Brexit: UK Still Refusing to Do Any Thinking Re Trade

We are in a relatively quiet period regarding Brexit, which in and of itself isn’t a good thing. If the UK had the remotest apprehension of the massive changes that it has set in motion, both government officials and business leaders would be moving heaven and earth to try to minimize disruption and move the country as rapidly as possible into operating like more of an autarky (not that the UK can become self-sufficient, but driving in that direction would be beneficial).

In the way of a mini-update, two stories highlight a manifestation of Brexit denialism. It has been both fascinating and distressing to watch an entire country sleepwalking towards a cliff, telling itself that things won’t change much, or if they do, they won’t be all that bad or will somehow be worth the sacrifice. In reality, the UK will undergo a significant, permanent decline in its standard of living. And it is not as if the UK is cohesive enough to take that at all well.

One of bizarre ongoing features is the Government’s refusal to engage the question of what sort of post-Brexit arrangement it wants with the EU. The EU has, Lord only knows how many times, told the UK what its boundary conditions are, most importantly that any arrangement has to fit within the parameters of existing deals. The UK’s negotiators doesn’t even have the self-awareness to see the fact that Barnier had to produce this chart in December to tell them that there was only one option, given UK red lines, was pathetic:

Yet we still have UK leaders prattling on about “special relationship,” “bespoke,” and “Canada plus plus plus” when nothing remotely like that will happen unless the UK retreats from some of its red lines.

The UK is even managing the difficult feat of regressing. Chancellor Philip Hammond, who had seemed more capable than the other ministers in May’s cabinet (admittedly a very low bar), has now joined the Brexit race to the bottom with his insistence that it is the EU that is holding things up by not saying what kind of post-Brexit arrangement it wants with the UK.

Richard North does his usual able job of eviscerating this nonsense. From his post:

It is given, one would have thought, that a massive trade bloc such as the European Union (or the EEA) would not be too concerned with deciding what sort of relationships it wants with its smaller trading partners.

In the general scheme of things, the more pressing need is for the smaller partner to define the sort of relationship it is seeking, and then to prevail on the larger bloc to give it what it needs…

This, though, it not the current view being taken by Chancellor Philip Hammond. He now seems to be of a mind that it is up to the EU to produce its own ideas of how Brexit should look, instead of “obsessing” over how to “punish” British voters for their temerity in voting (by a majority) to leave the EU…

Then, even if there was some merit in Mr Hammond’s view, it is more or less a matter of certainty that the EU (whether the Council or Mr Barnier’s negotiation team) is not going to take much notice of it. The intervention of the Chancellor thus does nothing more than demonstrate yet again that our politicians are completely out of touch with reality….

This is something that our political masters seem to have extraordinary difficulty understanding, which really confirms that they have a limited grasp of the realities of the Single Market and how the EU’s trading systems actually work.

Once again, therefore, we have to confront our own reality – that those in charge of our Brexit negotiations simply don’t have sufficient knowledge and understanding to be able them to function effectively – and nor is the opposition any better. As a result, these people are expecting outcomes which simply can’t be realised.

What makes this surreal is that, as we move towards the next round of the negotiations, issues raised previously and as yet unresolved will be re-presented. If not on this round, the scope for ambiguity will be reduced and eventually we will get to the point where reality and expectations collide. From that wreckage, one presumes, an agreement of sorts will have to emerge.

If that weren’t bad enough, Hammond and David Davis were trying a “charm offensive” to persuade the EU to allow them to have something other than the Canada-type pact that their other positions have already dictated. As North foretold, “issues raised previously and as yet unresolved will be re-presented.” This is the already-rejected “special close bespoke unique” deal. From the Financial Times:

Put simply, Britain is advancing the concept of what is called “managed” or “gradual” divergence in the UK-EU trade relationship. The idea, raised by Theresa May in her Florence speech in September and reaffirmed by her cabinet last month, is that the UK should reject the binary choice of a Canada-style or Norway-style deal.

Instead, as the Telegraph put it, the British think both sides should recognise the complete UK-EU alignment at the outset, and then work backwards, “managing divergence from there as the future UK-EU relationship develops”.

This is ridiculous. “What about ‘third country’ don’t you understand?”

The UK is deeply in denial that post Brexit and any stand-still transition period, it will have a hard border with the EU. The UK is still acting as if it is so important that the EU will redo its trading and regulatory regime to make life easier for the UK, which let us not forget is the party that initiated Brexit.

