Sean Mc Laughlin is a native of Northern Ireland and is the Northern Ireland Ambassador to the European Student Think Tank which is an International Organization that involves young people in the European policy-making process and promotes the values of the European Union and Human Rights. Sean presents to us an updated version of a previous piece published last month regarding the forthcoming negotiations between Britain and the European Union.

Although a decent deal on Brexit is in the interests of both parties, Europeans should not come to heel with Britain over Brexit.

In the original version of this piece, I outline historical ironies of Brexit and how many pro-Europeans in Britain may feel that the country, on the whole, deeply misunderstands the European project. Such misunderstanding is now having horrid consequences.

Below are immediate reasons why Europeans should not be nice to Britain. These reasons may not be immediately obvious to British observers.

Britain did not apply transitional caps to free movement

The EU allows for existing member states to put caps on immigration from new or entering member states, for up to nine years. Crucially, Britain’s labour shortages meant that Britain was one of the few Member States that did not do this when 10 eastern-European countries entered the EU in 2004.

Given that Britain was the first and one of only three countries to open the doors from the beginning, this lead to a huge influx – 1 million arrivals in the period immediately after 2004.

As such, mechanisms were available within the EU to have a better approach. Transitional caps on free movement would likely have meant Eastern European immigration to Britain would have been considerably more manageable.

Indeed, the influx marked the beginning of the rise in mass-Euroscepticism. Chancellor Philip Hammond, on 20 January of this year blamed Blair for Brexit for this reason. It is one of the many reasons which led to the outcome of the referendum.

Now, Brexit is forced upon European leaders to deal with. It seems reasonable that other EU leaders draw a red line on free movement, given Britain chose not to make immigration more controllable, whilst they did.

Was Brexit an invalid vote? Misinformation

The EU allows for the Member States to leave if they democratically wish to do so. There is no problem with this. One of Brexit’s causes, however, was a plethora of misinformation about Brussels on that part of the Leave campaign.

It would be without problem then, if the result had been procured on the basis of correct information. So, the result of a dishonest campaign has been foisted upon the EU and its Member States, disrupting the political landscape across the continent and distracting attention from more pressing problems. Mrs Merkel expects to be dedicating very little time to the affair for this reason. What Brexiters promised, was never possible, in any case.

Inferior to membership.

The rules of the club were already bent for Britain. Commonly touted was that Britain never participated in the Euro and the Schengen border-free zone.

Instead of bashing the Euro or the Schengen/refugee-crisis, during the campaign, then, it might have been more fitting to see Britain’s opt-outs as positives. The EU was prepared to bend the rules and give Britain such a deal, meaning that the country was sheltered entirely from the Euro and Schengen/refugee crisis.

Britain was the only member to have such a bespoke, favourable deal. The EU can certainly survive a Brexit for these reasons – there is much less to be extricated from. It is acceptable that the rules are bent for a member. They should not be bent for a non-member.

And so, is a firm reaction from the Europeans punishment or reciprocity? Is it protecting one’s interest? Surely a firm response is a normal reaction to a seismic event. The Maltese P.M. Joseph Muscat, said on 11 January of this year that Britain’s deal must be:

“Inferior to membership … otherwise would indicate a detachment from reality.”

This point has been reiterated by the Europeans since. It is for this reason, the idea that the EU shouldn’t punish those that wish to leave, to make a political point – is misunderstanding the situation: It seems unreasonable that the EU should not be labelled as spiteful for protecting itself against free-riding. It is hard to deny Guy Verhofstadt’s statement that it would be perverse to have a situation whereby non-members have a better deal than members. Otherwise, what would be the point of a club?

For all Europe’s disunity, they appear to agree with Mr Verhofstadt and Mr Muscat, across the board. They should continue to be coordinated and disciplined on the issue. For these reasons, EU leaders’ claims to repatriate Euro-clearing transactions, the European medicines agency, and similar institutions from London are lawful.

