Can Britain ever rejoin the EU?

First, Remainers must understand what a future UK membership would actually entail.

Photo by Jasmine Leung/SOPA Images/LightRocket via Getty Images

There is an old joke among economists that has recently re-entered their discussions: there are at most five people in the world who understand money. Let me borrow this observation. There are at most five people in the UK who understand the European Union. I mean really understand the EU, and not just the rose-tinted or resentful caricatures of the EU that swirl around in the heads of Remainers and Brexiteers.

The current polls are telling us that approximately 60 per cent of the British population think that Brexit was a mistake. What this makes clear is that the UK as a whole needs to confront the reasons for this. I think it is because Britain’s government and financial institutions lack an economic model for its post-Brexit existence. But whatever your views, be careful not to draw false converse conclusions. If 60 per cent of British people think that Brexit was a mistake, it does not follow that 60 per cent want to rejoin the EU.

I’m hearing the first rumblings of a pro-EU campaign. My advice to Team EU – those in the UK who want Britain to one day rejoin the EU – would be this: use this time wisely. Do not pick up where you left off in 2019. In particular, do not think about the deal you can get, or even frame it in terms of a transactional relationship. Instead, think about what you want the EU to do, and how you want the UK to contribute. That didn’t happen last time, during the referendum campaign in 2016.

Even if the UK were to reapply, in, say ten years, the EU would surely not offer it the same deal it had when it left. The UK had an opt-out from the euro and the Schengen passport-free travel zone. It also had opt-outs of sorts from the Charter of Fundamental Rights and the entire area of internal security and justice. The UK was not really a full member in the last 20 years of its membership.

By the time the UK reapplied, the EU would have moved on in several policy areas. London would be unlikely to regain its status as the eurozone’s financial centre. Frankfurt and Paris have taken some of London’s business. Milan is coming up fast. I recall well that Mario Draghi, in his role as president of the European Central Bank (ECB), was focused on challenging London’s position as the eurozone’s financial centre. The ECB thought it was bizarre that the world’s second-largest currency zone was reliant on a financial centre outside its territory. The ECB can be relied upon to insist that the UK should join the euro if it were to rejoin the EU. Has Team EU even thought about that?

France will almost certainly insist that the UK conforms to the EU’s policies on immigration and home affairs. Why would France want to accept an external EU border on its northern shores when it can outsource that problem to the UK?

We should remember that the EU did not hand the UK its opt-outs on a silver plate. The UK blackmailed the EU into them, by threatening to veto consecutive EU treaty revisions, starting with the one at Maastricht in the early 1990s. But if the UK applied to rejoin, the tables would turn. Each of the EU’s current 27 member states would have a veto on UK membership.

Another thing that has changed since the UK left is that Germany and France have cemented their powers over regulation. The European Commission has recently proposed the suspension of state aid rules in response to the US’s Inflation Reduction Act. This will help Germany in particular to rig EU economic policy even more in its favour. Germany dominates the regulatory debate in the EU because it speaks for several smaller countries that are part of the wider German economic zone. It is hard to see how the UK could impose itself on this.

[See also: This Brexit truce was inevitable]

There may be options available short of membership. Andrew Duff, a former MEP and clearly one of the five Brits who does understand the EU, has been calling for a reform of European treaties to funnel the EU’s diverse third-country relationship into a single associate membership. I have a lot of sympathies with that proposal, if only because it would open the most realistic pathway I can think of for the UK to re-engage with the EU. But the EU is, unfortunately, not moving in this direction right now.

The available alternative would be the “Norway” option: membership of the single market only. But the UK would once again become subject to EU law, be forced to reintroduce freedom of movement, and not be able to take part in any decisions. I proposed it as a transitory arrangement after Brexit. But it is not suitable as a permanent regime for a large country that is seeking to get in.

If there is ever another referendum, it will not be about regrets, but about whether or not the UK should become a full member of the EU, warts and all. I am not sure that Team EU has any chance of winning such a referendum unless its starts to think seriously about the EU itself. The EU would need to change too. It would also be wrong to reduce the goal to the act of rejoining by itself. The last thing anyone would want is for the UK to rejoin, only to leave again a few years later.

I have come to the conclusion, therefore, that the best political course of action right now is to make Brexit work. But if you are brave enough, or foolhardy enough, to go for full-Monty EU membership, make sure that the number of people in your team who have a deep understanding of the matter exceeds five.