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How a no deal Brexit could happen

by Frank Schnittger Tue Oct 17th, 2017 at 06:49:41 PM EST

Helen and others have expressed scepticism as to whether a "no deal" Brexit could actually happen in reality. Surely the leaders of the UK and EU couldn't be so incompetent or irresponsible? I have been gaming out the possible outcomes in my mind for quite some time now. The most plausible "no deal" scenario runs something like this:

The Brexit negotiations plod on for almost two years sometimes making progress and sometimes getting stuck. Some specific areas are almost put to bed, but as always, "nothing is agreed until everything is agreed". The negotiators home in on the outstanding areas of disagreement where the gap between the two sides seems bridgeable. Other areas, where the gap appears impossible to resolve are abandoned altogether. The ambition to craft a deal covering all areas of major mutual interest is ditched in favour of agreeing on what we can, while we can. "Nice to haves" are abandoned in favour of focusing on the absolute "must haves" of any deal.  

Keeping some form of "Blue skies" agreement in operation is vital if planes are to be able to fly between the UK and EU. Mutual recognition of regulations and their enforcement is vital if non-tariff barriers are not going to stymie efforts to keep trade and just-in-time multi-national production processes flowing.

Deadlines are set and pass without full agreement.

The EU27 leaders are called in to knock negotiators heads together. Everyone gets nervous as Brexit day end March 2019 approaches. The window of opportunity to ratify any deal done before Brexit gets narrower and narrower. Negotiators are keenly aware that a Brexit deal requires weighted majority support on the EU Council. They can afford to upset one major and a few smaller EU members, but any more than that and a "blocking minority" on the Council can stymie any agreement.

But worse than that, if no deal is agreed by March 2019, unanimity between the EU27 is required to agree an extension of the A50 deadline or any deal thereafter. Some EU27 members have already signalled their unhappiness with aspects of the deal that is emerging. Whatever chance there is of winning a weighted majority vote on the Council, the chances of gaining unanimous support are slim to non-existent. Huge pressure is exerted on the UK to agree something - anything - before the March deadline if any sort of deal is to be reached.


Meanwhile, back in the UK, Parliament is getting restless. Members are upset at being kept in the dark about highly sensitive and secretive discussions. All sorts of back channels are employed to try and put pressure on the EU negotiators on specific issues. President Trump offers to help and is politely rebuffed. Rumours abound about all sorts of unthinkable concessions being made. Ministers threaten to resign if such and such a concession is offered. The Prime Minister calls for third party arbitration and is quietly told that the UK is about to become a third party, as far as the EU is concerned.

Finally, just before March, Merkel and Macron present some breakthrough proposals that has the media marvelling at their ingenuity in tackling certain thorny issues. A special judicial panel will be set up to deal with trade disputes made up of members from both the UK and EU, perhaps with a WTO chairman. There will be continued mutual regulation and enforcement recognition unless regulations diverge. Worker migration will continue provided the worker has a job and work permit, but only immediate family will be allowed to stay with them. Some social welfare benefits for migrants will be curtailed. Northern Ireland will become a Special Economic Zone with customs controls only at Irish air and sea ports.

Cue enormous relief all around.

The draft agreement is debated in the UK and EU Parliaments and in national parliaments throughout the EU. Numerous "missings" and ambiguities are uncovered which threaten existing rights and relationships. Clarification as to how these issues will be resolved is hard to come by, beyond assurances that "common sense" will be applied. All downsides are highlighted and the agreement is generally compared unfavourably with the status quo. Some governments wobble in their support for the deal.

Meanwhile in Westminster Remainers are horrified as it becomes clear how much power and influence the UK will lose. London MPs are shocked that the City will lose access to EU financial markets. Labour, the SNP and the Lib Dems declare their opposition as the deal is clearly much less favourable than the status quo, and even when compared to membership of the Single market and Customs Union. Business friendly Tory Remainers shift uneasily in their seats and no one is quite sure how they will vote.

Hard line Leavers are outraged at how much the UK will have to pay in a once-off financial settlement and ongoing payments for Single market access. They rightly point out that it is not all that much less than the UK currently pays for full EU membership. They argue that the UK should reject the deal and refuse any payments. Germany and other member states will soon come begging for access to the UK market for their cars and others exports. Business leaders eyeing opportunities for their businesses to replace EU exports to the UK declare their support for the Leavers' position.

The deal is rejected by the House of Commons despite a three line whip. Some Tory members on both sides vote against the deal - Leavers because it makes too many concessions, and Remainers because it has too few benefits. The DUP are angry because they see N. Ireland being treated differently to the rest of the UK and see "Special Economic Zone" as a euphemism for a first step away from the Union and towards a United Ireland.

Theresa May calls Merkel and Macron asking for more time and further negotiations to fix some of the defects in the deal - as seen from the UK point of view. They have taken considerable flak at home for some of the costs the deal will impose on their economies and are in no mood for further concessions. Furthermore, the debates in national Parliaments have gone so badly that EU27 member governments cannot afford to take another hit by making further concessions. Unanimity cannot be achieved and so a no deal Brexit beckons at the end of March.

In desperation, and in order to head off a "heave" against her by her own MP's, Theresa May calls a snap general election. She says she will campaign for a new deal which fixes some of the flaws which have been identified in the old by both the Leave and Remainer camps. Observers point out that many of these demands for changes are mutually contradictory and cannot all be accommodated even if the EU were to agree. May assures the electorate she will deliver "a better deal for Britain".

The EU is left in a quandary. Some national Parliaments have approved the deal and will not be too happy if it is subsequently changed to their disadvantage. The UK general election date is at the very end of March and leaves no time for further negotiations even should these be agreed. However Corbyn promises a radically different approach, including continued membership of the Single market and Customs Union which would solve many of the problems created by the old agreement. He is silent on what net contribution the UK is prepared to make to the EU, as this would be the subject of further negotiation.

The EU Council decide it would be impolite not to await the result of the UK general election and see what any new UK Government might have to say. It takes a lot of arm twisting, but eventually the EU27 agree, unanimously, to a two month extension of the A50 period: Enough time to give the new Government a hearing, but not enough time to enable any major revisions of the deal.

Corbyn wins the General election to the great relief of even the business community. He declares a new dawn for the UK and a more cooperative attitude towards the EU. He asks for a two year extension of the A50 period during which all existing arrangement will apply. He looks for a new relationship with the EU which does not include "Tory restrictions" on the free movement of workers or the jurisdiction of the ECJ and ECHR. He proposes some reforms of the EU which would make it more of a fiscal transfer and social Union.

Progressives everywhere rejoice.

However Germany, Holland, and some Nordic and eastern members are alarmed at talk of a more "Socialist Union". No one wants to be the one to pull the trigger but all sorts of back channel discussions take place. Eventually, to the supposed shock of all, Hungary declares it is not prepared to vote for a further extension of the A50 period unless a whole range of outrageous (and often unrelated) demands are met. Putin is alleged to have been involved in their discussions.

