While the British press frantically reports on every move and countermove in the phony war that is their nation’s withdrawal from the EU before it has even started — and while the markets attempt to infer a plan from the every word of Theresa May and her ministers when there clearly is no plan — the outlook really hasn’t changed since Britons voted to leave the European Union in June.
There are essentially three ways this can go.
1. Hard exit
A “hard” exit, in which Britain leaves without a deal to stay in the single market, is the most likely outcome.
The EU’s position hasn’t changed. It warned before the referendum that Europe’s “four freedoms” — the free movement of capital, goods, services and people — cannot be separated. It maintains that position to this day, fearful that a compromise could augur in the end of the European project as we know it.
Britain, for its part, has made reducing immigration its priority.
So long as neither side changes its position on this, a hard exit is inevitable.
Less likely, but not implausible, is that the damage Brexit will do the United Kingdom’s economy convinces it to accept some form of free movement in return for continued access to the single market.
The result would be an arrangement like Norway’s. Britain would remain in the EU for all intents and purposes, but not legally.
The upside is that it could escape the bloc’s restrictive agricultural and fishing policies.
The downsides are that it would no longer have a say in EU decisionmaking and would still need to pay into the EU budget.
This is obviously not an appealing prospect for the second largest economy in Europe. The consequences of Brexit would have to get pretty bad for British voters to accept this.
Even less likely is a scenario in which the EU capitulates and allows the United Kingdom — for whatever reason — to stay in the single market without paying a substantial sum into the EU budget or accepting free movement of people.
This is nirvana for the Brexiteers: all the sweet of EU membership without the bitter.
It also makes the least sense.