Truss, the iron weather vane, defies the cold EU wind

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Liz Truss is not Boris Johnson. That was the chief consolation for diplomats and European Union leaders as congratulations flowed from Paris to Helsinki for the new resident of 10 Downing Street. After years of Johnson’s antics, from threatening post-Brexit trade to calling the French ‘shit’, relations certainly can’t get any worse.

But EU officials know deep down that they must cut their jobs to try to mend relations. Even if Russia’s invasion of Ukraine and skyrocketing energy prices should bind Western allies closer, there is legitimate pessimism that Truss, the self-proclaimed Thatcher supporter, is being dubbed the “iron weathervane” rather than the Iron Lady by the French media given her past political about-faces, including Brexit itself – who will have the freedom or desire to end the EU’s blame game that helped it win the Conservative leadership.

Continental optimists felt burned by Truss earlier this year when she used her combined roles as foreign secretary and Brexit negotiator to launch a frontal attack on the EU’s divorce deal approved in 2020 and to push for legislation that would tear up trade Terms in Northern Ireland that avoid a return to a hard border by effectively moving it to the Irish Sea.

Claiming that this is the only option to solve technical problems exacerbated by an inflexible EU runs counter to local support for the deal and earlier negotiated concessions by the European Commission’s Maros Sefcovic – and his own signed UK commitments.

There is continuity here with the Johnson era, and not just because Truss inherited his parliamentary majority. Talk of a “correction” through a trade deal obscures a deeper need to blame the EU for the disappointments of a Brexit project that has brought economic costs to the UK with no promised benefits like a US trade deal or financial sector deregulation . Hence the rhetoric that the EU only understands “strength” or that “the jury is at odds” over whether France is an ally – just a few of Truss’s recent jibes.

EU officials are understandably taking a defensive stance as Commission President Ursula von der Leyen urges Truss to “respect” UK commitments. The bloc will be under pressure to show that its defense of the single market is not faltering – even amid war in Ukraine and a looming eurozone recession – and that breaching Brexit deals will face costly reprisals. The “shamelessly” pro-growth Truss government, which is eyeing an election in 2024, should take note.

But as positions harden, so do the risks. Federico Fabbrini, Founding Director of Dublin City University’s Brexit Institute, lays out the potential damage of Truss’ current trajectory: a major legal confrontation with the EU (which has launched a total of seven infringement procedures against the UK), further political instability in Northern Ireland and one fixed US answer. Anything would damage cooperation between allies – and music to Vladimir Putin’s ears.

Against this bleak backdrop, European leaders have little choice but to pursue more constructive paths, despite the UK’s legislatively loaded weapon. A Brexit renegotiation is off the table, but there should remain openness to more palatable “flexible” customs formalities if there is a chance to end the trade limbo. It should also open new diplomatic doors for the UK as an energy and defense partner in wartime facing a shared crisis. The hope is that pragmatism might prevail, even in a conservative party that has defenestrated two leaders in three years.

Ironically, it is French President Emmanuel Macron who, despite a long list of grievances ranging from crossing migrants to dumping raw sewage into the English Channel, is making a concerted effort to appeal to Truss’ ambitions for a “global Britain”. His government is calling for a fresh start in Franco-British relations, and his vision of a new grouping of like-minded European democracies, including Britain, reflects a wartime shift in priorities. Although there has been closer EU integration on issues like defence, myriad threats ranging from war to cyberattacks to energy security require collaboration beyond the bloc’s 27 members. The UK is also a source of income and a testing ground for French industrial champions.

Ideally, Truss would use this opportunity to exert more diplomatic influence in Europe himself; Despite her greater interest in closer US ties, she is openly frustrated with the not-so-special relationship she has with the Biden administration.

But the harsh truth is that the catalyst for a shift in UK-EU relations is likely to be the severity of the looming energy crisis, rather than the smooth talk of diplomats. Economic slowdown, high inflation and energy poverty have effectively pushed the Brexit sparring partners into the same boat. Truss has called this a “storm” to overcome; Bad as that sounds, maybe that’s what’s pointing the weathervane in a kinder direction.

More from other authors at Bloomberg Opinion:

• Liz Truss’ high-wire plan might actually avert a recession: Therese Raphael

• Can truss make the shorts look silly? Just maybe: John Authors

• ECB hawks should be careful what they wish for: Marcus Ashworth

This column does not necessarily represent the opinion of the editors or of Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering digital currencies, the European Union and France. He was previously a reporter for Reuters and Forbes.

For more stories like this, visit bloomberg.com/opinion

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