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Apartheid USA: Will Trump do a reverse Mandela?

by Frank Schnittger Thu Nov 10th, 2016 at 01:45:57 PM EST

I completed my Masters Thesis on Apartheid some months before Nelson Mandela was released from prison by FW De Klerk in 1989. In it I predicted the imminent demise of apartheid based on changes in the South African economy which were happening at the time. I did so despite the fact that the relatively newly installed South African President, FW De Klerk, was widely regarded as a hard liner from within the ranks of the most reactionary parts of the South African Nationalist party at the time.  Sometimes past policies and positions are a poor predictor of how someone will act once in power. For me, economic circumstances could sometimes trump the personal characteristics of those in power.

Read more... (177 comments, 1944 words in story)

The decline of the USA

by Frank Schnittger Mon Nov 7th, 2016 at 06:45:01 PM EST


For all the hype and noise, this election has seen a remarkably consistent trend. If you average all the polls, Clinton has always been ahead, whether by 8 points or 2. Right now she is 4 to 5 points ahead, and it would take a massive polling failure for that not to be reflected in the actual vote. She is also ahead in all the swing states bar Iowa and possibly Ohio, North Carolina and Florida. What we are arguing about is the margin of victory, and who controls the Senate.

Without control of the Senate (55% probability per 538), she won't be able to make key appointments or ratify Treaties, and without control of the House, she won't be able to pass a budget or keep the government open. So either way we may be facing gridlock and an effective coup d'etat. The New American Century is no more. The USA's influence in the world will probably decline whoever wins the Presidential poll.

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Rugby Test in Chicago final score: Ireland 40 All Blacks 29

by Frank Schnittger Sat Nov 5th, 2016 at 09:06:01 PM EST


The Irish team form a figure of 8 in memory of former Irish international and no.8, Anthony Foley, who died a couple of weeks ago, as the All Blacks perform the Haka.

Live Blog...
The Chicago Cubs aren't the only team on the cusp of history, winning their first title in 108 years. Ireland have never beaten the All Blacks in 111 years of trying. But somehow this first ever match between the two teams in Soldier Field stadium in Chicago might just be different.

The current all blacks team are double world champions and have just completed a record 18 tests unbeaten winning the southern hemisphere's rugby championship by a record margin in the past few weeks. Meanwhile, Ireland haven't played a test since June.

Read more... (8 comments, 675 words in story)

Brexit: A new political dynamic is unleashed

by Frank Schnittger Thu Nov 3rd, 2016 at 01:30:55 PM EST

The High Court has found that the UK Government cannot trigger Article 50 "by Royal Prerogative" but must seek the approval of Parliament first:

The government had argued that it could invoke article 50 without parliamentary approval, using royal prerogative, a set of executive powers. The court found, however, that because article 50 triggers an irreversible process leading to Brexit after two years, it overturns the 1972 European Communities Act, which brought the UK into the Common Market.

"The most fundamental rule of the UK's constitution is that Parliament is sovereign and can make and unmake any law it chooses. As an aspect of the sovereignty of Parliament, it has been established for hundreds of years that the Crown -i.e. the Government of the day - cannot by exercise of prerogative powers override legislation enacted by Parliament," the court said.

The government argued that MPs who passed the 1972 act intended that the Crown should retain its prerogative powers to withdraw from the EU treaties. But the court rejected the argument, saying there was nothing in the 1972 act which supported it. And the judges accepted the main argument against the government, that EU membership conferred rights on UK citizens which the government could not remove without parliamentary approval.

The government has said it will appeal the decision, but presuming that decision is upheld by the Supreme Court, a whole new political dynamic will be unleashed. A clear majority of MPs voted remain in the referendum, and while many, including Jeremy Corbyn, have said that the will of the people must be respected, a vote on the matter ensures they will have to "own" the consequences of invoking A50. The Government's lack of a clear negotiating strategy will be laid bare, and the opposition have the opportunity to re-open the question should they decide to do so.

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The new politics, American Style

by Frank Schnittger Mon Oct 31st, 2016 at 07:17:35 PM EST

In common with many political junkies here, I suspect, I've been following the US elections very closely.  And yet, despite having written about 60 stories on US politics in previous years, I've written hardly a word this time around. Where to start? The subject is almost too horrible to contemplate: a reductio ad absurdum that keeps on plummeting into new unfathomed depths.  Could anyone have imagined a candidate so ridiculous as Donald J. Trump winning the Republican nomination, never mind the Presidency itself?

