Boris “Just Kidding” Johnson Outlines His Rainbows and Unicorns Brexit Plan

Boris Johnson is now the most hated person in the Western world. He is attempting to do something about that in the UK via an article in the Telegraph that says that Brexit will usher in the best of all possible worlds for the UK.

I’m not making that up. Johnson says citizens will get to keep all the things they love, like freedom of movement between countries and affordable European products, and get rid of what they don’t, meaning those EU nasty rules and courts.

This is so far from anything credible that I wonder if part of Johnson’s motive for writing it isn’t just to reduce his personal risk but to disqualify himself for leadership of the Conservative party. He’s in the position of being the dog that caught the car. And it’s hard to see how he can be effective with the white-hot anger at him. As one reader said:

I have been talking to some of my neighbours in London and am astonished how many are talking about leaving the country. The atmosphere is more febrile by miles than at any time since I arrived here half a century ago.

Johnson, once a favourite of the crowds in London, is being booed very aggressively by large crowds when he appears outside his house and clearly requires police protection. He may have to be moved to other accommodation for his safety.

And yes there are people now talking openly in the streets that they are going to throw the foreigners out.

The mood is very ugly. Remainers are saying that the country have been lied into voting to leave the EU and are openly challenging the vaiidity of the referendum result.

This could get very nasty.

Johnson’s promises now are no more credible than his campaign statements, such as:

NHS promise

As Sky News reported a day ago:

Brexiteer Iain Duncan Smith has stepped back from his campaign’s promise to give the NHS £350m extra per week….

But the former secretary of state for work and pensions said: “I never said that during the course of the election.”

It comes as another Conservative MP Leave campaigner, who will back Boris Johnson for leader, said there was no plan for Brexit.

But his article, I cannot stress too much that Britain is part of Europe – and always will be, Johnson is now a man with a plan. It warrants, if nothing else, as an indicator of how desperate the main actors in the Brexit drama are eager to extricate themselves from the holes they’ve dug.

Here is the core of his pitch:

It is said that those who voted Leave were mainly driven by anxieties about immigration. I do not believe that is so….I can tell you that the number one issue was control – a sense that British democracy was being undermined by the EU system…

We who are part of this narrow majority must do everything we can to reassure the Remainers…

I cannot stress too much that Britain is part of Europe, and always will be. There will still be intense and intensifying European cooperation and partnership in a huge number of fields: the arts, the sciences, the universities, and on improving the environment. EU citizens living in this country will have their rights fully protected, and the same goes for British citizens living in the EU.

British people will still be able to go and work in the EU; to live; to travel; to study; to buy homes and to settle down. As the German equivalent of the CBI – the BDI – has very sensibly reminded us, there will continue to be free trade, and access to the single market….

Yes, there will be a substantial sum of money which we will no longer send to Brussels, but which could be used on priorities such as the NHS

The only change – and it will not come in any great rush – is that the UK will extricate itself from the EU’s extraordinary and opaque system of legislation: the vast and growing corpus of law enacted by a European Court of Justice from which there can be no appeal. This will bring not threats, but golden opportunities for this country – to pass laws and set taxes according to the needs of the UK.

Yes, the Government will be able to take back democratic control of immigration policy, with a balanced and humane points-based system to suit the needs of business and industry. Yes, there will be a substantial sum of money which we will no longer send to Brussels, but which could be used on priorities such as the NHS. Yes, we will be able to do free trade deals with the growth economies of the world in a way that is currently forbidden.

So why exactly should the other 27 members of the EU allow the UK to pick and choose what part of the EU arrangement they like and scotch the rest? Remember that Cameron tried getting some small concessions before the Brexit vote and came back virtually emptyhanded? If this were an economic negotiation, as opposed to a politically fraught one, the only way would be to pay the other side to sweeten the deal for you, which is the opposite of one of Johnson’s fantastical promises, that the UK will get all of the bennies of membership along with lower payments to the EU.

Similarly, why should Europe stand for the UK restricting work opportunities for EU citizens in the UK while allowing Brits to steal jobs from their member nations via letting them work there under more liberal EU rules? Why should they allow free access to the European market when the UK will put EU manufacturers and farmers through the hassle of different consumer safety, labeling, and legal liability regimes?

Moreover, Johnson promises more neoliberalism, in the form of reducing those supposedly nasty EU rules. Yet particularly for the Labor voters who were strong supporters of Remain, EU regulations are seen as attractive precisely because the labor, human rights, and environmental protections are stronger than what the UK would put in place.

But the biggest lie in the many big lies here is the idea that the UK has any bargaining leverage. It was in a disadvantaged position before. Its counterparties had vowed to make the exit punitive to discourage other separatists-in-waiting. As PlutoniumKun pointed out yesterday, the UK was not well liked on the Continent even before this rupture:

The UK is, and has been for years, universally loathed within the corridors of the EU. The failure of UK governments, in particular Conservative governments, to accept that the EU existed for any other purpose than extracting money or blaming for domestic problems has long irritated them. But much worse, the complete refusal of the UK to ‘be part of the team’ for years has been highly damaging. The UK has long sent second raters and no-hopers to Brussels, has long been obstructive for the sake of being obstructive, and most crucially, has not built up allies within the European parliament (the fact that the Tory party aligns itself with crankish East European parties instead of the mainstream European centre-right speaks volumes). Quite simply, they have no friends there….

So I see there as being a lot of potential reasons why Brussels and powerful EU countries may well have a vested interest in creating a short term crisis. In particular, Sterling must be very shaky – a rapid fall could provoke panic in London and would allow the EU to ‘not let a good crisis go to waste’. This may seem cynical, but seeing what happened to Greece, it would be a mistake to underestimate the cynicism of EU leaders. And old mercantilist habits die hard – the Europeans never bought into English liberal ideas that trade was not a zero sum game.

And now the European leaders and Eurocrats are justifiably furious for reckless British pols throwing a wrecking ball into the very heart of their fragile system merely to gain some political advantage, with no serious plan on their side.

In addition, procedurally, it is virtually impossible to effect such fundamental changes outside of pressing the Article 50 red button. From a very informative article at the Constitution Unit:

It is vanishingly unlikely that the UK could withdraw without triggering Article 50 at all. During the campaign, Vote Leave suggested that it might be possible to leave via Article 48 of the Lisbon Treaty, which sets out the procedure for revising EU treaties. But a simple majority of member states could block even a request to consider such a route, and the amendments themselves would require ratification by every member state. Given that the Article 50 process skews the balance of power towards the continuing member states, we can presume they will insist on its use. Leaders of both Vote Leave (including Michael Gove) and Leave.EU (including Nigel Farage) have spoken since the result was announced in terms suggesting that they recognise this.

Someone needs to send Johnson the memo.

The article also gives a more realistic picture of how the negotiations would go:

The process of withdrawal will involve three sets of negotiations

  • First will be the negotiation of the withdrawal terms themselves. These will likely include, for example, an agreement on the rights of UK citizens already resident in other member states and of EU citizens resident in the UK. As Professor Sionaidh Douglas-Scott has explained, those rights – contrary to what some have said – are for the most part not protected under existing international law.

