The End of the Beginning

The Weekly Standard, July 22, 2016

It was the mayhem that made Theresa May. Britain’s unexpected vote to leave the EU crushed financial markets and plunged some Remainers into angry, unhinged, and tellingly snobbish mourning: It was, one author explained, "the revenge of the Brownshirts, a dictatorship of the illiterate and the opportunistic." The political class went into shock. Prime Minister David Cameron decided to quit, as, confusingly, did the leader of the Euroskeptic United Kingdom Independence Party (UKIP). The Labour party resumed its civil war, and the Tory contest to succeed David Cameron veered wildly off course, culminating in the defeat of a lightweight Leaver by May, Cameron's long-serving home secretary. May was a Remainer but widely credited with the safe pair of hands a nervous nation craved.

Dour and quiet, a gradualist, Theresa May shouldn't be underestimated. An effective bureaucratic in-fighter, she celebrated her appointment as prime minister with the most brutal ministerial reshuffle in recent British political history. Scores were settled, and not without—Britain being Britain—a hint of class warfare. Most important, May signaled this was her government, not Cameron 2.0.

She won't be Maggie 2.0 either. Mrs. Thatcher was more pragmatic than the legend goes, but at her core she was a classical liberal wrapped in patriotic, traditionalist guise. May's views are hard to pin down, but they are possibly rather closer to continental Christian Democracy. Her response to enthusiasm for Brexit amongst Britain's blue-collar "left behinds" included talk of an "industrial strategy," hardly the language of laissez-faire.

More generally, May is less fussed with the sovereign individual or, for that matter, the sovereign nation. She struck a blow against both when she corralled the U.K. into the EU's notorious arrest warrant regime. But she's no Eurofundamentalist: Her (understated) role in the Remain campaign owed more to political calculation and risk aversion than any embrace of the European ideal.

If May resembles any prominent female leader in method, ideology, and personality, it's Angela Merkel, another undemonstrative and authoritarian clergyman's daughter with no great fondness for boys' club politics. That might help Britain cut a decent deal with the EU, the decent deal on which the success of the May premiership will depend, the decent deal that has yet to be defined.

A Remainer needing to reassure Leavers, May has promised that "Brexit means Brexit," whatever that means. Forced into the referendum's crude binary, Britons chose to quit the EU, nothing more, nothing less. Their vote said nothing about how. The best way out, if it's available (and in the end, it probably would be), is some variant of the much-misunderstood status known as the "Norway option." This would allow continued participation in the EU's "single market," via membership (like that enjoyed by Norway) in the European Free Trade Association. As a reminder, the EU takes over 40 percent of the U.K.'s exports in goods and services, including those of Britain's vital financial sector.

Such access would come at a price, including, critically, the U.K.'s commitment to the EU's rules on free movement of people within the European Economic Area (EEA), the territory in which the single market applies. That's a highly sensitive topic, given the degree to which alarm over immigration boosted the Brexit cause. The Norway option does, however, provide for an "emergency brake" on inflows of people from elsewhere in the EEA, which might, properly sold and properly applied, soothe voter concern.

It's a solution, polling suggests, that would win the support of a plurality of Brits, if not most Brexiteers. It would play well in restless Scotland (where 62 percent voted to stick with the EU). As a package deal, "Norway" is reasonably straightforward and, crucially, can be implemented relatively quickly, minimizing any Brexit-related hit to investment in the U.K. It could be either a final destination or a convenient way-station along the route to a more definitive break with the EU.

But when May's team talks about winning access to the single market, it does so in a way implying a tougher line on immigration. That will be a difficult deal to secure. To be sure, mutual self-interest argues for a compromise (the U.K. is a large market for the EU), but, as the Swiss (who have their own separate arrangement with the EU) are learning, the EU is reluctant to give ground on free movement, a principle central to its sense of itself. There are also fears that too gentle a divorce might tempt other less enthusiastic EU member-states to follow Britannia's lead.