The BBC also takes up the Government position that it is the EU that is being unreasonable, when it was the UK that triggered Brexit and the EU has told the options that the UK has but the UK bizarrely thinks it has the right to something better. This is becoming frighteningly reminiscent of dealing with a three year old who keeps saying he wants ice cream after having been told “no” firmly. From the BBC:

If Britain is left with binary option of a “take it or leave it” Canada-style free trade deal (which excludes for example financial services, vital for the UK economy) or membership of the European Economic Area (which allows for free movement of people), then both are likely to be rejected, officials suggest.

Well, reject away and see where that gets you. Services deals take longer to negotiate than trade pacts, so putting trade and services negotiations on parallel tracks is more likely to result in the trade deal being consummated in a not-interminable amount of time than doing them tout ensemble.

We will turn the mike over to FT reader Italianstallion:

What the UK is asking is completely mad. In fact one could say that the UK would like a bit more cake. Say more control over FOM in a norway style deal, and perhaps more influence over rules. But this is known cake.

But what the UK believes is that a club of 27 nations, and 500 odd million people should allow it to gradually change rules in the UK’s favour, and to invest time and money in monitoring this and only to change access arrangements if the rules cannot be justified as being equivalent.

Also the UK is saying that it will seek to change the rules, and that existing bodies [ECJ] cannot rule on things in the UK. So disruptive sanctions is the only alternative.

In simple language: “I want to change my rules, and will not accept some rules now, but until I change other rules, I would like you to not change anything. And by the way when I change the rules I want you to prove that the rules have changed enough. That way until I get the benefit of changing the rules I don’t lose anything”

Dream on idiots. No sane individual, company, country or group of countries would deal on this basis.

Yet a front page Financial Times story bizarrely contradicts this reporting: Brussels raises prospect of longer Brexit transition. However, if you read the article, as well as sanity check it, this appears to be the sort of piece the pink paper runs once in a while, where it gives false Brexit hope that are at best based on the views of EU members like Poland and Hungary who are willing to align with the UK to poke a stick in the eye of the other EU members, and at most some other small states that export a lot to the UK, like Denmark. After five paragraphs of cheery talk, we get to this:

However, the suggestion was strongly opposed by France and Germany and is unlikely to be included in revisions of the draft negotiating directives.

The article goes into the usual Anglo line of argument, that of course the pragmatic thing will be done and there will be some sort of extension beyond 2020. There are several problems with this line of thinking:

1. If that were to happen, it would be a continuation of the standstill which is the only realistic way a “transition phase” can work. It would be too fraught to negotiate anything other than that, with at most some not very controversial variances. That means among other things, the UK keeps paying EU dues and being subject to the ECJ while having no influence.

2. There is a limit to how long that sort of thing can go on. It’s over my pay grade, but WTO rules allow only for time delimited and not very long favorable treatment, and a transition deal would fall in that category. My memory, and please correct me if this is wrong, but is that three years is the maximum that would be kosher. Other countries outside the EU could file suit with the WTO if this went on too long.

3. It took seven years for the EU to negotiate an agreement with Canada. There’s every reason to think a trade agreement with the UK will take at least as long, particularly since the UK is in the deviant position of being a “diverging” partner, one that wants to deviate from rather than align more closely with the other country’s rules. It seems inconceivable for the UK to stay in the half-pregnant transition state that long.

What I find particularly troubling about articles like this is that they serve to feed the UK’s Brexit delusion.

And a final “gang that can’t shoot straight” sighting. Some City firms were apparently willing to make payments to the EU in return for passporting rights. Hammond may have been alluding to something other than that, but whatever it was, that’s been kiboshed. From the Telegraph:

Theresa May has insisted that Britain will not make substantial payments to the EU for access to market after Brexit as she appeared to contradict Philip Hammond.

Mr Hammond was asked during a trip to Berlin whether the UK would be prepared to pay for access to the EU markets for City firms.

He replied: “We will talk about all of these things.”

However Downing Street said yesterday that the Prime Minister is clear that “we will not be paying for access” and insisted that the Chancellor “thought he was responding to a general point”.

The UK keeps circling the same issues, expecting different results. As Einstein famously said, that is insanity.

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  1. windsock

    I am no expert. I am not connected to any political powers. I am just “a mope” who voted to Remain, but accept that my compatriots voted in the majority to Leave.

    I have come to the conclusion that all this negotiating is illusion. The destination is “No Deal” by choice. We crash out and become the world’s whore. laundering its money, allowing fracking wherever and selling off whatever we have left. The desires of Fox and Davis are to make us a deregulated haven, and hopefully if we go completely “tits up”, we’ll be rescued like a damsel in distress by USA, for whom we will become a regional outpost.