  • Second, it will be necessary to negotiate a trade deal with the EU. The official Vote Leave campaign confirmed that it wanted such a deal and correctly pointed out that everyone’s interests would be served by having one. The content of the deal will, however, be hotly contested. Vote Leave focused on securing free trade in goods and argued that, because the UK imports more goods from the EU than it exports to the EU, we could expect to be offered a good deal. But there will be greater difficulties in services. Open Europe (which campaigns for EU reform and was neutral in the referendum) highlights particular difficulties in financial services, where it rates the chances of maintaining current levels of access to the EU as ‘low’.

  • Third, the UK will have to negotiate the terms of its membership of the WTO and will want also to negotiate trade deals with the over 50 countries that currently have such deals with the EU, as the existing arrangements will no longer apply to the UK from the moment of Brexit. The WTO itself has warned that this will not be straightforward: the UK will not be allowed just to ‘cut and paste’ the terms of WTO membership that it currently has through its EU membership. Similarly, while we might hope that other countries will agree quickly to extend the EU rules to the UK, we cannot presume that all will – and the UK itself might want different terms in some cases.

These negotiations could run in parallel, or the UK could negotiate withdrawal first and future arrangements later. As Professor Adam Lazowski has pointed out, there are difficulties in both approaches.

In the meantime, the pressure for the UK government to get moving is rising. The IMF’s Christine Lagarde called for prompt action to keep the Market Gods from killing the Confidence Fairy. However, she did point out the inconsistency in the EU position, and it was probably not referring to Merkel trying to tamp down the “nasty” remarks from the foreign ministers of the founding EU members. The Europeans are sending conflicted messages. The desire for a speedy exit and punishing the UK (out of their own pique as well as to discourage right wing nationalists) conflicts with the desire to reduce real economy damage. They need to calm down and sort out priorities.

In addition, as of this hour, sterling dropped another 2% and the 10 year Gilt yield fell below 1%. The futures market suggests hte US stocks will open down a bit under 1%. The Financial Times ran a story yesterday with the headline, Banks begin moving operations out of UK, which was roundly attacked in the comments section for exaggerating how imminent and large the job shifts would be. As Felix2012 pointed out:

The total number of workers in the 14 banks above is 65k and there are 2 million employed in the financial and associated industry across UK (mostly outside London).

Let’s just say London employs 200k people, we are talking about 1-2% (a few thousands) job loss. It is painful, especially for the people affected, but it is far from ‘close shop and go’.

But another headline today, Brexit: anxious employers freeze jobs and cut investment plans, has better backup:

Britain’s vote to leave the EU is prompting a sizeable minority of employers in the UK to freeze hiring and cut their investment plans, according to a survey of more than 1,000 business leaders.

The poll is an early indication that a British exit from the bloc will hit jobs and investment as employers grapple with volatile markets and political instability. Almost two-thirds of the business leaders surveyed by the Institute of Directors on June 24-26, immediately after the vote, said the referendum result would be “negative” for them.

While a third said they would continue to hire at the same pace, a quarter planned to freeze recruitment and 5 per cent expected to fire staff. More than a third planned to reduce their investment plans and a fifth said they would consider moving some operations abroad.

However, it’s hard to know how big the Brexit “uncertainty” effect is without a pre-Brexit baseline.

A final update: the Scottish first minister, Nicola Sturgeon, is threatening to ask the Scottish parliament to obstruct Brexit. But Scottish secretary David Mundell effectively said Whitehall will ignore the Scots if they fail to consent.

Cameron is scheduled to speak today. I doubt he is going to try to upstage Johnson by pulling a rabbit out of a hat.

Print Friendly, PDF & Email


  1. Ignacio

    In my opinion the negotiation of withdrawal terms and the new trade deals cannot be lead by current EU leaders (Junkers et al.) that have miserably failed to address Brexit. Current European Comission should resign as their position in the negotiations will be dominated by resenment and the wish to retaliate.

  2. ahimsa

    I cannot stress too much that Britain is part of Europe, and always will be. There will still be intense and intensifying European cooperation and partnership in a huge number of fields: the arts, the sciences, the universities, and on improving the environment. EU citizens living in this country will have their rights fully protected, and the same goes for British citizens living in the EU.

    The man is delusional – the wording of the referendum was very clear:

    Referendum on the United Kingdom’s membership of the European Union

    Should the United Kingdom remain a member of the European Union or leave the European Union?
    – Remain a member of the European Union
    – Leave the European Union

    1. m-ga

      The referendum question enables the UK to remain in the EEA. This is very similar to the EU (has full single market access, and free movement), but does not have voting rights.

      The Leave campaign’s promises implied that the UK wouldn’t join the EEA. But the Leave campaign was mendacious, and many of its promises are already being retracted.

      You could also note another way around the referendum wording. If the UK ceases to exist, then the referendum question is moot. I’ve suggested elsewhere that this could happen by moving the UK to a federal system. The attractiveness is that it would take 5-10 years to set up, during which continued EU membership can continue exactly as previously. I’ve not seen anyone else propose this idea, although I think it’s the simplest way to obviate the referendum result, should it be desirable to do so.

      1. ahimsa


        The idea of the UK leaving the EU but remaining members of the EEA (full single market access and freedom of movement) without voting rights is, I think you will agree, rather far fetched.

        Your idea of a UK federation is interesting, though I am not sure I fully follow the attractiveness of this route.

        Have you seen Fintan O’Toole’s articles on Brexit and it’s implicit dissolution of the UK.
        Brexit is being driven by English nationalism. And it will end in self-rule.
        Brexit fantasy is about to come crashing down

        1. m-ga

          Thanks for the links. I’d agree that Brexit implies the break-up of the UK.

          Leaving the EU but remaining in the EEA would follow the model of Norway, and a few other countries:

          There’s also the arrangement that Switzerland has, but I’ve seen suggestions that would be trickier to negotiate.

          1. Carla

            Fascinating that the Scots seem convinced they’ll get a better deal from the Germans than from the British. They might want to check with the Greeks first.

      2. Stein

        Even assuming the implausible: that a Norway model can be done, it is that it is still not satisfying and not just because of the vote.

        According to experts,

        Joining the EEA would also remove a requirement for UK companies to appoint fiscal representatives to report local sales. But Britain would be outside the EU VAT regime even if it were part of the EEA.

        1. m-ga

          They’re talking about this in the Commons at the moment. Ken Clarke asked if Cameron supports joining the EEA, and Cameron said he wants to stay in the single market.

          It doesn’t take too much reading around the issues to realise that this plan (switching from the EU to the EEA) will not be viable. The only exception, I think, will be if the UK government think they can hold a gun to the collective heads of the rest of the EU, and get a deal that no-one else has. I don’t personally think the UK government bargaining position is that strong. But we’ll find out soon enough.

          In some ways, it’s like a game of chicken. The UK’s economy and non-EU foreign relations are going to crash during the uncertainty. But, that is also the case for the rest of the EU.