There are other alternatives, such as a bespoke "customs union" with the EU, and one better surely than Turkey's, if still far short of the single market. David Davis, May's Brexit minister, seems remarkably sanguine. He has even argued that "in the improbable event of the EU taking a dog in the manger attitude" to British access to the single market, he could live with a "hard Brexit"—trade with the EU under World Trade Organization rules. I'll spare you the technicalities, but let's just say that those rules are less favorable for exporters than usually understood. Even then, it will not be as easy for Britain, which currently dwells in the WTO under the EU umbrella, to take advantage of WTO rules as many Brexiteers believe.

It's true that, once out of the EU, Britain will be able to conclude its own trade deals with the rest of the world, but such agreements typically take years to finalize. And the U.K. has to quit the EU before it can sign (or, strictly speaking, even talk about signing) anything. So far it hasn't even initiated the exit procedure. That involves giving notice under Article 50 of the EU treaty. The U.K. and EU will then have two years to agree on the technical details of their separation. If it intends to avoid the hardest of hard Brexits, Britain will also have to agree on its new trading arrangements with the EU at the same time, a tall order, and one not provided for in Article 50—something else that points to Norway, at least as an interim measure.

Keen to end the uncertainty and, doubtless, to exploit the edge that a fixed timetable brings, the EU wants to start the clock. It won't agree to formal discussions beforehand . Britain, however, insists that it has to decide what it wants from Brexit first. This stalemate could quickly turn nasty. Nevertheless, London won't trigger Article 50 before 2017. Elections in France and Germany that year won't make matters any easier.

No one really knows what comes next, but May's team has begun to take soundings abroad and, I assume, is calling in the experts (to the extent that they exist) at home. The need for the former is obvious; the need for the latter is pressing. The Cameron government blocked the civil service from considering any serious contingency plans for Brexit, and, with some notable exceptions in think-tank land and, yes, the blogosphere, most leading Brexiteers, including Davis, have been just about as cavalier. There is no plan. To pull a Melania on Otto von Bismarck, putting one together will be a matter of "the art of the possible .  .  . the art of the next best." Discovering the possible may be a rude awakening for some Brexiteers. The "next best" might even turn out to be located somewhere near Oslo, particularly if there are signs of sustained economic weakness.

The domestic politics of Brexit should be easier to navigate for now, despite May's narrow parliamentary majority. The next general election is not due until 2020. Helpfully for May, Labour is still preoccupied with a probably doomed attempt to unseat its leader, Jeremy Corbyn, a man almost certainly too left-wing and too strange to make it to 10 Downing Street. Meanwhile, with Brexit underway, the Conservatives need fret less about UKIP, their bugbear of the last decade: Busily reinventing itself as the party of the "left behinds," UKIP is increasingly focusing on Labour.

Wisely, May is courting the independence-minded Scots, though it's far from a given that Brexit means Scexit. To start with, Spain (worried about secessionist Catalonia) will block Edinburgh's path to Brussels. And even if it didn't, the EU would be a less attractive safe haven for mutinous Scots than is often imagined, involving as it would the prospect of austerity (low oil prices haven't helped Scotland's shaky finances), the euro, and tariff barriers with the rest of the U.K. But Scotland is not the only place where the U.K.'s Celtic fringe may be fraying. In Northern Ireland, somewhere that no British prime minister can comfortably ignore, nearly 56 percent voted for Remain.

British voters rejected Brussels for any number of reasons but, above all, they wanted their country back. The difficulties (many more than I have mentioned) associated with Brexit are the result of over 40 years of entanglement in an "ever closer union," an entanglement that was only going to get worse. They are confirmation that Britain is leaving not a moment too soon. But that will be cold comfort if the consequences drag the economy down for any length of time. If the mechanics of exit are mishandled, they will. Britons have voted for Brexit, but the intricate, painful, and dangerous job of carrying out their wishes has barely begun.