The EU Council baulk at the Hungarian demands and no further extension of the A50 period is agreed even though all other states vote in favour. The UK leaves the EU at the end of May 2019 with no formal Brexit deal in place. The one concession the rest of the EU27 members are able to wring from Hungary is that the original deal, ratified by a weighted majority of the EU Council but rejected by the House of Commons remains on the table after Brexit as a "take it or leave it" offer.

The House of Commons eventually agrees that deal as planes stop flying between the EU and UK, and as trucks queue for miles on the approaches to Dover and Calais. Britons declare they are being blackmailed by the EU and say they are so happy to be out of a Union that would treat any country in such a shoddy way. A war of words is declared and EU migrants and tourists in the UK are assaulted and abused. Corbyn declares he will negotiate a better deal than the "Tory" deal he has been forced to accept, but relations between the EU and UK go downhill so fast that the political will is lacking at almost all levels.

Travel and trade between the EU and UK goes down dramatically despite the original, limited, deal being in place. London loses much of its EU related financial services business and many EU emigrants to the UK leave claiming harassment or reduced benefits due to the rapidly devaluing £ Sterling. The UK is hit by a severe recession and the EU by a milder one. The business community blames Corbyn's socialist policies and leaves in droves. Ireland picks up quite a lot of business from the UK and is surprisingly unscathed by the resulting recession. The DUP are licking their wounds in Northern Ireland having lost their pre-eminence as the largest party there.

No one is happy, and everyone else is to blame.

Display:
Hard Brexit `entirely plausible', says Central Bank deputy governor
A hard Brexit with no transition period is increasingly likely, the Central Bank's deputy governor Ed Sibley has warned.

In a speech delivered at a Financial Services Ireland event in Dublin on Tuesday, Mr Sibley said it was "entirely plausible" that a hard Brexit would happen and that companies need to prepare for such a scenario.

Speaking on Brexit, Mr Sibley said it would have a "direct and negative" impact on the Irish economy.

"This impact will have knock-on effects on the Irish financial services system. Even in a best-case scenario, new frictions and duplications, with associated costs, will emerge in the European financial services system. The loss of the UK voice from the European system of financial regulation is also negative, particularly for Ireland," he said.



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Oct 17th, 2017 at 08:42:10 PM EST
It seems there is disagreement within the finance sector. A Dublin delegation is taking the EU "banking union" on a road show to The Great Pirate Confederacy.
Junior minister rejects claim Ireland is losing out on Brexit investments 15 Oct
The junior minister was speaking ahead of an investor road trip to New York and the west coast of the United States this week.
[...]
"It's clear now to all investors that the European regulatory framework is the same, no matter which country you go to," he said. "This is most obvious in banking, but also in investment funds and insurance. Whereas supervision is national, the regulation is pan-European."
[...]
"Bank of America, JP Morgan, Barclays are all relocating their European headquarters to Dublin. We expect investment to continue."


Diversity is the key to economic and political evolution.
by Cat on Wed Oct 18th, 2017 at 01:02:32 AM EST
[ Parent ]
We have limited capability to absorb companies moving. So long as we get (say) 5-10% of the exodus we'll be very happy.
by Colman (colman at eurotrib.com) on Wed Oct 18th, 2017 at 09:42:50 AM EST
[ Parent ]
I remain unconvinced there will be a huge exodus of actual people to Dublin, so infrastructural shortcomings may be moot. Most financial services operations these days are almost location independent.  The regulators will require that the key decision makers are working from Dublin, but that doesn't stop them just living in Hotels here 4 nights a week. A high profile front office in a key location will suffice.

What probably will transfer to Dublin is large assets on balance sheets distorting our GDP figures still further. Perhaps more profits will be declared here boosting our Corporation tax take, but that could be the height of our benefits.

What no one is talking about is all the smaller and medium UK businesses in other industries which require access to the Single Market for either their inputs or sales. They are probably taking a more "wait and see approach" because shifting plant is no trivial exercise and they don't have the same corporate planning resources in any case.

However I could see a real panic developing if a hard Brexit takes place and tariff and non-tariff barriers are set up particularly in high tariff industries like food. Some very rapid re-locations of some parts of UK businesses to Ireland and Irish Businesses to UK could be required to facilitate continues market access and reduced tariffs.

Ireland would be ideally placed to pick up such smaller businesses as many may not have much in the way of foreign language skills.  Also there is no need for them to be located in the greater Dublin region, so infrastructural constraints need not apply.

There is a lot of under-utilised labour and facilities capacity in more rural Irish towns which could benefit a lot from even a 50 job business moving in.  US FDI has been primarily large, knowledge intensive industries requiring access to large skilled workforces that can only be found in large urban centres. Smaller UK FDI in non-financial industries could have a proportionately far more beneficial social impact even where their contribution to GDP isn't very significant.

.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 11:03:42 PM EST
[ Parent ]
300 NEW! quants per financial institution creates the probability of 15,000 jobs. See, the quants gotta eat and drink, too. They gotta have proper housing, housing in the manner to which they are accustomed. They gotta have transportation, transportation in the manner to which they are accustomed. And the gotta have "cleaner"; they are not accustomed to cleaning up after themselves.

Is this all "menial" work? You betcha! Do you object to this prospectus, because it is menial work? Say, so. Tell us how Ireland's society will resist centuries of traditional "service economy".

Diversity is the key to economic and political evolution.

by Cat on Thu Oct 19th, 2017 at 06:50:22 PM EST
[ Parent ]
I hope Ireland is getting out in front of this so it doesn't end up with a bunch of brass plates and no operations.
by rifek on Thu Oct 19th, 2017 at 07:25:39 PM EST
[ Parent ]
I remain unconvinced there will be a huge exodus of actual people to Dublin
The EU27 will not accept mailbox companies to gain access to the internal market on financial services. There can be no functions performed from the UK on behalf of an EU27 subsidiary.

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 Fri Oct 20th, 2017 at 09:31:03 AM EST
[ Parent ]
Gradually yes, back office functions will have to move.  But there seems to be a degree of regularity arbitrage going on whereby some regulators are offering "light touch regulation" in return for for initial competitive advantage.

Irish politicians are particularly worried about Luxembourg and Amsterdam in this regard. Call it a loss leader promotion. I have no doubt the EU will ultimately clamp down on all "brass plate" operations.  The key is to get your foot in the door, and then gradually tighten the screw if I might mix all sorts of metaphors.

My point is that any staff migration will be gradual and incremental and won't unduly stress infrastructures which are in the process of being upgraded anyway. The Irish building industry is gradually building up to boom volumes from a low base.

10,000 additional jobs in a city of over a million isn't a drop in the ocean, but it isn't transformative either.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 04:25:51 PM EST
[ Parent ]
The German FAZ daily newspaper in August published an article about a study trying to determine the number of new jobs resulting from Brexit in Frankfurt.

The study assumed 10,000 bankers relocating to Frankfurt.
The conservative scenario "guessed" that 11,000 additional jobs would be created in Frankfurt alone and an additional 14,000 in the Rhein-Main region.
The optimistic scenario was 24,000 jobs in Frankfurt and an additional 50,000 in the region.

