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Munchau has lost his mind on Brexit.

The only surprise (for me) in the comments attributed to EU officials, is that they regard the A50 invocation as revocable, even up to the last minute. However if that is what you really want - to persuade the UK to revoke its A50 notification - then you have an incentive to make the Brexit negotiation process as nasty and unproductive as possible. Why make it easy for the UK to leave, if you really want them to stay?

Why is is this a surprise for anyone? Brexit is a disaster for the European project, the negotiations are lose-lose damage limitation, optimum outcome is the whole thing being dumped.

by Colman (colman at eurotrib.com) on Wed Nov 8th, 2017 at 10:52:27 AM EST
The whole thing being dumped, with the UK retaining it's opt-outs and the option to invoke Art 50 again is hardly the best outcome for the EU. The best outcome is the EEA as a transitional arrangement, followed by the Norway option.

Still, I think the EU should mostly worry about minimising damage to Ireland.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Wed Nov 8th, 2017 at 11:36:02 AM EST
[ Parent ]
What PM is going to invoke A50 after this experience? What has the UK gained? Where are these incentives that people are so convinced exist? A50 will have ruined two or three PMs and done significant damage to political careers and the UK economy for no benefit whatsoever.
by Colman (colman at eurotrib.com) on Wed Nov 8th, 2017 at 01:14:26 PM EST
[ Parent ]
And all of which has been a wonderful gift to the cohesion of the EU. Who would have thought that the EU27 could appear far more united, competent, and effective than Her Majesty's Government? All those Daily Mail headlines about EU incompetence have back fired nicely.

That is not to say that the EU is united, competent and effective.  Only that the UK makes it appear so by comparison. In fact it would be a great pity if the EU didn't seize the moment to make some much needed reforms. No doubt they will fuck that up, but we can only hope...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 01:45:22 PM EST
[ Parent ]
 to make some much needed reforms. No doubt they will fuck that up, but we can only hope...
What reforms, Frank? Seriously, what do you see them even remotely approaching doing that would help Europe?

Europe is marching to Macron's tune...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Wed Nov 8th, 2017 at 07:29:23 PM EST
[ Parent ]
Haven't we debated this before?

What PM is going to invoke A50 after this experience?
Why should we expect that the Brexiteers will be chastised and silent for a generation? Or even five years?

What has the UK gained?
In which imaginary universe do the Tories care about the UK? (to paraphrase our friend Jake)

by Bernard on Wed Nov 8th, 2017 at 07:48:41 PM EST
[ Parent ]
They care about the UK that exists in their hearts and minds.  The one they read about in Kipliing and Churchill in their childhoods.  The UK that had ceased to exist by the time most of them were born, or at least were out of their nappies (which in the case of Boris hasn't happened yet).
by rifek on Fri Nov 10th, 2017 at 03:22:26 AM EST
[ Parent ]
If the UK manages to extricate itself from the rentier economy model it has pursued while an EU member, and adopt an industrial policy based on innovation and rising productivity growth, that could work.
Münchau has been hoping for this since the Brexit vote (before, he campaigned for Remain) it's taken him over a year to conclude that
The trouble is, I see no signs of that happening.
I think he still believes reversing Brexit would lead to violence. I suspect before he would have argued that the Norway option counted as reversing Brexit, politically. I guess by the time the second anniversary of the referendum comes around public debate in the EU will have shifted enough to make the EEA option acceptable. Maybe.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 8th, 2017 at 11:46:20 AM EST
[ Parent ]
Paradoxically a lot depends on how the UK economy performs in the interim. The Brexiteer's strongest argument ATM is that the referendum didn't lead to the immediate melt-down predicted by "Project Fear". In their eyes that invalidates all arguments that Remainers might put up now.

However the UK economy has been losing momentum for quite some time now without actually going into recession. If it does go into recession prior to March 2019, that could change the political landscape considerably, enough to make EEA acceptable, though probably not enough to actually reverse Brexit.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 11:58:12 AM EST
[ Parent ]
In hindsight, it should have been obvious that economic damage would begin with the Art 50 letter and not with the referendum.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 8th, 2017 at 12:15:22 PM EST
[ Parent ]
I was with Krugman on this, arguing any turnabout would be slow and incremental, and given the strong momentum the UK economy then had, might well take quite some time to become obvious.

