EU to Members: Prepare for No Deal Brexit

The UK has made no progress on the critical issue of the Irish border and failed to articulate what sort of post-Brexit arrangement it wants. The EU therefore plans to issue a warning about a so-called crash out Brexit during the European Council meetings of June 28 and 29. From Bloomberg:

European Union leaders will say next week they’re concerned about the lack of progress in Brexit talks and call for member states to step up preparations in case no deal is reached, according to the first draft of their summit statement…

The leaders will say they’re concerned about the lack of “substantial progress” on the crucial issue of the Irish border. They will also warn that if there’s no divorce agreement before the scheduled departure date of March 2019, there won’t be a transition — the grace period that businesses are counting on for the first two years after the split….

The joint document shows that while some disagreements have been resolved in the areas of customs, sales tax and nuclear material, the biggest areas of dispute remain.

The Financial Times’ account was more pointed:

EU leaders are to call on member states, companies and organisations to step up preparations for a no-deal Brexit amid concerns that the UK has made “no substantial progress” on the Irish border, the biggest sticking point in the talks….

In an unwelcome warning for Theresa May, British prime minister, the summit text says contingency planning for a hard exit in March 2019 must be accelerated….

But frustration is growing in European capitals over the slow pace of negotiations on Ireland and the future relationship. “It is going nowhere and it is clear to everyone,” said one senior EU diplomat, who expected the talks to drag on into the winter…

In what he presented as a call for greater realism by London, Mr Barnier gave a speech on Tuesday in which he ruled out UK participation in the European Arrest Warrant and full access to EU law-enforcement databases. He said this was a result of the British government’s “red lines” on issues such as the role of the European Court of Justice.

“They want to maintain all the benefits of the current relationship, while leaving the EU regulatory, supervision and application framework. And they try to blame us for the consequences of their choice,” Mr Barnier said. “Once again, we will not be drawn into this blame game. It would mean wasting time we don’t have.”

The UK seems particularly upset at being told it will no longer be part of EU security operations. From The Times:

The head of GCHQ made an unprecedented intervention in the dispute with Brussels over post-Brexit security by spelling out yesterday how British intelligence had saved European lives…

It is rare for the head of any of Britain’s three intelligence and security agencies to speak in public, particularly on such a politically charged issue. Mr [Jeremy] Fleming’s comments appear deliberately timed to bolster Britain’s argument as ministers fight back against attempts to block the country from EU security databases and prevent Britain from accessing military aspects of the EU satellite surveillance system Galileo….

Asked about Mr Fleming’s comments, a Downing Street source said that the post-Brexit security relationship Britain was seeking was unprecedented but there were “compelling reasons” for Europe to agree. “Our intelligence capability is pre-eminent in Europe,” the source said. “We are saying if you want an unconditional commitment to security then alongside that we need co-operation. The offer is there and it is in our mutual interest.”

The UK again and again reverts to the same argument, that the UK must get a special deal…and the EU will benefit too! But the Brits simply do not want to internalize that the EU has accepted that they will take losses and have moved on.

Politico provided a high level sketch of some of the consequences of a no deal Brexit. We’ve covered many of these topics before, such as the fact that the sure-to-be-not-completed-on-time customs IT upgrade can’t handle post-Brexit processing volumes. From Politico:

What happens immediately?

  • Customs declarations at U.K. ports balloon to 255 million per year from the current 55 million, according to government figures.
  • As a result, long queues likely start to build up at entry points around the country. Fresh produce begins to rot as it waits for clearance and roads around major ports like Dover are gridlocked.
  • “Just in time” supply chains that require rapid transport of goods break down — including those for heavy industry, carmakers and producers of high-tech goods with assembly plants in the U.K.
  • Irish producers of fresh produce also likely face delays using the U.K. land bridge to reach the Continent.

Air travel is another disaster that we’ve discussed before:

What happens immediately?

  • All flights between the U.K. and EU27 stop. Seriously. Barring a transition deal, the unthinkable comes true.
  • More than 135 million passengers annually fly between a U.K. airport and an EU27 country. That’s about 370,000 passengers per day.
  •  The U.K is no longer part of the EU-U.S. open skies agreement, meaning that flights to American destinations are also grounded.
  • Leisure and business travelers are forced to take the ferry or Channel Tunnel services between Britain and France, leading to skyrocketing demand and delays.
  • The transport of transplant organs by scheduled flights between the U.K. and the EU27 is impossible.

More detail from an April article, European Commission Warns of Effects of UK’s Exit from EASA, from AIN Online. Note that the UK is now a member of the EASA through the EU:

If Brussels and London fail to come to an agreement on aviation, EASA’s safety certification will no longer cover British airlines, pilots, cabin crew, aircraft and aircraft part manufacturers, flight simulators, MRO facilities, airports, ANSPs, and medical attests for air traffic controllers. “Type certificates issued by EASA to persons and organizations located in the United Kingdom will no longer be valid in the EU as of the withdrawal date,” stated DG Move, which added that aircraft, engines, propellers, parts, and appliances “will no longer be considered as certified” by EASA.

