Boris Johnson has kept his word, and the United Kingdom will finally leave the European Union at the end of January. In little more than six months as Prime Minister, Johnson has succeeded where Theresa May failed: strengthening the conservatives in a national election and carrying the UK out of the EU without further ado. Those who thought that this would close the last chapter of the Brexit saga, however, should reconsider their guess. With the beginning of the transition period, new pages still have to be written.
“We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow”. (Lord Palmerston).
Boris Johnson called an election in December 2019. At the time government, parliament, and UK politics in general was log-jammed by the Brexit issue. Unable to move forward towards Brexit or back towards another referendum on remaining in the EU, Johnson cast the election in terms of pitching “the people” against parliament, causing some to see this as a populist election. Parliament was portrayed as divided, divisive and as an institution blocking Brexit.
The vote to leave the European Union marked a turning point in British politics. But it was also a potentially important moment for the UK’s role in global politics. For some of its supporters, at least, Brexit was in part about unleashing the potential of ‘Global Britain,’ allowing the country to trade and collaborate with countries across the world in a way it either could not or had not when in the European Union.
The victory of Boris Johnson in the UK general election could be considered a national endorsement for Brexit, but should not be judged as a breakthrough in reconciliating the factions that are splitting the kingdom. For at least two reasons. First of all, the result of the election confirms that the voters for and against Brexit are more or less the same as they were in 2016, when the referendum took place. Three years of excruciating debate has not shifted opinions in any clear direction.
Boris Johnson has kept his word. The United Kingdom has left the European Union on Friday. However, Brexit is far from over. London and Brussels now need to negotiate the terms of their future relationship in just 11 months (during the 'transition period'). So a new Brexit cliff edge may be just around the corner, with a hard Brexit still an option.
The British played a crucial role in the European Union as advocates for market liberalization and efficient regulation, transparent and accountable bureaucracy, and widening market access. Their fingerprints can be found on the completion of the internal market, the reform of the European Commission, the expansion to Central and Eastern Europe, and the continuing focus on the western Balkans and the eastern Mediterranean.
Amid the daily high drama of Brexit, it is easy to lose track of the structural shifts, or lack thereof, that may be associated with the UK’s possible departure from the European Union. One of them, and not the least, is the potential impact on the European and global financial system. London is currently the undisputed financial hub of Europe of the broader region encompassing the Middle East and Africa; together with New York, it is one of the two still-leading financial centers worldwide, despite the ongoing rise of Asia and especially China.
Most ways to resolve the current stalemate in the UK parliament with respect to Brexit imply that the UK will no longer be part of the internal market for financial services. There is a risk that capital market services in the EU-27 will decline in scope and quality without the UK in the internal market but this risk can be mitigated. We propose that the EU and the UK form a joint high-level committee to develop proposals for simplified and better regulation that strengthens market discipline.
The increased protectionist turn taken by the United States, including steel and aluminium tariffs levied against the EU and other countries and a potential trade war with China, comes at an awkward time for the United Kingdom. While the United Kingdom is negotiating its exit from the European Union, it still remains within the EU and its customs union and so is dependent on the EU to negotiate on its behalf.