That of course depends on which jobs are relocated. Do the families move as well? In which time period? And so on...

by Detlef (Detlef1961_at_yahoo_dot_de) on Sat Oct 21st, 2017 at 06:11:54 PM EST
[ Parent ]
Moving the jobs doesn't mean moving the people who hold the jobs.

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 11:53:10 AM EST
[ Parent ]
However I could see a real panic developing if a hard Brexit takes place and tariff and non-tariff barriers are set up particularly in high tariff industries like food. Some very rapid re-locations of some parts of UK businesses to Ireland and Irish Businesses to UK could be required to facilitate continues market access and reduced tariffs.

Unless the UK stays in the single market border controls are almost unavoidable. The UK is then a "third party country" and regulatory conformity is then only a necessary but not sufficient condition for imports to the EU.

Search "Veterinary border inspection posts". They are tasked to inspect "live animals" and "products of animal origin". For imports from third party countries that is the point of entry to the EU.

Ireland right now has three of them. Shannon airport, Dublin airport and Dublin harbour.
https://ec.europa.eu/food/sites/food/files/animals/docs/bips_contact_ireland.pdf

Ireland would need additional ones along the border to Northern Ireland.

And while obviously there are more in continental Europe (France, Belgium, Netherlands and Germany) they don´t have the size either to inspect British exports to the EU after Brexit.

Something that neither the British government nor the British farmers seem to realize.

And the EU can´t make an exception for the UK because if they do, they would have to relax inspections for WTO members too. WTO non-discrimination rules.

by Detlef (Detlef1961_at_yahoo_dot_de) on Fri Oct 20th, 2017 at 02:27:26 PM EST
[ Parent ]
Revenue says post-Brexit Border will need eight customs checkpoints
A possible option is an e-flow-style automatic number plate recognition (ANPR) system that would allow vehicles carrying goods to move from the Republic to the North and vice-versa without having to stop in cases where a pre-departure/arrival declaration has been lodged and green-routed, it suggests.

For such a system to work with it would require an interface between both countries' electronic systems, the report adds.

Whether such a system can be commissioned and installed in time is not known but Revenue says an analysis must be conducted to establish the cost and the practicalities of such before proceeding.

It also says clarification would be required from the European Commission as to what extent a camera-based system could be considered to meet this requirement.

It adds: "In any event, a physical customs presence would still be required to engage with legitimate traders and to meet a range of EU obligations.

"Regardless of any efficiency arising from an ANPR system, the inevitability of certain consignments being routed other than green and goods or documents having to be examined would still require investment in suitable facilities at all designated crossing points."



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 03:56:14 PM EST
[ Parent ]
I´m a tiny bit skeptical.

From what I´ve read the UK before Brexit was already in the process of developing and introducing a new system for customs transactions. I think the goal was to boost capabilities from 60 or 90 million transactions per year to 150 million. And of course it was planned long before the referendum with EU tariffs and regulations in mind. Estimates seem to say that after Brexit Britain will need a system with a capacity of 300 to 350 million transactions per year.

The British will have to change their not-yet-ready system on the fly. And given what I know of government IT projects in Germany, I would expect the project to be late and wastly more expensive than planned.

And of course the system needs to be compatible with the Irish system. We´ll also need a whole new system of identifying regular "trusted traders" who can use the system. How to deal with tariffs and VAT. How to avoid VAT fraud.
And even assuming the ANPR works as advertised, how do you control the rest of the border?

And I think the problem with farm animals was only mentioned (partly hidden) in:

"Regardless of any efficiency arising from an ANPR system, the inevitability of certain consignments being routed other than green and goods or documents having to be examined would still require investment in suitable facilities at all designated crossing points."

Veterinary border inspection posts for the inevitable examination of animals or products of animal origin are still necessary. And that would hurt Ireland quite a bit.

by Detlef (Detlef1961_at_yahoo_dot_de) on Sat Oct 21st, 2017 at 06:45:20 PM EST
[ Parent ]
Ireland could attract trillions in financial contracts post-Brexit
Ireland may become a jurisdiction for trillions of euro of financial contracts, covering everything from currency to fuel and interest-rate hedging agreements post-Brexit, under a plan being considered by a global body overseeing this market, The Irish Times has learned.

This would deliver a boon for corporate law firms in Dublin and potentially add to the International Financial Services Centre's (IFSC) attraction as a base for global financial activities.

Most international financial derivatives contracts - crucial to the functioning of the modern economy as they allow businesses manage various risks and costs - use standardised documentation from the International Swaps and Derivatives Association (ISDA), drawn up under either English or New York law.

However, an association communication to members in recent weeks, seen by this newspaper, says that it is looking at Irish and French law as alternatives to English law for European derivatives contracts.

I suspect that a decision to use Irish or French law for financial contracts post Brexit - instead of UK or New York law - could be the single most important influence on where most of the financial services departing London will end up.

I suspect the Irish judiciary may not have a huge amount of expertise/experience in deciphering the code around complex financial instruments, but the fact that the contracts would still be in English would be a considerable advantage.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 06:14:48 PM EST
[ Parent ]
And of course the Irish common law system is very similar to the UK one.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 06:16:18 PM EST
[ Parent ]
Careful what you wish for. If Ireland absorbed the City, the next crisis would devastate the country.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Sat Oct 21st, 2017 at 07:09:04 AM EST
[ Parent ]
Irish law being similar to English law is a big plus for using it for financial contracts. Other than that, Luxembourg law seems the natural choice to me because Luxembourg is already a microstate focused on finance and law. But French law? No.

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 12:04:51 PM EST
[ Parent ]
Plans have been made for BATNA. Here are representatives announce the default position is, the UK will simulate EU "existing levels of market access available to other WTO Members". How the EU will disgorge UK agricultural product from the common schedule remains to seen as UK negotiators are reluctant to commit to any numbers.

Joint letter from the EU and the UK Permanent Representatives to the WTO

Diversity is the key to economic and political evolution.

by Cat on Wed Oct 18th, 2017 at 01:29:34 AM EST
A BATNA has to be credible: "We will crater our economy, destroy our political careers and die on the guillotine" is not a credible alternative to a negotiated agreement.

Unless the UK are going for Nixon's Madman theory.

Which only works if you have a credible power to damage your opponent significantly.

by Colman (colman at eurotrib.com) on Wed Oct 18th, 2017 at 09:39:49 AM EST
[ Parent ]
Catalonia's BATNA is effectively mutually assured economic and reputational destruction with Spain, and I'm not sure the Brexiteers are saner than the Catalan separatists.

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 Oct 18th, 2017 at 09:18:00 PM EST
[ Parent ]
Catalonian separatists currently effectively have no other option as the Madrid Government won't negotiate with them.

If the Madrid Government agreed to discuss Constitutional reforms - i.e. greater regional autonomy - it could at least explore dividing hard-line separatists from others who are merely disgruntled with some aspects of Madrid rule.

