The EU will happily punish delusional Britain for last night's Brexit defeat

britain flag swing.JPGREUTERS/Hannah McKayIt was fun while it lasted.

  • Last night's vote defeating Theresa May's proposed Brexit deal seems like a significant event - an emphatic rejection of what the EU wants.
  • From Brussels' point of view, however, nothing has changed.
  • Article 50 is a legal process, not a negotiation. This isn't poker, and Britain has not suddenly been dealt a new set of aces. It's more like a court proceeding, in which the EU is deciding how the UK shall be sentenced.
  • If Britain deludes itself into thinking the EU will start compromising the country could flop out of Europe almost by accident, with no deal - that's the worst-case scenario.

After the historic defeat of Theresa May's Brexit deal in parliament last night, Britain feels different today. We might not know what our future with the EU will look like but one thing is certain: It won't be May's deal.

From Brussels' point of view, however, nothing has changed. Read the statements from European C0mmission President Jean-Claude Juncker, European Council President Donald Tusk, European Parliament Brexit coordinator Guy Verhofstadt, and chief negotiator Michel Barnier. "Time is almost up," Juncker said.

They haven't budged an inch.

That is important because there is a huge risk that Britain will delude itself into thinking that last night's vote "changes everything."

This, as warned before, is the "Greek Fallacy."

When Greece went through its debt crisis, trying to avoid a punitive debt bailout from the EU, it held four national elections and one referendum. Each one gave the country a "mandate" to secure a better deal for Greece. The EU ignored each one, and forced the country through an economic crisis worse than the Great Depression to get its money back.

This was described in 2017 by Duncan Robinson, the Brussels correspondent for the Financial Times, as the "Greek Fallacy" - the false belief that a domestic vote somehow gives a national government a stronger negotiating position than before.

It does not.

Article 50 is a legal process, not a negotiation. This isn't a game of poker, and Britain has not suddenly been dealt a new set of aces. It's more like a court proceeding, in which the EU is sitting in judgment of the UK and deciding its sentence. Last night's vote is just a footnote.

Brussels doesn't care about votes or elections inside individual countries. In fact, its officials work actively to negate them, according to former Greek finance Minister Yanis Varoufakis.

That's because the EU is not structured as a democracy in which power is devolved. Rather, it exists mostly as a system of rules, policies, and laws that are incredibly difficult to change or break. There is no way to negotiate with a body that cannot change its mind if just one of its 28 members won't go along.

We are now at the end of the Article 50 process and Britain is must either change its Brexit red lines, or leave the EU on March 29, according to of the EU's pre-approved options. Those are:

  • May's deal.
  • No deal.
  • Remain in the EU.

May, to her credit, appears to one of few people in the House of Commons who actually understand this. Until yesterday there was no other deal than May's deal on the table. The implication of last night's vote is that only the other two options are now available.

Labour party leader Jeremy Corbyn is hoping, somehow, to get a general election that will put him in power and allow him to negotiate a new, better deal. He will face the exact same situation as May, with the exact same options. For Brussels, a general election will be yet another footnote.

A majority of British people, and a majority in parliament, want some kind of functioning relationship with the EU post-Brexit. But the delusion that a defeat for May is somehow also a defeat for the EU could bring about the opposite of what that majority wants: reaching the end of Article 50 with no deal. To satisfy that majority, parliament must now choose between Norway and Remain.

The Norway option is tempting because it fulfils the Leave promise but keeps Britain economically tied to Europe - the damage will be limited.

Remain can be reached by staging a second referendum.

The worst-case scenario is for MPs to believe that they are still playing poker, and move to call the EU's bluff. As Verhofstadt said last night: "What we will not let happen, deal or no deal, is that the mess in British politics is again imported into European politics."

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