A narcissistic, racist, misogynist. A self-confessed serial sexual abuser of women and allegedly a child rapist as well. An admirer of Vladimir Putin, Saddam Hussein and assorted dictators around the world. A businessman who has stiffed many suppliers, contractors and customers throughout his career. A candidate who has encouraged his supporters to commit violence, and who has said he will imprison his opponent if elected. A rich kid who claims to speak on behalf of the dispossessed, and yet proposes policies which will dramatically further increase the gap between rich and poor in the United States.

And yet he is polling within a few percentage points of the front runner, Hillary Clinton, who, for all her faults, is none of the above. Yes, you can fault her for using a private email address for official business, possibly to avoid congressional scrutiny.  But she did so on the advice of a previous (Republican) Secretary of State, Colin Powell, and it was apparently a practice widespread amongst top officials, partly because of the cumbersome nature of the official email system, not to mention the risks of leaks emanating from that system due to cyberattacks and bureaucratic infighting.

So what is happening to the USA, and is it a harbinger of things to come in Europe and elsewhere in the world?

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A more nuanced solution to Brexit

by Frank Schnittger Thu Oct 27th, 2016 at 11:43:42 AM EST

Discussion of Brexit has been almost exclusively based on the proposition that the UK will exit en bloc, and that the only possible exceptions to this are if Scotland were to vote for Independence, or N. Ireland were to vote to join a united Ireland.  But there are some precedents for more nuanced solutions to the fact that both Scotland and N. Ireland voted Remain.  For instance, Greenland and the Faroe Islands remain part of the Kingdom of Denmark but with substantially independent political institutions, and neither are part of the EU.

The Faroe Islands secured an opt-out when Denmark joined the EU in 1973 (the same time as the UK and Ireland) and Greenland voted to leave the EU in 1985. In both cases the decision was based on their desire to retain independent control of fish stocks in their territorial waters.  The UK already issues distinctive passports for residents of the Isle of Man and the Channel Islands, and Jersey is neither a Member State nor an Associate Member of the European Union.
Jersey and the EU

Jersey is part of the European Union Customs Union of the European Community. The common customs tariff, levies and other agricultural import measures apply to trade between the island and non-Member States. There is free movement of goods and trade between the island and Member States. EU rules on freedom of movement for workers do not apply in Jersey.

So what if England and Wales exited the EU, but Scotland and N. Ireland remained? Both are substantially self-governing and have economic interests distinct from the rest of the UK. Their First Ministers have demanded a central role in the negotiation process and even Welsh first minister Carwyn Jones departed from Theresa May's "hard Brexit" position by insisting Wales wanted to retain full access to the European single market. Remaining part of both the UK and the EU would go some way towards appeasing both the Independence and Unionist voters in Scotland, whilst allaying Spanish fears of setting a precedent for Catalonian independence.

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Alan Dukes responds to my LTE

by Frank Schnittger Wed Oct 19th, 2016 at 01:30:27 AM EST

Alan Dukes, former Leader of Fine Gael, Leader of the opposition and Minister for Agriculture, Finance and Justice has responded to my letter to the editor criticising his original Irish Times article purporting to advise Theresa May on Brexit:
Preparing for realities of Brexit

Sir, - Frank Schnittger(October 17th) raised some objections to my "tongue-in-cheek" advice to Theresa May about Brexit ("Whitehall's Brexit advice to Theresa May", Opinion & Analysis, October 14th).

He is, of course, right to point out that the EU regards the four freedoms as indivisible. I agree with that, but the EU cannot demand that a state which is no longer a member should continue to take the same view. The EU trades with many states that do not attach the same value to the combination of these freedoms. The purpose of the UK's proposed "Great Repeal Bill" is clearly to lay the groundwork for an agreement with the EU on mutual recognition of standards post-Brexit unless and until the UK makes any specific change. It would be extremely difficult for the EU to argue that standards which it accepted up to the point of Brexit would no longer be recognised on the day after. Such recognition would not require the conclusion of a new trade agreement; all it needs is a bit of common sense.