    The government really does NOT CARE about the welfare of the people it governs, as can be evidenced by its shredding of the social (in)security safety net. “Universal Credit” lies by its very name, is difficult to claim and even its administrators don’t know the rules and get it wrong. People who are sick and disabled are being harassed by the Department for Work and Pensions with continuous assessments. The National Health Service is dying on its knees. Social housing has been sold off and not replaced. Housing Associations are being incentivised to move from community to business models. Thus a permanent drop in living standards for the majority of us is, for this government, “no biggie”.

    The farce upon which you comment is all part of the plan. I think you give our “negotiators” to much credit in even assuming they have a position they wish to achieve in good faith. Please refer to Lambert’s two rules of neo-liberalism.

    1. Pavel

      I have been following UK politics since the Thatcher years (that dates me!). May’s current government is the perfect storm in the form of the combination of all the Tories’ worst traits at their most extreme: corruption, greed, Little Englandism, bigotry, anti-EU, and most disastrously sheer incompetence.

      David Cameron promised the Brexit referendum as a sop to the Nigel Farage crowd, and Theresa May is completely bungling its execution. The two of them have pretty much destroyed the United Kingdom.

      (Having said all that, I am not a fan of the EU in its current form — it is anti-democratic and incompetent in its own ways.)

      I no longer live in the UK but spend a lot of time there on business. It bemuses me how many people are just sleepwalking through this ongoing Brexit disaster. My colleagues are all dismayed and angry to a degree, but don’t seem to appreciate how bad this is going to turn out. Apart from anything else, the “services” industry in London (hotels, pubs, restaurants, and most critically the NHS) are going to be decimated as the non-UK workers leave in disgust.

    2. Adrian Kent

      @Windsock. You, like much of the remain camp in the UK and most comment here, seem to think that we (I’m from Hove on the south coast) are destined for some kind of Tory-right wet-dream of a (reduced) state once we leave. It’s an easy assumption to make – they’re the ones who pressed for it and who seem to be happiest to be driving us towards the cliff edge, but I think the assumption is wrong.

      All the reliable polling evidence in the UK shows there is no taste for such a slash and burn mentality at the moment – and no evidence of any kind of swing towards it.

      Put another way, everyone seems to assume that what we’re going to face is a hefty dose of ‘disaster capitalism’, when a more likely outcome is ‘disaster socialism’ under a Corbyn government (‘no alternative’ PQE, renationalisation, increased investment).

      Certainly we’re in for a rough-ride in the short-term, but we’re in for one whatever happens come the next EU-wide crisis (have you read the Commission’s recent ‘Roadmap’ for further integration?) – we’ll be better off out when that comes, whatever the short-term costs.

      As an aside – has anyone here seen any forecasts made regarding a post-Brexit UK that even considers the possibility of another crash? After all the hand-wringing following the GFC and the status of the economics profession, it’s quite an over-sight.

    3. PlutoniumKun

      I don’t agree that the UK government actually wants to ‘crash out’ (although some hard line Brexiters clearly favour that). If they did, they would have allowed the Phase I negotiations to fall – they could easily have done that by making a ‘principled’ stand on one or other of the many issues they conceeded on. Given the time of year and the relative strength of the UK economy right now, it actually would have been a good time to do it if that was the plan.

      The most likely truth is that the government is both inept and hopelessly split between its pragmatic business wing (who no doubt know full well what a disaster a ‘no deal’ exit will be) and the ideologues. They are simply incapable of coming to any decision or conclusion, and there is not the slightest sign that they are near to facing up to their own ineptness, so this will continue to drag on, up until they finally go over the precipice.

      1. Jim Grace

        If the talks fail now we will have time to withdraw A50, but if we get to 30 March 2019 without agreement then the Disaster Capitalists behind Legatum will have won – chow time!

      2. jabawocky

        I am inclined to agree with this. And it is all too easy to ascribe evil motives to Tories, when I am coming more to the view that they just simply believe their own hype and have no real idea about the real consequences of their poilicies on the ground.

    4. JTFaraday

      “I have come to the conclusion that all this negotiating is illusion. The destination is “No Deal” by choice. We crash out and become the world’s whore”

      The neoliberal ideal. (Accidentally, on purpose).

