That was the week that was…

In this post Dr Sophia Price, Principal Lecturer in EU external relations looks backwards a week after the EU referendum vote, and looks forwards to assess the various alternative political scenarios for where the UK might go now.

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Dr Sophia Price

A week is a long-time…

Last Thursday the UK went to the poll with great hope, although by Friday morning that had been dashed for almost half of all voters. The country has been thrown into uncertainty, with markets tumbling as many had predicted, and racist violence rising, as many had feared. The Prime Minister resigned immediately, leaving the Tory party to fight a leadership election while the Labour party pulled itself apart – just at the moment they could have claimed the ascendency.

It seems that almost everyone, including the Leave campaign, believed that the electorate would reject Brexit.  Clearly some Leave voters also felt this way, prompting a change of mind on Friday and giving us a new category of equivocal voters labelled ‘Regrexiteers’. Polls estimate that 7% of Leave voters regrexit, while 4% of Remain voters also wish they had voted the other way – although as recent history shows, polls can be (very) wrong.

With the prospect of the UK leaving the EU now a real possibility, it’s clear that the Leave Campaign vastly underestimated the constitutional impact of Brexit. Rough guesses predict that unpicking the raft of legislation that binds the UK to the EU will take at least 5 years, incurring huge financial costs for the civil service alone. This will be no quick divorce.

Furthermore the UK government lacks the bureaucratic capacity to undertake this process, not least the negotiation of new trade relationships with almost every country in the world. Brexit therefore will require a significant expansion of Whitehall (putting the current costs to the UK taxpayer of the European Commission into perspective). Added to the billions of pounds that have been lost through falling stock markets and the devaluation of the pound one wonders how the Remain campaign failed to effectively engage with this in their campaign. In the interim we are facing years of stagnation and inertia while the messy detail is worked out.

One week on, we sit in an uneasy moment. The resignation of David Cameron automatically deferred the decision to trigger Article 50 until the county has a new leader –  something that is increasingly looking like being decided by a General Election. This would suit both sides well. While some Remainers have called for a second referendum, this would be a dangerous decision that threatens to further disenfranchise the already disenchanted Leave voters and risks an escalation of civil unrest and even violence.

A Hard or Soft Brexit?

A General Election focussed around Brexit offers the opportunity to re-ballot the voters and give the necessary mandate to Parliament. The difficulty however is that both Labour and the Conservatives are split between Remain and Leavers. The formation of positions is a Game Theorist’s dream, with preferences formed around the ‘soft’ Brexit, ‘hard Brexit’ or no Brexit options.

For the Tories, the preferences are forming around the ‘soft’ and ‘hard’ Brexit option led by a Leaver. While Boris Johnson did the leg work, Michael Gove has used him as a stalking horse for his own ambition. Theresa May, while in private a Remainer, publically (at least this week) claims ‘Brexit is Brexit’.

Soft option Brexit would entail negotiated access to the Single Market while restraining the movement of labour – a position based on the belief that the European Council will accommodate this preference due to the potential costs of the UK exit for the EU. This arguably underestimates the UK’s position in EU negotiations, as concessions are reliant on the leverage of power.

Both France and Germany have already made clear that there can be no ‘cherry picking’ in the conditions of EU membership and they have little interest in opening the doors for other member states to renegotiate the terms of their membership. The European Council have refused to undertake formal negotiations until Article 50 is triggered – forcing the UK to embark on the exit path prior to knowing the bargaining position of its partner. For the Council this will guarantee their awkward partner is cut loose and left to petition for a way back in – hardly a position of power.

The hard Brexit option is to leave the EU completely and relegate the UK’s access to the Single Market to similar or worse than the array of countries the EU already has bilateral trade relations with. This option too will take a number of years to conclude and while economically it’s a poor outcome for the UK,  the EU will have rid itself of its ‘awkward partner’.

The No Brexit Alternative?

There remains however an alternative approach – No Brexit.

The decision not to trigger article 50 could be offset by an attempt to develop a consensus within the EU to restrict the movement of people. This might gain some traction with other EU leaders who are also under pressure from their electorates. Austria has already effected immigration controls that have been permitted within the rules of the Single Market and there is discussion of measures to limit ‘surges’ of migration within the EU. While none of the Tory leadership candidates have currently opted for this middle ground, preferring to bank on Party cohesion around Brexit, this might be a de-facto position that emerges through inaction.

Options open to Labour

These conditions of complexity contextualise the current divisions within Labour. Labour could grab the middle ground and appeal to the 48% of the population that voted to Remain, while building a policy agenda that responds to the conditions that have alienated its traditional and core voters.

Jeremy Corbin

Jeremy Corbyn at the No More War event at Parliament Square in August. A Creative Commons stock photo.

Perhaps this is what the Parliamentary Labour Party hopes to achieve by ousting Corbyn – although whether the Blairite contingent would do anything other than continue to pursue the neo-liberal agenda it has been wedded to is open to question.

Corbyn, on the other hand, has long committed to a radical socialist alternative but is equivocal at best on the question of the EU. Rather than snatching this moment to push for a Labour Remain position, he might present the Hard Brexit option by allying his own socialist alternative to the nationalist vote. Leaving the EU could offer the opportunity to break free from the legislative and policy constraints that might limit the pursuit of an alternative socialist agenda at the national level.  However while this vision would play to some of Corbyn’s supporters, it might not meet with the approval of those that both support Corbyn and remaining in the EU. While the Labour Coup might be painful to watch, it’s clear that there is more at stake than IF Jeremy can lead, more like WHERE he would lead the Party to.