Mr Schnittger casts doubt on the possibility of the UK simply taking over the terms of existing EU agreements with other trading partners. He does not explain why any other country would decide to treat the UK differently in trade matters simply because it had exited the EU. True, the situation in regard to new trade agreements with the UK would be more complex, but consider the CETA agreement with Canada. Conclusion of that agreement between the EU and Canada has (so far) been stymied as a result of its rejection by the regional parliament in Wallonia - EU ratification requires unanimity among the member states, and Belgium cannot now ratify because of the decision in Wallonia.

My guess is that the UK would signal its agreement to CETA post-Brexit. I hardly think that Canada would not welcome such a decision. Australia has signalled that a UK-Australia trade deal would happen post-Brexit. The UK is leading a group of northern European member states in an attempt to moderate the commission's proposals for tough anti-dumping measures against China. That could facilitate a UK-China understanding post-Brexit.

Mr Schnittger correctly points out that I made no mention of passporting rights in the EU and euro zone for UK financial service providers. I did, however, suggest that the City of London might not be without leverage in a negotiation.

The purpose of my "tongue-in-cheek" piece was to point out that there are viable options for the UK, for which we should be prepared. - Yours, etc,

ALAN DUKES

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LTE: Alan Duke's "advice" to Theresa May on Brexit

by Frank Schnittger Sun Oct 16th, 2016 at 05:25:24 PM EST

Alan Dukes is a former chief of staff to Ireland's EU commissioner who subsequently held the three key cabinet ministries of Agriculture, Finance, and Justice, and then became leader of Fine Gael (the current Irish Governing Party) but who never won a general election to become Taoiseach. As such he is a member of a small band of people in Ireland who are regarded as knowledgeable and authoritative on EU affairs. (Peter Sutherland, former Irish Attorney general, EU Commissioner for Competition Policy, founding Director General of the WTO, Chair of Goldman Sacks International and currently Special Representative of the UN Secretary General for International Migration would be another).

Alan Dukes has just written an article for the Irish Times which I have a hard time taking seriously. In it he purports to articulate the advice Whitehall is or should be giving to Theresa May on Brexit.  I can't make up my mind whether he was just taking the piss, but if so, many people may not have seen the joke.  So I was moved to write the following letter to the Editor:

Read more... (7 comments, 651 words in story)

The difference a welfare state makes

by Frank Schnittger Fri Oct 14th, 2016 at 06:15:35 PM EST

Guest post by Prof. James Wickham. Professor Wickham was my Sociology Professor in Trinity College Dublin and is now Director at TASC (Think-tank for Action on Social Change - Ireland's independent progressive think tank);First posted: 13 Oct 2016 01:57 PM PDT

----

Two charts that tell very different stories about inequality in Ireland today...

Both charts show the Gini coefficient of income distribution: the lower the Gini coefficient the more equal the society.  The first (Figure 1a) shows Ireland as the most unequal society within the EU: the Gini is higher than for any other member state.

Gini: Market incomes 2013
Figure 1a Gini, market incomes 2013

By contrast, in the second (Figure 1b) shows Ireland to be boringly normal: Ireland's Gini is in the middle of the range.

Figure 1b Gini, disposable incomes 2013
[Source for both charts:  OECD Income Distribution Database (EU countries for which data available)]

Read more... (2 comments, 1146 words in story)

Brexit means Breakup

by Frank Schnittger Wed Oct 5th, 2016 at 09:54:35 PM EST

Theresa May made great play at the Conservative Party conference this week-end of the UK leaving the EU as one unit. Well she would say that, wouldn't she? I suspect that many Scots will have a different take on that, and the situation in Northern Ireland could well become unstable all over again. She also seemed to be hinting that the UK would be opting for a "hard Brexit" with very little in the way of special access to the Single market. Perhaps that is only an opening negotiating gambit - signalling to the EU that the UK won't be held to ransom in the Brexit negotiations.  

Brexit politicians seem obsessed with the notion that the EU can't afford to lose its export surplus to the UK and will thus be very anxious to offer the UK a good deal. But the UK receives only 4% of EU exports whilst the EU imports 40% of UK exports. It is easy to see which economy would be harder hit if no free trade deal is negotiated. Perhaps they also underestimate the degree to which the EU is a political project rather than just an economic arrangement. Having more or less declared war on the EU and everything it stands for, they may be surprised at the ferocity with which the EU will fight back.