  2. David

    I am increasingly convinced that the government does not want, and does not expect, a viable solution to the Brexit negotiations. To that extent, criticisms made by Richard North and others, whilst technically pertinent, risk missing the point.
    British politics is transitioning into Victim Mode: anyone familiar with Africa or the Middle East will know what I mean. In such a mode, there is no point in trying to solve problems, because they are insoluble, and anyway you have been betrayed and manipulated by foreign enemies who want to keep you weak. All that remains is to find people to blame abroad, and traitors to condemn at home. “Don’t blame us, it’s their fault, they betrayed us” is going to be the standard response after a hard Brexit, and the politicians who prosper will be those who have best mastered this discourse.
    Ironic, really, when I consider how often I have heard people tell me that this or that other country is itself a victim of British neo-imperialism.

    1. BillK

      Yup, I agree. The ‘negotiations’ just demonstrate what an unmanageable bureaucracy the EU has become. It is a dictatorship from Brussels with rules and restrictions for EU members that in effect say ‘Do what Brussels orders – you have no other option’. This is becoming an increasing irritation to some EU countries, especially those swamped by African immigrants who don’t live by European standards. In years to come there might be more EU leavers happy to trade with Britain as the EU experiment implodes.

      1. vlade

        *sigh* attitudes like the above are the reason why the UK is in the mess it is.

        “Do what Brussels orders – you have no other option”.

        Sorry, the UK had a LOT of options – even if it wanted to leave. It very dumbly to pick ANY of those, and is blidly flailing. North, quoted in the article is ardent Brexiter, and HE despairs with what is being done.

        EU has rules. It can very occasionally break or bend the rules, but in general it prefers to stick to them (even when they are very dumb), or just replace them with somewhat different rules. If the UK wants to deal with the EU, it has to follow the rules. Neither China nor US can dictate to the EU as the UK would like to, and both are much more important partnes to the EU than the UK is.

        Worse yet, the UK failed to negotiate in any sort of good faith so far. The worst of that was “well, it’s not really legally binding” notes from DD. This is idiotic beyond measure.

        IF you think that the US or China would be easier negotiationg partners, being “nicer” to the poor old UK, I’ve got a nice cosy bridge you might want to buy?

        1. BillK

          Agreed! That’s why Britain voted to leave the EU. For the EU to say that leaving the EU means that the UK still has to follow all the EU rules from Brussels is a nonsense.
          ‘Leave, but don’t really leave’ is not viable for the UK voters.
          That’s why I think the negotiations are bureaucratic delays until the inevitable break finally dawns on everyone. The repercussions of a hard Brexit will be just as bad for the EU as for the UK – the EU is just beginning to realize that.

          1. vlade

            The UK did not leave EU yet. The UK has to follow EUs procedures in doing so – anything else is badwill (which would not help the UK in negotiationg with anyone else. People don’t like to negotiate with badwill actors, unless they must).

            Moreover, the UK has to follow a protocol if it ever wants to negotiate anyting with the EU ever again – and I can assure you that there’s a plenty of people in the UK, not least businesses (and hence likely their employees and their families) who do. Part of the protocol is to say what the hell you want, at least in broad terms. And no, “I want a pony” doesn’t count – which is what the UK government is saying so far.

            “not viable for the UK voters”. Please stop talking for all the voters. Majority of the referendum voters voted leave. Not even half of registered voters. You are NOT speaking for the country – same way, as remainers would not speak for the country if they had won and were telling Farage to stop because “they won”.

            And that even entirely misses the point that while the voters voted “leave”, no-one has ever asked them “what do you mean”? Although you could make the argument that it could have been interpreted as “leave now and damn the torpedoes”.

            TBH, I’d actually like (sort of, except it would hurt millions of poor people in the UK) if the UK govt dropped off the cliff, as only then would the rabid Brexiters realise that the world has moved from the 19th (well, actually more like 18th) where they all seem to think they live.

          2. Jack

            BillK. From all the reading I have done here at NC and elsewhere, I do not see how a hard Brexit will be “just as bad for the EU as it would be for Britain”. Can you please expound on that statement?

            1. BillK

              You are asking for speculation about unknown unknowns! :)
              Until it happens, nobody knows what will happen or how people / nations will respond.

              There has not been much space given to the effect of Brexit on the EU. All the shock / horror coverage has been on how bad it will be for the UK.

              However some points to consider are:-
              The UK will take fewer refugees, therefore the EU will have to struggle to accept more refugees or institute border controls, leading to protests and the increase in support for nationalist political parties.
              After Brexit, Germany will become the dominant force in the EU. How the other members will react to this is unpredictable.
              Without the UK contribution, the EU budget will have to be drastically reviewed. i.e. Increased contributions from members and projects canceled. Again, the reaction is unpredictable.
              If UK / EU trade is blocked, then both the UK and the EU will see a drop in GDP.

