Brexit Diaries 15: Theresa May and Machiavellian intrigue

The latest Brexit drama centers on Prime Minister Theresa May, the UK and EU hoping for hints of progress, an ill-fated dinner in Brussels and Machiavellian intrigue.

This last week was all about Theresa May. We saw the British prime minister in Brussels talking to four flower pots. Maybe because nobody will listen to her in her own government? Or was she silently praying to the God of small things to make her horrible day, the awful EU summit and the whole dreadful Brexit thing go away? Maybe May was considering quitting politics entirely, just getting up and leaving for a quiet life in the country with husband Philip. But as the dutiful daughter of a clergyman she stayed the course. History will decide whether she did herself, her country and the rest of us a favor or not.

This was the week of the summit meeting where the EU and Britain were slowly getting hints of progress in the Brexit talks, with the hope of making enough headway by Christmas. Member states gave the green light for internal talks about the possible nature of a future deal. That was almost no news disguised as moderately good news.

Loose talk or Machiavellian intrigue?

Too much talk seems to be one of Brussels' problems. When May invited herself to dinner last week in the EU capital, it was clear what she wanted from Commission chief Jean-Claude Juncker. It was a last ditch attempt to sway him and to move the Brexit talks to phase 2: "Future relationship." During dinner, however, Juncker moved nothing but salt and pepper across the table. Life is not that simple.

It all seemed so friendly between Juncker and May...

Much more fun than this failed bit of personal diplomacy was the aftermath. The German weekly Sonntags FAZ newspaper wrote about the evening in worrying detail. May looked "anxious, despondent and discouraged," it reported, and she was pleading for help, had rings under her eyes and seemed very tired. The likely source of the reporting was quickly identified. It could be none other than Juncker's "eminence gris" and German cabinet head, Martin Selmayr, who had leaked these telling details.

But Selmayr reacted furiously. "I deny that we leaked this, that Juncker ever said this and that we are punitive on Brexit," he said. "It's an attempt to frame the EU side and undermine talks."

Selmayr is rumored of having a track record of leaks. He is suspected to be the source of the harsh comments Juncker made at similar dinner with May in London earlier in the year that went public. If he did it once, would he not do it again? The UK's Brexit minister, David Davis, is reported to have accused Selmayr of being behind the leak, pointing out that there were only "six people in the room." What would Selmayr's motive be?

Davis is a genuine Brexiteer, as opposed to May. He is still rumored to be a potential successor to the prime minister. He hates the way Brexit talks are shaping up and he was in the room. Would anybody think such a piece of Machiavellian intrigue was beyond the British chief negotiator?

Is Britain's economy tumbling over a cliff?

Still about a good deal or no deal

The EU believed it was doing May a favor in offering preliminary musings about the future. And this almost-progress must have encouraged business leaders in the UK. They are now writing letters to the government begging for clarity on Brexit almost daily. And their best hope was the transition period that May had announced in Florence. But in Parliament, the prime minister slapped everybody down. "There can be no implementation period," she said, "until the UK has settled its future partnership with the EU." 

It has a certain logic if you call it implementation instead of transition. But it shatters the hope that a transition phase could simply delay the looming cliff edge Brexit. With the economy tumbling down the hill helter-skelter, the fall may already be starting. As Goldman Sachs CEO Lloyd Blankfein tweeted last week: "Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I'll be spending a lot more time there." The grass may be greener on the other side of the channel.

EU Council President Donald Tusk dug the knife in by saying, "it's in fact up to London how this will end, with a good deal, no deal or no Brexit." Oops, the latter option seems off the table but is still a possibility if the EoB's, that is, the enemies of Brexit, get their act together.

How much money will the UK have left in its purse after Brexit?

Return of McCarthyism?

Astonishing in its blatancy is a letter that Tory MP Chris Heaton-Harris wrote to all British universities, asking for the names of "Professors teaching European affairs, with particular regard to Brexit." The lawmaker also wanted to have the syllabus and the links to online lectures.

Academics reacted furiously, calling it a sinister attempt to bring back the thought police and McCarthyism. "What happened to this great country?" anti-Brexit Campaigner Gina Miller asked. The answer is Brexit.

Deal or no deal? Brexit options boiled down

Hard or soft options

It's essentially a choice of a harder or softer Brexit. Harder prioritizes border control over trade. UK firms would pay tariffs to do business in the EU, and vice versa. The softest Brexit would see access to the single market, or at least a customs union, maintained. That would require concessions — including the payment of a hefty "divorce bill" — to which the UK has provisionally agreed.

Deal or no deal? Brexit options boiled down

A leap into the unknown

Businesses have expressed concern about a "cliff edge" scenario, where Britain leaves the EU with no deal. Even if an agreement is reached at the EU bloc level, the worry is that it could be rejected at the last minute. Each of the 27 remaining countries must ratify the arrangements, and any might reject them. That could mean chaos for businesses and individuals.

Deal or no deal? Brexit options boiled down

No deal - better than a bad deal?

If there is no agreement at all, a fully sovereign UK would be free to strike new trade deals and need not make concessions on the rights of EU citizens living in the UK or pay the financial settlement of outstanding liabilities. However, trade would be crippled. UK citizens in other parts of the EU would be at the mercy of host governments. There would also be a hard EU-UK border in Ireland.

Deal or no deal? Brexit options boiled down

Divorce-only deal

The EU and the UK could reach a deal on Britain's exiting the bloc without an agreement on future relations. This scenario would still be a very hard Brexit, but would at least demonstrate a degree of mutual understanding. Trade agreements would be conducted, on an interim basis, on World Trade Organization rules.

Deal or no deal? Brexit options boiled down

Limited arrangement, like with Canada

Most trade tariffs on exported goods are lifted, except for "sensitive" food items like eggs and poultry. However, exporters would have to show their products are genuinely "made in Britain" so the UK does not become a "back door" for global goods to enter the EU. Services could be hit more. The City of London would lose access to the passporting system its lucrative financial business relies on.

Deal or no deal? Brexit options boiled down

Bespoke deal: Swiss model

Under the Swiss model, the UK would have single market access for goods and services while retaining most aspects of national sovereignty. Switzerland, unlike other members of the European Free Trade Area (EFTA), did not join the European Economic Area (EEA) and was not automatically obliged to adopt freedom of movement. Under a bilateral deal, it agreed to do so but is still dragging its feet.

Deal or no deal? Brexit options boiled down

The Norway way

As part of the European Economic Area, Norway has accepted freedom of movement – something that no Brexit-supporting UK government would be likely to do. Norway still has to obey many EU rules and is obliged to make a financial contribution to the bloc while having no voting rights. Some see this as the worst of both worlds.

Deal or no deal? Brexit options boiled down

A Turkey-style customs union

Turkey is the only major country to have a customs union with the EU, as part of a bilateral agreement. Under such an arrangement, the UK would not be allowed to negotiate trade deals outside the EU, instead having the bloc negotiate on its behalf. Many Brexiteers would be unwilling to accept this. It would, however, help minimize disruption at ports and, crucially, at the Irish border.

Deal or no deal? Brexit options boiled down

No deal, no Brexit?

EU President Donald Tusk says the outcome of the talks depends on Britain, citing a good deal, bad deal or "no Brexit" as possible options. However, with both of the UK's major political parties – the Conservatives and Labour – committed to going ahead with Brexit, that looks unlikely.