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Thursday, March 28, 2024

Is Boris Johnson The European Union’s Worst Nightmare?

Courtesy of ZeroHedge. View original post here.

Authored by Bill Wirtz via The American Conservative blog,

Yesterday’s vote in the British Conservative Party confirmed that Boris Johnson will become the United Kingdom’s next prime minister.

Johnson beat his opponent, Secretary of State for Foreign and Commonwealth Affairs Jeremy Hunt, by a margin of 92,153 to 46,656 among Conservative voters. Prime Minister Theresa May had stepped down after her efforts to reach a deal with the European Union regarding the UK’s exit from the bloc were repeatedly rejected in the House of Commons. May had negotiated several extensions to the official exit, which is now set for October 31. That leaves Johnson with little time to find an agreement.

The Conservative Party is currently a minority government, relying on the Northern Irish Democratic Unionist Party (DUP) to get measures passed. Since the prime minister post is not directly elected, the ruling political party’s leader automatically becomes head of government. The next general election isn’t scheduled until May 2022.

Boris Johnson is a household name in British politics. He’s the former Brussels correspondent for the Daily Telegraph, former mayor of London, and was one of the most vocal voices behind the campaign to leave the European Union in the Brexit referendum campaign of 2016. The 55-year-old has a massive vocabulary, and is known for his colorful columns and even more colorful insults. In 2013, when he was mayor, he called the London assembly “great, supine, protoplasmic, invertebrate jellies,” getting a laugh even from those who had just voted to remove him from the assembly room.

Beyond his articulate wit, Johnson is likely to be more free market than his Conservative predecessors, though exactly where he stands ideologically is hard to tell. He doesn’t seem to follow in the footsteps of the Tories’ restrictive lifestyle police, as he opposes increased sugar taxes, which have been lauded as a necessary tool for public health. And even though Johnson supports tax cuts for the middle class and increasing the higher-rate income tax threshold by more than 60 percent, he wants to avoid deficits only by increasing borrowing.

Most important however, is what he’ll do differently than his predecessor, Theresa May, to secure Britain’s departure from the European Union. Johnson first opposed the Withdrawal Agreement that May’s government negotiated with the EU, only to “reluctantly” support it on the third vote. This cost him some trust among hardline pro-Brexit supporters. Famous Brexiteer Nigel Farage doubts that Johnson can get the exit done by October 31, though newly elected European Commission president Ursula von der Leyen says she would be open to another extension of the official exit date.

Johnson’s options are limited: either he convinces the EU to make fundamental changes to the Withdrawal Agreement—which seems unlikely—or he cancels triggering Article 50 and doesn’t leave the EU at all—which would be the end of his premiership—or he risks leaving the EU without a deal. In the past, he’s made it clear that he’s open to the third option. Under a no deal scenario, the UK and the EU would fall back onto World Trade Organization rules, which would reintroduce tariffs on goods coming from the EU. Westminster has insisted it would not do this, though Brussels has not been entirely clear on its position.

This is the point of contention: if the UK and the EU re-introduce tariffs, then long lines at the border (including in Northern Ireland) could interrupt the supply chain, and cause shortages and rising prices. On the other hand, Brexiteers have assured their critics that technological improvements can make the process smooth and unseemly, and that tariffs would only come into effect if the EU were to take that step. From a UK standpoint, no border would need to be erected.

The new PM has made it clear that he wants to get a deal, but also that he is ready to steer towards no deal if necessary. This is essentially a negotiating position: if you announce prior to a negotiation that you will never walk away (which is what Theresa May did), then you can be sure that the other side will exploit you.

For the EU, Boris is the least favorable option in this sense, because he seems most secure in walking away from the negotiating table. This explains the nervous reactions across Europe yesterday afternoon. EU Health Commissioner Vytenis Andriukaitis even insinuated on the official website of the European Commission that Johnson deceived the British electorate.

  • If Johnson does not reach a deal, if he kowtows to pressure and begs for an extension, then his days as PM will be short-lived.

  • If he leaves without a deal, he will be faced with doomsday scenarios for weeks, with every bit of bad economic news blamed on his leadership.

  • If he manages to strike a good deal for the United Kingdom, he will go down in history as one of the UK’s most effective leaders.

The suspense is palpable. We will find out what happens on October 31.

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