But that announcement will also have sent shock-waves through the City and leading industrial businesses with complex supply chains and customers spanning many EU countries.  You can't run a just-in-time manufacturing operation with vital components stuck in customs awaiting clearance. Even more worryingly, Ministers have started talking about British jobs for British people, and Irish academics in leading British Universities have been asked to furnish their passports as part of a "nationality audit".

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Brexit and free trade

by Frank Schnittger Sat Sep 17th, 2016 at 11:59:12 AM EST

For anyone still unsure of what complexities await the UK as it tries to negotiate a good Brexit agreement, Nick Clegg and Peter Sutherland, the founding Director-General of the World Trade Organisation, have produced a good outline. In summary, they find that:


  1. A free trade deal with the European Union will be impossible to agree within two years
  2. That, therefore, an interim deal will need to be agreed to avoid a dangerous and extended period of uncertainty for British companies
  3. And that a new trade deal will result in significantly more red tape for British companies exporting to the EU as British exporters will also have to comply with complex `rules of origin' which require UK exporters to obtain proof of origin certificates from their national customs authorities and are estimated to increase trade cost by four and 15 per cent.

And the above is only achievable with a great deal of good will and cooperation on the part of all 28 current members of the EU. Their 8 page report can be found here and is well worth a read in its own right.  Although primarily intended to describe the difficulties of negotiating a good Brexit deal which does as little harm as possible to the UK economy, it is also a systematic and detailed refutation of just about every claim made by the Leave campaign and by the UK Government ministers now leading the UK Brexit negotiating team.  In particular it describes the disastrous economic effects of the "hard Brexit" which will result if some sort of interim arrangements can't be agreed by the UK and all 27 remaining members of the EU on the expiration of the post A50 two year negotiating period.

Comments >> (162 comments)

Global tax competition and its reduction

by Frank Schnittger Fri Sep 2nd, 2016 at 12:52:52 PM EST

The Apple case has highlighted the degree to which major global corporates have been able to avoid paying any significant amount of corporate tax at all, never mind just taking advantage of relatively low headline tax rates like Ireland's 12.5% rate. In addition, even headline tax rates have been declining globally, and many countries operate complex systems of exemptions which means that the actual effective rate paid by corporates does not bear any relationship to the headline rate.

This distorts competition in a number of ways: It advantages the bigger multinational players at the expensive of smaller local businesses which cannot claim such exemptions. It encourages a race to the bottom in corporate taxation amongst countries competing for FDI. It reduces the tax take for cash strapped states seeking to maintain social services, and increases the power of wealthy corporates relative to to democratic states. It can be argued that this is the dominant engine driving the increase in global inequality more generally.

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Ireland to appeal Apple Ruling

by Frank Schnittger Tue Aug 30th, 2016 at 08:25:39 PM EST

The European Commission has made a ruling charging Ireland with giving illegal state aid to Apple and ordering Ireland to collect €13 Billion in back taxes due - a figure that represents c. 6% of Ireland's total national debt. Apple has a market valuation of $571bn, a cash pile of $230bn, and an expected $53 billion in free cash flow this year, making the ruling material but hardly terminal from a corporate point of view. Apple shares are down less than 1% on the day.

Irish Finance Minister Michael Noonan is recommending that the Irish government appeal the finding to the European Court. Yes, you read that right.  The Irish Finance Minister doesn't want the money. Apparently collecting the money would damage Ireland's ability to attract multi-nationals like Apple to Ireland in the first place.  Noonan is also concerned that the ruling might be seen to imply wrong-doing by Irish tax officials and that it represents an encroachment by the Commission of Ireland's sovereign right to determine its own tax policies.