              1. Marlin

                The UK has taken a miniscule number of refugees via official channels from other EU countries.

                Without international frameworks such as the EU, Germany would dominate Europe even more. The EU institutions are on purpose skewed in a way to give stronger representation to smaller countries. A single MEP in the EU parliament represents about 60k people in Malta or Luxemburg, but 800k people in Germany. Many decisions in the EU require a double majority of states and people, which means, while it is difficult to do something against Germany’s will, Germany can’t decide changes against the will of the majority of the smaller countries. If the EU falls apart, many things will essentially be decided based on size of the market, e.g. GDP, where Germany would dominate even more than with population size. Most likely the countries most woried about German dominance will realise this. See for example this article by German-hater Lord Haseltine for a realistic view.

                The net contribution of the UK relative to the EU budget is less than 10% and the total EU budget is 1.2% of GDP of the EU. Other countries will pay a few peanuts more, big deal.

                Yes, if trade between UK and the rest of the EU collapses, it there is damage to all parties. But to think, that the damage is even remotely the same for the EU, is ridiculous. Keep in mind, that the EU keeps all the trade treaties with 3rd countries, while the UK has to start to negotiate every deal anew.

                1. BillK

                  I only offered a few suggestions about some possible ways that the EU might be worse off after Brexit. There are probably many more disadvantages, some of which nobody will think of until they actually happen. :)
                  It would only take one major upheaval, like another nation leaving the EU or a major invasion of immigrants from North Africa for consequences to become unpredictable.

                  However, to consider your response –
                  The UK is much smaller in area than the large EU countries, so should not be expected to accept the same level of immigration. There are already a considerable number of EU citizens that have moved to the UK. Presumably they prefer to live in the UK. Why? Perhaps for economic reasons, better jobs, better prospects, better living conditions, etc. Some may even have moved to get away from EU areas struggling with the effects of mass North African immigration. Whatever the reason, they are creating a big fuss about maybe having to move back to the EU. And, of course, the UK wants good workers to stay in the UK.

                  Your Heseltine article agrees that Germany will dominate Europe even within the EU framework.

                  I think the EU budget changes after Brexit will be significant. There will be more complaints appearing as the budget is revised. The weaker EU countries already have financial problems.

                  The GDP reductions after Brexit will not be evenly spread across the EU. Some nations will suffer more than others and will grumble / cause problems accordingly.

                  And then there will be the unexpected problems as well. :)
                  Interesting times, indeed!

          3. PlutoniumKun

            For the EU to say that leaving the EU means that the UK still has to follow all the EU rules from Brussels is a nonsense.

            The EU has never stated that. In fact, from the beginning, the EU has stated that they respect the rights of the UK to go their own way (see, for example, Barniers most recent speech).

            What they have said is that they UK cannot expect the benefits of EU membership (such as passporting for City banks) if they are not willing to follow established and agreed rules and abide by ECJ rulings. Thats an entirely different thing. And its such an obvious reality that it hardly needs stating.

      2. Anonymous2

        ‘It is a dictatorship from Brussels with rules and restrictions for EU members that in effect say ‘Do what Brussels orders – you have no other option’’

        All primary EU legislation has to be agreed by the Council of Ministers and the European Parliament.

        The Council of Ministers has one representative each from each Member State. These are representatives of governments elected by their national electorates. Votes in the Council are weighted relative to population. Thus the UK with a population of 65 mn has a vote of approximately 12-13% as the total EU population is about 500mn. Proposals can be blocked by a blocking minority (35% of vote, four states). Even Germany can be outvoted if it is isolated.

        The Parliament is elected by the EU electorate, voting nationally.

        Secondary legislation can be made by the Commission (the ‘bureaucrats’) but this has to be mandated by the relevant primary legislation. In the UK secondary legislation also can be made without a vote in Parliament and is drafted by civil servants. I imagine many/most countries allow for such or similar arrangements.

        The system is not perfect (but whose system is?).

        It is perfectly reasonable to dislike some or even all the policies of the EU if you wish (I dislike some) but to describe it as a dictatorship is a serious distortion of the truth.

        Sadly, for those unfamiliar with the UK debate on such matters, assertions that the EU is an unelected dictatorship are often made and believed by the naïve.

