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Will UK survive Brexit "hangover"?
More than six years after the UK voted to leave the EU, you'd think the process would be over by now. Think again.
Unfortunately, the Northern Ireland protocol — no hard border with the Republic of Ireland, an EU member state — remains a Brexit "hangover" that's causing a lot of frustration across the English Channel, former British PM Tony Blair tells Ian Bremmer on GZERO World.
What's getting in the way of a constructive relationship between Brussels and London? For Blair, the very anti-European politics of part of the UK right.
Blair, who wanted to remain in the EU, doesn't think Brexit will end up fragmenting the country. But he admits Brexit has given fresh impetus to both Scottish nationalists and those who want a united Republic of Ireland.
The video above is an excerpt from the weekly show, GZERO World with Ian Bremmer, which airs weekly on US public television. Watch the episode on "upheaval in UK" here.
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- Tony Blair on Liz Truss & a post-Brexit UK on the brink - GZERO Media ›
- Northern Ireland trade deal ends Brexit but not UK's economic woes - GZERO Media ›
How new UK PM Liz Truss will impact UK/EU relations
Carl Bildt, former prime minister of Sweden, shares his perspective on European politics from Riga, Latvia.
What's the European attitude to Liz Truss as the new prime minister of the United Kingdom?
Well, welcome to her. It has to be said that I think the jury's still out. There are sort of some apprehensions because she's dug herself down into some pretty unconstructive positions concerning the UK relationship with the EU. I hope she can get out of that because we do need a better relationship between the EU and the UK.
How is Europe looking forward to the winter now when Russia is unreliable when it comes to gas supplies?
But it doesn't really come as a surprise that Putin now definitely cutting all or virtually all gas deliveries to Europe. It's going to be slightly tricky, manageable, I would say. But it's going to speed up the process of making Europe completely independent, of the EU, completely independent upon the gas and oil from Russia.
- Liz Truss' unenviable new gig - GZERO Media ›
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- The EU's natural gas troubles won't end after ditching Russia ... ›
- Russia may cut off Europe's gas; sanctions will hold - GZERO Media ›
- Tony Blair on Liz Truss & a post-Brexit UK on the brink - GZERO Media ›
- Tony Blair on Liz Truss & a post-Brexit UK on the brink - GZERO Media ›
Foreign Secretary Liz Truss leaves Downing Street in London
Liz Truss’ unenviable new gig
The UK will have a new prime minister on Sept. 6. Foreign Secretary Liz Truss, who is all but assured to move into Downing Street next week, beat a crowded Tory field vying to replace outgoing party boy Boris Johnson.
Truss takes over at one of the most perilous times in recent British history. What will be the major challenges at home and abroad — and which of these problems are of Truss’ own making?
Challenges at home. The UK is currently mired in its worst cost-of-living crisis in decades, in large part because of soaring energy and rent prices. The Bank of England recently warned that the UK will likely face its longest recession since the global financial crisis in 2007, and inflation is slated to hit a staggering 18.6% early next year. Indeed, sky-high energy costs and post-Brexit shortages have fueled inflation rates that top the EU and the US.
Truss, for her part, fashions herself as unabashedly pro-business and has rejected any new taxes to raise government revenue, including a windfall tax on oil and gas companies that have made a mint in recent months.
Indeed, as Europe braces for an energy crunch this winter due to Russian gas cuts – with EU member states agreeing to slash gas use by 15% until at least April 2023 – the UK is emerging as one of the biggest crisis hotspots. Why?
While the UK is less reliant on Russian gas than many countries – importing more than 75% of its natural gas supply from Norway – it is facing an even more brutal winter than many of its European counterparts.
There are several technical reasons for this. Minimal storage capacity after the Tory government closed in 2018 a massive energy storage facility to save upkeep costs has meant that the UK has limited ability to stockpile ahead of the cold winter months. The UK’s facilities hold enough gas to meet demand of four to five winter days. Germany’s capacity is 16 times that.
What’s more, gas accounts for 40% of UK energy consumption. This leaves Brits even more vulnerable to energy shortages, with two-thirds of households at risk of experiencing fuel poverty by 2023.
Challenges abroad. The UK and EU are on a collision course. Two and half years since Brexit, relations between the UK and the EU are still extremely strained. In her bid to win the Conservative Party's top job, Truss sought to appeal to the populist-right flank of the Conservative Party, rallying hard against the post-Brexit deal negotiated – and agreed to – with Brussels.
