Legal fallout ‘will pull UK back from Brexit brink’

The fear of legal repercussions will pull Britain back from the brink of Brexit, according to the man who led negotiations for the Greek economic bailout.

Economist and academic Giorgos Papakonstantinou was the Greek finance minister (2009-11) who negotiated the Memorandum of Understanding for the Greek bailout.

Papakonstantinou said that Brexit had many similarities to “the Grexit that didn’t happen”.

A high-level policy dialogue, organised by the DCU Institute and hosted by Grant Thornton, heard from Papakonstantinou and Denis MacShane, the Blair government’s Europe minister (2002-05).

Brexit is a battle between a rigid ideological position of part of the ‘Leave’ camp and process-and rules-driven EU systems, the DCU Brexit Institute heard.

The speakers at the 4 April event held that Britain has followed a flawed Brexit strategy because of a low-level of understanding of the political and institutional dynamics of the EU.

Mistakes

“Britain made several strategic mistakes to begin with, the first one being triggering article 50 before it knew why it was doing so,” Papakonstantinou said.

This left Britain in “an impossible trilemma,” because it doesn’t want a customs’ union, or a border between Ireland and the North, or a border between Ireland and Great Britain.

“Having done so, the mistakes which followed were kind of unavoidable,” he said, because a withdrawal process came first and, only afterwards, was the future relationship to be discussed.

He expressed amazement at this flawed negotiation process -- unexpected from such a long-standing member of the EU, unlike Greece which is a latecomer to the EU and has weak institutions.

He suggested that Britain had a misplaced belief in its large-country leverage, which  turned out to be not so important.

Lessons

Papakonstantinou said that there were important lessons to be learned from the Greek situation, which Britain could have heeded.

Firstly, the EU cannot be blackmailed; secondly the EU cannot be divided in order to build alliances; and finally, no country can win a game of ‘chicken’ with the EU.

“We [Greece] thought we could -- and we figured out we couldn’t -- and the UK is finding the same thing,” he said.

“You cannot bypass bureaucrats and achieve political solutions,” he said, pointing out that successive British delegations thought they could appeal directly to EU leaders and forget about the negotiators.

“Nothing moves in the EU without the negotiators having greenlighted it,” he said.

Interests

The EU will always side with existing members and defend their interests against a member who wants to leave, he pointed out.

The CJEU will also never accept a tactical ‘bad-faith’ revocation of article 50 in order to gain time, he said.

Therefore, as the clock runs down, a no-deal Brexit becomes the default outcome, though this is a huge economic gamble.

He warned of eventual legal repercussions to the Brexit strategy.

“I would bet that the British civil service has meticulously written down all the instructions that they got, and all the advice that they gave to the Government, and the advice that was completely ignored.

“When the time comes for an inquiry, some people will be in trouble, and these people know that.”

Legal repercussions

Drawing a parallel, Papakonstantinou said that fear of legal repercussions had led Greek politicians to pull back from the brink of leaving the EU.

“That will be something which will weigh heavily,” he said.

He pointed out that a long extension to the withdrawal period would have to involve European elections, should the EU agree to a delay.

The EU has characteristically spoken with one voice on Brexit, he said, and attitudes have evolved from initial shock and disbelief after the referendum, to concern that this would be problematic for European unity.

It had the exact opposite effect, he said.

Cohesion effect

“It had a cohesion effect, in that all the Eurosceptic parties now want to change from within.”

The EU felt pretty good about itself when sceptics became less vocal about exit, he said.

Behind the monolithic EU voice, there were two competing views though.

“The French view says the Brits never really wanted to be part of Europe … and there are good political, economic and balance-of-power reasons to let them go.”

The competing view is that Britain brings something important to Europe, and should be made to stay.

Evidence-based approach

“The evidence-based policy approach which Britain has had – and seems to have lost lately – has been tremendously positive for the EU as a whole,” Papakonstantinou said.

It would be a defeat for the European project if one country were suddenly out, even if that country were worse off as a result, he said.

He added that, ultimately, it would be a great victory for the EU if Britain tried to leave and then changed its mind after seeing that it didn’t make sense.

A reversible process would be the right way to proceed, he said.

It was not going to be an easy relationship either way, he continued, because there was now a lot of bad blood and changed dynamics.

Extremism

Britain’s former Europe minister Denis MacShane said that British Prime Minister Theresa May had a deep understanding of Northern Ireland, having served as Home Secretary, and would be very aware of the security issues and the importance of tamping down extremism.

MacShane warned that participation in May’s European Parliament elections could result in greater numbers of Eurosceptic MEPs at the House of Commons.

Dr MacShane referred to the “very serious” effect of Brexit on Britain’s unity, questioning whether it could produce a “dis-united kingdom”.

The DCU Brexit Institute was formed to increase public awareness and expand research and policy on the topic of Brexit.