So far, the UK has effectively avoided disintegration by allowing limited devolution of powers to Scotland, Wales and N. Ireland. There are still tensions and disputes, but at least there is a process to reduce them.

The Rajoy government has shown almost no willingness to do the same in Spain  and attempts to form a constitutional reform committee of parliament smack of "too little, too late".

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 10:37:08 PM EST
[ Parent ]
Spain moves to suspend Catalonia's autonomy 19 Oct 2017
The announcement came on the day when EU leaders meet in Brussels for two days of high-level talks, where the Catalonia issue was not originally scheduled for discussion.
 ... It said Prime Minister Mariano Rajoy, who is due in  Brussels on Thursday and Friday, has called an extraordinary Council of Ministers meeting for Saturday to approve the measures that will raise the Senate to "protect the general interest of the Spanish people, including the citizens of Catalonia, and restore constitutional order in the Autonomous Community".

I'm seeing no hint of Lincoln Brigades.

Diversity is the key to economic and political evolution.

by Cat on Thu Oct 19th, 2017 at 06:57:10 PM EST
[ Parent ]
Actually,
an extraordinary Council of Ministers meeting for Saturday to approve the measures
Actually, to propose the measures for debate and approval by the Senate.

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 Fri Oct 20th, 2017 at 09:27:40 AM EST
[ Parent ]
News I read Saturday heralds a week-long schedule for quorum and vote on the mystery package. Ima presume that doesn't include unexpected or unauthorized leaks.

Diversity is the key to economic and political evolution.
by Cat on Sun Oct 22nd, 2017 at 10:17:17 AM EST
[ Parent ]
The whole thing took less than 12h of debates in the Senate, committed and floor altogether.

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 11:48:57 AM EST
[ Parent ]
But it did take place a week later.

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 11:51:48 AM EST
[ Parent ]
Similarly, we intend  that  the  EU's  current  annual  and  final  bound  commitment  level  specified  for domestic  agricultural  support  be apportioned  between  the  future  EU  and  the  UK  on  the  basis  of  an objective methodology.

Unfortunately there is at present no agreement on what "an objective methodology" for apportioning quotas/supports would look like.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 10:43:57 AM EST
[ Parent ]
It appears that enough WTO members are not keen on allowing the EU27 and UK to divvy up the EU28 export quotas, so that this BATNA plan is dead in the water.

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 Oct 18th, 2017 at 09:17:02 PM EST
[ Parent ]
Both parties will be required to resubmit schedules for WTO approval in any case. I think, that is yet another understated condition of "membership."

Diversity is the key to economic and political evolution.
by Cat on Thu Oct 19th, 2017 at 07:01:26 PM EST
[ Parent ]
What Corbyn should do in that scenario is to - when he's in power - declare that the Tories bungled it so bad that they have to start over.

Then he retracts the A50 declaration (which the Council has said they would accept) and appoints commissions to hold hearings on what kind of Brexit there is popular support for, eventually leading to a new referendum between realistic scenarios.

That would give him back control over the timetable. If a new A50 declaration is given, the UK would have time to get the priorities sorted out first.

by fjallstrom on Wed Oct 18th, 2017 at 10:10:03 AM EST
Yeah, announce a ten year process to properly define, vote on and carry out the leave process, build a consensus and move forward from there. With the most likely outcome being chucking the whole thing.
by Colman (colman at eurotrib.com) on Wed Oct 18th, 2017 at 10:19:14 AM EST
[ Parent ]
The more I think about this, the better I like it. If they still want out after proper consideration, so be it.
by Colman (colman at eurotrib.com) on Wed Oct 18th, 2017 at 10:28:01 AM EST
[ Parent ]
I considered this scenario, and perhaps should have included a reference to it in my "most plausible" scenario above.

While the Council may have been receptive to an A50 revocation up until now, it was unclear to me whether any such revocation would have to be accepted unanimously or by weighted majority. In the scenario I paint above, Corbyn only comes into power after the initial A50 notification period has elapsed, after which unanimous decisions are required.

The UK doesn't have a monopoly on headbangers.  In my "most plausible scenario" it is actually Hungary (or some other state relatively less effected by Brexit and less than sympathetic to a Corbyn led UK) which finally pulls the plug even though the vast majority of EU27 members might have been agreeable to a revocation.

The overall point of my scenario is to illustrate that we are moving into complex situation with may moving parts, and that only one thing has to go wrong for a "no deal" Brexit to actually happen, because that is now the default position.

The incompetence of the UK side has been masking some pretty nationalistic and regressive political developments on the EU27 side which could become determinative in the final denouement.

We are now all hostages to fortune.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 10:59:47 AM EST
[ Parent ]
I think that if Council accepted an A50 withdrawal that would do. I don't think they even have to - I suspect that the court would find A50 can be unilaterally withdrawn, so you'd be in a position of Hungary taking legal action against Council to throw out the Brits against their will. Good luck with that.
by Colman (colman at eurotrib.com) on Wed Oct 18th, 2017 at 12:17:29 PM EST
[ Parent ]
It would be truly ironic if Corbyn, a lifelong opponent of the EU, were to be the one to revoke A50. To do so he would have to go against the will of the people as expressed in the referendum - something he has said he would not do.  I can't see him doing it unless he commits to doing so in the general election campaign and can thus claim to have a popular mandate for doing so.  That would lose labour their anti-EU voters and revive UKIP.  He could probably win the general election anyway - depending on how bad the Tories look by that stage - but would he take that risk, all for an EU he doesn't believe in?

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 02:31:48 PM EST
[ Parent ]
I think you could sell a considered approach to leaving in place of a obvious disastrous one as respecting the referendum result. And otherwise he gets the blame for Brexit .
by Colman (colman at eurotrib.com) on Wed Oct 18th, 2017 at 02:38:59 PM EST
[ Parent ]
There's a rational and an irrational level to politics, and the irrational level works on "This is good" vs "This is bad".

Before the referendum, the irrational level was sold to our less intelligent voters with the lie that everything that was bad was the fault of the EU.

Now that we're in the middle of the process, it's becoming obvious to softer leavers that the Tories are incompetent idiots.

The Tories have done an astonishingly good job of dramatising that incompetence. And as anyone who has read Bernays will tell you, dramatising a point makes it stick far more persuasively than rational argument.

So the softer leavers are drifting towards blaming the Tories for everything that's bad at the moment - including rising prices, the gig economy, debt, low pay, NHS provision, immigration, and so on.

The vote was supposed to fix all of this and it has - against all expectations - made it worse.

How could this happen? It's a mystery to many. But it's obvious someone is responsible, and it's not the Labour Party, "remoaners", or even the EU.

Other softer leavers are beginning to understand they were lied to. "It wasn't supposed to be like this", they sob.

So in addition to all of May's other problems, she's now having to deal with a slow but increasing wave of public rage which is gradually drifting away from blaming immigrants and towards blaming her and her party.

