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Pat Leahy: No-deal Brexit is still unlikely, but not impossible

Varadkar may have to decide whether to dig his heels in on backstop or fight again

Brexit took a lurch for the worse in Salzburg, jolting the prospect of a no-deal scenario into the centre of everyone's considerations.

The economic and political consequences of a no-deal Brexit are so severe for everyone (and for Ireland especially) as to make it unlikely. It’s not just the effects on trade and what that would mean in economic disruption. The political consequences of having failed to agree would poison the future triangular relationship between Ireland the UK and the EU for years. This is hardly unforeseeable, and will propel EU leaders towards compromise. But a no-deal is not impossible. Lots of bad things happen by accident.

Also, avoiding a crash-out, no-deal Brexit requires everyone to be acting rationally. And frankly, given the parlous state of British political leadership at the moment, that cannot be relied upon. That is an extraordinary statement, when you think about it, but it’s true.

In London, the reaction to the Salzburg summit was predictable. "EU DIRTY RATS" shouted the Sun (though not, as you no doubt noticed, the Irish edition), with a picture of Emmanuel Macron and Donald Tusk mocked up as gangsters. "Euro mobsters ambush May".

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"Humiliation," said the London Times. "Rebuffed by a vengeful EU," said the Express. "The Salzburg disaster," said the Independent. "EU leaders ambush May."

"Humiliated" was also the Guardian's assessment. And the Daily Mail declared that a "Furious May" was ready "to walk away". I could go on, but you get the picture.

The more you talk to people closely involved in the process, and the more the whole thing looks like a high-wire act

It’s hard to see what is gained by EU leaders’ public dismissal of May at the Salzburg summit. The jingoistic hysteria of much of the British press may have been preposterous, but it was hardly unsurprising. If it is in the interests of the EU for May to move her position on the future relationship and on the Irish Border – and it is certainly in Ireland’s interests that she does the latter – then the events of the summit and their predictable interpretation in London makes that harder to achieve.

No doubt teasing May on Instagram with jokes about cake and cherries amuses Donald Tusk. But is it really wise in the current climate?

Incredibly tight

The timelines for agreement are becoming incredibly tight. There is a general understanding that May can’t make any move before the Conservative Party conference at the end of this month, leaving perhaps 10 days before the October summit, when leaders will decide if there is any point in convening a special summit in November to approve a deal.

Presumably, the attendees at the Conservative conference can read the newspapers and are aware of this. So some sort of an attempt to prevent – or at least dissuade – May from making any further concessions will be made before then. The obvious way to do that is to convince her that she couldn’t get any retreat from her existing positions through the House of Commons. Many of the flag wavers at the conference don’t even want the Chequers deal to go through, never mind anything that represents a further move towards the EU’s demands.

The more you talk to people closely involved in the process, and the more the whole thing looks like a high-wire act.

Irish officials judge that the British “need everything played together at the end” – the agreement on the backstop, the withdrawal agreement, the political declaration on the future relationship: they all have to arrive together to get through.

Ignore, says one, the phony war until after the Tory conference – ignore all the posturing about who’s better prepared for a no-deal, who’s prepared to walk away, who’s not budging an inch, and so on.

What matters is when Michel Barnier sits down with May’s negotiator Olly Robbins in early October and afterwards makes a judgment about whether, based on the British position then, a deal is feasible. He will report to the EU leaders then, and they will decide.

Pressure

It’s at that point, senior figures in Government worry, that pressure will inevitably come on Ireland from other member states – certainly from central and eastern European countries who fear the withdrawal of British billions from the common agricultural policy, but also from Germany whose instincts are to keep the UK as close as possible. Some of them feel the pressure already.

The Taoiseach said he returned from Salzburg “very reassured” – though you’d wonder why reassurance was needed.

Whatever May offers on the Border – fresh proposals are expected on the backstop in early October – it is unlikely to meet all of Varadkar’s requirements. That’s not how negotiations work.

So the Irish Government will have to make a decision then, mindful that the biggest loser in the EU in a crash-out Brexit would be Ireland, but also mindful that it proclaimed a “bulletproof” backstop last year.

So Varadkar may have to decide whether to dig his heels in on the backstop and take his chances with the uncertainty of all that, or fudge the backstop and fight the good fight again in the talks on the future relationship.

The latter is the safer option but has a greater potential downside in the long term. Varadkar will be heavily influenced by senior officials and diplomats in his approach, and he is fortunate to have a team of smart and experienced people to call on in his own department and the Department of Foreign Affairs. But ultimately the decision will fall to the politicians – Varadkar above all, but with input from Simon Coveney and Paschal Donohoe.

Diplomacy tends to caution; politics is more given to risk. Either way it will be roller coaster few months. Hang on to your hats.