Conference Presentation, Panel
The Breckoning: The Endgame for Great Britain and Europe in 2019
Milken InstituteAnatole Kaletsky, Peter Beyer, Sir Michael Hintze, AM, GCSG, Michał Krupiński, Lord Mandelson, Sir Michael Hintze
- Long-term economic projections from the government, Bank of England, and IMF indicate Britain's economy will be significantly smaller over the next 10 to 15 years compared to remaining in the EU, though Sir Michael Hintze suggests the long-term impact will not be substantial within seven to ten years.
- The British government aims to exit the EU in March 2019, followed by a 21-month transition period ending in late 2020, during which a new relationship outside the single market and customs union will be negotiated.
- Negotiation status as of the current year shows 70 to 80% of subject matters agreed, with the remaining 20 to 30% identified as critical issues requiring resolution by year-end.
- Uncertainty regarding the Brexit outcome is expected to persist for the next two years, potentially leading to political division, friction, and risks to manufacturing jobs due to supply chain disruptions.
- Peter Beyer anticipates the government lacks the personnel capacity to simultaneously negotiate free trade deals with dozens of countries, despite plans to pursue agreements with China, India, and Commonwealth nations.
- Protectionist policies are noted as gaining traction in Brussels, potentially shifting the EU away from federal liberalization and creating a hostile environment for a UK exposed to Europe.
- A binary choice regarding alignment versus autonomy is projected to be presented to the British Parliament and public in the summer and autumn, potentially triggering a reconsideration of Brexit by the populace.
- Lord Peter Mandelson foresees a potential October scenario where the government proposes either accepting a negotiated deal or leaving without a treaty, with amendments possibly allowing Parliament to choose remaining in the EU over a "cliff-edge" exit.
- Political risks include the potential resignation of a pro-European Home Secretary, which could empower Conservative MPs to support remaining in the Customs Union, potentially causing the Prime Minister to fall if the government proposal is voted down.
- Peter Beyer expects the UK may be forced out of the EU on "extremely suboptimal terms" or kept in due to force majeure events, while some officials recall assertions that a clear Brexit prospect may not materialize.
- The British public may ultimately face a requirement to ratify any decision to stop the Brexit process through a popular vote, and Mandelson hopes a force majeure event will retain the UK in the EU, though this is not assured.
- Government planning includes preparation for both a "no-deal" scenario and a scenario where Brexit never occurs, while Sir Michael Hintze remains optimistic that technology and currency fluctuations will facilitate market adjustments.