Brexit watching has become an exercise in waiting for inescapable realities to start penetrating the astonishing delusion and fundamental incomprehension of the UK ruling classes and the media. What is remarkable is that the denialsm persists despite the EU having said “No” as many ways as it possibly could on certain basic issues.
Our best guess is that the EU is going to stick to its plans of forcing a crisis in June over the Irish border issue. Our view is that EU’s chief negotiator Michel Barnier erred in giving May breathing room last December by signing the so-called Joint Agreement. That reaffirmed the UK’s commitment to the Good Friday Agreement, while in remarkably flabby language, set forth three options for the border. The problem is that the two that appeared to offer political escape routes for the UK were never going to work and the EU and everyone who hadn’t swallowed a lot of Brexit Kool-Aid knew that.
Recall that Barnier once said that it wasn’t the EU’s job to solve the UK’s political problems. Yet he relented with the Joint Agreement, apparently to forestall an ouster of May by the hard Brexiteers, who appeared then to be able to pull off a palace coup. The only rationale for the EU to have saved the Government from rule-by-the-even-more-stupid was to spare the EU the costs and disruption of a crash-out Brexit.
But as we discuss below, a crash-out is now the most likely outcome. And if that is indeed the case, the EU has strong incentives to make that clear as soon as possible so as to give businesses as much time as possible to assume the brace position.
UK Debating on Train Tracks as Brexit Locomotive Bears Down
Richard Smith astutely remarked that the Windrush affair illustrates how Theresa May operates, and those habits have made what would have been at best a difficult Brexit into a certain disaster. May adopts rigid targets and keeps trying to beat everyone around her into compliance. That can work in the narrow sense of achieving your immediate goal (irrespective of ignoring warning signals that point to long-term costs) if you are in control of your environment. Ironically, May’s snap election backfire has had the perverse effect of giving her more short-term control over the party, since having a fragile coalition has meant neither the soft nor hard Brexit faction has been willing to press its case too hard and risk a crisis that would result in new elections.
The Cabinet is in the midst of yet another row that is dominating most UK media coverage on May’s “customs partnership” idiocy. The caliber of the political debate suggests that what passes for the British elite had better have some excuse like having contracted mad cow disease en masse to explain this pathetic performance to posterity.
The most embarrassing part is that it isn’t even hard to explain why the UK is wasting huge amount of its most important resource, time left to Brexit, on non-starters.
A “customs partnership” or “continued membership in the customs union” doesn’t solve the problem the UK wants solved. A Guardian story yesterday, Brexit: jobs at risk without frictionless trade, warns Greg Clark, unintentionally makes clear how the UK has send a huge pack of hounds to bark up the wrong tree. From the story:
Tory Brexit moderates and business groups have made a last-ditch attempt to push for Theresa May’s preferred customs plan, with the business secretary warning that thousands of jobs would be at risk unless there is frictionless trade.
Greg Clark dismissed the idea that the prime minister’s idea for a customs partnership – in which the UK would collect import duties on behalf of the EU – had been rejected at a meeting last week of May’s Brexit inner cabinet.
This is painful to read. It’s the sort of thing that makes you want to grab the speaker by the lapels and shake them. “What about ‘A customs union does not mean frictionless trade’ don’t you understand?”
Richard North has been debunking this idea from every angle conceivable, including posting images showing border checks from the hoary old days of the European Economic Community, before an internal market was achieved in 1993.
The EU has already rejected May’s “customs partnership” idea. Turning the mike over to North, from his current post:
The public face of Brexit has lost all contact with reality.
It’s so far gone that Greg Clark speaks of the discussions at last week’s “War Cabinet” having been much more “professional” and “collegiate” than you would ever think from the report.
This, believe it or not, is the meeting that devoted itself to exploring the two nonsense scenarios that have already been ruled out by the Commission…
If this was entirely a domestic matter, the government could perhaps get away with it, but the big difference is that anything that comes out of the current phase of stupidity will be tested in Brussels, not only by the genial Michel Barnier but by the hard-faced guardians of the treaties, buried in the deepest recesses of the Berlaymont….
The British cabinet is delaying choosing between two types of customs arrangement. Yet each of those two possibilities was long ago rejected by Brussels: one is unworkable the other does not exist.
The Ireland Deadline Looms
Barnier has said that the UK needs to resolve the Irish border matter by the June negotiating round. The EU will not discuss the future relationship nor will it sort out details of the transition period before that is resolved.
The EU now has no incentives to relent. In fact, Barnier probably did the EU a great disservice. There was no reason to think the UK would be any more willing to accept a sea border as the only solution for Ireland a few months later than it was last December. If the UK is going to wind up subjecting itself to a crash-out Brexit due to its inability to deal with the consequences of its choices, it is better for all parties to know that as soon as possible to allow them to do what they can to minimize damage.
The Government is refusing to acknowledge that it has no answers. Per North’s discussion above, it somehow keeps telling itself and the British public that the EU is extorting the UK and scheming to steal Northern Ireland. The reality is, as we and others have explained ad nauseum, that the UK leaving the internal market means there has to be a hard border somewhere with respect to Ireland. The EU27 was never going to stand for Ireland turning into a route for smuggling non-EU compliant goods into Europe.
The Tories and their media allies are sure to scream bloody murder when the EU sticks to its word on Ireland, using words like “blackmail” and “extortion”. At best, Barnier might give the Government another month to faff about, but there is no reason to the UK to come around. Indeed, one can imagine EU officials telling corporate contacts and regulators privately to prepare for a crash-out, having that get back to the Brits, and having that depicted as yet more dirty dealing.
As I often say, it would be better if I were wrong. One sign of that would be if EU business lobbies, editorials, or prominent politicians were calling for Brussels to ease up on the UK so as to assure that a transition deal gets done. Readers of the Continental press are welcome to correct me but I have seen no evidence of anything of the kind. Even though Europeans probably are underestimating the cost of a crash-out Brexit to them, they’ve made a decision that political considerations are paramount, and that means cutting the UK no slack. And they’ve had the great good fortune that Brits have been so utterly incompetent and high-handed that it is hard to have any sympathy for them. But as usual, the people most responsible for this debacle will be largely insulated from its effects.