a party-led campaign for an extension. Get business, the unions, the scientists, and/or Gina Miller to campaign for an extension on non-party grounds. Then Government might be forced to pay attention.
Of course we should not be leaving while Covid-19 threatens us; but you try telling that to ardent Brexiteers, both in the Houses of Parliament and elsewhere. What this crisis is revealing is that European unity is not all it’s cracked up to be. Perhaps the idea of a trading bloc may be what we all really want.
A two year extension?
Possibly. But we’d need to have a firm quotation on the cost first. The EU/eurozone coronavirus bill will be at least a trillion euros. Do we want to get involved in all that? The Germans and Dutch don’t want to pay it. Most other EU countries are in too much debt to be able to pay it.
https://www.ft.com/content/cee2c14a-fa59-4684-a335-27cef1260fa6
@Peter Martin – The Uk is no longer a contributor to the EU budget, the monies the UK is currently contributing are outstanding payments from previous years. What is being asked for isn’t an extension to our membership – which has already ceased, but to the length of the transitional period we are now in.
Every cloud has a silver lining: Currently, it looks like the UK will be achieving its climate change targets early.
For better or worse we have left the EU as per the referendum & then again endorsed in December last year by a massive majority..The straight jacket that is being offered by the EU to ensure that the UK isn’t successful in the future & becomes a colony of the EU should be rejected.Half in half out, semi detached colonial status clearly won’t work.
Time to make a clean break into a non EU world that has been responsible for 90% of global growth, join TPP plus bespoke agreements. Four years of messing about is plenty.
I thought after the Referendum result that the best compromise might be ASSOCIATE MEMBERSHIP. Apparently, this is what we have in this “transitional period”. If we have this now, we should continue with this into the future and let the British People decide our path. We should be clearer then about the economic, environmental, health, safety and security co-operation and how these links can benefit the U.K.
Article 132 of the Withdrawal Agreement just says that the Joint Comittee can agree an extension of the Transition period. So it’s perhaps you should campaign for the EU to request an extension.
Are there any real negotiations or just a set of demands which are unlikely to be met. The extent of the damage from a no deal Brexit is yet to be seen.
To me it makes absolute sense that we should put a pause on the remaining Brexit negotiations, but I can see the political benefits to pressing on at a time when there will be minimal scrutiny, and the problems from Brexit can be blamed on C19.
However, even the most eager of Brexit voters must recognise that Brexit is a distraction that the government and our civil service doesn’t need right now. We need our government departments and public bodies to be focused on the response to C19, and have their full attention on keeping the healthcare and social care systems functioning, as well as looking to deal with the economic fall-out as best we can.
And yes, businesses also don’t need to be worrying about what changes will be forced on them once the transition ends should they be lucky enough to survive the next few months.
The EU is a lot more coordinated than Brexit believers fantasise. It has the structures that enable political decisions to take place. The worst hit countries may inevitably wish for more, but will be clearly better placed than if they were alone.
Though it regulates minimum standards, the EU, since it is not a superstate, has never pretended to oversee public health provision. Nevertheless EU countries such as Germany and Luxembourg have taken in patients from Italy and France.
Plans are afoot for re-emerging from the lockdown. From what I can see, there will be a closely monitored step by step approach with extensive testing. The UK is well behind many other European countries in terms of progression of the disease and in establishing reliable data. It is also problematic if scientific advice has been compromised; again other countries have been more open.
It is likely that the UK will also be behind in its ability to reboot the economy. An ‘Australian’ (or North Korean) style relationship with the EU is very likely to disrupt the economy and supplies at a point when other countries are recovering economically.
The UK Brexit plan, as it was last Summer, is to pretend that is the stronger side in negotiations and can dictate terms. I cannot see how a climb down will happen, but doubtless the government is relying on its media friends to portray however it does take place as an overwhelming success.
The larger picture is that the UK is losing more and more credibility and trust with its neighbours and in the wider world.
@ Martin,
“The EU is a lot more coordinated than…..” I might think?
Maybe. They aren’t sufficiently co-ordinated to agree on just how a Covid-19 recovery fund might operate. As usual the Germans are insisting that aid should be in the form of loans:
“Ms Merkel insisted that any funding borrowed on the markets must ultimately be paid back”
But everyone knows that they’ll just make things worse and will never be repaid – unless the original loan is “refinanced” into a new loan. Guy Verhofstadt says as much with:
“Grants are like water in a fire fight while loans are the fuel”
The amount of money runs into the hundred billions of euros if not over a trillion. The EU is only going to survive if Germany and the Netherlands cough up most of the money unconditionally. That probably won’t happen. Instead there will be Ms Von der Leyen’s “innovative financial instruments”. Either the money can be given as loan or a grant. There aren’t any other options but it looks like she’s looking for a fudge.