  3. PlutoniumKun

    I’ve been trying for some time now to get my head around how the UK government has managed to more or less get away with its obvious incompetence for so long. I think the finger has to be pointed at the media – not just the obvious suspects, but the supposedly ‘reputable’ media from the FT to the Guardian to the BBC. Just as with elections, there seems a determination to see this in horse race terms, with each side jockying for position. In this context, every statement from Europe is parsed in a ridiculous manner, with all sorts of bizarre conclusions presented as ‘news’.

    A case in point is Barniers talk three days ago in Belgium (it was in the links 2 days ago). If you read the transcript it is a model of clarity and directness, remarkable really for a politician. It is entirely unambiguous and could be understood by any reasonably smart 12 year old. And yet, where it was reported in the UK, it was held as indicating some sort of ‘softening’ of the EU’s stance and could lead to a breakthrough. I’ve read the speech several times and I still can’t work out how a reporter could have read it and come to that conclusion. I can only assume that the UK press is convinced that the only type of reporting worth doing is one indicating some sort of movement.

    As Yves suggests, this is compounded by some reporters sounding out fringe countries in the EU who have some interest in a softer agreement (either generally pro-UK countries like Denmark and the Netherlands or s**t stirrers like the Polish and Hungarian government), and read far too much into what they are saying. The reality is that even if these countries are upset with a Franco-German hardline, there have no real incentive to do anything about it. The EU is, considering the difficulty in getting any sort of concensus on anything in such a diverse organisation, remarkably united over the broad principles. But you will never get the UK press reporting this.

    Another issue – one I’ve heard voiced by many people (not just in the UK) is that somehow there will be a midnight on the last day ‘deal’ which will be messy, but will allow everyone to get on with their lives. For reasons I don’t think I need to elaborate, anyone who understands how trade works will know that it just doesn’t work this way. Even if everyone wanted it, there is simply no legal or practical means by which a fudge could be worked, the mechanics of trade are far too complicated.

    So we have a toxic combination of a wholly incompetent government, a weakened and inept bureacratic system incapable of making up for its masters failings, and a press/public who are simply unaware of the realities of what is likely to happen. This is the Titanic sailing on oblivious to the iceberg ahead. This can’t end well.

    1. vlade

      I do wonder on what’s going on with FT. FT Alphaville, which is fairly irreverent in many ways, is very silent on Brexit (except for an occasional thing or two on the FTA Market Live, where you can see that thinking there is not dissimilar to NC one). I suspect that there is some “editorial policy” going on there..

      1. Anonymous2

        My suspicion is that the authorities have requested, instructed or hinted, as appropriate, that the UK media should avoid raising anxiety levels in the UK as this would be regarded as unhelpful at a time of national need.

        As to what is really going on, I agree that on the face of it the UK is still stumbling forwards, potentially towards and over the notorious cliff edge. Certainly the populace at large are almost completely in the dark as that is where the newspapers and the politicians like to keep them.

        Are matters as completely bleak as they appear? Well quite possibly yes. I have not totally ruled out the possibility, however, that there is a plan of sorts behind the apparent confusion. I think this would be 7Bino – Brexit in name only – where the hope is that, having ostensibly left the EU, the UK in practice remains largely inside for most practical purposes. This would undoubtedly require a lot of money being paid by the UK to the EU to make it worth their while, and a lot of subterfuge to disguise what is happening. Whether it would fly either domestically or with the EU27 is far from assured, so the UK is clearly living in interesting times, as the curse has it.

          1. Eustache De Saint Pierre

            A fine parcel of good sense there PK & yet again the Titanic sails again towards that much battered iceberg. I very much doubt whether the the majority of the toffs in first class will suffer very much from this particular voyage & some at least would probably delight in the fact that as usual third class will suffer most.

            The media will no doubt aid them in blaming Johnny foreigner for all of our coming ills & will cheerlead the inevitable prescription of austerity castor oil for anyone other than themselves. I am sure it would make some of them very happy if we were eventually forced back into a modern equivalent of those days, when it appeared that only Blake cared about those urchins who climbed up chimneys with the average life expectancy of eleven – often having suffered this fate due to being sold by their parents.

            We need some unity else the historical anomaly of some fair play for all will gradually become a thing of the past – pretty much everywhere.

            1. Peter Phillips

              All the groundwork for “blaming Johnny foreigner” is being carefully layed down by government ministers, the media and parties that will benefit (“the toffs). How else can you explain behaviour like Minister Hammond recently “demanding” that the EU must clearly outline the EU’s position on the future post-Brexit, when at the same the UK resolutely refuses to do so.

