A Brexit perspective: The United Kingdom will face slow growth with America's positioning within Europe weakened.

Author:Welfens, Paul J.J.
 
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The results of the snap election in the United Kingdom on June 8, 2017, have been sobering for Prime Minister Theresa May's government as the landslide victory expected was not achieved. Rather, the absolute majority of the Conservative government was lost, and May will now continue as prime minister heading a minority government. She will need the support of the Democratic Unionist Party of Northern Ireland where, just as was the case in Scotland, the June 2016 EU referendum brought a majority for Remain. The DUP will not want a hard Brexit, which would imply a hard border between Northern Ireland and the Republic of Ireland, replacing the current soft border across which people can easily move.

Switching to a minority government thus will mean an end to the hard Brexit approach for which May was originally seeking a strong mandate with the snap election. The May government wants full control of immigration and has refused to continue participation in the EU single market. It also does not want a customs union with the European Union. Rather, a special free trade agreement between the United Kingdom and the EU27 is May's goal. She now faces difficult negotiations with the European Union--with a looming deadline in March 2019.

European Parliament elections will be held in mid-2019, and it is inconceivable to extend the negotiation time beyond the standard limit of two years (read March 29, 2019), since electing British members for a new European Parliament would be quite strange in a situation where the United Kingdom wants to leave the European Union.

The 51.9 percent majority of the 2016 Brexit referendum thus brings considerable problems for the United Kingdom where Prime Minister David Cameron resigned after losing the EU referendum which he basically had called in order to neutralize anti-EU forces within his own Conservative Party. When May succeeded Cameron in July 2016, the legitimacy of the new government was in question. This resulted in May calling a snap election in June 2017 to reinforce her position. This election brought a weaker minority government, yet still May argues that Brexit has strong legitimacy and that she will make a success of it. Both conjectures are not really convincing for three reasons.

First, while the June 2016 referendum produced a 51.9 percent majority in favor of Brexit, the information brochure mailed by the Cameron government to households contained the key finding of a 10 percent income reduction from Brexit, as shown in...

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