UK airlines will have to obtain a third-country operator license and a safety authorization from EASA if they want to fly to the bloc…

Not remaining part of EASA will also affect British airlines’ aircraft acquisitions since almost all aircraft leases and financings refer to either EASA or FAA standards of certification and recognition…

The UK government and its civil aviation authority (CAA) have indicated they would prefer to remain a member of EASA, though at the moment the parties have agreed to nothing…

In an analysis published earlier this month, CBI cautioned that divergence from EU aerospace rules would lead to “a regulatory no-man’s land,” with no involvement in rules in either of the two key markets for aerospace—the EU and the U.S.—and would significantly increase compliance costs, particularly if the UK pursued a regime differing from both the EU and the U.S.

The head of the UK CAA, Andrew Haines, unequivocally stated that the country should not plan for a new independent aviation safety system, a view the industry shares. ADS Group, the trade body for British aerospace, believes that it would take 10 years for the country’s civil aviation authority to create the necessary certification infrastructure…

If continued membership of EASA proves unachievable, Haines has vowed, the UK should adopt the existing EASA regulatory system, rather than developing a new framework from scratch..

Still, the UK most likely will want to secure full membership in EASA, including voting rights. The EU, however, might find that politically unacceptable. Another hurdle involves the jurisdiction of the European Court of Justice, a prerequisite for EASA membership but a red line for May.

So much for not being a rule-taker.

We have not discussed the fishing industry much but Richard North has. Back to Politico:

What happens immediately?

  • The U.K. cuts off access to a 200-nautical-mile zone around the island, known as the exclusive economic zone. British navy patrols the maritime borders to stop EU vessels from illegally fishing in British waters.
  • U.K. fishermen, fish processors and retailers go bankrupt from tariffs imposed by the EU on fish exports and reduced access to the EU market.
  • Germany and Denmark also lose significant sales of fish products, as both countries are among the top five countries exporting to the U.K.
  • EU fishermen may lose their investments in British fleets and companies depending on the rules adopted by the government.
  • The Politico story covers more cheery topics, like medicines, financial services, and energy.

    The EU warning may finally lead to more realistic coverage of the consequences of a crash out Brexit. But Theresa May is spectacularly rigid, so even growing and well warranted panic are unlikely to make a difference.

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    1. vlade

      “The EU warning may finally lead to more realistic coverage of the consequences of a crash out Brexit”

      I’ll believe it when I see it. IMO, the consequences will get reported when they hit, and hit hard – not before.

      The drivers of the UK political class are deluded, and taking the country with them. I hope there’s enough lamp-posts come April next year, but TBH, I suspect not, as few people who make mistakes are willing to admit they do them, especialy when they blow up like this. As a note, if the lynching does start, I suggest starting with Cameron, who managed to blow up a country for party politics, without any real pressure to do so.

      1. Bob_Dole

        I suspect that the chief architects will be on the first planes out of Heathrow, probably to Trump’s America.

    2. ape

      I still don’t understand how the UK political elite are treating this as “normal internal politics” to gain a short-term edge in elections.

      Brexit is a major constitutional change. You’d a thunk that this would require putting together a national concensus — some equivalent to most nations requirement for constitutional amendments at a supermajority and/or federally/geographically distributed support. In the UK, I’d imagine the equivalent would be a national unity government, as done in the face of the great depression and WWII.

      The reason that countries have these aren’t because politicians are good guys, but because politicians realize that once you pull on the thread of constitutional changes, all the rules of normal politics are out the window. If one group will gain structural, permanent advantage by these changes, you run the risk of everything from secession to civil war — so you have to have all the elites on board and not divided by the normal tug of how you cut the pie.

      This, for me, is what’s at the bottom of the delusion — that the elite in the UK really are intellectual children now. Who’s running their military? There must be grown ups somewhere! You know, people who realize that this whole thing runs on an edge of authority and violence.

      1. el_tel

        I agree…. Trouble is the sensible people have all retired or are sidelined. Corbyn could be sensible…. I’d much prefer him running the show……but even he, though untainted by the increasingly neoliberalism at both the EU and national level, seems hobbled by a worldview that is too much influenced by what I call the “Islington set” – he’s not displaying the nous needed to balance young REMAINers with the large number of supporters in traditional Labour heartlands that have been deindustrialised and want someone to kick in frustration – and thanks to Cameron is the EU. Hence the large LEAVE vote in many Labour heartlands – and interestingly many gravitated to UKIP (which is not a homogeneous right wing little England party it is often painted as). He has many of the right ideas in his gut but alas doesn’t seem up to the task of dealing with the disjoint between different votes of supporters.