There's a hard core of thick racist nutcases in the UK who will never change their minds about the EU. But they're a minority. The majority is now swinging away from support for Brexit, and the further it swings, the less of a mandate May has, the harder she'll find it to hold the competing factions in her party together, and the more likely it is that a single weak challenge from an unexpected source will set the whole house of cardboard on fire and bring it crashing down.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Oct 20th, 2017 at 03:50:00 PM EST
[ Parent ]
AFAIK what you're all calling a Council position on Art 50 reversal is Donald Tusk's personal statement. Though apparently Juncker's chief of staff Martin Selmayr also claims to be "a dreamer". I wouldn't take anything Selmayr says at face value, though.

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 Oct 18th, 2017 at 09:14:02 PM EST
[ Parent ]
No one can be sure, at this stage, how the Council would react to a withdrawal of an A50 letter. I haven't even been able to find out whether that decision would be by unanimous or weighted majority vote.  It is simply unprecedented. I suspect the Council would need to be convinced that the UK has changed it's mind about leaving the EU and isn't simply using the withdrawal of the A50 letter as a tactic to gain two more years of negotiating time. And the only way it could be convinced of that is if a second referendum or another general election produced a victory for a Government supporting remain.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 10:26:33 PM EST
[ Parent ]
I don't think that's realistic. The UK has become a semi-detached member of the EU for the duration of Theresa May's premiership. She is ignored at Council Summits, and the UK barely takes part in technical negotiations. The EU is wondering what to do with the vacant UK seats in the European Parliament at the 2019 elections.

Allowing the UK to take back the Article 50 notification in the understanding that the principle of Brexit still stands and the UK will be in limbo for 10 years before starting negotiations again would be suicidal for the EU. It is simply not a sustainable situation, and the UK would have another two general elections in that time.

It is absolute madness. The only thing that makes sense is for Britain to withdraw the Art 50 notification altogether, and even then we all know a current parliament cannot bind future parliaments. A commitment to not trigget Art 50 again for a number of years would not be worth the paper it would be written on.

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 Oct 18th, 2017 at 09:10:31 PM EST
[ Parent ]
"The only thing that makes sense is for Britain to withdraw the Art 50 notification altogether, and even then we all know a current parliament cannot bind future parliaments."

Isn't that the point?  Any member has an absolute right to invoke A50 any time it wants. Absolute chaos would result if the Council also allowed any member to revoke a notification whenever it felt like it.

This really isn't a legal question, it is a political one. The Council has an absolute right to accept or reject a withdrawal of an A50 notification at it's absolute discretion.

I suggest the Council would have to be convinced that the UK Government really was serious about remaining in the UK and wasn't just using a withdrawal of the letter as a tactic to give itself 2 more years of negotiating time.

And the only way I can see the Council being convinced of that is if a second referendum or a general election was fought and won by a party committed to remaining within the EU.

That still seems a pretty remote prospect, to my mind, and so I didn't include it in my most plausible scenario above.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 10:04:39 PM EST
[ Parent ]
Allowing the UK to simply withdraw A50 and just pretend the last eighteen months never happened would be suicidal for the EU. What about existing opt-outs, rebates and other concessions for the UK in the EU? What's to stop other EU countries to use the same ploy (no British exceptionalism, please)?.

Should such a revocation ever happen (looks highly hypothetical today), the EU should think and negotiate long and hard, not to "punish" the UK, but for protecting the union from future blackmail tactics.

From a Dutch academic:

Never mind 'hard Brexit', let's talk 'hard remain' - EUObserver

They should stand firm, not out of spite, but to avoid a never-ending wrangling about attempts to maximise special treatment and benefits for the UK within the EU.

Herein lies the danger of even allowing the unilateral revocation of the Article 50 notification to leave the EU.

For instance, after a revocation, the threat of new referendums followed by tedious withdrawal negotiations would be hanging like a sword of Damocles - ready to fall at any moment and cut through the fabric that holds together the EU as an economic and political entity.

Moreover, if this strategy were to work for the UK, what is to stop other disgruntled member state governments from trying the same?

Hence, it would only be consistent to put all British opt-outs and other forms of special treatment on the table, with a view to phasing them out in exchange for letting the UK rescind its withdrawal.

The choice is then a clear-cut one: Have your cake or eat it.

Either Britain can proceed with "taking back control" and become a normal, sovereign state, or it can reassert control within the EU's common institutions and become a normal EU member state.

by Bernard on Thu Oct 19th, 2017 at 12:33:55 PM EST
[ Parent ]
Brexit will have taken two, maybe three PMs down with it if it's rescinded for no benefit or concessions, only damage to UK.

You think other politicians are going to try that? To what end?

by Colman (colman at eurotrib.com) on Thu Oct 19th, 2017 at 03:20:20 PM EST
[ Parent ]
Of course not. This is why I don't believe in Brexit interuptus.
by Bernard on Thu Oct 19th, 2017 at 05:12:24 PM EST
[ Parent ]
I do not understand what you were saying then.
by Colman (colman at eurotrib.com) on Thu Oct 19th, 2017 at 05:18:32 PM EST
[ Parent ]
I think Bernard is saying there can be no return to the Status Quo ante... The only circumstance in which the Council might accept a withdrawal of an A50 notification is if the Government which made the A50 notification is replaced by one which explicitly campaigned for remain in a general election or if a second referendum reversed the result of the first.

An A50 notification can't be allowed to become a negotiating tactic whereby a member state can negotiate better terms of membership for itself, or extend the time available to negotiate a departure.

I think Bernard is going further and saying that even if the Council were minded to accept an A50 revocation, it might impose conditions such as the loss of opt-outs or rebates.

I think that might be seen as being too punitive, and there would be a desire to avoid being seen to exacerbate the humiliation already felt by a member reversing its position.

Nevertheless, I doubt anything the UK said or wanted would carry much influence in EU corridors of power for quite some time after such a reversal. After all, Brexit is basically an attack on the EU27: the UK wanted the benefits without the costs, and someone else was going to have to pick up the costs.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Oct 19th, 2017 at 05:59:22 PM EST
[ Parent ]
Frank:
I think Bernard is going further and saying that even if the Council were minded to accept an A50 revocation, it might impose conditions such as the loss of opt-outs or rebates.

I think that might be seen as being too punitive, and there would be a desire to avoid being seen to exacerbate the humiliation already felt by a member reversing its position.

Well, it's not me saying this, but the Dutch academic from Leiden University I quoted (read the whole thing BTW).

But I think he has a point: A50 must not become a tool for the UK - or other countries - government to extract better EU membership terms.

It's not a matter of "punitive" or "humiliation": just a matter of protecting the EU member countries against parties who are actively leaving it. Since the UK has blown the house up, the house cannot be unblown. There is a strong argument for not just cancelling A50 and pretend it never happened.

EU27 members patience with the UK is running thin and I don't see much support for an "all is forgiven" Remain, assuming the UK ever goes that way in the first place, especially if the rescindment of A50 only happens once the UK realize they're not getting the deal they were expecting. There will be some frank appraisal: what's the best way forward for each member country and for the EU?

