UK: Brexit proceedings will likely begin in the first part of next year - BBH

Research Team at BBH, suggests that contrary to some speculation earlier (denied) that Article 50 would not invoked, word from the EU Summit is that Prime Minister May is signaling that divorce proceedings will likely begin in the first part of next year.  

Key Quotes

“News today is that the head of Germany's IFO wants a soft deal with the UK, so as not to cut the EU's nose to spite its face.  The head of the IFO claims that the UK's diminished influence in the EU is sufficient price.

Many European officials seem to disagree.  Recall that reports from the summit suggested that some officials thought that if their demands were sufficiently strong, the UK would balk at Brexit.  This too seems fanciful.  While the integration has been deep and complex, the key divisive issue is the UK's desire for access to the single market without having to accept EU migration, though it is not a member of the Schengen zone.  

We have been skeptical of the UK narrative that the EU changed from what the Conservatives that led the joining had anticipated. The UK consistently campaigned for a broader union rather than a deeper union.  Now, nearly every country that wants to join has done so (except Turkey, and maybe Ukraine).  The broader union, which speaks to the UK's successful strategy, meant that the governance had to change away from unanimity.  This means that the UK strategy ultimately led to the loss of its veto.  Nothing fails like success, even though the instability in Northern Africa and the Middle East spurred the refugee crisis, for which there is no easy solution and was mishandled.  

Even if the promise of a referendum allowed the Conservatives to defy expectations and secure an outright parliament majority, there were three things that Cameron could have done that could have changed the outcome.  First, he could have campaigned harder and presented a strong, compelling case of why UK historically has gotten involved with Continental politics to shape the outcome.  

Second, he could have taken a page from Scotland, and said because the referendum is about the future, 16-year olds should be allowed to vote.  They may not have voted in high numbers, but a strong turnout was not necessary to change the close results.  Third, recognizing the importance of the treaty with the EU, Cameron could have insisted that it is not the UK way to make such an important decision by the "petit oui" as the French did when it agreed to EMU.  Cameron could have insisted on a 60% or 2/3 majority to accept the conclusion of the non-binding referendum.”