Pseudo-independence

Facing increasing panic over a looming exit deadline in March 2019, Theresa May has called for a ‘transition period’ in which the UK loses its EU voting power but still has to follow its rules. It could easily turn permanent.

Desperate to salvage Brexit talks which have gone off the rails, British Prime Minister Theresa May gave a much-anticipated speech in Florence today. She surely hopes it will stem the panic over the country’s lack of preparedness for the ‘cliffs edge’. That is March 29, 2019, when the country must leave the EU.

There is now little prospect that an agreement on Britain’s post-Brexit relationship with the EU can be agreed by that date. And so the prime minister had little choice but to do something to calm the jitters of British businesses and markets. 

Fake Brexit: Is Britain heading for pseudo-independence from the EU?

On this week's podcast, we look at issues of national pride. Would a 'fake Brexit' be enough to satisfy British yearning for a feeling of sovereignty? And as the German election nears, what does a recent uproar about the use of English in Berlin say about the changing nature of German politics?

My prediction: Britain will join the EEA

Like in Norway and Switzerland, British elites will have to accept an arrangement they know is bad in order to indulge the illusions of a slight majority of voters. 

The political class was stunned. After a nationwide in/out referendum on EU membership, expected to yield an 'in' result because the entirety of the political and business establishment supported it, people awoke to the news that people had voted out, by 52%. A yearning for national sovereignty had won the day.

This wasn't 24 June 2016. It was 29 November 1994, the day after Norway's referendum on whether to join the European Union. 52% voted for Norway to be outside the EU, while 47% voted to be in it - an almost exact mirror of the UK result 22 years later. The result was a political shock that sent reverberations through the government and business establishment. 

What happened in Norway in the ensuing years was a lesson in how politicians must sometimes pull their citizens along begrudgingly, or even unwittingly. Because even though EU membership had been rejected, Norway effectively ended up becoming an EU pseudo-member - under terms much worse than if it had become a member state. The same fate awaited Iceland and Switzerland. 

Thousands marched, but what are the options for keeping UK in EU?

It is a time of huge uncertainty for Britain, but there are four scenarios which could see the country remain in the EU.

Yesterday saw an unprecedented, and uncharacteristic, outpouring of love for the European Union on the streets of London.
Tens of thousands of people marched on the British Parliament in a protest hastily organised on Facebook called 'March for Europe'. It was a show of European love not ordinarily seen in the British capital, where EU flags are normally verboten. And it wasn't a vague outpouring of sentiment either. The protesters had a specific demand for the parliament - do not pull the trigger on Brexit. That trigger is known as article 50 (more on that later).

The crowd was overwhelmingly young and educated. As The Guardian's Ed Vulliamy noted, "the hollow, bitter wit of the banners and placards was a fair indication of who took to the streets". “Un-Fuck My Future”, the placards pleaded. “No Brex Please, We’re British”. "Fromage, not Farage". Pictures of Whitney Houston singing “I Will Always Love EU” and Rick Astley singing "Never gonna give EU up, never gonna let EU down". 

“Hell no, we won’t go!” they chanted.

Why England in the EEA would be a victory for France

France has always resented British influence in the EU. Excluding the UK from EU law-making could reshape the union in the French model.

In 1963, when the United Kingdom first applied to join the European Community, the answer from Paris was a resolute 'non'. 

French President Charles de Gaulle vetoed the application in '63 and again in '67. He said that "a number of aspects of Britain's economy, from working practices to agriculture...made Britain incompatible with Europe". He added that the UK had a “deep-seated hostility” to any pan-European project.

It wasn't until De Gaulle relinquished the French presidency that Paris finally relented and allowed the UK to join the club in 1972.

So what were the "aspects of Britain's economy" that De Gaulle was so worried about? It was free market liberal economics. De Gaulle, and his successors, distrusted the "Anglo-Saxon" (The French term for Anglo-American) model of capitalism and had a very different vision for Europe.

After divorce, UK and EU unlikely to be 'friends with benefits'

The EEA was not built for a country the size of Britain. To think that the EU will allow it to easily join is folly.

This week the EU's most powerful finance minister, Germany's Wolfgang Schäuble, will say in an exclusive interview to be published by Der Spiegel that the UK should not be given special access to the EU common market, à la Norway, if it quits the bloc.