          The rest of the EU has a larger and more diverse economy than the UK, so should be able to hold out much more easily. However, the rest of the EU has weaknesses that the UK doesn’t have (e.g the eurozone imbalances, upcoming elections in member states). So, it’s not hugely easy to read.

          I wonder who will blink first. If the UK decides to fold, it will most likely be by doing nothing (i.e. never getting around to triggering Article 50). It would be necessary for the UK government to find some explanation which will allow them to signal to investors that the UK’s EU membership is not changing, whilst somehow placating Brexit voters. This isn’t straightforward.

      3. larry

        Boris Johnson has effectively said it, by backing an English parliament. Though like many of his statements, it was a trifle vague.

    2. Pelham

      Europe is not the same as the European Union. Europe is a continent of nations, some in the EU, some not. The EU is a sclerotic, profoundly undemocratic institution that imprisons much of southern Europe under a disastrous single currency.

  3. paul

    Alexander Boris de Pfeffel Johnson jumped on the leave train to show how principled he was.
    After the refendum failed he would succeed Cameron.
    Funny how things work out.

    1. Pavel

      Amusing to see Boris hoist with his own petard — the former Mayor of London and First Buffoon now the most hated man in London (and elsewhere).

      That “£350 million pounds per week that will now go to the NHS” is going to go down in history along with Bush I’s “Read my lips — no new taxes” or Bush II’s “MISSION ACCOMPLISHED” as another unforgettable political gaffe.

      An example of how Boris is a walking disaster: apart from his, ahem, complicated private life, for years he didn’t file FBAR notices with the IRS for his US accounts, and in a huff he gave up his US passport. He really is a UK version of Trump in many ways.

    2. flora

      Extraordinary that in the run up to the referendum vote Cameron, Johnson and others didn’t game out a “what if the Leave vote passes? – what is our plan B in that case?” scenario.

  4. Darthbobber

    He’s not even the most deluded. One of the UKIP wheels had a blurb on the desired “negotiation” strategy in which the minimum preconditions included: Full access to the single market without being “part of” the single market or needing to submit to any limitations whatsoever in return for that.

    In other words, a “negotiation” in which the people across the table get nothing at all, while handing you all your fondest pipe dreams. Of course, the only way “negotiations” ever produce such a result is if they aren’t really negotiations at all, and the stronger party is simply dictating terms. Since Britain has not in fact fought and won a war against the rest of Europe, its hard to see how that would apply.

    1. John k

      Eu is desperate to maintain their 100b/yr trade surplus with Britain. They will happily agree to a tariff free trade zone with Britain.
      Imagine if Germany left… That is the country that would have no leverage.

      1. Yves Smith Post author

        No one is acting that way. Keeping the separatists at bay is a higher priority. Only Merkel is taking a moderate line. Her own foreign minister and much (most? don’t have a good read of German sentiment yet) of the members of her coalition want harsh treatment of the UK. AfD is breathing down their necks.

  5. abynormal

    for me the politics is getting way murky, but my gut continues to burn every time i consider the Debt Exposure from all this. it would seem unrelenting debt contagion is what should expedite a speedy an orderly exit. what do i know…are Haitian divorces still legit?

  6. Deep Thought

    Rainbows and unicorns

    That was exactly what I thought of his article. The man clearly has lost all grip on reality.

    1. jabawocky

      It seems Boris views ‘leaving the EU’ as vague enough to encompass remaining in the EU if necessary. All he cared about is getting rid of ‘Dave’.

      1. Deep Thought

        Indeed. I am praying that even Johnson can’t backpedal that much.

        I’d love to know what his brother thinks of him right now. Jo Johnson has been a vaguely competent minister and is pro-EU.

  7. vlade

    Two comments:
    – to be able to negotiate anything, UK would have to have diplomats worth the name. It doesn’t, and for a very long time it didn’t. Incidentally, ignoring foreign diplomacy (especially at the EU level, except when it come to the City) is one of the major reasons why UK was in the place it was. There’s no question about German sovreignty over EU laws… (anything coming from EU which doesn’t fit German constitution is automatically null and void as far as Germany is concerned)..

    – job losses. It may be 200k “only”, but it terms of GDP contribution it’s probably a large chunk of the top 5-10%. More if you take in all the consultants, high powered lawyers and accountants feeding on the caracass. Median salary in FS is likely north of 50k pounds. That would translate to about 20k+ tax loss per job (first order effects), so about 4bln pounds for 200k jobs. That’s 76m pounds per week, or about slightly more than one fith of the magical “350m per week that goes to EU”.

    1. Jim A

      I suspect that the number of job losses will be greater. I for one was not at all surprised by the real estate crash in the US, because RE prices obviously indicated a speculative bubble. However, I certainly WAS surprised by the degree to which it took the rest of the economy with it. In reality the financialization of the US economy meant that much of the growth of the previous 5 years was just a financial bubble. And my guess is that we’ll discover the same thing about the UK economy.

    2. vidimi

      the 200k is the total number of people employed in the City. 1-2% of them would lose their jobs, so 2-4k.

  8. Carolinian

    Sounds like WW3 is going to be fought, not with Panzers and Spitfires, but with trade treaties and exchange rates. Future screen epics will pull back for the long shot as armies of lawyers clash. At any rate those of us who are fans of NC will be in the right place.

    1. Deep Thought

      Speaking as a fan of NC who is currently sitting right in the middle of the front lines I for one do *not* I am in the right place. Not at all!

  9. m-ga

    There’s one interesting takeaway from Johnson’s ramblings. It’s that the appetite for Brexit within the Conservatives is dwindling.

    The only other senior Conservatives to campaign for Leave were Gove and IDS. Gove has already indicated that he’ll fall in line behind Johnson. IDS has acted as Conservative leader already (he was deposed via a vote of no confidence), and is unlikely to make major waves.

    If the Conservatives collectively decide that they don’t want Brexit, it won’t happen.

    I suspect the question currently being discussed within the Conservative party is whether there’s any advantage in switching to the EEA, or to some other relationship, or whether it would be better to stay in the EU. The most pressing issue for them might be that if they don’t get invited to the EU meetings, they aren’t as much use to the USA. It’s very unlikely that any Conservative would want the UK-US relationship diminished. The idea of the USA increasing its direct dealings with Germany will not go down at all well.

    In addition, Conservatives are unlikely to want the breakaway of Scotland, which is now looking likely.

    And they will want to immediately quash the negative impact on London’s position in financial services.

    So, it might well be that the formerly anti-EU members of the parliamentary Conservative party fall into line quite quickly behind whatever direction the top brass choose to take.

    1. Ed

      The Conservative Party first applied for the UK to join the European Community, took the UK into the European Community, and got Maastricht through. The only other referendum on withdraw was offered by a Labour government. The Tories have always been the more pro-EU of the two parties, regardless of how they come across in public. Its Labour that has flip flopped all over the place on the issue, splitting on the issue in 1982 and likely to split again.