Forgot to include this reference link:
https://www.ft.com/content/cee2c14a-fa59-4684-a335-27cef1260fa6
Buttonwoods column in the economist this week features on “Why the Euro always survives until tomorrow” https://www.economist.com/finance-and-economics/2020/04/25/why-the-euro-is-more-durable-than-it-looks
He writes “The euro is a lot more durable than it sometimes looks. A bond is a government liability, but so is money. In a world of near-zero interest rates, cash and bonds are indistinct. As central banks print money to buy ever more bonds the lines between fiscal and monetary policy become increasingly blurred. Quantitative easing by the ECB is, in effect, mutualization: a shared liability (cash) has been swapped for the sovereign bonds of individual euro-zone countries. The ECB is a collective endeavor.
Who bears the financial burden incurred by the recession is a question that all economies must answer eventually. Some combination of taxpayers. consumers and bondholders will have to foot the bill in the end. Some counties will lose; others will win. This is what makes the argument so bitter. For all the bickering, the euro-zome has become good at lasting another day. It never quite does enough to resolve all its contradictions. But they have never quite proved fatal.”
It may be a remainer dream to extend,.. extend,.. extend forever, but it just isn’t going to happen, simply because we see that the EU just loves to fill any extra time allocated with pointless posturing and indecision.
My guess is that we will leave the transition period without a deal in December and go directly onto WTO rules because the EU has proved itself as too obstinate. By the same token, this UK government will not cannot let this drag on, and will become proactive probably from mid May into June.
Another way of looking at an exit strategy from Covid19 lock-down, is to consider it as a re-boot of business. It makes sense therefore for government to instruct business to prepare and fire-up its procedures with a WTO system re-boot, rather than an EU regulatory system re-boot.
Once Brussels [Barnier], realises that British business has had official government instruction to rebuild themselves post Covid without EU regulatory influence, and instead with a WTO proforma, they will finally understand that an extension to talks are pointless. That said, the EU is so sclerotic in its decision making, there will unlikely be any comprehensive deal this side of Christmas, and I expect a deal will be more of a WTO +, with incremental negotiated trade ‘additions’ implemented through 2021.
It’s been said that the EU doesn’t make big decisions until one minute to midnight. I disagree. I see an EU which simply cannot make the big decisions until it runs out of time, or is forced to run out of time, which is the very best reason not to extend.
All this of course assumes that there will still be an EU to negotiate with?
” Quantitative easing by the ECB is, in effect, mutualization”
Not in theory. If, say, the ECB swaps euros for Italian govt bonds then only the Italian government is responsible for redeeming the bonds at such time as they mature. But maybe that is how it will work out in practice, because the ECB will, almost certainly, never to ask for euros back from the Italian govt. They are unlikely to ever have anywhere enough! It will simply accept new Italian bonds for old Italian bonds. ie New debt to pay off old debt.
For some reason the Germans are clinging on the the pretence that the accumulating debts will be paid off with actual euros.
The EU rules on the size of allowable Govt debt are quite meaningless and have been for many years. The coronavirus issue has just worsened an existing problem which should easily have been foreseen when the euro was introduced. The EU PTB were warned!
How do we convince the government to extend the Brexit negotiations? Opinion polls will help as will continual media coverage of the nonsense of continuing the negotiations while the public health emergency continues. Surely many Conservative MPs feel similarly. If it wants a no deal Brexit, all this might fall on deaf ears. We can only hope that sense will prevail.
The EU is demanding that the UK follows certain EU regulations for posterity. These are designed to negate all competitive benefits that the UK may derive from leaving the EU.
This is an unacceptable and outrageous demand not imposed on any other country with which the EU has a trading relationship. This makes leaving without a deal inevitable unless the EU adopts a more realistic approach.
With regard to EU stability, I agree with others that ECB fudges have saved the Euro many times and the Corona crisis is already the subject of yet another ECB fudge.
Back in the Eighties I believed that democracy would bring down the EU. Many countries had been stripped of their sovereignty without proper consultation. That particular threat has diminished but today, the people are not happy for other reasons.
France has been in the grip of serious protests for many months. Macron has slumped in popularity. Attacking others has always been one way of raising leadership approval and Macron is directly challenging Merkel on further integration via Coronabonds aka debt sharing. In doing so, he is challenging Merkel’s EU leadership role as well.
Merkel is in decline in Germany. The voters are furious, since they expect that they will pick up the tab for the financial black hole left by Brexit and now the Corona black hole is coming their way too. German taxpayers must be weighing up the attractiveness of the Euro exchange rate and the ever more frequent plundering of their hard earned wealth.
Just to add to these woes, a recent Italian poll shows that 40% of voters wish to leave the EU and Eurozone. EU leaders are losing credibility, popularity and control in their own backyards. Electorates are becoming more fickle and unpredictable. Dramatic events are no longer totally surprising.
Hasn’t FOM been curtailed all over the world for obvious reasons so it’s a bit churlish to finger point at the EU.