              I think Hammond’s position is a clear case of “look over there” from what I have observed the EU has been as clear as day about how things should proceed..and is literally begging the UK to come to the negotiating table with concrete proposals for implementing Brexit and carrying on afterwards.>

              1. Peter Phillips

                Edit.. “at the same time the UK resolutely refuses to do so”.

                And additionally, the EU negotiators are not really “begging” for the UK to come to the table with concrete proposals. The EU comes to the table with clear positions and seems to be met with a collective “myopia” on the other side of the table that stems from adopting an approach “that it will all be good on the day and well you know..they can’t do without us”. Pure folly!

    2. Carolyn_F

      So we have a toxic combination of a wholly incompetent government, a weakened and inept bureaucratic system incapable of making up for its masters failings, and a press/public who are simply unaware of the realities of what is likely to happen. This is the Titanic sailing on oblivious to the iceberg ahead. This can’t end well.

      Agreed. Reading Barnier’s speeches/comments, and blogs such as this and North’s, is the only way of getting a grip on the real issues. Believing output from UK media , ‘reputable’ or otherwise, gives one a completely false impression and yet (sigh) so many of my compatriots are ‘sucking that up’ as if true. There is a ‘disconnect’ of gigantic proportions – deliberate or sheer incompetence, I know not – whichever, it ain’t going to end well.

    3. fajensen

      I’ve been trying for some time now to get my head around how the UK government has managed to more or less get away with its obvious incompetence for so long.

      By Outsourcing! They first outsourced a good deal of the complicated (and of course boring) legislative workings to the EU, while drawing down the competences of the local bureaucracies to “save taxpayers money”. A lot of the experts also left for Brussels, they pay better and this is the place if one wants to make a mark in ones field (if ones field is some kind of public administration) .

      This “brain-drain” weakened the government institutions and allowed politicians and spin-doctors space to meddle more directly in the inner workings of government ministries, this of course yielding about the results one would expect from amateurs with the collective attention span of a fruit-fly.

      But, they managed again by outsourcing, this time outsourcing the blame: Like the five-ear-olds they are – they – with solid help from click-bait-driven media – went right ahead and blamed “Brussels” for whatever abysmal failure their incompetent policies produced. This went on for years and years.

      Now people, strangely enough listened to this disinformation campaign, building up more and more rage and desire for revenge amongst people and that got them Brexit. However, our dear politicians are still as incompetent, venal and deviant as they ever were, and they will still blame “Brussels” as much as ever.

      Because there is nothing else they can do.

      As an aside, the same “blame-the-EU”-game was running in Denmark until Brexit. Now, after Brexit, it is all gone very, very quiet with “Brussels” this and “Germany” that. We have positive stories about the EU, like the Data Protection Act being the only thing standing between The People and the Danish government’s dream of remaking STASI “for our own protection”.

  4. EoH

    UK Brexiteers are beginning to sound like a twelve year-old, who, having done in his parents, expects the court to be lenient because he’s an orphan, and to let him out on bail on his own recognizance.

    As long as HMG – and its loyal opposition – continue to be mired in denial, perhaps it should consider another referendum to reverse its disastrous, trillion pound mistake.

  5. NT

    Digby jones spoke on radio 4 and spoke alot of sense recently after his meeting with the EU Barnier.

    He says Basically a deal on goods is easy as we are aligned on EU regulation and we don’t want lots of checks on goods at the border with EU and the EU have a surplus of goods trade with UK so this will happen. we should organise this as soon as possible.

    A deal on services is hard and is very unlikely to happen so UK should just get prepared for this instead of moaning about the EU as barnier and uk politicians are speaking on totally different wavelengths.

    All this talk and debate etc is just hot air and a waste of time but i guess newspapers need to be sold so there will always be controversy. -)

    1. Strategist

      Digby Jones has always struck me as one of the stupidest people in British public life.

      A deal on goods is going to be easy because UK runs a massive deficit on goods with the EU27. A deal on services is going to be hard because UK runs a big surplus with the EU27 on services. Every big European city from Dublin to Frankfurt via Paris fancies a piece of the action of the City of London disbanding and moving its operations to the continent, and if the EU makes a deal on services, that won’t happen. But if UK says, no deal on services then no deal on goods, then the supermarket shelves are going to be empty 48 hours after Brexit.

      This is what happens when you’re sat at the poker table with rubbish cards.

