After Brexit: Roadmap for a leap in the dark

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After Brexit: Roadmap for a leap in the dark

Brussels - British voters will shape the future of the UK and Europe on Thursday 23 June when they decide whether to stay in the European Union.

By Reuters

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Published: Thu 23 Jun 2016, 10:21 AM

Last updated: Thu 23 Jun 2016, 12:32 PM

Dawn, Friday. The votes are in. The British have spoken in their EU membership referendum and they want out. It is a scenario European leaders are planning for in earnest while praying it never happens.
Secret meetings in Brussels and across Europe reveal huge uncertainty, officials and diplomats familiar with the proceedings say, over what would follow a vote that British Prime Minister David Cameron calls a "leap in the dark" - and also no little concern about what happens if Britain stays on.
This is a rough roadmap to Europe after June 23, based on conversations with many diplomats and officials, few of whom speak of it in public for fear of inflaming debate in Britain:

Day 1 - Friday, June 24 - The three r's - or more
Polls close at 10 p.m. (2100 GMT). No mainstream exit polls are planned but overnight counts should give a result by around the time the midsummer sun comes up over Brussels.
Aside from the result itself, there are already several big imponderables. Cameron says he will notify the European Union "immediately" if Britain is leaving. But he may take some time. If he has lost he will be under huge pressure from his divided Conservative party to resign. He might also be, even if he wins.
Money markets will be volatile. The Bank of England and European Central Bank have contingency plans to deal with a "Brexit shock" to sterling and the euro.
Leaders of the main parties in the European Parliament plan to meet at 7 am (0500 GMT) in Brussels followed by a broader meeting of all party chiefs with the speaker at 8 am.
If it is Brexit, European Council President Donald Tusk, who will chair an EU summit next week and will have spoken to all the leaders in the days before the vote, may deliver a brief statement in the name of the Council, the EU's governing body, possibly soon after Cameron has confirmed the result.
However Britons vote, European Commission President Jean-Claude Juncker, the EU chief executive, will host Tusk and European Parliament President Martin Schulz at his Berlaymont headquarters in Brussels at 10:30 a.m. (0830 GMT). Also present will be Dutch Prime Minister Mark Rutte, whose government holds the rotating EU presidency, to take stock and deliver a message.
EU affairs ministers and ambassadors from member states will gather in Luxembourg by 1 pm (1100 GMT) for routine talks that will provide the first chance for many to react.
If Britain votes to leave, look for a mantra of Three Rs: Regret - at losing nearly a fifth of the EU economy and more of its military and global clout; Respect - for the will of the British people; and Resolve - to forge ahead with European integration.
"The show must go on," one senior EU official said.
There may be a fourth message. Call it Reprisal, perhaps, though Britons should not take it personally; warnings of woe for those leaving will aim to discourage others from following suit. "Don't try this at home," as a senior EU diplomat put it.
If it is Brexit, Tusk may fly to key capitals, such as Rome, Berlin and Paris, EU sources say, though it is not confirmed.

Day 2 - Saturday, June 25  | No, minister?
Foreign ministers from the six founders of the bloc - Germany, France, Italy, Belgium, the Netherlands and Luxembourg - plan to meet in Berlin, the Belgian minister has said.
Some euro zone finance ministers have suggested their Eurogroup might hold an emergency meeting but senior officials call that unlikely; managing banking and market turbulence will be up to the ECB and other regulators.

Day 3 - Sunday, June 26 | Rallying round the EU flag
After a Brexit vote, Commission President Juncker will chair an emergency meeting of the executive's "college" of 28 commissioners, including Britain's Jonathan Hill, officials say. The Commission will be responsible for negotiating the divorce.
EU officials insist there is no "Plan B" for Brexit. But, recalling the same denials during last summer's near departure of debt-laden Greece, one speaks of a "Room B", where a fire-fighting team of EU lawyers and experts will be ready. "The idea is to have everything ready for Monday," the EU official said.
Member states' ambassadors and leaders' "sherpa" advisers are expected to meet in Brussels in the event of a Brexit vote.

Day 4 - Monday, June 27 | Keep calm and carry on
The start of a new week on global financial markets will see investors and voters demanding answers on where Britain and the EU are heading. Expect both to offer assurances of orderly talks, while nothing changes immediately, for firms or citizens.