    2. vlade

      TBH, I find the whole EEA funny.. In a sad sort of way. Because to me, it would pretty much codify the pre-referendum situation. I had a close-second-hand experience with how the EU directive process worked for the UK.
      – EU comes with an idea for a directive, and invites EU members to comment.
      – UK ignores it (unless it was incentive touching the City)
      – EU decides on something, and EU parliament passes it.
      – I’d note that all directives have degrees of freedom that national parliaments can use.
      – UK ignores it
      – UK passes the directive as is (basically taking the draft and making it a law)
      – few years goes on
      – UK complains about EU directive that ignores any and all UK idiosyncracies

      From that perspective, being in EEA formalizes the first five steps and pretty much skips them. And then they say that EU is inefficient!

      1. PlutoniumKun

        That pretty much sums up the UK approach to Directives. I would add though that they do pay attention if it effects big farmers (the Dept of Agriculture and the National Farmers Association (essentially the same organisation) pay a lot of attention to what goes on in Europe). the UK was central to shooting down a recent very sensible directive aimed at preventing soil erosion. But in most other respects the UK just ignores Directives until they get a hammering in the courts, and then act all surprised.

        1. vidimi

          the UK lobbied hard to keep the ISDS within the TTIP and killed the financial transactions tax.

          good riddance

      2. IsabelPS

        I have read something interesting: regulations will disappear immediately, directives will have to be dismantled one by one.

      3. jochen

        That explains my experience. Upon beginning a postgrad degree in the UK the building manager of our department gave an intro and saftey lecture. He was a very nice, friendly and polite man. Very British, indeed.

        However, he did go on about fire extinguishers and how the EU keeps on making new rules about the colour requirements. Meaning the colour indicates the content just as it is done on gas cylinders. (‘And the the EU decided that it has to be…’).

        Coming from Germany I was all surprised about this since our extinguishers have always been red, without interuption. I know now that ours do have an apropriate colour marking somewhere but are generally still red (the brand new one 3m from me is red only, I just noticed).

        So I guess sovereignty depends on whether you choose to use it.

  10. Bugs Bunny

    I got a link to a DLA Piper Brexit portal this morning in my mail. It’s astounding the depth of ties that will have to be renegotiated or legislated de novo.

    How will the UK even manage this without creation of an entire ministry or two and the hiring of thousands of civil servants?

    Unless of course they simply outsource it all. Perhaps they can hire French diplomats and German lawyers to sort out the mess.

    1. PlutoniumKun

      They could of course hire lots of Polish, Latvian and Pakistani lawyers…. but of course they’d have to give them immigration status.

      1. Bugs Bunny

        Sounds like a “Centre of Excellence” e.g. why bring them over when it could all be done remotely?

        I imagine the consulting giants are on top of this already.

  11. Ignim Brites

    Most negative reactions to the Brexit are overwrought. Everyone knows that the EU suffers from a democratic deficit. This was amply demonstrated when both the Dutch and the French rejected the mandarin written EU constitution. Exactly why people are so disturbed is hard to fathom. Secession is the new name for Revolution which a major Presidential candidate in the US has recently been promoting.

  12. Severian

    “I have been talking to some of my neighbours in London and am astonished how many are talking about leaving the country…”
    Boo-hoo. Sounds like a positive sign. Call their bluff. But where shall they go? Perhaps Turks and Caicos. I am with many who feel that that the UK is smart in getting out ahead of an EU that is incapable of reversing its disintegration. It will be a pain and a struggle to refashion an economy built less on BS and parasitism (particularly finance). Many outside of the metropole and elsewhere have already felt it and been forced to adjust.

    1. Tony Wright

      Where will they go? Probably off to some scuzzy tax haven where most of their money is already parked. It reminds me of the old story about the Rolls Royce salesman who, when a potential buyer complained about the lack of boot ( I.e. Trunk in the US) space, replied ” Sir, a Gentleman’s baggage should always precede him…”

  13. JW

    There is an existing arrangement with one EEA/EFTA country and the EU that exactly matches the decription contained in Boris Johnson’s article. A precedent has already been set many years ago by Leichtenstein.
    No doubt France will have to be given a ‘bung’ of some description, as well as some arm twisting by Germany. Also its actually in France’s interest to allow the ‘negotiation’ to drift until well after their next general election.
    Once the dust has settled and the media ( and blog writers) turn their attention back to other issues like the US elections; this matter will find an acceptable solution along the lines od the accomodation with one of the smallest of european states.

    1. m-ga

      The Liechtenstein model excludes Liechtenstein from EU agriculture and fisheries laws. EU agriculture and fishery regulations are, for whatever reason, a big deal in the UK. So, if Johnson gained an exclusion from those laws, he could cite his negotiations as a win.

      However, Liechtenstein is in the Schengen area. The UK is already outside Schengen, and entering would cross a red line for Brexiters. So, the deal can’t be exactly as for Liechtenstein.

      It’s also not clear there’s an advantage over the UK’s current EU membership. Being in the EEA requires paying into the EU, but without any voting rights. Even if there is a saving by switching from EU to EEA membership, paying for the voting rights would presumably be worth it. Especially for the UK (e.g. the UK can use its vote to protect Gibraltar, or UK financial services, or promulgate a US view, and so on).

      1. JW

        Liechtenstein has a rolling 5 year agreement on reduced immigration, This will be seen as a ‘win’ and will be worth the EEA ‘fee’ paid to the EU.

        1. m-ga

          That’s just the kind of thing the UK Government could present to the Brexit voters as a victory.

          However, Liechtenstein has a population of around 35,000. If Liechtenstein were able to lean on the EU for concessions, it might well be due to their tiny size. Being a tax haven could also help. The UK, on the other hand, is attached to a tax haven (the City of London), but seems far too unwieldy for a major concession on immigration to go unnoticed by occupants of the other 27 EU members states.

  14. PhilK

    Most negative reactions to the Brexit are overwrought.

    Agreed. And these overwrought negative reactions are what the owners of the media, in the UK, Europe and the US, want to present and to encourage. There are thoughtful and knowledgeable people who have been working for Brexit for years (eg., the EUReferendum blog), but these views are not found in the media because the owners of the media do not want these views propagated. Sleazy politicians are presented as the leaders of the Brexit movement because the owners of the media want to portray the Brexit movement as nothing more than the tool of sleazy politicians.

    1. Yves Smith Post author

      Huh? Did you miss that Boris Johnson is probably going to be the next PM, hence in charge of the Brexit negotiations, and is the epitome of a sleazy politician? And that he and Nigel Farage, no paragon of virtue either, have been the leaders of the Bexit push?

      Whatever you are smoking, it is very strong.

      1. Pavel

        Yves, I agree re “the epitome of a sleazy politician” (though Boris manages to do it in his own idiosyncratic way, with clown hairstyle and quoting Latin and Greek proverbs etc).

        However, I now think the Brexit vote is creating such blowback and the Leave team (esp BoJo and Gove) are already having to retreat on their promises (most notably “£350 million per week for the NHS”) that Boris is too toxic a politician to lead the Tories. I think an “Anyone But Boris” campaign has already begun.

