May is weak in Europe but strong at home by Charles Grant
Theresa May doesn’t like the term ‘hard Brexit’. That is because a hard Brexit – meaning a withdrawal that cuts many ties with the EU – will inevitably have negative economic consequences. And when considering key decisions on Brexit, the British prime minister has been unwilling to acknowledge the trade-off between sovereignty and economic growth. But speaking in Lancaster House in January, May was fairly clear about the kind of Brexit she wants, and she edged towards recognising the trade-offs. May wants a hard Brexit: freed of the EU’s rules on free movement and the jurisdiction of its Court of Justice, Britain will leave the single market. And it will pull out of the essentials of the customs union, which means the return of customs posts to the EU-UK border (including the border between Northern Ireland and the Republic), to check for things like rules of origin. She wants “a bold and ambitious free trade agreement” (FTA) to govern the future economic relationship. The prime minister doesn’t want the very hard Brexit favoured by some eurosceptics, according to which the UK would leave the EU and simply rely on World Trade Organisation (WTO) rules. Nevertheless some key officials in Brussels and other capitals fear that Britain may face a much harder Brexit than the version she sketched out: either exiting to WTO rules, or perhaps even falling out of the EU without any Article 50 agreement, leading to legal chaos for companies and individuals.
This pessimism stems from the officials’ reading of UK politics. They note that the domestic political pressures on May are nearly all from the shrill lobbies and newspapers which want a very hard Brexit. The officials worry that these pressures may prevent May from striking the kinds of compromise necessary – for example, over the money Britain is supposed to ‘owe’ the EU – for a deal to be reached. They also fret that the British government is deluded over the strength of its negotiating hand; the reality, they (correctly) surmise, is that once Article 50 is triggered, determining that the UK must leave in two years, London has few cards to play. They fear that UK politics may drive May to storm out of the Article 50 negotiations and seek a bigger parliamentary majority in a general election. Despite such worries, Britain’s partners welcomed much of the Lancaster House speech, notably the clarity over Britain’s intentions, and the warm words about the EU (which contrasted