This debate within the Labour Party reflects the broader debate within the Left – the extent to which the effects of crisis and austerity can and should be dealt with at a national level, or whether, as these are representative of conditions at a global scale, collective responses forged between transnational coalitions are a more appropriate strategy.

Other possibilities?

Of course there are other parties to consider. The pro-EU Lib Dems are waiting in the wings. While they were disciplined in the last elections by an electorate that couldn’t forgive Clegg’s complicity with the Tories, they could be viewed as having already taken their punishment and be now ready for a resurgence to take the middle ground of disaffected Tory and Labour supporters alike.

Similarly the Green Party might be an attractive option to the Remain voters disenchanted with their current parties.

And we cannot disregard UKIP and other parties of the Right. While UKIP discredited their referendum campaign within hours of the vote by denouncing their own key pledges, an election campaign based on the ‘hard’ exit option will still be attractive to some – particularly now the Pandora’s box of race politics has been opened and will continue to run throughout any possible election.

Of course there might not be a general election. If not, and depending on the outcome of the Tory leadership campaign, the UK could be facing years of stagnation and crisis, whether article 50 is triggered or not. While holding off announcing Brexit might buy some time, the EU will continue on with or without our participation (for the short term anyway).

 

Whether any of these scenarios or others play out, while the politicians complete their infighting, the rest of us look on as our pension funds devalue, future economic prospects become less certain and social divisions continue to broaden and deepen.  Leadership with a progressive and unifying vision for the future is badly needed. This week, it is difficult to see where that might come from.

New Paper on EU Meta-Governance

Things move slowly in the world of academic publication.  Around 18 months ago my collaborator Dr Paul Beeckmans and I submitted our paper on ‘Continuous Adjustment in EU Meta-Governance’ to the International Journal of Public Administration.  It was accepted well over a year ago and only last week was it finally published.

The wait means that the paper is somewhat out of date in terms of the latest changes in EU meta-governance and in particular the myriad developments in the ongoing saga of Greek bailout negotiations. To a large extent though, this doesn’t really matter for the argument that Paul and I wanted to make.

CC - courtesy of Wikipedia

CC – courtesy of Wikipedia

The paper started in response to a call for papers issued by Laura Horn and Lindsey Whitfield at Roskilde University for a two day workshop on the theme of ‘Structural Adjustment Comes to Europe’, which was held in November 2013.  The theme addressed a question that was attracting much discussion at the time: did the austerity measures imposed on some EU member states (notably Portugal, Ireland, Italy, Greece, Spain) by the EU institutions, amount to much the same process of externally enforced neo-liberalisation as experienced by African and Latin American governments and societies in the 1980s under the banner of ‘structural adjustment’?  If the answer is/was ‘yes’, then should the same outcomes of income polarisation, social conflict and political destabilisation be expected to result from this adjustment?  Several papers have been published in the academic literature which effectively address these questions.

Paul and I though, wanted to take a different approach.  To us, it wasn’t entirely accurate to view the experience of bailout countries as separate and distinct to that which is inbuilt in the process of European integration.  We thought that the notion of ‘structural adjustment’ conjured up images of a one-off adjustment to changed external economic realities.  We wanted to suggest that European integration has been a mechanism to secure ‘continual’ adjustment to the demands of international competitiveness since at least the Delors White Paper on Competitiveness published in 1993.  Since then that same commitment has been pursued through a variety of headline strategies including the Lisbon Strategy and now Europe 2020.

Where we were in agreement with the terms of the call for papers was that this adjustment was neo-liberal in orientation.  Acknowledging that this is often a ‘woolly’ and under-specified term, we were specific about what we mean by this: a set of policy reforms designed to shift the gains from economic growth toward capital rather than labour; to finance over other sectors of the economy; and frequently with the effect that income inequalities increase.

The implications of our argument that adjustment is continual and an integral feature of EU integration are that all EU member states are subject to adjustment and that this will continue into the future. We documented in some detail the ways in which neo-liberal adjustment is built-in to a variety of aspects of the meta-governance process. Importantly this is about much more than fiscal policy and extends into significant areas of social, welfare and employment policy.

Our overall conclusion is in line with that of Bob Jessop that EU meta-governance has become subordinate to the process of world market integration and that this is best understood as a multi-scalar process.  Meta-governance is a process of securing compliance with the demands of world market integration at a variety of other scales including state-level welfare reform, but also at the level of local and regional service provision and the organisation of individual households.

In making these arguments we contest some of the findings in the mainstream EU-studies literature that EU meta-governance is relatively ineffective at driving policy coordination among EU member states.  By contrast we argue that the frequent invocation of failure in relation to member states’ efforts to meet EU wide objectives (in relation to social, employment, welfare or economic policy) are actually a useful tool to reinforce the message in favour of continual adjustment. In this sense we support the wider findings of authors such as Jamie Peck or Susan Soederberg that EU meta-governance repeatedly ‘fails forward’.  The failure to fully implement one round of neo-liberal adjustment becomes the justifying logic to undertake the next round.

The full paper is available at the pages of the International Journal for Public Administration.

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A pre-publication copy is also available here.

Transpennine Working Group of the CSE: Seminar on Friday

All welcome!

Theodoros Papadopoulos (Bath University) and Antonios Roumpakis (York University).

The meta-regulation of European industrial relations: Power shifts, institutional dynamics and the emergence of regulatory competition among EU Member States

Leeds Metropolitan University

Rose Bowl 207, 24th May 14.00-16.00.

Directions and maps are at the link below. The Rose Bowl is no 11 on the City Campus Map (ie not the Headingley Campus). It is about 10 minutes walk from the Rail Station, and quite easy to find. http://www.leedsmet.ac.uk/about/files/campusmaps.pdf