Forget the letters. The EU will almost certainly extend the Brexit deadline, even though UK prime minister Boris Johnson sent three contradictory missives to the bloc on Saturday evening, rather than simply asking for an extension, as required by the Benn Act.

But the EU’s position on extension has shifted in a subtle but substantial way from six months ago. Back then at least some EU leaders sympathised, or even colluded with, the Remainers in the House of Commons. They had lost confidence in then-prime minister Theresa May after her repeated defeats. They had even lower expectations of Mr Johnson.

But the crucial difference this time is that he has managed to edge towards, and possibly beyond, the majority needed to pass his deal.

So what will the EU do?

There is still a small window for an October 31 Brexit, but it is closing. The two more likely scenarios both involve an extension. If the commons approves the deal, the EU would agree to a short technical extension, of a few weeks, to secure ratification of the agreement by the European parliament.

If the UK parliament votes no, the European Council will require the UK to point to a political way forward as a condition for granting an extension. I do not see a majority for a second referendum. This leaves an election.

From the EU’s point of view, this is a fairly straightforward decision, unlikely to prove controversial. Since Mr Johnson also wants to avoid a no-deal Brexit — despite what he says publicly — their interests are more aligned than it appears.

READ  Hazelnut spread M&M's are here, and they taste like Nutella

What is the reason behind the shift in Brussels? EU leaders are political animals. They can be quite brutal. Think about how they stitched up Silvio Berlusconi and George Papandreou, the former prime ministers of Italy and Greece during those countries’ crises. Mr Johnson is not in that category. Continental European chancelleries see Mr Johnson as the big beast of British politics right now. They will need him as a political ally beyond Brexit.

What has also shifted is their perception of relative risk. The EU would, I think, still prefer Brexit to be reversed. But the past two months have shown that the risk of a no-deal Brexit is much higher than previously thought. It is one thing for EU officials to say to a journalist that they expect it, quite another to believe it and to act on it. Germany may already be in a recession due to a drop in Chinese imports of German manufacturing goods. Brexit uncertainty is also a factor. A no-deal Brexit would turn the industrial recession into something much worse. Chancellor Angela Merkel and other EU leaders are willing to accept a less-than-perfect withdrawal agreement to insure against such a calamity. They would rather take the safe option of a compromise than a three-way bet that gives them, say, a 20 per cent probability of both a Brexit reversal and a no-deal Brexit.

That view has changed since the spring, when several EU leaders were only too happy to play the extension game. Even Donald Tusk, the outgoing president of the European Council, has dropped his previous habit of arguing in favour of a second referendum. I have often disagreed with him, but I thought he hit the right note last week when he spoke about his sadness about Brexit, and his hope that a future generation might reverse the decision.

READ  R&D tax credit claims up 16% as firms pursue innovation

Many UK Remainers have been in campaigning mode since 2016. They are not ready yet to concede defeat. But at least Mr Tusk has decided that it is time to move on to the next stage of mourning, from denial to acceptance.

There are other, more subtle, reasons why the EU might want to cut its losses. Brexit has distracted the bloc from other important, unresolved issues. Some EU leaders had hoped to present the accession of North Macedonia and Albania as antidote to Brexit. One country leaves, two join. France vetoed this, arguing the EU needs to reform itself before the next round of enlargement.

The EU is also struggling to agree a response to Turkey’s invasion of northern Syria. Germany’s recent decision to allow Chinese group Huawei to participate in its 5G networks shows that the EU has yet to formulate a coherent policy towards China. And the European parliament’s rejection of France’s pick for the next European Commission, Sylvie Goulard, means that we can no longer take the investiture of incoming president Ursula von der Leyen’s selections for granted. Brexit is not the only game in town.

Having said all this, there is still one big reason to expect more Brexit extensions: EU leaders habitually kick the proverbial can down the road whenever that is possible. While I would not go as far as to claim that they have dropped this preference, I believe this time is different because interests have shifted.

munchau@eurointelligence.com



READ SOURCE

WHAT YOUR THOUGHTS

Please enter your comment!
Please enter your name here