Abandon all ideas about a so-called “soft Brexit” – we need a clean break from the EU

Abandon all ideas about a so-called “soft Brexit” – we need a clean break from the EU

Stanislas Yassukovich is the author of the recently-published Two Lives, a Social & Financial Memoir.

Although the EU has been the hottest geopolitical discussion topic for some time, there remains a widespread lack of understanding of its most abiding characteristics. So-called “soft Brexit” is a mirage. It has as much chance as the proverbial snowball in Hades. For the Masters of the EUniverse to grant concessions to even its most important member would pull the plug on the entire project.

The stampede for concessions by the remaining members would be unstoppable. This has been made crystal clear by any number of leading Eurocrats. Yet the dream persists. At least the quest for the Holy Grail, an equally impossible mission, raised the moral tone of knighthood in the early Middle Ages. The quest for “soft Brexit” wastes time and money, delays the necessary reforms of affected economic sectors, and the onset of the clear benefits of leaving the EU.

An oft-cited justification for British naiveté vis-à-vis the EU is that it is regarded as an economic rather than a political project. But that doesn’t explain why most have a weak understanding of the economics of the EU. It is vaguely viewed as some sort of closed shop – a large economic island close by, membership of which is somehow in the “do or die” category of strategic options.

But a customs union does not stop non-members from accessing it. It only stops its members from forging trade ties with third countries. The US exports more to the EU than does the UK, and Japan is not far behind.

And despite the fact that the expression “single market” is the most utilised in every discussion,  the EU is only partially a single market. None exists in services – now the largest sector of the British economy. The red herring about access for the City to a totally fictional single market in financial services is slowly drowning in a sea of truth.

The only way the EU could stop its institutions from accessing the City’s wholesale markets post-Brexit would be by imposing exchange controls. And financial retailers have a relatively low cost option for marketing to continental savers/investors through Luxembourg subsidiaries – as do American asset managers. Under GATS rules against non-tariff barriers, they can’t be blocked. So financial services are a non-issue.

Even if it finally perceives this truth, through a fog of misleading statements by City lobbyists, the Government will spend months trying to do a single market “deal” for physical exports, when the UK’s tariff exposure under WTO rules would be less than average fluctuations in exchange rates. In fact, taking into account its contribution to the EU budget, the UK’s average tariff in trading with the EU has been more than that suffered by the US – not a single market member.

Does anyone really think that EU leaders are bluffing when they say absolutely no concessions on free movement? Can one imagine the implications for the highly restive eastern European members, if it gave in on this sacred principle? Forget the EU’s trade balance. Politics will always trump economics in Brussels. There can be no separation between practical proposals on trade issues and the simple and fundamental principle of free movement of people within the EU, regardless of how they achieved entrance in the first place. The issues are inextricably linked in the minds of Eurocrats now desperate to keep le grand projet alive in the face of a hundred unkind economic and political cuts.

The apparent concession for temporary suspension of uncontrolled immigration won by David Cameron was still entirely subject to EU discretion on its duration and conditions of implementation. It in no way returned border control to British jurisdiction. And in this context, there was never any reason to believe the UK would abandon its centuries-old tradition of importing needed skills from anywhere in the world.

Now, by seeking to secure an impossible and relatively economically immaterial “deal” on so-called single market access, we are jeopardising the bespoke trade deals we could do in certain sectors once the UK becomes a fully independent country. The balance of economic and political advantage is overwhelmingly in favour of a clean break with the EU’s dilution of national sovereignty and its protectionist and limited single market.

The Leave campaign successfully identified a national, gut feeling that “something was wrong” about a sacrifice of sovereignty on such matters as border control and the judicial system. Now the public’s resolve must be strengthened by an educational blitz on the true nature and limited scope of the much vaunted “single market”, on the benefits of leaving it and its restrictions, and by a slaying of the false dragons being kept alive by Remainer misrepresentations.