Putting the argument the other way: should the EU27 decide we're all better off with the UK inside the tent pissing out, where do we set the membership terms?
To the concessions granted to Cameron pre-referendum in 2016? Before that point?

No easy answer, but anyway, not much use speculating on something that's not very likely to happen.

by Bernard on Thu Oct 19th, 2017 at 09:29:20 PM EST
[ Parent ]
Cameron's concessions have to go.

The rebate should go too - though that could happen at the next round of budgeting, when it is due to be "renewed".

But I don't think they should be forced to join the Euro, when we have seen how poorly designed it was.

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

by Cyrille (cyrillev domain yahoo.fr) on Fri Oct 20th, 2017 at 07:44:24 AM EST
[ Parent ]
Cameron's concessions "went" with the Brexit referendum result.

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 Fri Oct 20th, 2017 at 08:36:15 AM EST
[ Parent ]
But I think he has a point: A50 must not become a tool for the UK - or other countries - government to extract better EU membership terms.

Ok, but I don't see any connection between this and A50 withdrawal and return to the status quo ante. What that will show is that you don't get anything except a stack of ruined political careers and some pretty entertaining economic and social damage for invoking A50.

by Colman (colman at eurotrib.com) on Fri Oct 20th, 2017 at 08:46:56 AM EST
[ Parent ]
Are you sure?

The referendum was in June 2016. The A50 letter was delivered in late March 2017. And the "economic and social damage" is only just starting to emerge.

While the euroskeptic parts of the British media and politicians are whipping the Brexit supporters into a frenzy. Christ, reading comments by (some/most) Brexit supporters on British media websites, you´d think they were part of a cult.

Point them (and link) to EU and US databases which show that the EU and the USA don´t trade on WTO terms alone but have dozens of bilateral trade agreements and they will simply ignore the facts. "WTO rules are perfectly alright. It´s how the USA is trading with the EU."

You don´t think that nationalistic governments in the EU are watching this?
If your popularity drops, take a hard stance against the EU. Worked in Britain. Send an A50 letter and revoke the letter 6 - 9 months later.

If it takes 12 - 15 months before any "economic and social damage" is felt, you can run riot for 6 - 9 months.

Not to mention that the Brexit supporters in Britain won´t vanish. You´ll still have a deeply divided country inside the EU after an A50 withdrawal.

Your idea of punishment won´t work!

It´s the politicians who seek a compromise who will be blamed.

Brexit can´t fail, it can only be failed.
"May and Hammond are secret remainers and that´s why Britain won´t get their glorious Brexit."
That seems to be part of the new "dagger in the back" illusion.
If that doesn´t work blame the EU, blame remainers and blame foreigners.

"Brexit means Brexit".
"Red, white and blue brexit."
"Enemies of the people."
"Crush the saboteurs."
"No deal is better than a bad deal."
"Go whistle."

That was intended for British domestic consumption. British politicians don´t seem to realize that such statements get reported in continental Europe too?

by Detlef (Detlef1961_at_yahoo_dot_de) on Sat Oct 21st, 2017 at 07:39:50 PM EST
[ Parent ]
Thank you for an excellent comment which articulates much of what I am trying to say. But you have to understand that British politics and media operates in a bubble where PR spin is everything.

So one day Brexiteers can be advocating the destruction of the EU as some sort of evil empire, and the next day May can be saying she wants a deep and meaningful relationship with "our European friends" and we are supposed to believe her as if Brexit isn't a direct attack on the EU as a whole.  

And then we are supposed to offer the UK all sorts of everything they desire (or have recently decided they want) because that is in "the EU's own best interest" and there is no better authority on what is in the EU's own best interests than the self same people who want to destroy it.

Davis is now going to prepare contingency plans for "a no deal Brexit" to show the EU how serious he is about walking away if the EU don't become "more imaginative and flexible" and give him what he wants.

I think it is only a matter of time before a majority of EU citizens and leaders decide that the UK should have the no deal Brexit so many of it's leaders evidently crave.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Oct 21st, 2017 at 10:57:08 PM EST
[ Parent ]
UK excercise of A50 is a test case of EU supranational law and authorities.

Just as "financial stability" of Greece has been a test case of EU supranational law and authorities (Panic of '08 notwithstanding).

Each of these tests is not only an opportunity to define boundaries of authority under color of law by the responses of all interested parties, the are declarations which instantiate the function of EU laws and authorities.

Diversity is the key to economic and political evolution.

by Cat on Thu Oct 19th, 2017 at 07:11:33 PM EST
[ Parent ]
"Hard remain" is withdrawal according to Art 50 followed by accession according to Art 49.

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 Fri Oct 20th, 2017 at 08:30:31 AM EST
[ Parent ]
Let's not forget the MEPs and their "veto" power. Frank hasn't given the political groups any role in The Scenario.

73 seats vacated in BREXIT in 2019
Macron to deliver vision for EU democracy in Athens

The first stage concerns the election of some 50 MEPs from transnational lists, beginning with the 2019 elections.

Assuming that Brexit remains on schedule, the UK's 73 European lawmakers would be replaced by around 50, chosen not for their nationality but for their political programme and their party. The aim is to strengthen the European nature of the elections while respecting the European Parliament's principle of degressive proportionality, according to this memo sent by the French government to MEPs.


UK's vacated European parliament seats may go to EU-wide candidates

archived:
Apportionment of EP seats2. When will eurogreen post likely "degressive proportionality" distribution?
EP resolution RC-B8-0237/2017, the "olive branch"
EP plenary session: The government leaders of the EU 27 member states should postpone their assessment of Brexit on 20 October as "sufficient progress" has not been made (557 votes to 92, with 29 abstentions)

Diversity is the key to economic and political evolution.

by Cat on Wed Oct 18th, 2017 at 10:48:34 PM EST
[ Parent ]
The reason the European Parliament doesn't feature in my scenario is because getting a simple majority for a deal in the parliament should be easy compared to getting a weighted majority or unanimous agreement in the Council. If you can't get a simple majority in the parliament, any deal is probably a non-starter in the Council.

That said, I suspect Farage and co. have made many enemies in the Parliament, and a deal seen as favourable to the UK could have difficulty in passing. As of know the parliament seems to be acting as something of a ginger group seeking to stiffen the resolve of the Commission negotiating team.  Few members owe the UK or its representatives any favours...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Oct 19th, 2017 at 03:55:22 PM EST
[ Parent ]
557 against negotiating a "future relationship" with the UK at this time would be a super-majority.

Now, one may argue that the Clouncil is a liberty to ignore the EP. But that claim requires evidence in fact and law, would it not, in the face of political groups, provoked to undermine a "deeper union"?