The largest remaining sticking point is the Northern Ireland Protocol, which sought to avoid creating a hard border between Northern Ireland, which is part of the UK, and the Republic of Ireland, an EU member state. The Tories have since reversed course and seek to change some terms, a move that some observers say breaches international law.
Why does this matter so much? “The way the EU structured the negotiating process,” explains Mujtaba Rahman, managing director of the Europe desk at Eurasia Group, was that “the trade deal between the two rests on the UK respecting and implementing the core elements of the withdrawal agreements,” primarily the Irish border.
If the UK continues on its current course and does not respect the protocol, Rahman says the “Europeans are going to say in response … we’re not going to respect the future trade agreement. The two things are linked.” This would be catastrophic for the UK, which is desperately seeking to maintain robust trade ties with EU economies.
A bill amending parts of the protocol has already passed the House of Commons and is now headed to the upper chamber, where things could get ugly.
If the bill continues to pass through parliament, Rahman says, the EU won't feel it can continue to engage in serious discussion with the UK. “How do you negotiate in good faith while you’ve got what you believe to be a very hostile piece of legislation working its way through parliament?”
Looking ahead. So is it possible that Truss, who won the Conservative Party’s leadership with only a slim mandate, is simply engaging in anti-European bluster to rally her base? That’s not necessarily relevant now, explains Rahman.
“Truss is constrained by the fact that she made a deal with the right to gain the keys to No. 10, and the cabinet she's putting together is going to be made up of many right-wing eurosceptics. The space she has to make a political deal [with the EU] is very constrained.”
- How new UK PM Liz Truss will impact UK/EU relations - GZERO Media ›
- Russia may cut off Europe's gas; sanctions will hold - GZERO Media ›
- Remembering Queen Elizabeth II - GZERO Media ›
- Tony Blair on Liz Truss & a post-Brexit UK on the brink - GZERO Media ›
- Tony Blair on Liz Truss & a post-Brexit UK on the brink - GZERO Media ›
What We’re Watching: Libya delays vote, Sudan’s embattled PM, COVID cures, EU-UK fish deal
Libya election postponed. As many had expected, Libya’s election will in fact be postponed. The vote, the first since psycho autocrat Muammar Qaddafi was ousted in a NATO-backed uprising 10 years ago, was supposed to happen on Friday. Now the country’s electoral board says it will be postponed by a month, until January 24. The move isn’t a surprise: for weeks the two rival governments that run Libya — and their outside backers — have been squabbling over electoral rules and candidate eligibility. The question now is whether delaying the vote genuinely gives the parties time to agree on a process that seems legitimate enough to hold, or whether the move risks further unraveling a fragile and fragmented country. The UN has already raised alarm about rival armed groups setting up positions in and around Tripoli.
Sudan PM to step down? Meanwhile, Libya’s southeastern neighbor Sudan isn’t having an easy time of it either. Beleaguered PM Abdalla Hamdok could soon step down amid protests over the transitional military-civilian government. Hamdok represents the civilian wing under a deal negotiated after the ouster of Omar al-Bashir in 2019. But that agreement has always been shaky — in October, the military staged a coup and arrested Hamdok, only to release and reinstate him a month later under a fresh arrangement. But supporters of the civilians rejected that new pact, and in recent days they have thronged the streets to call for “no partnership, no negotiation, no compromise” with the generals. Sudan can ill-afford another political crisis — one-third of the population is already in need of humanitarian assistance, and the number of Sudanese in outright life-threatening conditions rose 75 percent to 13 million in 2021. Meanwhile, Sudan is also struggling to accommodate refugees from the ongoing war in neighboring Ethiopia, and to navigate the ongoing diplomatic and security challenges posed by the Ethiopian construction of a massive hydroelectric dam upstream on the Nile.
Covid pill pops, Pentagon miracle jab to follow? The FDA on Wednesday approved the first oral, at-home, antiviral medicine for those infected with COVID-19. Pfizer's Paxlovid pill reduces severe illness by up to 90 percent in high-risk people who take it early in the course of their infection. In the coming days US regulators are likely also to greenlight a similar pill made by Merck, called Molnupiravir, though France seems less keen. The arrival of mass produced oral therapeutics is a major turning point in the pandemic, giving doctors and public health systems a powerful tool to reduce mortality from the disease, while also reducing pressures on hospitals. Also this week we learned that the US Military has developed what sounds too good to be true: a vaccine that works not only against all current variants but against all future ones too? Forgive us for thinking this was an Onion headline at first, but we're eager to learn more about Pentagon Pharma's potentially game-changing jab.
