The United Kingdom is officially headed for the Brexit.
On Wednesday, Prime Minister Theresa May delivered formal notice of her nation’s decision to withdraw from the European Union, by invoking Article 50 of the Lisbon Treaty. Now Britain and the E.U. have two years to settle on the terms of a divorce that must be generous enough to win the approval of the U.K. Parliament — but punitive enough to discourage other E.U. nations from exiting the bloc.
If such an agreement can’t be reached, then World Trade Organization rules will kick in, British goods and services will be hit with high tariffs, and the economy of the entire continent will likely suffer — and all because David Cameron decided his reelection prospects would be aided by proposing a silly referendum that he knew “remain” would win.
“Today the government acted on the democratic will of the British people, and it acts too on the clear and convincing position of this house,” May told Parliament Wednesday, before extolling the virtues of a “truly global Britain, the best friend and neighbor to our European partners but a country that reaches beyond the borders of Europe too.”
Britain heads into negotiations with Brussels with a less-than-ideal amount of leverage.
The U.K. is a big market for continental Europe — one that German exporters are particularly reliant on — while London’s financial sector feeds capital to many continental businesses. Further, Britain is one of only two significant military powers in the bloc (the other being France), and could potentially barter access to its intelligence and security capabilities.
But any agreement will need to be approved by every parliament in Europe — and the W.T.O. rules that would take effect if no deal is reached would hurt the U.K. far more than the rest of Europe, according to most economists. What’s more, many European leaders are looking to demobilize anti-E.U. movements in their own nations. Any deal allowing Britain to have its privileged access to the European common market — and its sovereignty over immigration, too — would put wind into the sails of Marine Le Pen and her ilk. In other words: Many of Britain’s negotiating partners believe Britons must be made worse off by the end of this process.
Finally, time is not on Britain’s side. The nation’s businesses can’t wait long before preparing for the worst possible outcome. If the parameters of a final agreement are still mysterious in the early months of 2018, financial firms could start fleeing London and a sharp downturn in the British economy could follow.
All of which is to say: When racist demagogues promise that shared prosperity can be restored by deporting immigrants and rejecting international cooperation, you should probably take their claims with a grain of English sea salt.