Has a No-Deal Brexit Become More Likely?

Fanatical Brexiteers argue that a UK prime minister genuinely determined to deliver a no-deal Brexit could, and should, go nuclear: suspend parliament and refuse to call MPs back until after the October 31 deadline, when Brexit will happen automatically. The problem for them is that the UK isn't Zimbabwe or Venezuela.

LONDON – After British Prime Minister Theresa May’s resignation announcement, several of the candidates to succeed her have proclaimed their desire for a “no-deal Brexit.” In response, European leaders are ramping up preparations for a total rupture with the United Kingdom, financial analysts are revising their forecasts accordingly, and sterling is collapsing.

The fears about a no-deal Brexit are understandable. Such an outcome would eliminate the 18-month transition period that both sides considered essential for an orderly realignment of Britain’s relationship with the European Union. This would mean a sudden stop in Britain’s commerce with its largest trading partner, and the EU’s with its second largest (after the United States). As the world learned in the aftermath of Lehman Brothers’ collapse in 2008, a sudden stop in trade and finance, even if it lasts only a few weeks, can cause years of pain.

To emphasize the dangers, the head of Britain’s civil service presented a 14-page dossier to the cabinet (which was promptly leaked), describing not just potential economic and financial damage, but also the risks to national security and health care. Even more significantly, the cabinet secretary insisted on including this dossier in the cabinet minutes, to demonstrate that ministers, rather than their civil or military advisers, would bear full responsibility for taking such risks.

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© Project Syndicate

© Project Syndicate

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