The Prime Minister did well to reach agreement with the European Union this week but the hard parts are still to come and bettors believe Theresa May's government is still in jeopardy. Max Liu reports.
It's that time of the year when the newspapers are full of articles in which the great and the good talk about the books they enjoyed this year. One of the most interesting works of non-fiction I read in 2017 was Adults in the Room, Yanis Varoufakis' memoir about his time as Greece's finance minister, in particular his clashes with European Union leaders over the terms of the Greek bailouts of 2015. The book is of special interest to UK reader as Varoufakis' account of his failed attempts to get a fair deal for Greece reveal how canny and hard-nosed EU leaders can be.
With hindsight, Varoufakis realises he was at his most vulnerable when he thought he had won concessions from the EU. Their negotiators, he shows, are experts at lulling opponents into a false sense of security by making what look like compromises and accommodations in the short term, when really they are completely unshifting and will force you in the long term to accept their terms.
These scenes from Adults in the Room came flooding back to me on Friday morning when waking to the news that Theresa May had made a deal with the EU that would take Brexit talks to the next stage. Because let's be under no illusions: the hardest parts of the negotiations are still to come. May did well to wrangle an agreement that had earlier in the week looked impossible, due to disagreements over the Irish border and a veiled threat from the DUP to bring down her government.
May's middle of the night manoeuvres in Brussels means Brexit negotiations can move to the next stage and Britain can start to talk trade deals. The Prime Minister received warm endorsements from the Brexit press: "May bounces back" was the headline on the front of The Times on Saturday and the Telegraph chimed in with: "The Price of Freedom", claiming that, while May has agreed a Brexit 'divorce bill' in the region of £40 billion, nothing is set in stone.
Bettors still back 2018 general election
In spite of Friday's deal, Bettors make it odds-on that Britain will still be in the EU after the March 2019 deadline. If you think they're wrong, you can get [2.14] on Britain leaving by the deadline.
Bettors also think that, while May has secured her short term political future, a general election next year is still likely. I recommended you back 2018 at [3.6] last week and it's now in to [3.35], with Labour shortening to [1.85] to win, even though this week's YouGov poll puts them only one ahead of the Tories.
The problems for the Prime Minister have already started. Not only has Nigel Farage attacked Friday's deal, calling it a national humiliation for Britain, but the Telegraph reports today that Downing Street told leading Brexiteers, including Boris Johnson, that some of the key concession the UK made in Friday's deal are "meaningless." Is this May's way of saying Friday's agreement isn't worth the paper it's written on? If so, the EU will be furious and they get their revenge.
Some Brexiteers appear to think Friday's deal is a fudge which the UK can later go back on once we've agreed a cushy trade deal. But might Michel Barnier and Jean Claude Junker be thinking something similar? Brexiteers alternate between depicting Brussels leaders as ruthless technocracts and naïve teddy bears, but they are neither. Junker, Barnier et al are shrewd politicians who will do whatever it takes to get the best deal for the EU and secure its future. They're as passionate about the EU as the Brexiteers are about British sovereignty. What's more, the Europeans are right and have 27 countries on their side.
So May will do well to listen to what Donald Tusk, president of the European Council, said on Friday, after the deal between the UK and EU was announced: "Breaking up is hard; breaking up and building a new relationship is even harder."