A job in UK that no man wants, but two women do

Arvind SukumarCNBC-TV18There’s one job in the UK that’s begging to be taken up. It comes with quite a few perks including a huge residence at Number 10, Downing Street in London, a convoy of vehicles, and even a dedicated helicopter or five. However, not one of the 1.67 million unemployed people in the UK seems to want that job. A few, like former UKIP leader Nigel Farage and former London mayor Boris Johnson, have changed their minds and turned a deaf ear to opportunity’s knocks. So, it has fallen to one of two ladies – Home Secretary Theresa May and Energy Minister Andrea Leadsom -- to become not just Britain’s next Prime Minister but also, in outgoing PM David Cameron’s words, “be the captain to take the country to its next destination." Whichever lady finally gets the job will have her hands full, and not just at home. Globally, UK's decision to walk away from the EU has already set global markets shaking in their boots. Uncertainty has suddenly been reinforced as the new normal, and the one question everyone’s asking: Will Britain actually leave the EU, and if so, when? Yes, the people voted to leave at the referendum last month, but the UK vote does not set anything down in stone. It does not mean the divorce is final. Far from it. The referendum is not legally binding, but as most political weathermen have pointed out, an emotionally poignant vote like this is not something any political party can ignore if it knows what's good for it.So, let’s assume that is how things will play out, and there’s no escaping a Brexit. This means it falls to one of these two ladies to push ahead with the exit, which will begin by invoking Article 50 of the Treaty of Lisbon. That will set a 2-year clock running. The new Prime Minister will then have to negotiate, clause by clause, the terms UK will have to meet to officially leave the 28-nation bloc.The European Union, however, is not in a mood to give UK time to get its bearings. Minutes after the results of the referendum were announced, a joint statement by the European Council, the European Commission, the European Parliament, and EU President, said any delay to Britain's exit would "unnecessarily prolong uncertainty... We stand ready to launch negotiations swiftly with the United Kingdom regarding the terms and conditions of its withdrawal from the European Union."These negotiations could turn out to be grueling for the UK. With Britain voting to leave, the powers that be in the EU have to deal with the possibility that the populace in other EU member countries may also start pushing for similar referendums: France, the Czech Republic, and the Netherlands being a few likely candidates. Given this scenario, one can assume that the EU leadership will want to set a precedent which ensures leaving the union will prove costly for any country. The bigger problem for the next British Prime Minister is that it's not one party she will be negotiating with. As per the procedures in effect now, the terms of exit will be negotiated between Britain's 27 counterparts in the 28-nation bloc, and each will have a veto over the conditions. It will also be subject to ratification in national parliaments, meaning, for example, that MPs in Belgium or Greece or France or Italy could stonewall the entire process. The single ray of hope here is, as has been pointed out, that the Union itself does not want to "unnecessarily prolong uncertainty." That brings us to the next problem: What kind of deal would sit well with Britain? One like Norway’s, which has that country adopting nearly all of EU's rules and regulations? Or a customs union like the one Turkey enjoys, which will force the UK to implement EU's external tariffs, without influence or guaranteed access to third markets? Or will it choose the Free Trade Agreement (FTA) model, where the UK will have to live with common standards and regulations?Whatever the final formula, one Herculean task the new PM will face is that her team will have to re-negotiate close to 50 new trade agreements with various nations, because most of the existing trade agreements the UK has been prospering from were signed through the EU. Two disadvantages here. One: the fact that Britain is forced to the table will give the other country the upper hand in pushing for an advantageous deal. Two: till such negotiations are complete, the UK economy will come under extra pressure.Various think-tanks and global organisations -- from the IMF to the OECD to the UK's own Treasury -- have said the British economy will shrink by between 5 and 8% over the next 20 years if it leaves the EU. They measure the consequences of the exit in terms like lower labour productivity and a fall in capital inflows. Quite a few companies that operate in the UK and use it as a staging area to cater to the important EU market have already begun working out scenarios that reduce their presence in the UK, if not withdrawing outright. As John Van Reenen, the Director of the Centre for Economic Performance at the London School of Economics told CNBC, "You get a rabbit-in-the-headlights phenomenon where businesses don't want to make new decisions, or new investments, because they are uncertain about the future. The immediate effect will be lowering of investment activity, a lowering of hiring. There will be an immediate slowdown of growth."Of course, there are some who argue that the UK will do just fine on its own. Cass Business School's Prof. David Blake, who has been a proponent of the pro-Brexit faction, says, "There's no reason why the UK cannot have a good trade relationship with the EU and other countries in the medium-term. The relationships already established within the EU will mean that the UK should be able to negotiate a much better, mutually beneficial trade deal than a country that never joined the EU, such as Norway or Switzerland."Prof. Blake also does not believe that the EU will go in for strong-arm tactics and push for higher tariffs when renegotiating trade deals with the UK. "The WTO does not allow tariffs to be raised once they have been lowered between countries," he points out. But in this, he may be a tad optimistic. Former French President Nicolas Sarkozy, who's also the leader of the opposition party in France, seems to be smelling blood in the water. His ominous words: "Europe can function without the British and we have time, by the way, to rethink our relationship with our neighbour."Back home, the problems are not just economic, they're political. The biggest one stems from the other nations within the United Kingdom. Scotland's first minister Nicola Sturgeon reacted to the vote saying a second independence referendum is "highly likely", because it was "democratically unacceptable" that Scotland be taken out of the EU against its will. In Northern Ireland, Deputy First Minister Martin McGuinness of Sinn Fein called for a vote to leave the UK and unite with Ireland, which is a member of the EU. All this, along with some harsh monetary and fiscal policy measures to ensure the government can provide some kind of cushion, however meagre, to its own economy, makes the new Prime Minister's job an unenviable one. Any victory in either the negotiations or in buttressing her own economy, however hard-won, will be shrugged away as something expected of her. Any defeat or compromise will be met with sharp criticism.And that, ladies & gents, makes for one heck of a thankless job -- one that has grown men running for the hills. So Britain can only hope it will soon get one more Iron Lady to deliver what the nation so desperately needs in the years to come.