Diversity is the key to economic and political evolution.

by Cat on Thu Oct 19th, 2017 at 06:35:44 PM EST
[ Parent ]
The Council isn't at liberty to ignore the EP because any Brexit deal has to be approved by the EP as well as the Council. There isn't a concept of a super majority in the EP, although an absolute majority (376 out of 751 members) is required for budgetary matters and a two thirds majority of those members present as well as an absolute majority is required to censure the Commission. The Commission Brexit negotiating team would have to make a complete mess of the negotiations not to be able to secure a majority in the Parliament.  Getting a weighted majority or unanimity on the Council is a much harder ask.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 04:42:56 PM EST
[ Parent ]
What is the concept of a plenary session among MEPs, Frank?

Diversity is the key to economic and political evolution.
by Cat on Fri Oct 20th, 2017 at 05:05:38 PM EST
[ Parent ]
No different from a plenary session anywhere, as I understand it, i.e. all members are entitled to attend.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 05:33:48 PM EST
[ Parent ]
That would be the easiest way for him to avoid taking the fall for the Tories' mess.  We'll see if it happens.  I refuse to underestimate the left's ability to snatch defeat from the jaws of victory.
by rifek on Thu Oct 19th, 2017 at 07:28:21 PM EST
[ Parent ]
Again, yea but no but yea.

There is another factor you're ignoring, which is public opinion. The proportions of remain/leave have continued to be fairly static for the last 18 months; "the concept of "Regretful Leaver" has been massively over-hyped and caused considerable resentments.

However, there have been signs since August that there are shifts occuring as not just at the contuing deadlock but as the foolishness of the Tory negotiators is exposed. People are beginning to notice that Boris Johnston really is a fool, David Davis is becoming repetitive in Parliament and looks genuinely flummoxed when somebody asks a technical question as if such things had never occured to him before.

As for Liam Fox, he increasingly is beginning to resemble Comical Ali, the Iraqi spokesman who didn't know there were tanks behind him, wheeled out on the news so that his stupidity provides light relief rather than to inform the public.

No longer are we talking about £350 million a week for the NHS, more we are talking about the continuing deterioration of the pound and what the £500 Billion loss so far is doing to the public purse.

People are beginning to notice. And public opinion is shifting. I saw last week a suggestion that there had been a 5 point shift over September. Lacking good news that trend will continue, maybe not 5 points a month, but this time next year that could begin to resemble a chasm. Especially as the City begins to up sticks.

House prices are falling everywhere in the country except the south east. When the City goes, that will encroach here.

The CBI points out that investment is falling, that may not matter to anyone now, but 12 months from now all sectors will feel it.

Food prices are rising. Up till now the food sector has been absorbing import price increases, but now they can't/won't. The retail price index went up 5% in september and will probably rise again before xmas.

People talk about 5% here and there as being negligible, but there are an increasing number of people who are financially on the edge now, hey don't have 5% for this, there are no luxuries to stop buying. This is it now. As it gets worse it will bite harder and harder. And the people it will bite will be all the poor tabloid buying brexiteers who didn't like immigrants and didn't care cos they had nothing to lose.

And as they begin to realise it's cos that will be our new life under brexit, they'll swing. And no tabloid lie can beat a reality in front of people's eyes.

That flood tide will stop brexit dead. This time next year.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Oct 18th, 2017 at 02:39:05 PM EST
It's hard enough to construct a scenario as to how the principle actors will behave over the next two years without trying to predict how public opinion will swing as well. As you say, polling on whether the UK should leave the EU since the referendum has been broadly stable and it is only in recent months that a slight swing in favour of remain is detectable.

As you know, opinion polls on contentious issues are often a proxy for general happiness/unhappiness with how things are going, and so this may simply reflect disillusion with how the government is handling the negotiations.

It is by no means certain, based on that data, that a referendum held now would reverse the original result.

I have little doubt that public opinion may well develop in the direction you suggest, but without another general election or referendum there is no direct way that any swing in opinion can re-structure how the talks are being conducted. The Tory government can carry on regardless unless it losses it's Commons majority.

If the Brexit talks were to break down completely and Theresa May's leadership was in imminent peril I could imagine her calling another snap general election to ask whether the people wanted a "clean break" from the EU without any deal. I could see her losing that election and Corbyn resetting the talks provided he had enough time to do so before the A50 period expires.

In that scenario he would look to remain in the Single Market and Customs Union and avoid many of the complications bedevilling the current talks.

My problem with that relatively benign scenario is that (in my view) the talks are unlikely to break down completely until we get much closer to March 2019 and by that time there will be all the problems I instanced above about time extensions requiring unanimous approval.

Unlike fjallstrom , I don't believe the EU Council would simply accept a revocation of the A50 notification if the intention was simply to delay leaving and start Brexit talks all over again. The EU27 have had quite enough of Brexit already.

So if Corbyn tried to revoke the A50 notification, they would ask him simply, "are you in or out?" , and if he wants to stay in they will insist that the UK commits to not invoking A50 again for at least another 10 years.

Would Corbyn be agreeable to that?

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 04:00:23 PM EST
[ Parent ]
they will insist that the UK commits to not invoking A50 again

And even if he is, what about his successor?

by gk (gk (gk quattro due due sette @gmail.com)) on Wed Oct 18th, 2017 at 04:22:41 PM EST
[ Parent ]
Personally, I think he could be letting everyone off the hook and putting them out of their misery by revoking A50.  No one will one to go there again for at least 10 years...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 04:43:19 PM EST
[ Parent ]
No parliament can bind a future parliament.

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 Oct 18th, 2017 at 09:19:30 PM EST
[ Parent ]
Ha. With public opinion evenly split and static, the referendum result looks to be cast in concrete.

But if that favourable/unfavourble split goes to 30 points or more, which is entirely possible if that bad news keeps coming, then the Titanic post-iceberg will be more likely to keep floating.

No MP has a political principle so profound it is resistant to the threat of losing their seat at the election. Maybe Jacab Wheeze-Moggadishu or John Redwood, but I bet there's a lot of anti-EU MPs who can and would far prefer their seats inside an EU than be removed from Parliament outside it. After all, if the City goes to Dublin, all those lucrative directorships go west as well. At which point brexit means brexit may become the we tried our hardest but the terms simply were unacceptable so we're punishing them by staying.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Oct 18th, 2017 at 04:44:57 PM EST
[ Parent ]
Maybe Jacab Wheeze-Moggadishu or John Redwood can't read polls,...

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Wed Oct 18th, 2017 at 04:46:15 PM EST
[ Parent ]
They're ideologues. They couldn't care less about polls. The people are there to be led. By them.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 07:22:28 PM EST
[ Parent ]
as I say, the ideologues might not read polls but there are plenty in the Parliamentary Tory party who will be reading them and chewing their fingers if things get noticably worse.

And they will panic and they will start making representations to number 10 about reversing policy.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Oct 18th, 2017 at 07:50:18 PM EST
[ Parent ]
You assume that it is possible for people to realise things are going badly close to the March 2019 date, and panic then. In fact, 18 months is not too long a time for business planning, and we're already past that point. If "No sufficient progress" remains the situation this December, businesses will start executing contingency plans for a no-deal brexit. BY the end of March the entire UK economy will be gearing for autarchy whatever the politicians say.

