Brexit Chaos Continues To Shock

There seems to be as much behind the scenes maneuvering in current British politics as there was in the courts of British kings and queens hundreds of years ago. On Tuesday, it was the Labour party's turn to rebel against their leader. Today's shocker is the Boris Johnson has announced that he won't run for Conservative party leader and, therefore, will not be the next PM. Michael Gove had abandoned his support for Johnson earlier and decided to make a run himself. This leaves the leadership battle between Gove, a leave supporter, and Theresa May, who supported remaining in the EU.  May made it clear in a speech announcing her intention to run that Britain will leave the EU. "Brexit means Brexit. The campaign was fought, the vote was held, turnout was high, and the public gave their verdict. There must be no attempts to remain inside the EU, no attempts to rejoin it through the back door, and no second referendum".  On the other hand, May also said that Article 50 should not be invoked until next year at the earliest and that there would be no early election.

Johnson's withdrawal is truly a shock and it's hard to know whether he was outmaneuvered by Gove or whether his backtracking on immigration earlier in the week crippled his chances. Perhaps Johnson is playing the long game, letting the Gove or May negotiate the exit and then mounting a general election challenge. I do find it hard to imagine that May can keep her promise to not hold an election until 2020 unless she delays invoking Article 50 until well into 2017. Correspondingly, it is hard to believe that the public and the business community will put with the continued uncertainty associated with such a long delay in starting negotiations to leave. Whatever she does, you have to believe a general election will be necessary to ratify any agreement Britain makes with the EU to leave.

I keep on reading stories by serious pundits that Britain will never actually leave the EU, either out of self-interest or because it will somehow be blocked legally. On the other hand, the next PM, whether Gove or May, has now explicitly stated that they will invoke Article 50 and Angela Merkel made it quite clear yesterday that the UK vote to leave actually meant leaving. “I want to say very clearly tonight that I see no way to reverse this,” Merkel said. "We all need to look at the reality of the situation. It is not the hour for wishful thinking." But neither Gove or May have laid out an endgame that is remotely within the realm of possibility. Both talk about somehow staying as a member of a single market but without the freedom of movement that EU membership demands.  I don't see any way that other EU members would allow Britain to stay in the EU but have total control over its own borders. To negotiate that kind of deal with Britain is to invite every other member country to negotiate its own special deal with the EU - it's just not going to happen.

If Article 50 is eventually invoked, there seem to be only two possible solutions out there. One is for the UK to negotiate some pretty minimal changes to immigration from Europe that would still be in the context of "free movement" and try to sell that, as Cameron did with his renegotiation this spring, as a victory. Or the insurgency from the far right all over Europe becomes so great that the EU revokes the free movement requirement for every EU member. The former solution will strengthen UKIP and the xenophobes; the latter will mean victory for the far-right. In either case, it is a loss for a dynamic economy and a pluralistic society.