UK and EU reach 🐟 deal. The EU and the UK reached a compromise on Wednesday to end a contentious fight over fish. The two sides will share fish stocks next year by reverting to the quotas included in last year's post-Brexit trade agreement. On the plus side, each side now knows exactly how much fish it (and the other) is permitted to catch in 2022, though on the downside environmentalists still say the number is too high. Still, this deal doesn't solve the nasty bilateral UK-France row over who gets to fish which waters in the English Channel. In recent weeks, the UK has shown more willingness to compromise by granting French fishing vessels more licenses to operate in the disputed waters, but Paris wants a lot more. Fishing rights are a big deal in the two countries — expect them to come up as a campaign issue in next year's French presidential election.Is Brexit breaking Britain?
When the UK left the EU at the end of last year, Prime Minister Boris Johnson promised that his country would put its new freedom to good use. A more open and dynamic "Global Britain" would still benefit from solid ties with Europe, he pledged, but aligning its foreign and trade policies more closely with democracies in other regions – the United States, India, South Korea, Australia and others — would lift the UK into a new era of security and prosperity.
But critics warned that Brexit, the most dramatic and abrupt large-scale commercial realignment in modern history, would inflict both short-term and lasting damage to Britain's economy. For decades, most of Britain's exports have gone to Europe. People and money moved freely between the UK and EU too. London's importance for Europe made it a global financial capital. You can't give all that up, the critics cautioned, and expect Britain's ship to sail smoothly on.
There was also the question of boundaries. How to draw a new line between the Republic of Ireland, an EU member state, and Northern Ireland, still part of the UK, without disrupting the hard-won peace that ended an era of Irish violence in 1998? Though Johnson got Brexit done, that problem remains unresolved.
Turn on the news now in Britain, and it appears the critics were right, at least about the short-term pain. A shortage of truck drivers, about 20,000 of them foreigners forced home by COVID and then kept out by post-Brexit visa restrictions, have created product shortages at British supermarkets and petrol stations. Prices have reached their highest point in nearly a decade and are predicted to climb higher.
There are also fears of longer-term pain as many UK industries, like its automakers, face higher costs, more paperwork, and longer wait times for parts they've long imported from Europe. The UK services sector — finance professionals, doctors, lawyers, architects etc. — which accounts for about 80 percent of economic output and jobs, is now newly subject to rules created by European regulators that increase costs and delays.
There are also new fights between the UK and EU over the Irish border question and threats flying between London and Paris over fishing rights and lingering controversies over the long-term status of EU citizens still living in the UK.
Some of the economic damage can surely be blamed on COVID, which killed more people in the UK than in any European country and forced extended lockdowns. But the lack of gasoline and other shortages in Northern Ireland, which still has an open border to the Republic of Ireland, an EU member, suggests Brexit, not COVID, is mainly to blame.
Boris Johnson says he's "not worried" about shortages and rising prices. The PM said this week that "Brexit freedoms" will boost Britain in coming years even if the UK is now struggling through an unfortunate but entirely natural period of economic adjustment. He insists the current problems will prove short-lived, and late last month his government announced an offer of three-month visas for foreign truck drivers to help Britons cope with the Christmas season.
But in the end, the truth about Brexit and its effects may not matter, because the perception that Brexit is sinking Britain's economy and prospects – and that Johnson doesn't understand or doesn't care about the impact – will boost the voices of those in Scotland who want to leave the UK and those in Ireland dreaming of Irish reunification. Latest polls suggest that support for independence in Scotland (48.3 percent) is now higher than during the 2014 independence referendum, when Scotland voted 55-45 percent to remain in the UK. The Irish border question created by Brexit has already triggered violence in Northern Ireland.
The bottom line: Brexit won't break Britain's economy – despite the shortages and anxiety it's now provoking. Producers will adjust to post-Brexit realities, and recovery from COVID will create momentum for new growth. But it might yet break up the UK politically if the current economic disruption and public anger across the country continues long enough for Scottish and Irish secessionists to build momentum for exit plans of their own.