  6. Frenchguy

    More of the same delusion at Bloomberg according to which a disunited EU will hand over to the Brits a “good deal” (whatever that means):

    The pound is supposedly rallying (not really, it’s mainly the dollar which is falling). But here are the important bits of the article:

    Spanish and Dutch finance ministers have agreed to push for a Brexit deal that keeps Britain as close to the European Union as possible, according to a person familiar with the situation.

    Spanish Economy Minister Luis de Guindos and his Dutch counterpart Wopke Hoekstra met earlier this week and discussed their common interests in Brexit, according to the person. Both have close trade and investment ties and are concerned about the impact of tariffs. They are also worried about losing U.K. contributions to the EU budget, the person said. […]

    A Spanish economy ministry official said the two finance chiefs underlined the importance of U.K. ties for both countries, and agreed to keep track of their common interests, while offering their full support to Barnier’s negotiating efforts.

  7. Anke

    Dear Yves,

    I am a European living in the UK for a few years now and was here when the referendum took place. As most expats, I was surprised by the emotional charge of the debate and lack of understanding of important things like international trade, finance and (most importantly for the people themselves) the structure of the UK economy, which since Thatcher has become extremely London- and finance-centric. As you have already mentioned in the article, the UK will never be self-sufficient simply because it is not endowed with the necessary natural resources. Furthermore, London is great *precisely* because of its European/international character.

    In the beginning I thought that the elites of this country simply wanted to change course due to poor finances, rebalance the structure of the economy (less reliance on unstable FDI and finance) and maybe focus more on the Commonwealth. Over the last few months, I have started thinking that it was a fortuitous decision based on emotions and very little planning. I am sure some people stand to win something out of this, but for the majority of the people, including the expats, I can only see chaos and misunderstanding (at best).

    As a disclaimer, I do believe that Britons are right to feel neglected by their government and to demand better living standards and prospects for future generations (as all other peoples). Unfortunately, they keep on blaming those generic “foreigners” for all their problems, when in fact they should look closer to home and understand that all current problems are consequences of bad decisions taken in the past by those who rule them. Unfortunately, this is an old strategy and I doubt history will change course now.

    On a micro-level and how this could affect the average little consumer: I was in a shop today on a prominent retail street in West London. While I was perusing the items on sale, I overheard a conversation between a shop assistant and a customer. The shop assistant said how due to Brexit, because all their items are produced and sent from the Continent, it is very likely that prices will increase by quite a bit next year. They might try to reduce some items, to balance things, but prospects are not awesome… Therefore, inflation for (more items than people imagine now) is to be expected very soon.


    1. EoH

      I suspect most Britons feel abandoned by their government because, in slavish adherence to neoliberal policies, their government has abandoned them.

      Lower taxes, deregulation, so-called privatization, subsidies for white elephant projects, such as the most expensive nuke plant in history. Meanwhile, schools are privatized and unregulated, libraries are closed, the NHS A&E waits are at historic highs, with 50,000 plus surgeries pushed back or cancelled so as to balance the budget and deal with problems owing to inadequate staffing. And that doesn’t touch the administrative dysfunction, with the Home Office perhaps most dysfunctional of all.

      The UK has resources to solve such problems, but refuses to do so. It refuses to modify its neoliberal priorities in order to govern in the interests of people whose bonuses are not a function of the day’s change in the FTSE. The priorities the UK seems to have acquired from the US, which has similar problems in spades. The process, however, is uniquely British.

  8. Strategist

    It may be a quiet period in the Brexit negotiations, but in UK it seems to me that the ‘Great British Public’ may be slowly starting to wake up to what all this could mean for them and their lives. The movement for a ‘ratification referendum’ on the Brexit deal was given a massive boost yesterday by, of all people, Nigel Farage. He said he was coming round to the idea of a second referendum, claiming it would shut the ‘remoaners’ up once and for all. But I suspect at some level he wants to lose it so he could go back to his comfort (and celebrity) zone of being the champion and voice of the betrayed.
    Meanwhile, Jessica Simor QC (who Yves crossed swords with back in October over this article in The Observer) and other leading EU law specialists have now written to Theresa May with a formal legal opinion that Article 50 is unilaterally revocable up to 29 March 2019.
    This in its turn paves the way for a ‘meaningful vote’ in parliament in Oct to opt for remain, to pave the way for another referendum with remain on the ballot paper, and revocation of Article 50 comfortably before the deadline. She is interviewed on this morning’s BBC Radio Today programme here, at 1h22 into the broadcast.
    And by this route shall Old Blighty be saved, and then – hopefully – offer the world a period of silence on its own part for a little while. What’s needed now is to mobilise the ground campaign to fight for this route map, and things are starting to get under way.

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