Wednesday 19 December 2018 8:12 am

All change in 2019, as Europe heads to the polls

Just as it is always 5 o’clock somewhere in the world, there are always voters preparing to go to the polls, even when they don’t hit the headlines here in the UK.

In the first part of 2019, almost a third of the world’s population will take part in significant elections. In April and May alone, India and Indonesia will be going to the polls, and the new European parliament will be elected at the end of May.

This will be the first European election which hasn’t included the UK – the first one was held in 1979, after Britain joined the European Economic Community in 1973 – and it is set to be the only time that the EU’s electorate has shrunk.

The election will be significant for another reason: it will be an important but rarely discussed dynamic in the Brexit negotiations.

In recent weeks, it has sometimes been glibly suggested that Britain should extend the Article 50 process to the end of 2019 “to get a better deal from Brussels”.

Putting to one side the question of whether the House of Commons would approve such an extension, the European election would also prove to be a significant obstacle.

Would the UK elect a new set of MEPs? If we did, would we be given our current quota of 73 seats?

And if so, what would happen to the 27 seats from the UK tranche which have already been allocated elsewhere?

The election would also be a political minefield. With the current controversy over Theresa May’s withdrawal agreement, the UK government would risk either the re-emergence of Ukip or, more likely, the creation of a new party dedicated to delivering “real” Brexit, which might well win more seats than any of the existing parties.

From the EU’s perspective, it would turn the focus from a positive, forward-looking vote on the future of Europe to a rerun of the Brexit referendum.

What if the EU allowed the UK to extend Article 50 but withdrew our right to sit in the European parliament? Under this scenario, British voters would cry foul, citing “no taxation without representation” – and public opinion would shift even further away from the government.

This is why the European election is such an obstacle to an extension of Article 50. There are scenarios where it might be pushed back by a few weeks, but the election prevents an extension of any longer.

The second interesting dynamic generated by the European election relates to the nature of a possible no-deal Brexit.

There are two types of no-deal Brexit: chaotic and managed. The imminence of the European election increases the likelihood that a no-deal scenario would be a great deal smoother than it might otherwise have been.

EU leaders are fearful that “populist” parties of both the left and right will dominate the new European parliament. From Marine Le Pen and Jean-Luc Melenchon in France, to the League and Five Star Movement in Italy, not forgetting Alternative fur Deutschland and Die Linke in Germany, the European political scene is becoming more fractured and ideological.

While these parties – which are replicated across the EU member states – do not advocate their countries leaving, they are all more eurosceptic than the traditional centre-right and centre-left parties that came before them.

Generally speaking, their reaction to the EU “punishing” the UK in a no-deal Brexit scenario would not be positive. Instead, the EU has a battle on its hands to convince electorates that it is capable of acting reasonably.

European leaders will therefore be more inclined to opt for a managed Brexit. Expect a series of emergency directives securing temporary mutual recognition, which means that everything continues as normal until further notice.

While the Treasury’s recent assessment of the economic impact of a chaotic no-deal Brexit is a fall of 7.6 per cent of GDP over 15 years, two think tanks have estimated the impact of a managed scenario in the two per cent region.

In the absence of support for May’s deal, some cabinet ministers are turning their attention to this option.

It is easy to myopically focus on events that are geographically close over those which are taking place further afield. And when studying the year ahead, we should all pay closer attention to key elections such as the one in India which, with a population of 1.4bn, massively overshadows the EU27’s 450m inhabitants.

But for anyone living in Europe, 2019 is undoubtedly set to be a big year. Not just because of Brexit, or the European elections, but also the replacement of the entire EU leadership: Jean-Claude Juncker in the Commission, Donald Tusk in the Council, and Mario Draghi in the European Central Bank by October.

It’s all change in Europe. And if 2018 seemed like a tough year, I suspect we ain’t seen nothing yet.


City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.