        I’ve read a million posts and comments today on Brexit, so I can’t remember if it was here on NC or elsewhere, but someone said the Tory leadership is now a “poisoned chalice” and wiser heads wouldn’t want it right now. But nobody every confused Boris Johnson with a “wiser head” I suppose!

    2. William C

      A look at the flexcit plan advocated by he suggests to me that this too is the work of fantasists.

      1. c

        Please explain because that’s not the way it looked to me
        enquiring minds maybe like to check it out for themselves (PDF)

        While they’re sweeping up all those chicken heads, we have Flexcit for you: it’s all worked out here. Just follow the instructions and you won’t go far wrong. Written by hundreds, read by thousands (currently over 80,000), this is the definitive exit plan, as noted by The Register.

      2. BruceK

        I agree. It’s full of wind.

        Paragraph 2:

        The history of Britain for a thousand years has been as a merchant and maritime
        power playing its full role in European and world affairs while living under its
        own laws.

        Like under William the Conqueror or Henry II.

        1. vlade

          muahahaha.. Clearly the guys on that blog read a different history of UK (probably a UKIP version) than anyone else.

          UK has a history of boom-to-bust, of being a third-rate power suddenly moved to a first rate one, and then back.

          1000 years of merchant and maritime power? Yeah, with long periods of pretty much no navy, dutch and hanseatic traders controlling the wool trade, Dutch VOC whipping East India Company wherever it met it etc. etc.

          Fantasy land in history, thus I expect a fantasy land in present and future.

  15. RMO

    “Britain’s vote to leave the EU is prompting a sizeable minority of employers in the UK to freeze hiring and cut their investment plans, according to a survey of more than 1,000 business leaders.”

    Yeah, I hear that right up to the vote they were hiring so many people they were considering press gangs and throwing money by the truckload into their facilities vainly attempting to keep up with demand. That’s why Great Britain has a negative unemployment rate and things are being built so fast that if you nod off for a second there’s a good chance you’ll find yourself entombed in the walls of yet another new factory.

  16. Fred

    “And now the European leaders and Eurocrats are justifiably furious for reckless British pols throwing a wrecking ball into the very heart of their fragile system merely to gain some political advantage, with no serious plan on their side.”
    Last time I looked this was a national referendumm not a politician’s referendum. How dare the Eurocrats deny democracy in the United Kingdom? Well of course they deny it because they don’t believe in it. Which is precisely why the system is “fragile”. Maybe they should call up the EU army and keep Britain IN by force of arms. We set the precedent for that over on this side of the pond.
    ” an agreement on the rights of UK citizens already resident in other member states and of EU citizens resident in the UK” The EU does not grant citizenship the member states do. The EU is not the United States of Europe.

    1. Mark John

      I agree. The big picture is that the EU is an undemocratic institution that is causing instability and widening inequality, which, of course hits those on the (growing) lower end of the divide hardest. The Leave vote managed a convincing 52% of the vote, indicating deep dissatisfaction with the status quo.
      Descending into all of the minutia of British politics obscures the main lesson of the Brexit vote. I would urge focus on the larger goals of social and economic justice.

      1. Fred


        Yes, and London is outraged. London of course being England (like NYC and D.C. are America). If those so outraged are so enamored of, and so valuable to, the EU then they should move across the channel and become citizens of which ever EU nation they prefer.

    2. Yves Smith Post author

      Please see PlutoniumKun’s comment above about how the UK has behaved badly for years as an EU member.

      It’s one thing for an “inside” power like France to have a revolt against the EU, or more accurately, the Eurozone, which is imposing austerity on member states. It’s another for the British to rebel, when they actually had a very favorable deal.

      As for “EU citizens” this legal site indicates they do have rights they can assert in court. For instance:

      Individual travellers could also sue Member States in national courts for imposing border controls, indirectly challenging the legality of the Recommendation; national courts could then send the issue to the Court of Justice.

    3. Waldenpond

      Those defining themselves as left of center have spent several years criticizing liberals and using neo-liberal as an insult are now complaining about voting….
      Oh, the horror of direct democracy and the affection for representative democracy when barriers to voting and complex layers within voting are just more neo-liberalism.

  17. Pavel

    Nice, thoughtful, poignant piece in the Guardian by a Mike Carter, who walked from Liverpool to London. The entire piece is well worth a read, and is getting lots of positive comments, many people noting how the MSM including the Guardian haven’t reported the public mood properly:

    I walked on. Birmingham glittered, a skyline of cranes and high streets of fashionable shops, a confidence, a bounce. But out of the city centre the familiar motifs returned: boarded up pubs and shuttered shops, leave posters in windows, and a proliferation of hand car washes. It began to make sense why these have blossomed in modern Britain: why invest in expensive automated machinery when labour can be sourced so cheaply.

    Nuneaton, the home town of George Eliot and Ken Loach, had more charity shops in its high street than anywhere I’ve ever seen. And some of those charity shops had closed down. What does it say about a town when even the charity shops are struggling?

    ‘I started asking people if they wouldn’t mind telling me how they’d be voting. There was little reticence. “Out,” they would say. “Why?” I’d ask. “Immigration,” would come the response.’

    In Coventry, whose car industry is now mostly gone, there seemed to be a construction frenzy. These were mostly new buildings for the colleges and universities, competing not only for a bigger share of domestic students but also for the lucrative foreign student market. A friend doing an MA in the city told me that 90% of the students on his course were from overseas, and the majority of them Chinese.

    As I moved south, I thought that the economic picture might change, but in Rugby, Bedford, Luton the high streets all had the by now familiar composition: betting shops, fast-food outlets, tattoo parlours. And the answer to the question “in” or “out” never changed either. “We’ve been left behind,” a white, middle-aged man told me at a bus stop as I rested in Hemel Hempstead. “Those politicians don’t care about us. Immigration has ruined this country.”

    I walked into central London, through Chiswick, past people sitting at pavement cafes, shops selling expensive furniture, estate agents offering two-bedroom flats for a million pounds. Through Hyde Park and on to Wellington Arch, with all the pomp and puffery of empire, and then Buckingham Palace, as tourists lapped up the pageantry. I was in, literally and spiritually, another country.

    –I walked from Liverpool to London. Brexit was no surprise

      1. Pavel

        My pleasure, flora — I think it was one of the more thoughtful Brexit commentaries I’ve read lately.

        My own dealings in the UK are almost exclusively in London, but on the rare occasion I visit another city it does indeed seem like a different country. Rather like the “flyover zone” in the US. Of course the media elite live in NYC and Washington and holiday in the Hamptons or Martha’s Vineyard, so how much exposure do they have to the people outside their little bubbles?

  18. m-ga

    This just popped up on the FT live blog, and is important:

    It argues that Article 50 can only be passed with UK parliamentary approval. The UK prime minister cannot trigger Article 50 without parliamentary approval.

    This is required not only by UK law but also (crucially!) by European law.

    If the argument is correct, there are major legal hurdles to even initiating Article 50.

