Theresa May Could Try a Leisurely Brexit Stroll

(Bloomberg Opinion) -- The Brexit-battered pound jumped for joy yesterday when European Union trade negotiator Michel Barnier told an audience in Slovenia that a finalized divorce agreement between the U.K. and the EU is “realistic” in six to eight weeks. That doesn’t mean that we can all exhale by November.

The divorce deal — which dictates the amount the U.K. will pay into EU coffers, citizens’ rights, a transition period and other matters — is over 80 percent complete. There is no reason it couldn’t be done in six weeks, or four weeks. Indeed, the parties, the core positions and the red lines remain exactly what they were six months ago. Any agreement, then, will rely on a certain amount of fudging the remaining issues.

Fudge can be made at any time; when is a question of political expediency. For Barnier, it’s easy to see how cutting a deal sooner rather than later makes sense. There’s a lot of money on the table — 39 billion pounds ($50.8 billion) — for the budget-constrained EU. The longer negotiations drag out without agreement, the greater the potential that cracks will appear in the EU’s united front. The negotiations also take attention and energy away from the EU’s own reform discussion while increasing the risk of market jitters and mischief-making from euroskeptic politicians in Italy, France, Hungary and elsewhere.

From May’s perspective, Barnier’s timetable could look rushed. Better for her if disheveled EU negotiators emerge bleary-eyed from an all-night negotiating session hastily convened to prevent a Brexit bust-up in late November or even December. Better for her if they mumble in reluctant admiration about the U.K. leader’s extraordinary powers of negotiation, her storied stubbornness. It was tough, they might say; it went down to the wire and they couldn’t have given her any more if they’d opened a vein for her.

May could then look at smug Brexiters and ask what they had done for Britain lately. She would give parliament its moment of truth: Accept an imperfect deal, the result of a bad hand played as well as it could be played, or throw Britain over the cliff of uncertainty and risk letting a hapless Labour Party try to sort out the mess if it came to new elections.

If the EU makes some concessions — for example, allowing the political declaration on the future trading relationship to be linked to the withdrawal agreement so that payments to the EU depend on the promised market access materializing — it’s just possible Barnier will give MPs an excuse to say yes.

No deal that May reaches will satisfy those with a puritanical attachment to complete detachment from Europe. If former foreign secretary Boris Johnson’s recent likening of May’s Brexit strategy to wrapping a “suicide vest” around the country seemed unhinged, it is just a taste of the venom that will be unleashed at an actual deal. The longer May waits to unveil that agreement, the less time Johnson and other hardline Brexiters have to fight it.

But if May doesn’t want an early deal that could wither on the vine as opposition mounts — which is exactly what has happened with her July Chequers plan — she needs to show progress. Barnier’s recent conciliatory statements help in demonstrating the gap between the U.K. and EU positions is narrowing.

The timing question is finely balanced, though. Even more moderate parliamentarians will balk at being bounced into a decision without the time for proper consideration, as Labour MP Hilary Benn warned in June.

Any suggestion that a deal is within reach no doubt cheers markets, but for businesses and the taxpayer, the high-wire act comes at a cost. The longer the period without clear direction, the more money businesses will have to spend on hedging against no deal at all — and the more technical notices the thousands of civil servants who are charged with preparing for a no-deal Brexit will have to issue.

Like an eager couple who recklessly plonked down their life savings for a fixer-upper home only to find they are in over their heads, the Brexit project has already gone way over budget; it would be a miracle if it didn’t also run over time. Don’t tell the pound, but it’s more likely that the Christmas holidays will be ruined by a nail-biting finish.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.

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