Chronic. The long-term future of the UK depends on the answer to a simple political question: in 2020, will Boris Johnson betray the ideologists of Brexit or the new voters of the north of England? Will he choose to impose a “soft”, centrist Brexit while remaining close to the European Union, which would limit the short-term economic damage? Or will he prefer to drop the moorings, impose the “Singapore-on-Thames” model, a sort of fiscal and liberal paradise at the gates of Europe, and follow the dream of early brexiters to the end? The hour of choice, postponed by London for almost four years, is approaching.
At the start of the year, the British Prime Minister has almost complete freedom of action. Following his triumph in the December 12 legislative elections, he has a very comfortable majority and faces opposition in pieces. He will now have to decide: what Brexit does he want to set up?
Because nothing is really decided. The United Kingdom is going to leave the European Union on January 31, it is a given. But this is only the political phase: the country will no longer have a commissioner or MEPs. And it can replace the red passports stamped with the European Union by new blue documents, to make " like before ".
But the hard part remains to be done. We must now negotiate the future free trade agreement between London and Brussels, which should in principle come into force on 1st January 2021 (the date may be postponed, if both parties agree). Until then, nothing will change on the ground.
On this negotiation depend the real economic consequences of Brexit. The Bank of England estimates that a complete break with the EU (to switch to World Trade Organization rules, with tariffs and quotas) would cost 5.5 percentage points of GDP over the long term. The most obvious example is the British auto industry, whose factories import and export spare parts continuously from Europe. The slightest grain of sand in this well-oiled logistics will reduce their profitability. What will voters say in Sunderland (north-east England) if their large Nissan plant, the backbone of the local economy, ends up closing in a few years?
The north of England, which has partially switched to the Conservative Party, is the most industrial region of the country and the one that has the most to lose from a radical Brexit. Boris Johnson, who got elected promising to take better care of the region, said the political cost would be heavy.
