‘Bumpy, difficult, conflictual’ road ahead, post-Brexit

The former British ambassador to the EU, Sir Ivan Rogers, has said that his country will not be talking much about the bloc in future, as part of a strategy of de-legitimising the EU.

Britain will ”stop mentioning the EU and start mentioning key states and key friends and key alliances,” as part of its vision of sovereign states acting in the world, he said, speaking on Friday (5 March) at a DCU Brexit Institute webinar on the framework of new EU-British  relations.

Britain was a clear asset to the EU for expertise in a huge range of financial services and its deep pools of capital, and now that it has left, the issue of strategic autonomy comes into play, according to Ireland’s Ambassador Tom Hanney (Permanent Representative  to the EU). 

Many member states are now of the view that the EU should deepen its own capital-markets union, he said.

“There is an appetite to try and repatriate quite a significant chunk of the financial services industry into the EU,” he said, adding that he wasn’t over-optimistic for a strong equivalence regime in the future.

Extremely vigilant

The EU is setting itself up to be “extremely vigilant in the implementation of the trade and co-operation agreement,” he said, with internal structures for strong monitoring.

Tom Hanney said that within the EU, the degree to which Britain’s departure had been forgotten was striking, after its confrontational and aggressive approach during negotiations.

“The approach of the UK throughout the negotiations has left a sour taste,” he observed, and matters ended in an air of disgruntlement.

The closing stages of negotiation had led to exhaustion, and remaining issues are simply an irritant, with a strong desire to move on to bigger issues and strategic relations with wider powers.

Good relationship not a priority

A good relationship with Britain was no longer a priority, he noted, and the EU states “almost surprised themselves” by remaining united throughout the departure stages. 

Sir Ivan Rogers was equally pessimistic on equivalence, and said there had never been a rational economic debate about what would be optimal for both sides.

Tensions

He pointed to immense difficulties and huge tensions, even when Britain was in the single market, but outside the monetary union. 

“When you are outside the town walls altogether, and you’ve left the EU, you could very easily be completely screwed,” he said.

He said that there was a risk to the EU of fragmentation around multiple capitals, and that London activity would disappear to New York or the Far East.

Sir Rogers continued: “We’re in a politicised and political world, and a ‘sovereignty-versus-strategic-autonomy world’ – and that’s not a brilliant place to be in terms of the future economic prosperity of either the continent or the UK.”

He said that there was no appetite to do sensible things at the moment on either side, which would give both sides modest wins.

He feared that the mood would worsen and a more litigious response would emerge that could lead to the European Parliament stalling ratification, leading to a full-blown no-deal crisis.

No change

The choice of David Frost as negotiator might make things more difficult, he said, and his elevation to cabinet meant that the style of negotiation was not going to change.

“You could imagine Michael Gove having the confidence to think, ‘well actually, we need to build one or two things here that were not in the original agreements’,” he said.

Gestures

Emblematic gestures of goodwill could unfreeze the ice, however.

Sir Rogers said that he expected a bumpy, difficult, mostly conflictual, not very harmonious few years ahead.

“I think this will take a long time to settle down, if it ever does. It’s complex,” he said.

While there was scope within the framework to “fill in the boxes”, there was no appetite in London for this to happen, he warned.

The dynamic that led to a thin, sub-optimal deal for both parties was not going to change, he added, because, if anything, British PM Boris Johnson was now in a stronger position domestically, primarily because of the vaccination success.

“This is not a government in trouble – it’s got rid of its most troublesome ‘priest’, the ex-chief of staff, Dominic Cummings,” he noted, predicting continued unfriendly relations with the EU.

Radical divergence 

Though Boris Johnson sometimes wears his ideology lightly, he believes that the purpose of Brexit is radical divergence from the EU model, Sir Rogers noted.

The North and border were not even secondary in his considerations: “He never wanted the Irish border question to dictate the shape of the Brexit he delivered, which was always going to be a thin, free-trade agreement, goods-heavy and services-light,” the former diplomat said.

The interests of economic operators would not reassert themselves under a Johnson government, he predicted.

'Fragile' deal

The ‘fragile’ deal would require a lot of effort to work, in terms of dispute resolution and arbitration mechanisms, he said, but Britain could choose to ensure that there was no real connection between the technocratic level and the political level: “Then we’ve got a big problem.”

An overloaded dispute-resolution mechanism was a serious possibility, he added. 

The partnership council would need to meet regularly at a technical level, and at a principles level, he said.

It must “find ways to defuse disputes and prevent grenades going off, rather than lobbing more grenades into this relationship”, he warned.