What’s all this talk about “Article 50”?
The referendum result is not legally-binding. Article 50 of the Lisbon Treaty is the instrument which exists in law to allow for countries to leave the EU. But until it is invoked – until a prime minster presses the “red button” – Britain’s relationship with the bloc remains the same. Once it is pressed, the process will take two years. But Brussels has no power to force the UK to set it in motion and the current political turmoil means it will be months, at the very least, before this happens.
There currently exists a kind of stalemate. David Cameron, who has in effect washed his hands of the whole situation, said on Friday that pushing the red button and dealing with the consequences will be a job for his successor. In doing so he has laid a trap for Boris Johnson, whom the bookmakers believe is set to replace him as prime minister. Mr Johnson, for his part, equivocated on the matter in his Daily Telegraph column on Monday – he is in no hurry whatsoever to invoke Article 50.
To press the red button is, from a political perspective, to drink from a poisoned chalice. And David Allen Green, a legal commentator at the Financial Times, believes that the longer the delay before it is invoked, the greater the chance that it will simply not happen. “In my view, the failure to send the notification on the very day after the referendum will mean that there is a strong chance it will never be sent at all,” he wrote on Sunday. Naturally, this has the potential to cause all manner of political upsets – hardcore Brexiters expect the will of the people to be enacted.
Brussels is displeased because, in the main, it wants Article 50 invoked immediately. Eurocrats worry about the potential for Britain’s referendum to reverberate around the continent and inspire other countries to agitate for their own exits, causing a wave of instability to the established order. That said, Angela Merkel, the German chancellor, has struck a more conciliatory tone and indicated Britain should be given the chance to rethink what it has done.
What happens next therefore depends on the UK’s domestic political situation and who emerges at the top of the two main parties. A future Conservative government may fudge things to avoid invoking the Article. A Labour party under a new leader may enter the expected autumn general election explicitly pledging not to invoke it, therefore making that election in effect a proxy second referendum. Or, some entirely unanticipated turn of events could see it quickly invoked after all. We are in completely uncharted territory.
Unfortunately for businesses and investors, all this means another prolonged period of uncertainty.
Article 50, Boris Johnson, EU referendum, Politics, Public Policy, UK