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Brexit could be like the Greek bailout

04/10/2016 16:36 | Updated 04 October 2016

John. F. Kennedy said with reference to the Soviet Union "We cannot negotiate with people who say what's mine is mine and what's yours is negotiable," and that's a good description of the EU's reaction to Britain's current negotiating stance on Brexit. Brexit has united European leaders like nothing else in recent years. They have privately, and in some cases publicly, responded with a firm 'no' to the British Government's so-called red lines of wishing to continue to enjoy tariff free access to the EU Single Market, while restricting the free movement of EU nationals.

What is baffling is that the British Government seems to be surprised by this negative reaction. The working assumption, in Whitehall and Westminster, is that the Europeans will not object to the Britain's Brexit policy of, as the British Foreign Secretary delicately put it last week, 'having our cake and eating it', because they will not do anything to risk their commercial, business or economic interests, or harm their relationship with us.

These are the same false assumptions that have blighted Britain's relationship with the EU and its predecessor organisations for over half a century. Britain has never understood that the EU is above all a political project. Some in Britain even reminisce how they were misled into joining the Common Market because the real political aims, such as ever closer union, were carefully hidden. The fact that the political aims, including an ever closer union, were fully spelt out in the original 1957 Treaty of Rome is an inconvenient truth.

It's true there is still a lot of respect and admiration for Britain on the Continent but the reservoir of good-will has been running on empty for years, as Britain pursued a half-hearted approach to many of the EU's policies. So European politicians argue there really isn't much of a relationship left to harm, and in any case who's walking away from whom?

And whilst of course the remaining EU Member States will seek to protect their interests, their political considerations, both domestic and European, will be uppermost in their minds when they weigh any possible business, commercial or economic risks in rejecting Britain's so-called red lines. They also believe that if Britain's demands are rejected the British Government doesn't really have much room for manoeuvre. Does the Government threaten to stay, or threaten to leave the EU, in the event of their demands not being met?

It's true the Germans, the French, and others will not want to willingly put at risk their exports. But there are so many other considerations, including their view that Britain's departure from the Single Market actually represents a huge potential business opportunity in terms of penetrating other EU markets, or the 52 markets internationally where the EU enjoys preferential trade access but Britain, at least for several years, will not. But above all, given the EU is a political construct, European Governments fundamentally believe that whatever the short run risks in the long run business will be better off in a strong and united Union.

The British Government needs to rapidly come to terms with this realpolitik if it is to avoid being out manoeuvred and develop a negotiating strategy that is as much about give as it is about take. Developing an accurate understanding of the other side is one of the most important things a negotiator can do.

They can't continue to ignore the fact that the European politicians from across the remaining 27 Member States, together with the European Parliament, will put politics above everything else. If they do I fear the warning from Britain's good friend and Commonwealth ally, Malta's Prime Minister Joseph Muscat will come true. Muscat, who is soon to be one of the most influential men in Europe as the Chair the EU Presidency when Article 50 is triggered, recently remarked Brexit will not be good for Britain, "Expect the format to be more or less like what happened with Greece."

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