Saturday 23 February 2019

Sean O'Grady: 'Brexit has shown the UK it should finally accept its diminished status in the world'

Echoes of history: Egyptians crowd around a British tank in Port Said during the Suez crisis on November 12, 1956. Photo by Fox Photos/Hulton Archive/Getty Images
Echoes of history: Egyptians crowd around a British tank in Port Said during the Suez crisis on November 12, 1956. Photo by Fox Photos/Hulton Archive/Getty Images
Sean O'Grady

Sean O'Grady

Rarely, a moment arrives in a nation's history when reality hits, and it realises that it is not the power it was, not the force it fancies itself to be, and that it cannot get what it wants because other, stronger nations, won't allow it to. It is becoming more obvious that Brexit is just such a moment for the UK.

As Theresa May asks us to consider what the historians will say, it is a nice moment to suggest that they shouldn't heap the blame on her. She made her mistakes, heaven knows, but the fundamental problem for her is that the EU is, roughly, 10 times bigger than the UK. In population, in economic heft, in terms of the scale it can bring to its negotiations with other economic superpowers such as the US, China, India and Japan.

The British were not able to get the Brexit they'd like - to have their cake and eat it - because the EU could say no to that proposition, and it did. The UK had few cards to play - the budget contributions, keeping EU citizens as "hostages", the EU's loss of the City as a pool of capital, and impeding the "import" of everything from French cheese to Polish plumbers. In the end, the EU had far more.

So it told the UK where to get off: what did the UK expect? It has happened before. Politicians occasionally mention "Suez" as a moment of similar national crisis and humiliation. The parallels are close. Back in 1956, the British government believed that it could still play a global role, as a "great power". It disliked the Egyptians nationalising the Suez Canal, through which all of the UK's oil and much other trade used to flow, to and from what is nowadays termed "global Britain". The UK joined with the French, a similarly post-imperial medium-sized European power, and the Israelis to collude in an invasion of Egypt. The idea, entirely pre-planned, was the Israelis would invade Sinai, and then the British and French would invade, secure the canal for international security and to break up the fight.

All went well - it was a military success - until the Americans found out about it. They were furious, because it interfered with their Cold War policies, and told the British to pack it in and get out. If they didn't, they told the government, they would crush the pound, and thus inflict huge economic damage on the UK's economy and banking system. The British thus came face-to-face with the limits of their power. They couldn't do what they want. So the British and the French retreated. Humiliation. Bitter recriminations. Reputations trashed. Fall of the prime minister.

The contrasting sequels to that are instructive. The British decided to rebuild their "special" relationship with America and become its closest and most trusted ally, co-operating on security and nuclear weapons. The French, by contrast, were confirmed in their belief that they should look to Europe for their national and international ambitions. Suez was October 1956; the Treaty of Rome was March 1957.

And so we find the EU now in the same position the Americans were in the 1950s; revealing uncomfortable economic realities to the UK. In Britain, the events created and opened up deep passions and divisions, just as they do today.

The EU, like the US then, is too big to ignore, too rich to dictate to, and too powerful to say "no" to. The economic realities behind diplomacy drive events far more than we'd like to think in our personality-obsessed media.

The UK relies on the EU for half of its foreign trade, roughly a fifth of national income. The EU relies for about 10pc of its exports on the UK, and less in terms of its overall national income. It varies - it is rather larger for the Netherlands than Bulgaria, for German car makers than for Romanian retailers, but the broad economic imbalance is there. For BMW, for example, the integrity of the vast single market is more important than the money it makes in Britain; it is a global concern with plants from Spartanburg, South Carolina to Shenyang, China. The UK is useful, lucrative as a market and has been an excellent place to build Minis and BMW engines; but it is not as important to the group as the British might imagine.

Think, if you will, about the referendum on Scottish independence in 2014 that preceded the UK's vote on the EU. That, too, was dominated by economic, material issues, though with traditional patriotism, or nationalism, also in the mix. The Scots wanted, from the English in effect, to be able to stay in the (former) UK single market; to keep the pound sterling; and to have various other benefits that they currently enjoyed, but without making many other concessions. The government loftily said, basically, that they could take a hike along the high road. The British Treasury had no special wish to favour Scotland, and the Bank of England would not run monetary policy to suit the Scottish.

The Scots, in effect, would be granted independence if they voted for it; but they would have to accept English terms. Mercifully the Scottish people were canny enough to see the realities facing them.

The disparity in power was clear - the remaining UK (England, Wales, Northern Ireland) was about 10 times larger than Scotland in national income and population just like the UK vs the EU. If the UK has any sense now, just like after Suez, it would retreat and accept its diminished status in the world, with as much dignity as it can muster, and hope time heals the wounds. (© Independent News Service)

Irish Independent

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