Brexit dominated the news cycles for so long, it became hard to imagine anything else causing the same excitement. But now it has finally happened. There is only one story in town: the Coronavirus pandemic. But as Britons prepare to hole up with their cupboards full of dry pasta and not enough loo roll (finally, a use for any copies of the May Withdrawal Agreement still floating around), it is worth remembering that Brexit news continues too.
Covid-19 will change the landscape of Brexit negotiations considerably. Already the strain that the pandemic it is putting on economies worldwide is becoming clear. Italy faces particular difficulties. The EU’s infamous fiscal inflexibility will be tested once again. The EU needs to be flexible, using all the fiscal levers to which the ECB has access, and to act fast if it wants to stop the Italian crisis from spiralling into a global one. BfB contributors Paul Sheard and Ashoka Mody have explored these challenges in two important pieces this week.
Meanwhile in Britain, Rishi Sunak’s Keynesian budget has come at just the right time. The government’s hopes that levelling up infrastructure will also level up regional economic disparities are perhaps overly hopeful. However, this is certainly a good time for a spending boost, which can offset the small economic bumps in the road that would result from no deal with the EU, making the path to a no deal Brexit as smooth as possible.
That said, the virus also means that a deal becomes ever more likely. A free trade agreement has always been in everyone’s economic interests. While the EU has been prioritising its political commitments to closer union, the virus is likely to focus minds on purer economic imperatives that would underpin a basic free trade deal.
There is good reason for cautious optimism. By 2021 – Britain’s first year properly outside the EU – we can hope for a return to post-virus normality, and economic growth which is better than normal.
On the website this week
The Budget, the Virus and Post-Brexit Britain, by Graham Gudgin
Economist and BfB co-editor Graham Gudgin argues that our first year fully outside the EU is likely to be one in which the UK economy grows faster than usual. By then the negative impacts of the Covid-19 virus are likely to be reversed. In addition, the spending boost announced in this week’s Budget will come at just the right time.
“Economic forecasters are assuming that the main damaging impacts of the virus will occur in 2020 and that 2021 will see a bounce-back to faster growth.”
How can Britain secure its interests in Europe? By James Rogers
Expert in International Relations James Rogers suggests that Britain needs to recalibrate ‘onshore tethering’ and engage in a careful and calculated strategic operation – potentially without end – to regenerate its ability to influence European affairs, while also acting as a ‘flying buttress’ – in Prime Minister, Boris Johnson’s words – when the EU comes under threat.
“In short, Brexit does not have to be the end of British influence in Europe; it could in fact represent a new beginning.”
The Coronavirus challenge, by Paul Sheard and Ashoka Mody
Two of BfB’s regular contributors, the distinguished economists Professor Ashoka Mody and Dr Paul Sheard, have written important commentaries on the grave financial implications of the Coronavirus, especially effecting the Eurozone, and by extension the rest of us. Here we publish summaries of their analyses.
“It is quite shocking that the new German president of the European Commission calls for zero dumping, when her own country is one of the world’s biggest dumpers of goods onto world markets.”
We are also on Twitter, posting articles and retweeting the daily events that bring Brexit to the fore in the national news.
Discussion also continues over on Facebook. There was a lot of appreciation for Mervyn King’s suggestion that the City of London needs equivalence with New York rather than EU trading centres. Keith Birt called these ‘Wise words indeed’.
How you can help
There is much about Brexit still to be decided. Our MPs listen to their constituents. Do continue to send them links to our articles, especially on matters relevant to your constituency – for example, in rural areas, articles on the threat to British agriculture. Alternatively, make an appointment to see them at their next surgery. Let them know what you want post-Brexit Britain to look like.
As Boris Johnson said in in his post-election address, it is also time for unity and reconciliation. Keep reading our posts and share links to our quality content to help others understand how leaving the EU will be good for the UK economy and for our own democratic governance. We aim to educate our critics to think differently and more positively about the long-term impact of Brexit.
An Oxbridge PhD Student
Dr Graham Gudgin
Economist, Centre for Business Research, Judge Business School University of Cambridge
Professor Robert Tombs
Emeritus Professor of French History, University of Cambridge