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Shortly before the end of the month, a hard Brexit was averted. There will be no massive interruption, especially in economic relations between Great Britain and the European Union (EU).
The EU Commission and the UK Government After months of struggle, have agreed on a trade deal to regulate their relations after the UK leaves the European Community on January 1, 2021.
“It took a while, but now we have an agreement. It was a long and rocky road, «announced the EU Commission chief Ursula von der Leyen at a press conference in Brussels. As is to be expected in the political world, it logically does not know any loser. She and EU negotiator Michel Barnet responded rather soothingly to the few admitted critical inquiries from press representatives who were involved.
In the end it was “a fair and balanced deal.” The European Union is well prepared for Brexit, Great Britain is now a third country, but the EU and the country remain in partnership because they share the same values. Normally she feels joy after such tough negotiations, said the Commission President. Today she feels mainly relief. »Now we should leave Brexit behind us. Our future lies in Europe. ”
British Prime Minister Boris Johnson too rather ironed out critical questions in his press statement from Downing Street 10. The agreement is a “good deal for all of Europe”. He emphasized that the British could now decide on their own affairs and that the European Court of Justice no longer had anything to report on behalf of the country. At the same time he suggested conciliatory tones and made it clear that the bridges to Europe had not been broken. It is not a bad thing for the European Union if the Kingdom henceforth »does things differently … This deal gives us a new stability and security in a relationship that was sometimes fragile and difficult. We will remain your friend, your ally, your supporter and, not to forget, your biggest market. ”
With the agreed trade agreement a hard break at the beginning of the year is avoided. From then on, it should regulate the economic relations between the island and the continent. The most important aim of the negotiations was to avoid tariffs and to enable the smoothest possible economic relations. In addition to fishing and agriculture, the contract also includes cooperation in energy, transport, justice, police and many other fields.
Great Britain had the EU at the end of January 2020 and since then has only been a member of the internal market and the customs union for a transitional period until December 31. Without an agreement, customs duties and more complex controls would have been necessary. Business representatives on both sides had warned of upheavals and the loss of tens of thousands of jobs.
The negotiations would actually have been in October should be completed, were obviously on the verge of failure several times. Because of the short time, this agreement can no longer be ratified on time by the EU. It will come into force for the time being, not only the remaining 27 EU states have to agree, in the last resort the European Parliament has to approve the more than 2,000 page agreement. On the British side, the government has announced that it will allow parliament to vote at the end of December.
The Prime Minister’s Office has already announced the deal provided everything that was promised to the UK public during the 2016 referendum and the 2019 general election. “We have regained control of money, borders, trade and fishing waters” and said the deal was “fantastic news for families and businesses in all parts of the UK.”
The agreement guarantees Great Britain exports without tariffs and without quantity limits in the EU internal market. In return for this right, the EU demanded fair competitive conditions (“level playing field”), ie the same environmental, social and subsidy standards. At a comparable level, the EU wants to prevent the goal of a zone of lowered standards aimed at by the right-wing conservatives from becoming a reality with the goal of competitive advantages at the gates of the continent.
This remained a very complicated one until the end Point of contention. A way was sought to ensure fair competition also for the future and otherwise to be able to take countermeasures, which obviously only succeeded at the last moment. The access of EU fishermen to British waters remained particularly controversial until recently.
Last but not least, the appearance of a mutated variant the corona virus and with it the worsening pandemic in Great Britain built up further pressure. France had temporarily closed its borders to traffic from Great Britain. That is why thousands of trucks were jammed on the British side – from the point of view of many critics a foretaste of the situation after the no-deal Brexit. Apparently the preparations for lengthy controls were completely inadequate.
British voters had 2016 Voted in favor of leaving the EU with a narrow majority. Boris Johnson won the parliamentary election in 2019, among other things, with the announcement that Brexit would actually be carried out. Even then, he repeatedly mentioned regaining sovereignty and control over one’s own limits and laws as the central point. Then he would lead Britain through economic and social advancement into a golden age. And he had stated that he would not agree to any agreement that would undermine British sovereignty.
The complete exhaustion of the negotiation deadlines In addition to the difficulties in reaching agreement on comparable competitive conditions and fishing rights, it also has to do with the fact that Johnson is under considerable pressure from the right-wing populist wing of the conservative party. Now he has put this and the House of Commons under pressure with his approval of the deal due to the tight deadlines on his part. The resolution on the agreement of almost 2,000 pages is to take place in an extremely short period of time on December 30th.
That in turn also depends with domestic political complications and consideration for the representatives of companies and the more conservative-neoliberal parts of the British upper classes. The prime minister had to take these different interests into account during the negotiations, but got caught up in contradictions and missed the opportunity to extend the Brexit transition period in early summer.
The corona recession is having such a hard time in Great Britain hit like hardly any other country in Europe. An additional burden with a no-deal Brexit would have resulted in a further worsening of the crisis for the economy. Johnson had already had to part with his long-time advisor Dominic Cummings due to increased public pressure. He recommended the toughest possible Brexit and a laisser-faire in the Corona crisis with the inhuman remark that if saving the economy in the pandemic kills a few pensioners, then that’s the way it is.
A little later, Johnson lost after being voted out Donald Trump is also another proponent of strict economic nationalism. The transition to a contractually regulated Brexit will by no means only find approval in the conservative group, but it can be assumed that the calculation with the short consultation time will not fail to have its effect.
Whether this political change of course away from a hard Brexit, which can stabilize the political authority of the prime minister, not least because of the by no means positive economic framework data, will probably also be decided by the further course of the corona crisis (see also the article »Johnson’s successful destruction of the United Kingdom« on socialism .de, current from December 22nd, 2020).
The now agreed deal prevented an escalation of the severe economic crisis triggered by Corona on both sides, even if after deliberations, in particular by the European Parliament, the design of detailed questions may still be explosive. Overall, however, it would be an illusion to assume that the EU is ultimately the winner in averting the no-deal Brexit. From an economic point of view, leaving the internal market and the EU customs union remains a politically dangerous and economically risky policy.
A no-deal Brexit would have According to the National Institute of Economic and Social Research (NIESR) in London, UK economic output will be reduced by 5.5% by 2030 compared to the rate it would have if it remained in the EU. The reasons are losses in trade, investments and productivity. The free trade agreement limits these losses to around 4%.
Gabriel Felbermayr, President of the Kiel Institute für Weltwirtschaft (IfW Kiel), rightly states: »The fact that there will now be no tariffs and quantity restrictions in trade between Great Britain and the EU is clearly better than if the general rules of the World Trade Organization (WTO) had been traded without a deal . But how good the solution really is depends on the details, the analysis of which is just beginning. ”
In France, too, there is only subdued optimism. Head of State Emmanuel Macron welcomed the agreement: “European unity and stability have paid off … The agreement with the United Kingdom is important in order to protect our citizens, our fishermen and our producers”. However, one will first have to convince oneself whether this is really the case. Nonetheless, here too the optimistic tongue that is usual in the political field: “Europe is making progress and can look forward to a united, independent and strong future.”
For EU countries with the exception of Ireland it would be the no-deal shock turned out to be much smaller, but it remains that the economic role and proximity of Great Britain are significant factors for the EU and a state without a treaty would have meant a political indictment. The trade agreement creates a basis on which future cooperation between the UK and the European Union could be built. At least there will now be smoother border and customs controls than would have been feared in the absence of a contract.
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