British Prime Minister Theresa May will quit

The Brexit conflict will never end

Why do the financial markets stay so calm? At least at first glance, there is reason to panic.

In December, the UK House of Commons will reject Prime Minister Theresa May's divorce treaty with the EU. For the UK, this means that the UK will probably leave the EU on March 29th without any agreement.

In this dreaded “no deal” scenario, planes would no longer fly back and forth between the EU and Great Britain, the British would need visas to visit the continent, goods would have to be cleared through customs, and the UK would quickly get food and medicine go out. There are already contingency plans in place to use the army to maintain order in the country. There can be no more catastrophic prospects for an industrialized country in peacetime.

Nevertheless, the British pound has barely reacted, it has been between € 1.10 and € 1.16 for a year. UK stocks did not fall for fear of the no-deal either. So why are the markets so relaxed? Because they expect that a situation without a contract - should it occur - should only last a few weeks. Even after a chaotic winter, two scenarios would be most likely: a UK-European treaty - or no Brexit at all.

Theresa May's divorce agreement looks like this: You will leave the European internal market, stop the free movement of people, but at the same time remain in the customs union for goods. Almost all British politicians are of the opinion that the UK would then be basically worse off than if it remained in the EU. That is probably not May's fault - it is simply because of Brexit itself. Many MPs will vote against their agreement. Still, it will probably survive.

Scenario 1: After the no-deal, a deal will follow. Because most UK MPs, businessmen and trade unions will try desperately to avoid the no-deal. So the MEPs could either in January or a few weeks before the contractless state from March 29th still approve May's agreement in a second round, with a few cosmetic corrections, which Brussels admits in order to soften the humiliation.

Scenario 2: No Brexit. Many believe that a second referendum would reverse the result of the first vote. But that is rather unlikely. Neither May nor Labor leaders want a second vote. Surveys currently show that a small majority would vote against Brexit. However, millions of Britons would be angry if their first vote in 2016 was ignored.

Therefore, the most likely route to a no-Brexit is as follows: Parliament rejects May's agreement, chaos ensues. The conservative government, torn between Brexit supporters and pro-Europeans, is blocked. As an interim solution, the British say to the EU: “We will pull through Brexit one day, but not now. Please let us postpone this until we have a suitable plan. " However, since there is never a good moment to shoot yourself in the own foot, Brexit could freeze as a conflict and never really be resolved.

Or the government says in Scenario 3 in response to the domestic political chaos: “We will officially leave on March 29, but we cannot decide which Brexit we want, so we will first of all follow the EU rules and maintain the free movement of people . " That would then be a “BRINO: Brexit in name only”, ie a Brexit in name only. Economically, that would be almost painless, so it could also become a long-term solution.

In the meantime, around 500,000, mostly older, Brexit supporters die every year - and 700,000 mostly anti-Brexit Britons turn 18 years old. Great Britain would slowly grow out of the desire for Brexit.

Simon Kuper is a columnist for the Financial Times. Translation: Bettina Schneider