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Will a Brexit agreement require ratification by 28 Member states?

by Frank Schnittger Thu Aug 18th, 2016 at 02:04:41 PM EST

Luis de Sousa raises an important point. Will a Brexit agreement require ratification by 28 Member states, or can it simply be agreed, by majority vote of the EU Council as provided for in Article 50 of the Lisbon Treaty? He quotes legal opinion to the effect that all 27 remaining member states would have to ratify any trading agreement post Brexit: EU Law Analysis: Article 50 TEU: The uses and abuses of the process of withdrawing from the EU

In this context, it should be noted that (contrary to what is sometimes asserted), there's no legal obligation for the remaining EU to sign a free trade agreement with the UK. The words `future relationship' assume that there would be some treaties between the UK and the EU post-Brexit, but do not specify what their content would be.


This point is politically significant because while the withdrawal arrangement would be negotiated by a qualified majority, most of the EU's free trade agreements are in practice `mixed agreements', i.e. requiring the consent of the EU institutions and ratification by all of the Member States. That's because those agreements usually contain rules going outside the scope of the EU's trade policy.  While it seems likely that in practice the remaining EU would be willing to enter into a trade agreement with the UK (see, for instance, the `gaming' exercise conducted by Open Europe), the unanimity requirement would complicate this.

In short, this legal opinion considers a Brexit agreement to consist of mainly transitional measures to facilitate the departure of the UK from the EU, which may or may not include special arrangements for ongoing free trade. I think we are in danger of confusing the process by which an exit agreement between the UK and EU might be reached, and the content of what it might contain.

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Is Brexit without invoking Article 50 possible?

by Frank Schnittger Sat Aug 6th, 2016 at 11:49:22 AM EST

In a long an spirited discussion over The Brexit Negotiation Process, Colman made a point which has not been adequately addressed:

Colman:

Brexit without article 50 is also possible.

So is some sort of face-saving operation for the UK (which would, if it was anti-immigrant, fit nicely into the agenda of a lot of EU leaders).

Is this really the case?

A few preliminary points need to be made:

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Ireland's Post Brexit strategy

by Frank Schnittger Wed Aug 3rd, 2016 at 03:13:21 PM EST

The Brexit vote has already had an effect on consumer confidence and investor sentiment in the UK with the Governor of the Bank of England warning of the likelihood of at least a technical recession in the near term. A prolonged period of uncertainty is unlikely to improve that outlook in the medium term, but at least the UK can use Sterling devaluation, monetary policy easing, and reduced rates of corporate tax to mitigate its worst effects in the short term. That is, however, of no comfort to Irish exporters to the UK who are heavily dependent on the UK market - especially the small and medium sized indigenous sectors of the economy.

Indeed the whole Irish economy is heavily integrated with the UK economy although that dependency has reduced markedly since entry into the EU. Exports to the UK currently amount to c. 14% of total exports  with the USA, Belgium and Germany accounting for 20%, 13% and 8% respectively. An official report for the Irish Government has estimated that Brexit could result in an average 20% reduction in trade flows between Ireland and the UK and the OECD has estimated that Ireland's GDP will be reduced by 1.2% as a result.

That official report is also pessimistic that Ireland can make up the difference by increasing its share of FDI that would otherwise have gone to the UK.  Despite the proclamations of popular economists like David McWilliams that "Brand Britain is ours for the taking", it estimates that the ability of Dublin to attract business from London will be limited by Sterling devaluation, reduced UK corporate tax rates, and a shortage of suitable office space, housing and schools in the greater Dublin area. Nevertheless, the shape of the Irish government and corporate response to the Brexit crisis (or opportunity) is now becoming clear:

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The Brexit Negotiation Process

by Frank Schnittger Thu Jul 28th, 2016 at 03:56:41 PM EST

A reader who wishes to remain anonymous writes (By email):

Is it yet clear what the process for British Exit is and what is to be negotiated?" UK politicians seem to depict a different view of what is involved than the EU Commission. I think the answer is important and is not being given enough attention in the UK.

Cecila Malmstrom (EU Commissioner for Trade) has stated that the process is two stage and sequential. First UK leaves completely to third country status and WTO rules.  Then, UK can begin to negotiate its future relationship, i.e. the terms of access to the single market is what some, but not all, Tory politicians think is necessary.  [UK can either negotiate that break cleanly within two years of A50 or it happens at the end of that unless extended by unanimous agreement.]

Paragraphs 3 and 4 of the official statement following the 29th June meeting of the 27 seems to support this view though the statement is not intended to clarify that Malmstrom view.