    The article suggests two reasons why parliament might decline to grant permission to initiate Article 50, and thereby act against the instruction of the electorate in the referendum vote:

    1. False Prospectus. The Leave campaign was both contradictory and deliberately misleading in the claims it made to voters of what would happen following Brexit.

    2. National Interest. The suggestion is that a strategy for Brexit would have to be laid out and agreed, before parliament agree to initiate Article 50.

    The article notes that the UK is a representative, rather than a direct, democracy. As such MPs could be justified in overturning the referendum result on the basis of either (1) or (2) – doing so would not be undemocratic according to the UK’s unwritten constitution.

    1. sd

      If Parliament ignores the Brexit vote, what would be the likely response from the electorate?

      1. m-ga

        Well, that’s the rub! There needs to be a cover story.

        Kicking the issue into the long grass would be the usual UK government style. I’ve got no doubt whatsoever that the Conservatives are capable of managing this move domestically.

        The difficulty for them then is to signal internationally that the UK remains in the EU, and is open for business as normal. And also reassure the USA that the Brits will continue to show up to EU meetings and throw a spanner in the works.

        I don’t see how both messages can be sent simultaneously. I’d guess that all the current Conservative signalling is aimed at buying time, so they can brainstorm what to do next.

        1. m-ga

          To clarify, the simultaneous messages would be:

          To the electorate:
          “Brexit is really complicated. We need to spend ages on the negotiations. It is definitely happening and we will get really good things for you”.

          To governments and investors:
          “Don’t worry about that Brexit thing. Not happening. We’ll whip the plebs a little harder next time.”

    2. Yves Smith Post author

      Opinion is divided on this issue. From the Constitution Unit which says of itself, “The Constitution Unit in the Department of Political Science at University College London is the UK’s leading research body on constitutional change”:

      9. Parliament has no formal say over whether or when Article 50 is invoked, as this lies within the royal prerogative powers that are exercised by government. Government’s powers in matters of foreign policy are very extensive, and parliament has veto rights only in respect of treaties. If parliament were to pass a motion calling on the Prime Minister not to invoke Article 50, we might nevertheless expect him (or perhaps, by then, her) to respect that. But the Prime Minister could claim the authority of the popular vote to justify ignoring such pressure.

      10. Parliament will, however, be able to vote on the withdrawal deal, as that will be a treaty. Indeed, as we examined in our briefing paper on Brexit’s effects on Westminster and Whitehall, parliament will expect to be updated regularly on the negotiations and to have its views heard, perhaps through votes on specific issues. The large majority of MPs currently favour staying in the EU. If they want a post-Brexit deal involving substantial ongoing integration with the EU – perhaps akin to Norway’s arrangements – they could potentially have the power to reject any deal that does not provide that. Whether they will do so will depend in part on the political situation and the state of public opinion at the time, both of which are highly unpredictable. It will depend also on the withdrawal timetable: if the two-year window is near to closing, rejecting the deal on the table could be very risky.

      Cameron has made no mention of a vote, so I don’t think the Government intends to put the question. Labor might try to if they succeed in defenestrating Corbyn.

      1. m-ga

        It seems to hinge on the question of royal prerogative. And, whether statute beats prerogative.

        From the UK Constitutional Law Association link:

        I’ve emphasised what I think is the key argument:

        In his resignation speech, David Cameron said:

        “A negotiation with the European Union will need to begin under a new Prime Minister, and I think it is right that this new Prime Minister takes the decision about when to trigger Article 50 and start the formal and legal process of leaving the EU.”

        The Prime Minister did not specify the legal authority under which he believed he or his successors might invoke Article 50, but the typical answer will be obvious to constitutional lawyers: it is the royal prerogative, a collection of executive powers held by the Crown since medieval times, that exist unsupported by statute. The Prerogative is widely used in foreign affairs, which Parliament has largely left in the hands of the Government. The treaty-making prerogative of the Crown is one such area.

        If the Prime Minister is correct, and the Prerogative is the basis for the declaration, he enjoys complete discretion about when to issue the declaration: the trigger could be pulled in October, next year, or in ten years’ time.

        The relationship between statute and the prerogative has long been contentious, and up until quite recently – the 1980s – it was arguable that the exercise of prerogative powers (though not their existence) was beyond the capacity of the court to review; the King could do no wrong. Whilst the courts might not have been able to review its exercise, they certainly could and did rule on whether the prerogative contended for by the Crown existed in the first place. One of the earliest limits on the prerogative was that it could not be used to undermine statutes; where the two are in tension, statute beats prerogative. In one of the seminal cases of the common law, The Case of Proclamations, (1610) 12 Co. Rep. 74 Sir Edward Coke declared:

        “..the King by his proclamation… cannot change any part of the common law, or statute law, or the customs of the realm…”

        A more recent statement of this principle can be found in the Fire Brigades Union Case [1995] 2 AC 513 in 1995, where Lord Browne-Wilkinson stated that:

        “…it would be most surprising if, at the present day, prerogative powers could be validly exercised by the executive so as to frustrate the will of Parliament as expressed in a statute and, to an extent, to pre-empt the decision of Parliament whether or not to continue with the statutory scheme…”

        This case law forms a core part of the separation of powers in the British Constitution: the Government cannot take away rights given by Parliament and it cannot undermine a statute. For the courts to hold otherwise would place the rights of British citizens at the mercy of the Government and would be contrary to Parliamentary supremacy.

        Admittedly, and with most aspects of our constitutional law, the precise ambit of the principle invoked in the Fire Brigades Union case, and in associated case law, is open to different interpretations. A narrow one would limit its application to situations where the statute proscribes in detail how Government must act, but where the Government circumvents that guidance by recourse to the prerogative. The wider principle is that it is not open to Government to turn a statute into what is in substance a dead letter by exercise of the prerogative powers; and that it is not open to the Government to act in a way which cuts across the object and purpose of an existing statute. In our view the wider principle correctly states the law and is particularly apt here, as we are concerned with a constitutional statute upon which an extensive system of rights is founded.

        This argument does not entail that the Government can never withdraw from an incorporated treaty. Everything depends on the terms, object and purpose of the statute in question. The Human Rights Act 1998, for instance, incorporates the European Convention on Human Rights in a very different way.

        If Cameron received advice that parliamentary approval isn’t necessary, then it’s likely Cameron’s advisors are correct! However, if Cameron’s advisors told him that the reading is ambiguous, then Cameron may have preferred to suggest an interpretation that gives more power to the Prime Minister (i.e. to himself).

        Alternatively, Cameron may have been careful to avoid any suggestion that the Brexit referendum vote could be overturned by parliament. It would be incendiary for the Brexit voters to think such a thing possible just now. Cameron has been consistently careful to say that the wishes of voters should be “respected” – where “respected” does not necessarily have the same meaning as “followed”.

    3. Pelham

      But if Parliament ignores the express will of the people, by definition there is no longer any representation and therefore Parliament renders itself illegitimate.

        1. hunkerdown

          As a right-wing authoritarian, Burke would say that, wouldn’t he. Just because dead RWNJs say it doesn’t make it fact (cf. “reality-creation”).

