(Bloomberg Opinion) -- The deal Boris Johnson has struck with the rest of the European Union over Britain’s withdrawal follows a familiar pattern. Much like other populist politicians in Europe, the British prime minister is trumpeting a false success. The same agreement could have been reached nearly two years ago at a lower economic cost.
He’s now in the same class as Alexis Tsipras, Luigi Di Maio and Matteo Salvini (the leaders of Greece’s Syriza party, Italy’s Five Star Movement and Italy’s League). They also took their countries to the brink and back for no good reason except their thirst for power.
The U.K.-EU withdrawal agreement has scrapped the controversial “backstop” arrangement, which Johnson feared would have kept Britain in a customs union with the EU indefinitely. In doing so, however, it has tied Northern Ireland to the EU’s tariffs and customs rules, which is the only way to ensure there’s no physical border with Ireland (something Dublin would not have accepted for reasons of peace).
This solution had always been available, but for months it was dismissed by Brexiters as an insult to the U.K. A year ago, Johnson described an arrangement that would imply custom controls in the Irish Sea as “little short of an attempt to annex Northern Ireland.” He’s now signing up to it.
The prime minister’s defenders will point to concessions from the EU, including a complex mechanism whereby the Northern Ireland assembly can vote to quit the customs arrangement. But this scheme is unlikely to ever be used and appears trivial next to Johnson’s acceptance of a de facto border in the Irish Sea. The arrangement has also enraged his ruling Conservative Party’s allies, the Democratic Unionist Party, making it far from certain that the House of Commons will support the deal.
Johnson can take comfort at least that he’s not the first leader to make such an embarrassing U-turn with the EU. Tsipras, Greece’s former prime minister, stormed to electoral victory in 2015 by promising to renegotiate the terms of his country’s rescue program. He even called and won a referendum demanding essentially the same. Only a few weeks later he crumbled. Greece agreed pretty much to the conditions that were always on the table.
Italy has suffered similar. The Five Star-League coalition agreed a governing program that would have broken EU budget rules. They then settled for a more modest increase in borrowing, which still proved unpalatable to the rest of the bloc. In the end, the prime minister Giuseppe Conte had to accept a deficit target of 2% of gross domestic product, which Italy could have agreed to months before. The populists’ consolation was being able to brag that the new agreed target was actually 2.04% percent; a very big win indeed.
This all makes a mockery of democracy and popular mandates. The populists get elected by promising — in Johnson’s famous words — that they can “have their cake and eat it” when dealing with Brussels. Then they come back hungry.
They cause serious economic damage in the process. The negotiations with the EU have weighed heavily on the U.K. economy and investment. Italy’s borrowing costs for a 10-year bond shot up to more than 3.5% under the League and Five Star (they’re below 1% now). Greece plummeted into a self-inflicted recession and its central bank was forced to impose capital controls.
The important question for the future of Europe is whether such behavior is rewarded or punished by voters. The evidence is mixed. In Greece, Syriza was booted out of power but remains a force. In Italy, Salvini still rides high in the polls, though Five Star has taken a battering. In Britain, the Conservatives are leading in the polls, although that’s not much to brag about when the Labour Party under Jeremy Corbyn is your opposition.
It’s too soon to say that Europe’s populist rulers will self-destruct. But the damage they have inflicted on their countries is all too evident.
To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Ferdinando Giugliano writes columns on European economics for Bloomberg Opinion. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.
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