I think "Project Fear" was overly influenced by the "confidence fairy" theory of economics - that a downturn in certainty would result in a down in confidence with immediate market and real world economic consequences.

Yes Sterling did devalue radically, reflecting such a loss of confidence but paradoxically also making the UK economy more resilient in the short term.

My concern was always more about investment rather than consumer confidence - all those businesses putting investment decisions on hold pending greater clarity, all the strategic focus being on contingency plans for a hard Brexit rather than current investment opportunities.

By definition, those effects would be slow, incremental, long term, and largely invisible until large scale relocation decisions actually come into effect.

We're only beginning to see those effects now.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 12:59:27 PM EST
[ Parent ]
May did make some noises about developing an industrial policy/strategy when she first became PM, but little has been heard of this since. Au Contraire all the signs are that the UK will double down on a rentier model, attracting hot money from dodgy regimes and Oligrachs all over the place, and engaging in regulatory arbitrage to keep the rich happy - a sort of Giant sized Jersey.

Speaking of which, has anyone heard anything about what will happen to jersey and it's extraordinarily privileged position post Brexit? Brexit seems like a good opportunity to wipe out some tax havens like Jersey, Isle of Man, Gibraltar etc. They make even Ireland look like a model of tax probity.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 12:09:37 PM EST
[ Parent ]
UK staked a claim in "Future customs arrangements, a future partnership paper" that The Crown Dependencies and Overseas Territories are not members of the EU Customs Union.
archived:Wed Aug 16th, 2017

Accordingly, Apple, for example, moved some its off-shore cash from Ireland to Jersey. This event came to light recently in disclosure of "Paradise Papers".
Apple used Jersey for new tax haven after Ireland crackdown, Paradise Papers reveal

UK finance market regulation has always been a joke. BREXIT portends greater difficulties for EU enforcement of its modest campaign to choke tax evasion and avoidance worldwide.

Diversity is the key to economic and political evolution.

by Cat on Wed Nov 8th, 2017 at 04:03:07 PM EST
[ Parent ]
I see no way to avoid violence at this stage. The idea that appeasing xenophobes will satisfy them is immensely stupid. The choice is whether to wreck the place and break some heads a little later or not wreck the place and have to break some heads a bit earlier.
by Colman (colman at eurotrib.com) on Wed Nov 8th, 2017 at 01:11:52 PM EST
[ Parent ]
Personally I think most Brexiteers are paper tigers huffing in their dotage. Pathetic armchair generals yearning for empire for the most part with no relevance to a modern economy...  Sure there will be a hooligan element who take advantage of any conflict to have a riot, but UK securocrats are past master at turning political protest into criminal activity so as to deal with it more easily.

The problem is more immediately political.  The Conservative Party might well implode, and at the moment Conservative Party interests trump all others.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 01:51:09 PM EST
[ Parent ]
EU officials might prefer this outcome, but would all of the European Council, especially if Corbyn were in power, or if May then talked about kick starting the whole process all over again. I'm with Munchau on this: Some members might want to extract a price for their support, such as the UK losing it's opt-outs or rebate - which I imagine no UK government could agree to.

The critical question would be whether the EU Council can agree to accept a withdrawal of an A50 notification by weighted majority or must it be by unanimous decision. Given that an A50 extension explicitly requires unanimous agreement of the Council, I think it's termination, would also so require. But I have found no authoritative legal source giving clarity on this.

I think a weighted majority would probably quickly and gladly accept a revocation of A50.  The question is would all 27? And without attaching onerous conditions? And if an old socialist like Corbyn was in power? Doubtful at best.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 12:48:57 PM EST
[ Parent ]
I hope the rebate is a gonner. Maybe not at the revocation, but I understand that it has to be confirmed at each budgetary cycle. Maybe that would be when it would be terminated.

Opt outs are something else. Maybe they could be kept. But the existence of the rebate is a scandal.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Nov 8th, 2017 at 02:24:23 PM EST
[ Parent ]

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