"In is in, out is out," he will say in the interview, which was seen and previewed by The Guardian.  “That won’t work, it would require the country to abide by the rules of a club from which it currently wants to withdraw. If the majority in Britain opts for Brexit, that would be a decision against the single market."

Norway is the Puerto Rico of Europe

Puerto Rico has to obey laws made in Washington, but has no say in shaping them. Sound familiar?

Over the past two years, Puerto Ricans have been reeling from a government debt crisis that is throwing the island into near chaos. But for their fellow American citizens, it has gone largely unnoticed.

The incomparable John Oliver did a segment about the crisis last week, and like a lot of Americans I found myself watching it with a sense of embarrassment. I also hadn't heard anything about the crisis before.

Continental Americans have a disconnected relationship with the American territory to their south. Many do not know that it is part of the United States, and even those that do know often forget.

Switzerland's misleading model

The EU helps Eurosceptics when it allows Switzerland to be in the single market while pretending to be outside of it.

Last week, when Dutch Eurosceptic politician Geert Wilders unveiled a much-anticipated 'nexit study' (Netherlands exit from the EU), Switzerland featured prominently in the press conference.

The wealthy Alpine nation, about the same size as the Netherlands geographically, was held out as the paradise which would await a country if it leaves the EU.  Mark Pragnel, an analyst at British firm Capital Economics, which conducted the study, said Switzerland’s bilateral system of treaties with the EU is a model that the Dutch should emulate. “We think the Swiss option is viable for the Netherlands,” he said.

The argument is not new. Switzerland often features prominently in British debates about leaving the union. Not being in the EU hasn’t harmed economically thriving Switzerland, so why would it harm the UK? In fact, Switzerland’s success is often held out as being the result of, rather than in spite of, the country not being subject to EU law.

But this narrative is false. Switzerland is in fact part of the EU’s single market and it has to follow most EU law. Like the European Economic Area (EEA) countries Norway, Iceland and Liechtenstein, Switzerland exists in a ‘fax democracy’. Its ten bilateral treaties with Brussels, which mirror EEA membership in all but name, bind the country to follow EU law in agriculture, transport, trade, public procurement, environment, free movement and border control.

How small is too small?

Yesterday the citizens of San Marino voted on becoming an EU member state. But is that even possible? 

As Brussels braces itself for the inevitable disappointment of a referendum on EU accession in Iceland, when or if that ever takes place, it will come as little comfort that another non-EU European country rejected EU membership yesterday.

The Republic of San Marino, the tiny microstate of 33,000 people situated within Northern Italy, held a referendum yesterday on whether to apply for EU membership. The proposition failed because not enough people turned out to vote. Though a narrow majority of people who voted approved the measure (50.3% versus 49.7%), a referendum needs 32% of eligible voters to vote yes in order for the measure to pass. The 'yes' vote amounted to just 20%.

Unlike an eventual Iceland referendum, the San Marino referendum was not a response any actual offer of EU membership.  The question of whether to start accession negotiations with Brussels was put to voters after a group of citizens collected the required number of signatures. No matter how the referendum turned out it was non-binding. It would be up to the San Marino government whether to actually request accession negotiations, and it would be up to EU member states whether to accept that request.

Switzerland buries its head in the sand

Switzerland's foreign minister was in Brussels yesterday for some awkward discussions with EU leaders, and despite the beaming smiles following her meetings it was clear that by this point Brussels and Bern are operating on two different wavelengths.

The visit was arranged following a serious souring in relations between Switzerland and the EU after a resolution from EU foreign ministers in December warned that the relationship between the two had become incoherent and unwieldy. While Switzerland is not a member of the EU, it is a sort of "pseudo-member" and is allowed to participate in the EU single market thanks to a series of bilateral agreements. These 120 agreements were negotiated in two rounds in 1999 and 2004. In exchange for allowing Switzerland the benefits of access to the common market, the EU expects certain things in return - such as the right for any EU citizen to live and work in Switzerland (and vice versa). But in return, the EU position is that if Switzerland violates any of these accords, all 120 of them will be torn up.

So far this arrangement has suited the Swiss just fine - probably because most Swiss citizens are unaware of the extent of the accords and think their country remains completely independent and separate from the EU. But Brussels has grown frustrated with the unwieldy and complicated arrangement, and now they are saying Switzerland needs to move over to a more defined relationship as exists in the other pseudo-EU countries - Norway, Iceland and Liechtenstein.