Caught Between the Devil and the Sea, “No Deal” is a Bad Deal for Brexit Negotiations
Brexit negotiations are already underway but the possibility that the UK and the EU won’t be able to work out a mutually agreeable Brexit deal is hanging over the economies of the two blocs like a dark cloud. U.K. Prime Minister, Theresa May has hinted that her government has started making preparations for a ‘no-deal’ even though it is optimistic about the prospect of the negotiations.
To begin with, the EU chief negotiator, Michel Barnier has said that the EU won’t make any concessions for the talks to progress as the Brexit negotiations hit a deadlock. In his words, “the agreement we are working on will not be built on concessions. There’s no question of making concessions on citizens’ rights, and as regards to the financial settlement, there’s no question of making concessions on thousands of projects throughout Europe.”
Here are two reasons Britain is preparing for a “no deal” scenario
- It is just common sense
The first reason Britain is preparing for a no deal is that the fate of thousands, possibly millions of people hangs on how the UK is able to navigate the tumultuous waters of the negotiations. If the UK gets a fair Brexit deal, all will be well in the kingdom. However, an inability to secure a deal could be disastrous for the U.K because there would be chaos on the economic and geopolitical landscapes. In essence, preparing for a “no-deal” scenario is the logical and responsible thing to do.
- It shows a willingness to walk away
The second reasons the U.K is being vocal about its plan to prepare for a “no-deal” scenario is that it needs to show the EU a willingness to walk away from a potentially bad deal. Theresa May in May has said that she’ll walk away from the Brexit negotiation tables because “no-deal is better than a bad-deal“. Hence, UK’s preparation for a deadlock suggests that it wants to stay at a position of strength on the negotiation table.
Chaos looms on the horizon if Brexit negotiations fail
British nationals and patriots would love to buy the lack of desperation that the UK is portraying with its no-deal rhetoric. Yet, the obvious reality is that time is an important factor counting against Britain in the negotiations. Brexit will take place officially in March 2019 (about 17 months away). Clifford Griffin, an analyst at Wilkins Finance submits that “the time is too short for Britain in place the necessary infrastructure to weather the storms that will accompany a hard Brexit.”
In addition, the EU side of the Brexit negotiations already understands that the UK would suffer tougher economic headwinds than the EU in the event of a hard Brexit. Economists predict that the UK could be hit with a recession that could last about two years, even if the EU and the UK mutually agree that it’s possible to work out a Brexit deal. Hence, you can begin to imagine the economic impact of a hard Brexit in which both the EU and the UK storm off the table.
The UK has fundamentally sound reasons for kicking against a potentially bad deal from the EU. Yet, it is obvious that the UK can’t afford to walk away from the table without a deal.