Six questions about Brexit after the European elections of 23 May 2019

What do the results of the European elections tell us?

Does Prime Minister May’s resignation change things?

Can the Withdrawal Agreement still be saved?

Is there still a risk of a no-deal Brexit?

Are we heading towards early elections?

How is the UK economy holding up?

In the referendum of 23 June 2016, 51.9% of UK citizens voted for Brexit, i.e. for the UK to leave the European Union (EU). On 29 March 2017, Prime Minister May triggered article 50 of the EU Treaty, which officially started the withdrawal procedure that was to be completed by midnight on 29 March 2019. By May 2019, Brexit still had not occurred. Against all expectations, UK voters were called to participate in the European elections, after which Theresa May announced her resignation. With five months to go before the new deadline, which was moved back to 31 October 2019 (the official end date of the Junker Commission’s mandate), we examine six questions pertaining to Brexit.

What do the European elections tell us?

The main takeaways are the polarisation of opinion on Brexit and the paradoxically high voter participation rate for an election that was not supposed to have occurred. In the UK, a good third of voters expressed support for the two extreme eurosceptic parties, the Brexit Party and UKIP, which are seeking a radical break with the EU.

Does Prime Minister May’s resignation change things?

Above all, her resignation risks extending the period of inaction, whereas the deadline for Brexit is still set at 31 October 2019. After her resignation on 7 June, Mrs. May will continue to handle ongoing business until the Conservative party finds a new leader. Through a series of votes, the 313 Tory MPs must first select two of the thirteen (!) candidates (as at 3 June). The final choice will then be made by the Conservative party’s 125,000 members. The elected candidate becomes Prime Minister after being appointed by the Queen, which is normally a formality. The procedure could last until 20 July, and then it’s the summer holidays, which means the new prime minister will have very little time to act.

Can the Withdrawal Agreement still be saved?

The 27 heads of EU State and government have clearly stated that they would not reopen negotiations on the Withdrawal Agreement concluded with the UK on 28 November 2018. One of the big issues is the Northern Ireland backstop[1], which is the main sticking point for the UK side, but which the Europeans see as a guarantee of the integrity of the single market. The House of Commons still has the possibility of ratifying the Withdrawal Agreement, up to the 31 October deadline. But having already rejected it on three occasions, there is little chance that it would change its mind, especially under current configuration where the Irish Democratic Unionist Party (DUP) plays a pivotal power-sharing role that prevents any compromise. The only way to work towards a negotiated solution would undoubtedly require a new House of Commons, which implies holding early elections.

Is there still a risk of a no-deal Brexit?

Second, even if the new prime minister were to lose a no-confidence vote in the House of Commons, he or she could still extend the parliamentary session through the deadline of 31 October, on the grounds that it must continue to negotiate with the EU partners. In this case, a no-deal Brexit would occur by default (see Boles, 2019[3]).

Are we heading towards early elections?

Considering that the House of Commons is unable to ratify the Withdrawal Agreement but also opposes a no-deal Brexit, the only chance of breaking the deadlock would seem to be early elections. It is not really a question of whether early elections will be held, but when, and under what conditions. The 31 October deadline seems to be too close, but the EU-27 would probably agree to push it back again on grounds that a general election in the UK might change the situation, enabling gradual progress towards a smooth exit, or it might even call into question Brexit. In any case, the next prime minister would have to agree with this plan (he alone has the power to call for another delay), which is far from certain. Of the 13 candidates to lead the party, five have already said that they were prepared to trigger a no-deal Brexit on 31 October, including the two frontrunners, Boris Johnson and Dominic Raab, the former foreign secretary and Brexit secretary, respectively.

How is the UK economy holding up?

Immigrant flows from the EU have dwindled as well (fewer than 60,000 net arrivals in 2018, in line with the low point of 2009), which is straining the housing sector.

[1] Under the Withdrawal Agreement, to avoid the reintroduction of a physical border between the two Irelands once the UK exits the European Union, a safety net or backstop would be applied to Northern Ireland. Northern Ireland would temporarily maintain a customs union with the EU as well as the complete alignment of legal, technical and environmental standards, as long as necessary for the completion of a framework agreement on future relations.

[2] National Institute of Economic and Social Research (2019) “Modelling the short- and long-run impact of Brexit” NiGEM Observations n°14, May 31.

[3] See the opinion expressed by former Conservative MP Nick Boles on the Guardian website, May 29.