Starting position: Stalemate
This is arguably where we were before the election. The UK government had been taking a tough stance on migration and the divorce bill. Meanwhile, Europe was refusing to back down on free movement of people and had doubled it’s initial estimate of the potential “divorce bill”.
Under pressure: Initial UK position softens
With UKIP support having collapsed at this election, there is the opportunity to pull back from the hard stance on the EU. Theresa May has been weakened and needs to gather support from both wings of her party. The DUP will also want ensure an open border with Ireland, which will limit the scope for hard Brexit.
An opposition that is decidedly less hostile towards Europe also means the Conservatives don’t have to compete on a harder Brexit. Indeed, the government may have to consider a softer stance to secure parliamentary passage of the Brexit legislation.
EU lead negotiator Barnier has opened with a conciliatory approach, saying negotiations should only start when the UK is ready. “Let’s put our minds together on striking a deal”, he said on the morning after the election.
Defections destabilise fragile government
To get here, it might initially take signs of a softer Brexit stance from the Conservative government. This could frustrate the harder-line Brexit supporters in the Conservative party, and could potentially see threats of defections to a resurgent UKIP. This in turn could see the Conservative’s fragile majority erode to zero, raising the possibility of an immediate election. Awkward timing of such a move during the negotiations would spell trouble.
Toxic politics return
Even if the UK softens its stance, the potential for Italian elections to result in an anti-EU government could see the EU respond by showing that leaving the EU is incredibly painful. This could see the EU pulling back from negotiations, risking the clock ticking down and the UK leaving the EU without a deal in place in an effort to deter Italy from following the UK down this path.
EU politicians might also calculate that a hard line could lead the UK to reconsider its position, or destabilise the minority Conservative government in such a way as to trigger another election.
This new election would then be fought on the issue of an unattractive hard Brexit option. This could lead some parties to campaign on the basis of a softer Brexit or on the offer of a second referendum. Both options would be more desirable for the rest of the EU.
What now for Brexit?
Theresa May called the election anticipating a landslide victory, but the Conservatives failed to win a majority and are reliant on Northern Ireland’s DUP for support to continue in government. Having adopted a tough line on Brexit, this election outcome could re-open her party’s wounds regarding Europe and May will need to work hard to unite it. With the UKIP threat eliminated (for now) and all opposition parties keener on a “softer” Brexit, there is scope for a shift in her stance.
The seemingly conciliatory tone struck by the EU leaders (Michel Barnier today commented that negotiations will start only when the UK is ready) also seems to reduce the odds of a “hard” Brexit. Nonetheless, there are lots of risks to this assessment, with a narrow majority leaving the government vulnerable to by-election defeats and defections. There is already a question over how long Theresa May could last as PM, but there will be plenty more twists and turns before Brexit is concluded, including the possibility of a new election.