          Can we come right out and say representative democracy is neither?

      1. Pavel

        After all the build-up to the EU referendum and how “the people must decide”, if they try to stitch up a different outcome via a vote in Parliament or some other means (a fudge with the EU negotiators) there will be riots in the streets in the UK.

        The Tory party would break up and people would flock to UKIP.

        1. m-ga

          The government could fall in the situation you describe. This might be in the back of the minds of the Blairite Labour MPs attempting a coup right now. Labour would be much better placed to profit than UKIP would if the Conservatives totally screw up.

          However, the Conservatives are unlikely make such an obvious mistake. What’s I think they’d prefer is to reshuffle the cards, and declare Brexit achieved. Trouble is, it’s not at all clear how that could work. But anything along the lines of “associate EU member” is saleable.

  19. hemeantwell

    Over at Verso Press Richard Seymour has a useful left analysis of the attempted coup against Corbyn:

    In reality, Corbyn not only has the support of the overwhelming majority of members, but twelve trade unions have signed a statement in his defence. Only a faction of the parliamentary party, which has never accepted his leadership, wants this coup. There are therefore only two ways in which a leadership election would not be won by Corbyn in these circumstances. Either, the plotters manage to somehow circumvent a new election, or, Labour MPs ensure that Corbyn is not on the ballot — after Collins Review reforms, he needs 15% of Labour MPs to nominate him. Both outcomes would be such a gross affront to the party’s democracy that it is difficult to see how they could carry it off. This is clearly a scorched earth strategy, intended to destroy Labour’s electoral chances in the likely event that there is a snap election, by sinking it into a deadly internal battle..

    To the extent this is true, it attests to how utterly careerist the plotters are. Precisely at a time when the party could be organizing to fight for economic positions that might bring in Leave voters, they are willing to make Labor appear fragmented and unreliable and allow the Conservatives time to pull themselves out of the crapper. As Seymour points out, they are the very sort of people who will, based on past voter experience, be incapable of drawing new support. Apres nous, le deluge.

  20. Pookah Harvey

    I think Brett Arends at Marketwatch called it:

    The British and the Europeans are going to get together and do deals. Britain will almost certainly end up in a new, face-saving, “we’re not really in the European Union even though it looks like it” version of the EU. Everyone has an incentive to do a deal. No one has an incentive not to. And those Europeans who helped cause this by talking smack, like European Commission President Jean Claude Juncker, have now been sent to bed without dessert by their bosses

    1. Yves Smith Post author

      Americans have a tendency to assume economic rationality of the actors when that may not be the driver. If Europeans were economically rational, Europe would not be in a near depression as a result of their neoliberal austerity fixation. In additional recall that every US financial outlet assumed that Greece and the Troika would come to an understanding. I also heard this from Americans who prided themselves on well tuned in to what was going on in official circles.

      The political dynamic is that that the foreign ministers of the biggest members of the EU are furious with the UK. Merkel is the only person so far trying to act like an adult in the room and that is still in opposition to her own foreign minister AND much if not most of the Bundestag (I have not had time to get a better fix on the degree of domestic opposition). That German choler is despite the fact that Germany’s car industry has a ton to lose with a punitive Brexit. And also remember that the Article 50 procedures give the Europeans the upper hand, and on top of that, the UK has so hollowed out its civil service that it will have trouble manning the extraordinarily complex negotiations which puts 40 years of EU and domestic legislation up for review. Those manpower limits will also translate into an advantage for Europe.

      The key players believe that a punitive Brexit is necessary to save the EU and Eurozone, to tamp down the separatists. Until there are signs that that mood has shifted, Arends looks terribly optimistic.

      And the longer it takes to invoke Article 50, the madder the European side will become. If the Conservatives hold out for 3+ months as they (so far) have repeatedly said they will (Cameron said he is staying for 90 days and his successor will pull the trigger), they will be absolutely furious because that will keep Brexit in the headlines, which will only help the hated populists of various sorts, as well as intensifying the damage caused by the loathed “uncertainty”.

      1. Pookah Harvey

        “The key players believe that a punitive Brexit is necessary to save the EU and Eurozone, to tamp down the separatists.” The question is punitive to whom; the British financial elites that are personal friends with the European key players or the poor working stiffs that voted to leave.

        Austerity, as nutty as it is, seems rational to the European neolibs. But amputating the financial hub from the EU may actually strike them as being a little bit crazy.

        I’m sure Schauble will want to set an example of the British workers. Can the Tories cut a deal that saves the elites?

        1. Yves Smith Post author

          Huh? The Europeans view a Brexit as a opportunity to have Continental big players (SocGen, BNP, Deutsche, ABN Amro, Paribas) eat the City’s lunch. They have no reason to coddle the UK’s financiers. This is part of the reason for the bloodlust. The unarticulated view seems to be that what the EU will lose in trade in goods (which may be limited ex discretionary purchases like cars and things with substitutes like wine) will be offset by what they can extract in the trade in services side. I doubt they fantasize that there is any way this can be a net neutral equation, but most European leaders seem to see a certain level of economic cost as warranted to prevent more fracturing of the EU.

          So on the Continent, you have the pols predisposed to want to make a Brexit harsh to weaken the separatist movements. And in terms of the economic interests, the real economy players will want the UK to be treated nicely while the financiers want the reverse.

          1. Pookah Harvey

            Stupid me. Where could I have gotten the idea that sociopaths would watch each others backs. Thanks for setting me straight.

    2. DarkMatters

      …the EU PTB’s excepted. As others have said, the EU’s fear of contagion may override all else, and could sideline considerations of the mutual self interest of states. It remains to be seen whether the EU has amassed enough power to impose the control needed for its own self-preservation. Given Greece’s treatment, anything is possible.

  21. financial matters

    “”The freedom that neo-liberalism espouses is a “freedom to suppress wages … the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments … freedom from the distribution of wealth that lifts people out of poverty.”

    This abandonment of concern for the interests of the majority is behind the Brexit vote.””


    I think the Brexit vote can be seen as similar to a vote for a Trump presidency. It is a protest vote against poor worker conditions and rising inequality. As Bill Mitchell puts it in the above article ‘the train is moving faster but more people are being left at the station’.

  22. TMoney

    The British working class and their allies the over 50’s have adopted scorched earth in the fight against the globalists. They will retreat to their market towns and industrialized cities, knowing that (to steal a phrase) winter is coming, but the globalists and their proxy shock troop immigrants are going to get hurt far more. Too bad the Brits can’t turn co-opt the immigrants, although if the migration is reversed, history shows returning armies can have profoundly unexpected consequences in their own societies.
    It looks like Boris and some of the “leaders” of leave tried to get in front of a mob and call it a parade.

  23. Pelham

    I can understand why Johnson might be widely hated, especially among the upper crust. But surely he’s not the most hated man in the world.

    There are millions on the European continent who would similarly like to leave the EU and probably wish they had someone like Johnson to help lead them. If Johnson were as widely reviled as the writer says, those millions in the Netherlands, France, Sweden and a few other countries wouldn’t be so eager to put the EU in their rearview mirror and there wouldn’t be any danger of the EU breaking up as a result of the Brexit vote, as everyone seems to fear now.