We need them more than they need us. It’s the European Economy, stupid

Whilst British exports to the EU are worth some 12% of British GDP, EU exports to Britain make up just 3% of the EU’s GDP.

Yet, Britain is disproportionately important to the EU economy. It is the single largest market for the EurozoneA sensible deal is in the interest of all. Britain’s financial and economic systems are highly integrated. A sudden break could become a car crash and bring down the continental economy.

Many claim that Britain is the EU’s investment banker. Yet, one could also look at that statement the other way: There needs to be a market for an investment banker to be for.

Take finance, the City of London’s financial services are very mature and sophisticated, but that is not to say they do not need single market access: Clearing houses and securities trading have high EU exposure. Yet, it seems reasonable that EU politicians do not allow sectoral carve outs for Britain’s financial services.

London’s Economy is an eco-system of which European-dependent business is one aspect. In truth, London will likely remain ‘a’ significant financial centre. The question is whether or not London will remain ‘the’ financial centre, with time?

John Purvis, prominent businessman and former Conservative MEP for mid-Scotland and Fife recently told me the following:

In regards to the City’s banks… many will continue to move… London’s services are vast, but we are inevitably going to lose certain bits of it. It is like going from a 9/10, to a 7 or 6/10.”

When giving Britain the ‘freest possible access’ to the single market (mostly for financial services), its rules of observing the free movement of people should apply no less to Britain.

EU leaders should not fret on May’s threat to walk away from no deal. May appearing desperate would be a bad tactic. The below figures demonstrate the situation well.

The EU is stronger than it thinks it is

The European project lacks confidence. At the same time, Europe looks to be increasingly on its own. It is certainly fair to say that an element preventing the EU states holding their own as a unit, is the belief that they can’t.

Previous US secretary of state John Kerry message for Europeans at the Davos summit on 17 January of this year:

“Europe has got to believe in itself … no assembly of countries has grown as powerfully as Europe has.”

Perhaps it takes an outsider to remind Europeans of their fine achievement.
Nowadays it is the ‘sensible’ Anglophone countries that seem to be behaving rather oddly. The new US administration, now dangerously, for the first time, seems to be joining some Britons in longing for the demise of the European project. In that regard, Britons have been proven wrong, every step of the way.

There is certainly no doubting the gravity of its current trials. However, building the peace and prosperity that Europe has done, since 1945, was certainly much more of a challenge than overcoming the problems it faces today, including Britain’s departure.

In the last week of March, it seemed as though the British government was becoming more realistic about the situation. Yet irrationality on the British side seems to have come back.

Following a 25 April meeting, Mr Juncker called Mrs Merkel to relay his concerns about impossible expectations in London. Shortly afterwards Ms Merkel warned that some in London still harboured “illusions” about what Brexit could achieve (parallel talks). Britain seems ignorant to continual and consensual statements from European leaders that issues concerning “people, money and Ireland” will come before talk of any trade deal and that the talks cannot be conducted in parallel.

The potential for breakdown is very high. Britain plays with some very thorny issues over Brexit, not least the status of its borders with Ireland and Spain. Yet vociferous Brexiters could have given these issues more thought during the campaign to leave the EU.

Expect further leaking, counter-leaking, statements being blown out of proportion and even illusions to war (as Michael Howard did days after Article 50 was triggered).

The average British observer will be told that ridiculous Europeans are victimising Britain, and for example, making Britain pay extortionate and arbitrary sums of money for leaving. This will frighten even sophisticated thinkers in Britain. Few will hear the other side – more reasoned and calm analysis suggests that this is what Britain owes in contractual obligations.

Such has been the case for nearly half a century of British membership. Decades of Brussels-bashing have led Britons to believe that the EU is an ill-intentioned entity.

Sean prepared a separate, complementary piece on this subject named ‘Mother of all divorces’. The piece includes comments from primary sources consulted on the topic. It also includes selected secondary comment on the topic.

Sean McLaughlin
Sean McLaughlin is a financial analyst for Latin America in London. Aside from this, Sean is building a profile as a commentator on political and economic developments on the European continent.

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