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 Oct 18th, 2017 at 09:01:25 PM EST
It is typical for negotiations to ebb and flow in the early stages and not get really serious until some hard or soft deadline is approached. Many will remain convinced that the politicians will eventually reach a deal at the eleventh hours after a few all night negotiating sessions. The EU generally does.

Of course businesses cannot operate with such uncertainty and contingency plans are being implemented as we speak. This will result in the gradual slowdown of the UK economy putting added pressure on the UK negotiators, in particular.

Having been altogether too alarmist about the immediate economic consequences of a Leave referendum victory, I suspect economic forecasters are being overly cautious now. UK economic growth will hit a wall some time next year.

But we won't know for certain whether a Brexit deal will be agreed until much closer to March 2019 unless there is a total breakdown in negotiations before then. And then we won't know for certain whether it will be ratified by UK and EU parliaments until v. close to the deadline - leaving very little time, if any, for a renegotiation in the event of rejection before Brexit actually kicks in and makes all agreements subject to the unanimity rule.

That is why I think a no deal Brexit is quite likely.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 10:20:07 PM EST
[ Parent ]
No one is happy, and everyone else is to blame.

Welcome to life on planet Earth.  Consider yourself lucky if you can find adequate food and water ... for now.  Keep drinking alcohol, i.e. stay sedated, and by all means, KEEP BREEDING. Meanwhile, the ultra wealthy are executing their plans.  They don't include the 99.9999%.  Something about "decreasing the surplus population".

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Thu Oct 19th, 2017 at 08:06:05 PM EST
The elephant in the room is the fact that the political consensus that the EU is attempting to create - austerity forever - is going to produce problems like those presently seen in the UK and the US, as well as Hungary, etc. - the further rise of the right. But the governing elites in the governments comprising the EU are too distracted by this imbroglio to notice or are using it as a reason not to have to deal with the consequences of their policies - the tip of that spear being austerity. What would the EU do were both France and Germany to be taken over by leaders representing ascendant right wing parties who more resemble Trump than any present 'mainstream conservative' politician? Another ten years of the same ole same ole and what are the chances the USA and Europe will not both be saddled by such leaders by the furious and easily misled disaffected bottom 60% of the population?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 20th, 2017 at 06:04:31 AM EST
The EU puts some restrictions on absolute debt levels (60% GDP) and Budget deficits (3% GDP) which have been more honoured in the breach in recent times and which, if observed, limit the degree to which individual governments can act counter-cyclically in bad economic times while having little practical effect when times are good.

AFAIK the intent is to prevent individual irresponsible governments (aka Greece, Italy) from racking up big debts and then expecting responsible governments (aka Germany, Benelux and Nordic) to bail them out when everything goes south.

This of course ignores structural imbalances within the EU and especially the Eurozone and and reduces the scope governments - who have already lost control of their interest rates and the value of the Euro - have of using Keynesian stimulus to revive a recession hit economy.

All of which wouldn't matter as much if ECB policies were more geared to the needs of struggling peripheral economies or if the EU itself has a greater fiscal capacity to correct imbalances within the Eurozone as a whole. Hence the debate and need for Eurobonds and common deposit insurance etc.

However it would be wrong to characterise this as austerity forever for most countries other than Greece which has a plainly unsustainable debt burden and little hope of escaping ongoing austerity without debt forgiveness.

What it does mean is that the EU, as a whole, has a limited ability to respond effectively to external or asymmetric economic crises and is forever bedevilled by economic imbalances within.

Attempts to complete the banking Union, limit the degree to which sovereign governments/taxpayers can become liable for private banking debts, and create common deposit insurance schemes etc. may improve the situation at he margins, but the bottom line is that (thanks to net contributor intransigence) the EU lacks significant fiscal capacity to help any members in trouble or indeed respond effectively to mitigate the effects of a global economic crisis on the EU as a whole.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 06:03:15 PM EST
[ Parent ]
However it would be wrong to characterise this as austerity forever for most countries other than Greece which has a plainly unsustainable debt burden and little hope of escaping ongoing austerity without debt forgiveness.

Well, that is optimistic! But it is also practically irrelevant at this point. Germany is imposing austerity on its own citizens to the extent that it, combined with the surge of Syrian and other immigrants, most of whom are followers of Islam, has fueled the rise of AFD. And nothing short of a massive social welfare initiative for the bottom half of Germany's indigenous population is likely to reverse that - as if it were even a conceivable option for any likely German Government. And Macron - who reminded Hollande about Say's Law and is busy pushing through 'reforms' in France will do nothing to improve the lot of the bottom half of Frenchmen.

Anything that might have a chance of working is off the table for even discussing - see Varoufakis. Putin must be laughing. At least HE knows how to gull the bottom 70% of Russians it seems and he is well on his way to being democratically elected as President for Life of Russia.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 24th, 2017 at 04:42:25 AM EST
[ Parent ]
Martin Wolf: Planet Brexit is ruled by zombie ideas
It is highly likely that the Brexit negotiations will fail, imposing an abrupt shock on the UK economy and ruining relations with its neighbours. This view is condemned by those who insist we must be more positive. That is like advising someone who has just jumped off a building that, if only he thought positively, he could fly. To understand the state we are now in we need to understand the zombie ideas that hold so many Brexiters in their grip

He goes on to provide a useful elucidation of some zombie Brexiteer ideas.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 06:41:07 PM EST

source: #EUCO wrapup: EU summit agrees on `Leaders agenda' despite Brexit
Top-line Minutes (pdf)
conclusions on migration, digital Europe, security and defence, and external relations, pp 11 inc. cover: mystery FY budget adjustments, emphasis on security infrastructure plus condemnation of DPRK, affirmation of "Iran nuclear deal," and obligatory Turkey tease.
conclusions on Article 50 , pp3 inc. cover: As Migeru once noted, the EU Irish position remains open for people (GFA), not goods. (I still expect, EU to leverage customs cost-sharing at A50 financial settlement.

Diversity is the key to economic and political evolution.

by Cat on Sun Oct 22nd, 2017 at 01:24:55 PM EST
Financial Times - Patrick Jenkins -

Bankers are not known for their patience. Finance relies on speedy interaction with the markets. Traders are used to reacting to news within seconds. So it is pretty astonishing that the City of London's financial services industry held its collective tongue for so long. For nigh on a year after the UK voted for Brexit in June 2016, few banks challenged the government's unofficial request to keep a low profile over the issue.

They have made up for lost time over the past few months. Once Standard Chartered, an emerging markets bank with a tiny EU business, announced it would establish a subsidiary operation in Frankfurt, others soon followed with their own announcements of post-Brexit plans involving the set-up of new subsidiaries and job moves from London to other EU financial centres.

The reason? Once Britain leaves the EU, it will leave the single market for goods and services. Without some kind of replacement deal, that means the end of the City's role as a hub for doing cross-border business with clients across the EU, through the "passporting" of services from a regulated UK entity.



keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Sun Oct 22nd, 2017 at 07:47:08 PM EST


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