    1. Yves Smith Post author

      I didn’t say in the world. I said in the Western world.

      The fact that he might have some fans on the Continent does not change the fact that he is widely hated in his own country, by people in finance all over the world, and by many members of the elite in Europe (politicians and businessmen).

        1. William C

          Max Hastings (Johnson’s former employer) writing in 2012:

          “If the day ever comes that Boris Johnson becomes tenant of Downing Street, I shall be among those packing my bags for a new life in Buenos Aires or suchlike, because it means that Britain has abandoned its last pretensions to be a serious country.

          I have known the mayor more than 20 years. He worked for me as EU correspondent of the Daily Telegraph and then as a columnist when I was the paper’s editor, and I have seen plenty of him since. He is a magnificent journalist and showman. He proved himself the perfect maitre d’ for the London Olympics. But few maitre d’s are fit to cook the dinner.

          Most politicians are ambitious and ruthless, but Boris is a gold medal egomaniac. I would not trust him with my wife nor – from painful experience – my wallet. It is unnecessary to take any moral view about his almost crazed infidelities, but it is hard to believe that any man so conspicuously incapable of controlling his own libido is fit to be trusted with controlling the country.

          His chaotic public persona is not an act – he is, indeed, manically disorganised about everything except his own image management. He is also a far more ruthless, and frankly nastier, figure than the public appreciates.

          When one of his many sexual affairs was exposed and much trumpeted in the headlines, he telephoned a friend of mine who was then running one of Britain’s largest media organisations. “It’s utterly disgraceful what your reporters are doing on-screen about my private life,” spluttered Boris. “It’s time you realised that I know all about your private life. If your organisation goes on reporting my affairs like this, you’ll be reading all about yours in the Spectator [the magazine he then edited].”

          My friend responded: “Stop a minute, Boris, and think about what you just said. There is a word for it, and it is not a pretty one – ‘blackmail’.” Johnson waffled away, muttering that he had never really meant it. But he is much given to making threats, bearing grudges and behaving with malice aforethought.

          I would not take Boris’s word about whether it is Monday or Tuesday. ”

          I believe Johnson has twice been sacked for lying.

          And this is the man Britain may find as its next Prime Minister at a time of national crisis

  24. JimTan

    For anyone who’s interested there is some detail on the methodology behind reports that UK GDP per household will be £4,300 lower post Brexit:

    The short version is this number is estimated from a “Gravity model of trade” which assumes Trade Quantities are proportional to a multiplier for Trade Partners participating in a Common Market (Eurozone), and inversely proportional to he distance between the countries:

    This neglects many other relevant factors including exchange rates between trading partners, product differentiation (trades is not exclusively for commodities), advertising, market share, and estimates of tariff changes.

    The -£4,300 number commonly repeated does not include many things people assume that it does.

    1. Yves Smith Post author

      We never cited that analysis or any claim re the economic impact of Brexit, save dissing Osborne’s estimate that home prices will fall 20%. Trying to put a precise number on the Brexit cost is a foolish exercise. Too many uncertainties, including how long it takes to negotiate a deal and what the deal consists of.

    1. MyLessThanPrimeBeef

      Do not declare Independence on July 4, unless a cost/benefit analysis is done.

      Wait for the accountants.

      Tell general Washington we will call him when we are ready here.

      Many families will want to move north to Canada and doubtlessly people will suffer. Thus, we have to be very cautious. Maybe status quo is not so bad.

  25. Bimbo

    Outside the UK, in Europe, everybody is happy with Brexit.

    The enemies of the EU are happy but soon they will cry.

    The Europhiles are happy to see the UK imploding and a real case of how the European Union has won this “war”.

    Outside of Europe, like in the USA, they are clueless about what is really going on in Europe.

    Best Regards from Europe

  26. Mark Ó Dochartaigh

    “Yes, the Government will be able to take back democratic control of immigration policy, with a balanced and humane points-based system to suit the needs of business and industry.”
    A telling comment on how the Toraigh and Republican parties view immigration; movement of people to depress wages.

    1. Paul Greenwood

      Australia has a points system which only covers 23% immigrants. The fact is Australia has a QUOTA

  27. Paul Greenwood

    The Constitution Unit is not exhaustive to my mind. It is clear that Art 50 is the mechanism under VCLT 1969 and I doubt the EU will cause much trouble – public noise aside – since the UK takes in $50 billion more than it exports. Its exports to the EU are overstated by 11% by the Antwerp-Rotterdam Effect. Exports to Netherlands are largely oil to Rotterdam – I take it Netherlands will still import oil ? To Belgium it is N Sea Gas through The Connector in Summer to Belgian storage tanks and secondly, gold.

    The imports to the UK are mainly cars. Bavaria depends on the UK market – BMW sells 14% production to UK, Audi also. Mercedes has a No2 market in UK. Siemens depends on UK. If Bavaria suffers as the Net Contributor to the German States it will seek to cut its transfers. Three German states fund the Republic – Bayern, BW, Hessen – without them most of East Germany goes bust including Berlin.

    The absolute twaddle posted online and spouted in media is worthless. Denmark and Netherlands cannot exist without the UK nor can Eire. The UK is a major food importer, Denmark controls the bacon market, Netherlands farmers own much of East Anglia farming. BreXit will tear the coastal nations away from the EU just as China will break up into coastal exports and hinterland.

    BreXit is the ONLY chance to rebalance the economy away from The City before the Endgame Crash takes everything down.

    1. Yves Smith Post author

      This isn’t anywhere as simple as you suggest. Economic rationality has not prevailed in how the Eurozone dealt with Greece and with getting to unified banking regulations (and many other issues…). They’ve got the worst of all possible worlds with the latter right now.

      First, you ignore the political imperative of not encouraging other separatist movements. Some of the key actors, such as France, see that as paramount. Second, the the UK is running a massive current account deficit, and that includes trade in services. The Europeans, particularly the French, would love to take a chunk out of the City.

      Third, you act as if the interests of the (comparatively few) countries who depend on exports will prevail. Article 50 requires various approvals. This won’t be a German-only deal.

      Fourth, I don’t know if you read our extensive coverage on Greece last year. We were virtually the only site to call it correctly, so we have a good track record on reading fraught multiparty political/economic negotiations. The relationship between the parties is already hostile. It’s going to get worse as the UK takes its time, which it will. If the UK does not find a way to back away from a Brexit (and a lot of people are arguing with me privately that they will…I think the situation is too fluid now to make firm calls, but I don’t see enough messaging to soften up the electorate for that to be a real plan yet) and is perceived to be slow in pulling Article 50 (which seems inevitable, but the EU is already getting very antsy), the negotiating atmosphere will be poisonous. The US does not have any stellar negotiators on its side. I don’t have a reading on the various EU foreign ministers, but their remarks so far don’t give one much confidence. Greece proves how the perception that one side is dealing in bad faith is fatal to negotiations.

Comments are closed.