This is what will happen once Article 50 is triggered – and how it could lead to Theresa May's resignation

Two years sounds like a long time, but in reality, when factoring all the breaks in, it’s around 18 months. I do not know a single expert on trade who thinks a comprehensive deal could be struck within the available time

Anand Menon
Tuesday 28 March 2017 13:22
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This is what will happen once Article 50 is triggered

Tomorrow Theresa May will send her letter to Donald Tusk, notifying him that Britain is leaving the European Union. The clock has already started ticking. And you could be forgiven for thinking it’s going to be easy.

The Prime Minister herself declared at Lancaster House that she intends to define a “new, positive and constructive partnership” between Britain and the European Union “by the time the two-year Article 50 process has concluded”. This is ambitious. Indeed, it is probably hopelessly unrealistic.

Even if all goes smoothly, there are good reasons to doubt the Prime Minister’s optimism. Leaving the EU involves two sets of negotiations. One – the Article 50 or “divorce” talks – is about the modalities of ensuring a smooth exit. The other will be about the nature of any future relationship between Britain and the EU.

Even assuming the other member states are willing to accede to the British desire to talk about a trade deal at the same time as we negotiate the Article 50 agreement, this might not be straightforward. Time will pose one immediate problem. Article 50 gives us two years to sign the two agreements. What with pauses for elections, for unexpected – though highly probable – crises involving the eurozone, or migration, or whatever – and, of course, for summer holidays, not to mention the period required for any deals to be ratified, we’re talking a maximum of 18 months for the negotiations themselves.

Even settling the divorce in such a time frame would be impressive. Agreeing on a comprehensive trade deal would be miraculous. And this, remember, is assuming the best of all possible worlds. More realistic scenarios imply far less salutary outcomes.

Article 50: What will happen after it's triggered?

The British Government has repeatedly underlined its determination to negotiate a trade deal simultaneously with the Article 50 “divorce” settlement. Other member states, however, are more inclined to carry out the talks sequentially, sorting out the exit before turning to the future.

Given this, it makes sense for those other states to make talks on trade conditional on an agreement over at least the principles governing the Article 50 agreement. “Prime Minister, we’d like nothing more than to sort out our economic future. Can you just sign this agreement first, and we’ll get onto that?”

Unfortunately, the agreement promises to be deeply problematic. We’ve all heard the numbers being bandied about, which range from €20bn to €60bn. Other member states want what they feel is their due. And this is all the more important in that they now have to adjust to life without a net contributor, which means difficult decisions about either who pays more or who gets less from the next budget round. As negotiations about the next Multi-Annual Financial Framework for the period 2020-2026 are about to start, these issues will be very much in their minds.

Coming to an agreement acceptable to both sides will not be easy. Indeed, even agreeing which issues should figure in the negotiations – whether they should, for instance, include British liabilities for the loans the EU has provided – will be far from straightforward.

There is every chance, then, that the talks might not even reach the trade agreement. As word of the sums being discussed leak to the British press, the political pressure will mount. Hardline Eurosceptics in Parliament will balk at the idea of paying for the privilege of leaving the EU. And the Prime Minister may decide, in her own words, that “no deal is better than a bad deal”.

Yet assume that this does not happen, that the Article 50 talks go well, and that a clever way is found to breach the divide over money. Payments could be staggered. They could be dressed up as a British contribution to poorer member states rather than a compulsory payment to the EU budget. The potential fudges are endless.

At this point, attention turns to trade. Here, too, time will be an issue. I do not know a single expert on trade who thinks a comprehensive deal could be struck within the available time.

As for substance, the Prime Minister has stated that she wants Britain to be able to trade with the EU “as freely as possible”, while refusing free movement and the jurisdiction of the European Court of Justice. Yet for some member states – including, crucially, Germany – this latter condition precludes much of what might be reconcilable with the former. In particular, it is hard to see how the kind of sectoral arrangements with the single market that British Ministers have hinted at will be possible without some kind of ECJ oversight.

Leaving aside the time constraints, then, there are practical barriers standing in the way of the negotiation of the kind of outcome the Prime Minister is after. If, after all this, the deal she gets is not one that provides the kind of trade of which she has spoken, what then?

One option would be to take whatever deal is on the table to Parliament. Yet if the political mood has shifted (possibly because of similar shifts in public opinion) this would be a risky tactic.

At this point, it will be Remainers and Leavers keen to maintain something as close as possible to single market membership who will form the roadblock. The promised parliamentary vote would indeed be meaningful if the Prime Minister were to lose it. At that point, given the credibility she has staked on this negotiation, she might have no choice but to resign. Following that, no option is off the table.

Consequently, Theresa May has very little incentive to take anything but the sort of stellar deal it is hard to see being negotiable before the House. Should she fail to achieve this, the temptation of resorting to the “no deal is better than a bad one” approach will again be overwhelming.

The stakes are high and the risks of failure equally so. At either stage of the talks, formidable hurdles stand in the way of the Prime Minister being able to come up with a deal acceptable to a domestic audience. The cliff edge looms ever larger.

Anand Menon is director of the UK in a Changing Europe initiative and professor of European politics and foreign affairs at King’s College London

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