Richard North, 01/03/2019  

Three Dutch parliamentarians, Anne Mulder, Pieter Omtzigt and Lodewijk Asscher have produced a report on extra measures needed in Holland to deal with a hard Brexit (Download from here).

Writing on behalf of the European Affairs Committee, they warn of the consequences of a so-called no-deal scenario which, in their view, is becoming increasingly more likely. But easily the highlight of the eight-page report, from our perspective, is this passage:
The political stalemate in the UK at the moment is causing almost everyone to try to place his or her favourite solution against a chaotic no deal Brexit. We have noted carefully how in the United Kingdom the government and a majority in parliament are unable to reach an agreement, let alone make a proposal that is acceptable to the EU-27 as well.

Actually, the British are only now having the discussion about what kind of Brexit they actually want - a debate that actually should have taken took place three years ago, before the referendum. A number of British politicians have claimed that Brexit brings enormous benefits. This has created unrealistic expectations. The result is that Brexit is becoming a disappointment. And then they blame each other and others, which in turn leads to bitter arguments with all the risks that entails.
The ironic thing that that these MPs waited until there were only 31 days to go to Brexit, before making these observations. But they have at least remarked on something which still tends to elude our own politicians – that the debate we're beginning to have now should have taken place three years ago, before the referendum.

There were those of us, of course, who did have that debate but such is the almighty wisdom of our ruling and media classes that they ignored it altogether. And, as a result, negotiations have not yet resulted in an agreement that can count on a parliamentary majority in the UK. As the clock continues to tick, the Dutch MPs note that the no-deal scenario becomes more likely every day.

Their particular concern is that, because of the close relations between the Netherlands and the UK, the potential impact of a Brexit on the Netherlands is likely to be significant in political, economic and social terms. Not only will trade and the economy be affected – there are tens of thousands of Dutch people who live and work in the UK.

As to a no-deal Brexit, this takes on the aspect of a major economic experiment. The UK has relatively few trade agreements in place and this means that UK trade with both the EU and a substantial part of the rest of the world would take place on a WTO basis in the short term.

And the Dutch MPs are under no illusions as to what that means: high tariffs and checks at the border. What started as a plea for more free trade by a country that has always had free trade as a high priority, ends in the short term with considerably less free trade.

In this scenario, they say, the UK economy itself is hit the hardest. But the economic effects on the neighbouring countries, such as Ireland, the Netherlands, Denmark, Belgium and France will be considerable. And, with the departure of the British from the EU, the Netherlands also loses an important ally. It becomes even more important to conclude new alliances within the EU.

On the vexed issue of postponing Brexit, the MPs argue that a few weeks for technical reasons such as adjusting laws is manageable. But if the delay is more than a few months, the question of the UK's participation in the European Parliament elections arises, as well as the British contribution to the EU budget.

But what mainly comes over from this short report is the lack of preparedness for a no-deal scenario, and the number of questions it raises. As late as 8 February 2018, the European Affairs Committee had sent a letter to all parliamentary committees to alert them to Brexit, but it was then assumed that a withdrawal agreement would be concluded. A no-deal scenario was not then considered a realistic option.

Now, the MPs are asking whether relevant ministries have a picture of the consequences of the no-deal scenario, whether they know what measures and solutions are needed to deal with the consequences, and whether action plans have been produced. In particular, they want to know whether every ministry (including the implementing organisations) is "in control" when it comes to a chaotic Brexit.

And here, a concern is that the Netherlands, Belgium and France will react differently to the new situation, leading to competitive differences between the ports of these countries. They thus call for the EU-27 to deal with the new British trade policy in the same way to ensure a level playing field within the EU.

With more questions than answers, though, we don't get any clear idea as to how the Dutch might react to a UK request for an Article 50 extension. But, given the uncertainties and potential impacts of a no-deal on the Dutch economy, it would be logical to assume that they would not be opposed to a short period of extra time, if for no other purpose than to give themselves more time to prepare.

This very much brings to light issues rehearsed in my piece yesterday and further rehearsed in the Guardian. This paper indicates that Brussels is prepared to accept a short extension, although any delay will have to be a one-off.

If the purpose of the delay is to make time for further negotiations, the EU-27 heads of state and government are said by senior sources to "hate the idea" of the UK then asking for a further delay if the initial extension proves to be insufficient for renegotiations.

However, the paper really isn't making sense, telling us that key member states are understood to be planning to put pressure on the European Council president, Donald Tusk, to rule out a second extension in writing. "Some member states will insist on that being on paper", an anonymous diplomat is cited as saying.

The point, of course, is that Article 50 extensions are not a consensus issue to be "managed" by the European Council president. Agreement requires hard unanimity, with every Member State entitled to a vote. Thus, any state can block a second extension, without needing any commitment from Tusk.

In terms of scheduling, the expectation is that Mrs May will put her deal to the Commons again on 12 March. If rejected by MPs, an Article 50 extension will be sought at the European Council at the meeting on 21/22 March. Our old friends, the anonymous diplomats, say that the EU-27 leaders will not want to discuss the length or terms of the delay. They will simply expect to vote on a pre-agreed period.

Where this falls down, though, is Macron – presumably with the approval of Merkel. He has already stated that he will only vote for an extension if there was a clear purpose to it. Along with Austrian chancellor, Sebastian Kurz, the sentiment is that it is pointless prolonging the agony if the next round brings more of the same.

On that basis, Mrs May is understood to have been told that she needs to provide "a clear path" as to how the deal could be saved. But, if she cannot get her deal past the House on 12 March, it is extremely hard to see what options she has left.

That then brings in the question of whether the "colleagues" might go for the long or short scenario. Some senior EU officials and diplomats, we are told, are still pushing the idea of a 21-month extension. However, if there isn't agreement on this at EU level, Mrs May can hardly be expected to bring clarity to the table.

When so much is reliant on anonymous sources, with multiple and conflicting variables, all we really have is speculation. There are as many good reasons for the EU heads of states and governments to reject outright the idea of an extension as there are for them to accept a delay, while there are arguments for both short and long options.

From Mrs May's stance, though, it seems unlikely that she could survive the long option, which possibly leaves her making a bid for an extension of a few months, this being accepted on the narrow grounds that it provides more time to prepare for a no-deal Brexit. This would suit the UK as well as other Member States as we are also not prepared for a no-deal departure.

On the other hand, it must be equally plausible that one or more Member States reject an extension, especially as there may be some who will be relatively unaffected by the UK's departure. That would leave us on track for a no-deal Brexit on 29 March, confounding the expectations of those MPs who have convinced themselves that this option is off the table.

There again, there is always the possibility, however remote, that MPs approve the deal on 12 March, opening the way for the transitional period and the prospect of trading with the EU and the rest of the world on current terms. In what is basically an intelligence-free environment, even that is possible in our increasingly unruly political system.

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