Tuesday 20 August 2019

Dan O'Brien: 'With-us-or-against-us tribalism puts these islands on dangerous trajectory'

A new government at Westminster has heralded a sea change in relations between Ireland and the UK, writes Dan O'Brien

British Prime Minister Boris Johnson speaking in the House of Commons. Photo: PA
British Prime Minister Boris Johnson speaking in the House of Commons. Photo: PA
Dan O'Brien

Dan O'Brien

A new low-point has been reached in the Brexit fiasco. Not only is the prospect of the most serious breakdown in relations between western European countries in decades looming ever closer, but the nationalisms on these islands are growing in intensity.

Boris Johnson's coming to power in London last week, and the Churchillian-tinged rhetoric he has used since, has echoes of an era that many Britons consider their country's "finest hour" - the period when Britain stood alone against the all-conquering Nazis in the 1940s. The centuries-long tradition of "splendid isolation" from continental entanglements is asserting itself ever more forcefully. Either London gets its way or there will be no deal. Do or die.

On this side of the Irish Sea there is nothing more certain to get teeth grinding than the sight of English patricians and bulldogs trying to lay down the law. Because of the long history of interference in the affairs of this island by those from the larger and more powerful neighbouring island, there remains an (overly) acute sensitivity to anything that might be construed as an English slight.

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"Bullying" - a term used many times in media coverage over the past few days - is red rag to the Irish bull. Not being bullied by the British and being seen to stand up to them have returned as central motives for politicians of all hues.

All of this is profoundly dangerous. Too often in history nationalisms have fed off each other, leading to a dangerous downward spiral in which both sides feel a sense of grievance which can justify further escalation. Accusation is followed by counter-accusation. The centre ground hollows out.

Those who advocate proportionality and, where possible, de-escalation are accused of weakness and even treachery. Those who belittle, dismiss, deride and speculate on the weaknesses of the other side win kudos. Only those who take the hardest line with the other side are truly loyal to the tribe.

At the centre of this evolving nightmare of nationalisms is Northern Ireland. The Irish and EU sides insist they will not change a comma in the Withdrawal Agreement signed up to by Theresa May but rejected by Westminster on three separate occasions. The new regime in London insists the Irish backstop must go in its entirety.

The binary nature of Northern Ireland's status - it can only be in the British single market or the EU single market at any given time - means there was never any real room for fudge or tweaking. Even time-limiting the backstop, which was always the most plausible compromise available and which would almost certainly have got the deal through Westminster earlier this year, has been rejected emphatically by Johnson.

Who gets their way on how Brexit happens has become a pure test of strength. That is a dire position to be in when the options are so binary. With national pride at stake and all other factors declining in relevance, the already slender chances of a smooth Brexit have narrowed further the past few days. Both Dublin and London are now painted so far into their respective corners that rupture increasingly looks more inevitable than probable.

But it is not just political decisions on these island which make a deal look increasingly unlikely. The EU has invested too much in the backstop position to back down and, besides, if it was ever going to compromise it would have done so by now.

Further, backing down now would be a sign of weakness, and there are good reasons why showing signs of weakness can be dangerous in international affairs. Giving to Johnson what was refused May would reward and incentivise others who believe they can get what they want from Europe by playing hardball, whether that is Donald Trump from outside the bloc or Matteo Salvini within it.

Despite the geopolitical logic for Berlin and Paris not to alter course, fears remain in Ireland (and hopes remain among Brexiteers) that the Franco-German axis might force Ireland to back down at the last minute for fear of the economic damage it would do to their economies. A period of continental sluggishness and concerns about the possibility of recession (the European Central Bank last week moved towards a new round of monetary stimulus) has again brought this issue up.

But it has been clear for a long time now that both of the most important continental capitals believe geopolitics trumps economics when it comes to Brexit. And it is not just because of factors mentioned above. Another reason is that the economic hit of a no-deal Brexit for both France and Germany is likely to be limited.

Although Germany sells a lot of cars to Britain, total German exports of goods and services to the UK market are worth less than 4pc of German GDP. For the less export-oriented French economy, the figure is below 3pc. Even an unprecedented reduction in exports to Britain of, say, 20-30pc would be more than manageable for either economy.

The situation for Britain and Ireland is very different. Britain's exports to the EU 27 and Ireland's exports to the UK are many multiples of the figures cited above for France and Germany.

Severe disruption to trade would have a much bigger impact for both economies. A sharp recession would likely result, even if there is extreme uncertainty about the depth and duration of any slump.

Uncertainty prevails in relation to all aspects of no deal: there are as many unknowables about how it would all play out as there are outcomes. One scenario that is less certain than many on the Irish and EU side believe is how London would react in a post-no deal scenario.

It is widely believed the economic shock of a no deal would quickly bring the British back to the table and that they would quickly accept whatever terms are offered - including the backstop - because the economic fallout would be so serious. Anything is possible, but in my view this scenario is a lot less likely than many in officialdom believe.

The much-talked-about delays at ports would impact from the first day of a no-deal departure. The new trading regime, with a great deal more friction at borders, would be felt immediately. But a no-deal scenario would not amount to some sort of blockade of Britain - the EU position would merely be to apply the same rules to Britain as it applies to other non-member countries which do not have bilateral trade deals.

As such, the consequences for daily life in the event of a no-deal Brexit are likely to be front-loaded and to dissipate over time as businesses get used to the new (much inferior) arrangements and find ways to deal with them. That would come at a cost in jobs and trade, but as the new regime settled down its effects would likely dissipate, and not intensify as they would if the EU side was trying to damage or blockade Britain, something which only the most extreme Brexiteers might contend.

The point of all this is that if the economic pain is indeed frontloaded and begins to wane as weeks and months pass, pressure will ease on London to come back to the table.

Indeed, the pressure could work the other way - being seen to cave in to the EU's demands after taking the pain of no deal could be politically impossible.

How things turn out in Britain will depend on how the economics and politics interact. But when nationalist sentiment comes to the fore, the latter usually takes precedence over the former.

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