  1. Once the [A50] notification has been received, the European Council will adopt guidelines for the negotiations of an agreement with the UK. In the further process the European Commission and the European Parliament will play their full role in accordance with the Treaties.

  2. In the future, we hope to have the UK as a close partner of the EU and we look forward to the UK stating its intentions in this respect. Any agreement, which will be concluded with the UK as a third country, will have to be based on a balance of rights and obligations. Access to the Single Market requires acceptance of all four freedoms. [My emphasis]

Again delusion sets in amongst the Tories when they think UK is going to control movement but have full access with all the existing benefits. [I am aware that Switzerland has failed to come up with such a deal and is running out of time to resolve its position following the Feb 2014 Swiss referendum].

Liam Fox [UK International Trade Secretary] has described Malmstrom's view as "bizarre, stupid, preposterous and ridiculous" according to the Guardian.

It would be interesting to find out if Juncker, Tusk and Michel Barnier take the same position as Malmstrom. But I don't think I am in a position to ask them. Perhaps you are or know someone who can?

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RIP: Finbarr Flood 1938-2016

by Frank Schnittger Mon Jul 25th, 2016 at 08:56:45 PM EST


Finbarr Flood was one of my first bosses in Guinness and taught me much of what I have learned about surviving in big business. He had joined the company as a messenger boy aged 14 and also played semi-professional soccer as a goal-keeper in both Ireland and Scotland. Having risen through the ranks to become Managing Director, he left to pursue a further career as Chairman of the Irish Labour Court, Chairman of Shelbourne Football Club, and Chair of a number of city rejuvenation projects.  Having left school at 14 he was extremely chuffed to receive an honorary Doctorate from the Dublin Institute of Technology and to become an adjunct Professor to Trinity College Dublin.

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Brexit and a United Ireland.

by Frank Schnittger Tue Jul 19th, 2016 at 02:44:45 PM EST

The 1998 Good Friday Agreement is an international Treaty between the UK and the Republic of Ireland lodged with the United Nations.  It was incorporated into the Irish Constitution by a referendum which was carried by a 94% yes vote.  It was also approved by a 71% majority vote in a referendum in Northern Ireland and sets up a number of internal Northern Ireland, North South, and British Irish institutions.

The Good Friday agreement was predicated on both Ireland and the United Kingdom being members of the European Union and the EU has played an active role in facilitating the peace process by supporting peace and reconciliation in the border regions. Peace IV has just been approved and has earmarked some €269m to this end. Any re-emergence of a "hard border" with customs and immigration controls will jeopardise the much improved community relations within Northern Ireland which are dependent, in part, on much closer North-south integration, at least as far as the Nationalist community is concerned.

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Tories do ruthless so well...but Boris?

by Frank Schnittger Thu Jul 14th, 2016 at 11:59:02 AM EST

With Labour stuck in what seems like an interminable leadership struggle, the Tories are wasting no time putting together a new order post Brexit.  Within days of losing the Brexit referendum, Prime Minister David Cameron is gone, replaced by Theresa May, and she has just sacked more cabinet ministers in a few hours than Cameron did in his 6 years in Office.

George Osborne, Michel Gove, Oliver Letwin, John Whittingdale, Teresa Villiers and Nicky Morgan have all been sacked while devout Christian and leadership candidate, Stephen Crabb, has resigned apparently for sexting a women who is not his wife. Presumably Johnson and Gove cold not have been expected to serve in the same Cabinet after the latter stabbed Johnson in the front...

But it is the early appointments she has made which are the more interesting: She has put three of the top Brexiteers in charge of foreign relations: Boris Johnson as Foreign Secretary, Liam Fox in charge of a new Department for international Trade, and David Davis in charge of the Brexit negotiations themselves. None will appeal to the Europeans. Boris Johnson is hated for his persistent lies, and his appointment has been the subject of much derision worldwide.

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News and Views

 28 Nov - 4 Dec 2016

by Bjinse - Nov 27, 39 comments

Your take on today's news media

 21 - 27 November 2016

by Bjinse - Nov 20, 111 comments

Your take on today's news media

 Open Thread 28 November - 4 December

by Bjinse - Nov 27, 39 comments

Open the pod bay doors, thread

 Open Thread 21-27 November

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