The Fall

As the summer ebbs away, history returns with a vengeance—the balmy days of August quickly replaced by the barmy days of fall.

History, in this case, is prefixed by the adjectives ‘political’ and ‘economic’. I resampled London this week, which gave me a chance to probe the post-brexit mood. The thing is, as Private Eye pointed out, the UK is not in post-brexit, but in post-vote.

There is a certain naive hilarity to all this, because there’s a buoyant mood in the Great British press that ‘we got away with it.’ Problem is, the invocation of Article 50 is as distant as winter sunshine.

Let’s get down and dirty. You’ve heard Article 50 mentioned umpteen times, but most likely never read it.

1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.

A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.

5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.

There’s a whole website dedicated to the Lisbon Treaty, should you be affected by insomnia, but I give you only the offending article. Thankfully, it isn’t written in legalese, like so many EU directives—it may appear that the salient points are (a) the notification in 50(2), which the UK shows no signs of providing; and (b) the two-year period following it, as per 50(3).

However, 50(4) tells a more interesting tale—since the European Council concludes the negotiation, and the withdrawing Member-State does not participate, it means that in the end the UK doesn’t have a say in the final decision.

And there’s the rub. It’s for this reason that Theresa May and her twin bêtes noires (Davis and Johnson) want to strike a backdoor deal before notification, whereas the EU repeats that negotiation begins after notification.

I did a little homework on Articles 218 and 238 to help me understand the process and the majority definitions. Turns out that a qualified majority, normally equivalent to two-thirds of the vote, is a little different here. For the purpose of closing this deal the EU needs 55% of the nations, holding 65% of the population of the Union.

My interpretation is that the UK is excluded on both counts. As Stalin famously observed, it doesn’t matter who votes, but who counts the votes. So let’s engage for a minute in what the Portuguese call contar espingardas—let’s count our guns.

Rather than make a spreadsheet to work all this out, why not use the European Council’s voting calculator? The qualified majority voting system clearly favors big countries, so you can get your 65% with a five to six nation agreement.

Our calculator is flawed for this purpose, because it includes the UK, but we can make a quick correction in Excel. The UK has 12.73% of the EU population, so deduct and recalculate the percentage.

Turns out that if Germany, France, Italy, Spain, and Poland negotiate an agreement, we’re at 66% of the population. You’d then need a further ten countries, just to gild the lily—I’d say you’re spoiled for choice (you could start with the ones that hate Farage).

Currently, the annual EU income from Member-States stands at about 133 billion euro. If you remove the net contribution from the UK, that value goes down to 126 billion euro. To top that up, each country needs an increased contribution of about five percent, but since eighteen countries are net beneficiaries, the shortfall can be partly compensated by a cut in structural funds. This penalizes convergence, but so would an increased contribution.

The point is that from the budgetary aspect, brexit is of little consequence to the remainder of the EU. From the trade perspective, it may be different. Nevertheless, people in the UK don’t choose German cars on the basis of price—they buy on quality, brand, and prestige.

Everywhere in the UK, the mantra is repeated that the EU is broken. I maintain we’re seeing the beginning of a great experiment, exactly as we saw in the creation of the United States, and it saddens me greatly that Britain won’t be along for the ride.

In between all this and the potential ‘Trexit‘ in November, perhaps things won’t be cooling down in the fall.

As the Chinese curse goes, may you live in interesting times.

The India Road, Atmos Fear, and Clear Eyes. QR links for smartphones and tablets.

The India Road, Atmos Fear, and Clear Eyes. QR links for smartphones and tablets.

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