European Scenario

 

WEEKLY COMMENT 23-02-2017

By Barry Edwards

European Scenario

 

The Conservative win at the Copeland by-election is a stunning victory for the Theresa May government and their political management of the Brexit policies they have outlined. Admittedly, there are other issues that worked heavily in their favour especially the nuclear energy policy but however it is analysed winning an opposition held constituency mid-term is a rare event.  It clearly sends a signal that if a general election were to be held in the next few months the possibility of a massive swing to the Tories is almost certain. In fact, it actually indicates that it is not necessary to do that and cements the strong position the government has politically.

This is particularly relevant at this time as Brexit is the most important event that any recent government has had to negotiate and its standing with the 27 countries of the EU will definitely have been enhanced. That will improve the confidence of the British negotiating team and give them the support and knowledge that they are truly representing the will of the nation.

It is expected that article 50 will be enacted by the end of March as promised even though there may be some amendments to empower the vote of parliament when the negotiations are complete. The EU Commission with the support of most of the 27 members are insisting that the matter of the cost of leaving the EU must be discussed and agreed before anything else. It looks as though the British will have to go along with this schedule and accept that a trade agreement will have to wait until this matter is finalised. We discussed the implications of the possible outcomes of this a couple of weeks ago in this weekly comment.

It would seem that it is in the interests of the British to come to a satisfactory arrangement with the Commission as soon as possible since the forthcoming elections in the EU will not directly affect the talks. That would allow for negotiations of the trade agreement and a transition strategy to commence during the two year period before departure becomes effective. That does assume that there will be a functioning EU in existence by the end of 2017.

The scenario that most people are ignoring is that Marie Le Pen and her party actually win the first round of the French presidential elections. The other candidates are finding it difficult to retain their following once their policies have been challenged now that Francois Fillon is out of the running. The result is very open and Le Pen is gaining support as the days go by. It is not out of the question that she may win the first round. The March election in the Netherlands is up in the air over security for Geert Wilders, the populist leader, who may become the largest party in parliament although without a majority. He has called for a referendum on the EU and if there is an election in Italy in the autumn the Five Star movement may gain power and they have promised a referendum as well.

It does not matter how the Germans vote since the main parties should triumph but if those three other countries all call for a referendum and the result is to leave, what happens to the EU and the agreements with the UK. It is not a situation that is impossible to consider and even if just one country does vote to leave it would change everything in the EU. It may not cause the break-up of the EU but it would change the negotiating stance of the UK substantially since two countries would put much more emphasis on the stance the UK could take for a free trade agreement.

Admittedly, this is a hypothetical proposition but 2017 could throw up unpredictable circumstances which could change the expected course of Brexit. This recent confirmation of Conservative political domination from the Copeland by-election may place the UK in a strong position with the EU Commission who will be desperate to hold the EU together in a structure that prevents break-up. That may re-awaken the concept of creating associate EU members with access to the single market and agreements to suit all those who wish to apply for that arrangement. This could ultimately be the ideal proposition that the UK has wanted for the EU and its relationship with all the other European countries.

Brexit may have started a chain of events that will change the evolution of the EU into something quite different from the outlook many people have predicted. The prospect described above is one possibility but there are many others which may not be so appealing and reverse the unification of Europe causing unrest and conflict. Our international allies would do their best to prevent that occurring and use all their influence to keep Europe together. It in their interests of world leaders to have a peaceful and united Europe to keep the balance of world power intact and functioning effectively.

2017 is the year that could decide the destiny of Europe and the UK may have more influence than many commentators are predicting it will have on the world scene.

That’s all for this week, more observations next week.