Day 5 - Tuesday, June 28 | "David, are you leaving now?"
A 24-hour EU summit is scheduled. After a Brexit vote, his political career may be over but Cameron would likely stay on until his deeply divided party elects a successor. He would be expected to appear for dinner in Brussels. Big question - would he notify summit chair Tusk that he is triggering Article 50 of the EU treaty, the legal basis for Britain to leave? In London, pro-Brexit would-be successors may try to play for time.
EU officials and diplomats say they would want Britain to launch the process right away and rule out any new negotiations, though for now they see no legal way to force London's hand. The EU treaty does not allow for expulsion but there would be fierce political pressure, urging London to respect voters' wish to leave, and the other 27 could start discussions without Britain.
If Cameron secures a referendum win, the summit will discuss quickly enacting the reform package he won from fellow leaders in March to give Britain a special deal to stem EU immigration.

Day 6 - Wednesday, June 29 | "Please wait outside, David."
Day Two of the summit and, if it is to be Brexit, leaders of the 27 other states will confer without Cameron in the room - a pattern Britons will have to get used to. Article 50 sets a two-year limit on divorce talks. The EU must fill a Britain-sized hole in its budget and reassure millions of EU citizens living in Britain and Britons on the continent of their future rights.
EU leaders may push for a quick show of unity on more integration. Divisions between Berlin and Paris on managing the euro zone probably rule out a big move on that front before both hold elections in 2017. Closer EU defence cooperation, without sceptical Britain, may be revived. A major EU security policy review is already on the summit agenda.
Other initiatives, aimed at blunting Marine Le Pen's far-right, eurosceptic bid for the French presidency in 2017, could include a push to create more jobs, especially for the young.
However, others, including summit chairman Tusk from Poland, caution against alienating voters by moving ahead too fast. Tusk argues British voters have shown many in Europe are reluctant.
EU leaders must give the executive Commission a negotiating mandate. Some in Britain see exit discussions lasting longer than two years to include talks on new trade terms. But an extension requires an EU unanimity that few in Brussels expect.
Some suggest talks with Britain on its future trade terms can run in parallel. Juncker has said the EU's priority would be a two-year divorce, then talks starting "with a blank slate".

From day 7  | Nothing (and everything) changes; Hello Estonia
After a Brexit vote, all EU laws apply in Britain until two years after London starts the process to leave. Then none would apply. Meanwhile, British lawmakers sit in the EU parliament, Hill in the Commission, thousands of Britons would go on working as EU civil servants and British ministers sit in EU councils. But they will have no real voice and Britain would be expected to renounce its EU presidency in the second half of 2017; Estonia might come forward to start its first stint in the chair six months early. Other solutions include new member Croatia being slotted in.
Some see heavy pressure to exclude British MEPs from a say on EU laws and to deprive Hill, a Cameron appointee, of his sensitive portfolio overseeing financial services regulation.
Whatever the referendum's outcome, a host of other EU plans, shelved for fear of alienating British voters, will come out of cold storage, including energy-saving rules to limit the power of toasters and kettles. Dealing with the fallout from a Swiss referendum on EU migration and a Dutch rejection of the EU trade deal with Ukraine will get back on track, as will a review of the EU's seven-year budget, which covers a period out to 2020.
If Britain votes to stay in, some, notably in France, fear a new British-led push to free up EU markets and rein in regulation. Some British officials see a mandate to do just that after a referendum win, though others doubt that Cameron, if he survives at all, would have much appetite for deeper EU engagement amid post-campaign Conservative blood-letting.
A post-Brexit relationship between Britain and the EU is the great unknown. Many EU leaders, wary of eurosceptic voters at home, are determined Britain cannot have access to EU trade and financial markets if it wants to keep out EU workers and refuse to contribute to the EU budget. "Out means out," they say.
New trade barriers would hurt both sides' economies. But the EU fears a political "domino effect" would cost more long-term.

End of the road?
Leaders have much else on their plates to distract them from negotiating with Britain, including Russia, the euro, jobs and refugees. London may have other priorities, too, not least the likelihood europhile Scotland would bid again to break away.
There is a "Brussels consensus" that Britain would face a chilly future, cast out to perhaps talk its way back later into some kind of trade access in return for concessions such as free migration from inside the bloc and contributions to the EU budget - things which Brexit voters want to end. But cautious diplomats do not rule out surprise turns.
EU law may seem clear but EU leaders, German Chancellor Angela Merkel included, are loath to see Britain go and may yet seek a way to keep it in, whatever the vote on June 23. "Will Merkel really shut the door?" a senior EU diplomat said. "It may seem clear-cut in Brussels. But in politics, never say never."

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