Brexit: The EU Was Bluffing the Whole Time!

An In-Depth Look into the Remain Strategy

Yesterday, I wrote a scathing piece on the incompetence of the British pro-Remain MPs. That piece was based on a few resolute statements by the EU side — they have since backtracked on those statements. An update is necessary.

Per Bloomberg: "On Thursday, the European Union is likely to tell U.K. Prime Minister Theresa May she has three weeks to decide whether to delay Brexit until 2020, or to take her chances on getting her current deal approved in Parliament by July, a senior EU official said. If May decides she can coax a winning vote by summer, the EU is almost certain to reject any further delay if she loses, the official said. If, however, May decides she can’t get a deal by July, the EU is likely to grant an extension into next year." 

Contrast this to previous statements by the EU: 

Chief EU Brexit Negotiator Michel Barnier: "the time for negotiations between the UK and European Union is over and there will be no more 'clarification' on the Withdrawl Agreement." 

EU Commission president Jean-Claude Juncker: if May's Brexit deal was voted down again, there would be “no third chance."

Well, looks like there will be a "third chance" and "more clarification" after all, and that "the time for negotiations" is not "over." They were bluffing the whole time to gain negotiating leverage. And I fell for the bluff in my last piece.

The Winning Pro-EU Strategy

Let’s analyze the situation. The best-case scenario for the EU-side and the Remainers in Parliament is that Britain remains an EU member. The worst-case scenario is that there is a hard, No-Deal Brexit. Understanding these two points is key to understanding the actions and negotiation strategy of both the EU and the Remainers. An additional thing to note is that the EU is also satisfied with the terms of May’s deal (after all, they’re the ones who gave it to her), so the status quo deal is fine too. 

Given this, the pro-Brexit faction’s greatest leverage is the threat of No-Deal. By claiming that the “time for negotiations… is over” and that there is “no third chance” even in the face of a looming No-Deal outcome, the EU is signaling (bluffing) that they are not scared of No-Deal, thus taking away the leverage of the Leave camp. 

The Remainers know that the EU would love to have the UK remain in the EU. With this knowledge in mind, yesterday, House of Commons Speaker John Bercow banned Theresa May “from bringing her deal back to Parliament for a third time, unless it changes significantly.” 

What this does is force the British side towards further extension and negotiation. In order for the deal to "change significantly," there has to be further negotiation and extension. Great move by Speaker Bercow. Now, the EU had said that there would be no more negotiations, but clearly Speaker Bercow and the Remainers correctly assessed that statement as a bluff (sadly I failed to in my previous article). 

Now, the Remainers in Parliament have assessed the bluff correctly and acted on it, namely by offering up an opportunity for the EU to get closer to their shared goal of a soft Brexit or no Brexit at all. The EU seized this opportunity appropriately with their statement (the one at the beginning of this piece). 

Why exactly does an extension help get closer to a soft Brexit or no Brexit? Per Bloomberg: 
“Leaders will allow a long Brexit delay only if May sets out a clear explanation of how she will break the current parliamentary deadlock, EU officials said. This could be in the form of “a timetable to a new referendum or a new election,” EU chief Brexit negotiator Michel Barnier told a meeting of European governments in Brussels on Tuesday, according to a diplomatic note. This reflects a feeling among leaders that a long extension might pave the way to the U.K. changing its mind and staying in the bloc, the official said.” 

We can see how this string of actions from the Remainers and the EU mean that every extension does two things: 
1.) Decrease the probability of No-Deal, which is their worst-case outcome (This one goes without saying. More time to negotiate means that there won’t be an exit that lacks a negotiated agreement). 
2.) Increase the probability of a softer Brexit (or even no Brexit) by increasing the probability of a new referendum. At the very least, the EU can just not budge from what they have with May’s deal right now, which they are happy with. 

And the cherry on top? Britain stays in the EU during extension periods, which means Britain will have to continue paying EU fees (on the order of millions of pounds) the entire time they're negotiating. So extensions are also free money for the EU. 

Honestly (and this is purely my opinion), the best available option for the Leave faction right now would probably be a No-Deal. Every other road seems to lead to soft or no Brexit.

In conclusion, the Remainers in Parliament and the EU are reading each other accurately and coordinating perfectly to inch closer to their shared goal of a soft Brexit or no Brexit. They fooled me yesterday. Unfortunately, I was wrong and could not read the bluff so accurately.


Update: So extensions are bad for Leavers. It seems like May understands this too. Today, she "vows not to delay departure beyond June." The game is being played. Let's continue watching.