      2. PlutoniumKun

        A few years ago I did quite a bit of reading on the topic of groupthink and inbuilt bias in decision making. There are some classic examples used in the literature, usually military in nature – from the decision of the Japanese to bomb Pearl Harbour despite ‘knowing’ (but somehow simultaneously ‘unknowing’) that the US was vastly stronger militarily, to Operation Market Garden, where the whole Allied military command somehow managed not to listen to updated intelligence that they were sending lightly armed paratroopers into the arms of a crack SS armored division. I think in future years, Brexit will fill many books and journal articles full of the question ‘what on earth were they thinking?’

        Usually, the literature ascribes the errors to inbuilt stuctural issues within the power heirarchies that made them unable to change course once certain key decisions were made or conclusions (however erroneous) were arrived at. However, with Brexit they will probably have to add in the specific calculation of the crass stupidy of many of the key actors.

        1. vlade

          I have always thought that the stupidity and ambition were always massively underestimated in any groupthink analysis.

          1. Summer

            Ambitiously stupid? Or stupidly ambitious.
            Or trying to one up the parents and grandparents? Plenty of kiddies strut around schools on the accomplishments of their parents – as if those accomplishments were their own. It’s the root of high/jr high school cliques (and eeks its way into the workplace), that social conformity revolves around. Object or disrupt it and you’re a trouble maker.

        2. hemeantwell

          PK, did you happen to read Graham Allison’s “Conceptual Models and the Cuban Missile Crisis” (1969)? It’s a very good look at organizational processes inhibiting rationality.

          1. PlutoniumKun

            That book passed me by, but thanks for the recommendation, it looks interesting.

          2. larry

            Is that the correct title? When I checked Amazon, it listed Essence of Decision: Explaining the Cuban Missile Crisis that came out in a second edition by Allison and Zelikov in 1999. I am not saying it isn’t. I am just querying.

            1. Malcolm

              I think the book is “Bureaucrracy and Policy: Conceptual Models and the Cuban Missle Crisis.” A shorter version titled, “Conceptual Models and the Cuban Missle Crisis”, was published in The American Political Science Review, Vol. 63, No. 3, September 1969, pp. 689-718.

        3. David

          The classic examples often get the dynamics wrong. The Japanese were perfectly well aware that the military potential of the US was much greater than theirs, but they believed they had a window where they could drive the US out of the Pacific and secure the oil supplies, before the Americans could mobilise. And as often in these cases the alternative was worse. There was less than a week’s oil left in the country at the time, and the US-led embargo was bringing the economy to its knees; It was a case of surrender or fight (think Iran). And no matter how risky the attack was, the alternative was worse. Oh and there was a power struggle between the Navy and the Army. It’s also worth noting that the actual decision was taken quite quickly once the technology for shallow-running torpedoes became available. And in any case, from Tokyo’s perspective, there wasn’t much of an alternative except surrender.

          1. PlutoniumKun

            Its been a while since I’ve read my modern Japanese history, but the impression I got from a variety of historians is that through the 1930’s a concensus has built up within ruling classes of Japan that in what would now be called a Thucidides scenario, war with the US was inevitable, even if likely catastrophic for Japan. The view seemed to be that the older European empires were irrelevant, dying anyway, but that the US was going to replace them as an even more formidable opponent. Many Japanese were in awe of the gigantic scale of the US economy.

            The core point I think is that while particular circumstances forced Japans hand in 1941, the reality was that there was no opposition to this, even from the ‘peace party’ such that it existed, because of the view that a war was fated and inevitable. A key factor was the mistaken view by the military that the US response would be an immediate naval mobilisation into the east Pacific, giving them the opportunity for a single decisive battle. But even this was based on wishful thinking rather than hard analysis. They also of course shared the European fascist delusion that democracies were incapable of sustaining long term wars of attrition.

            So Japan entered a war with a country with nearly 10 times its industrial capacity, and did so with a military designed specifically for rapid attack, not one capable of, or intended to maintain, a war of attrition, and without any weapons capable of inflicting a serious attack on its opponents mainland. By any reasonable standards, this was suicidal and delusional.

            1. David

              Yes, I agree about the consensus that war was inevitable, although the type of war changed once Roosevelt moved the Seventh Fleet from San Diego to Pearl Harbour, and put it in range of a Japanese attack. My recollection is that earlier Japanese planning was based on the opposite scenario – that of a US fleet heading to Japan. Because war was considered inevitable, there was indeed no “peace party” – the Navy, and Yamamoto in particular, are often given too much credit for this. What Yamamoto and some of his colleagues did have, though, was a better understanding of the potential industrial and military power of the US.
              The decision itself, typical of those often taken to go to war, is best understood as the choice between two really bad ideas, but one (surrender) even worse than the other (attack). There was no third option, so probable disaster was chosen in preference to certain disaster: a choice governments have made distressingly often.

              1. boz

                probable chosen in preference to certain disaster

                A very good point – loss aversion, as demonstrated by Daniel Kahnemann in Thinking Fast and Slow.

                We choose certain gain over probable gain when the probabilities are the same, but choose probable loss over certain loss, even when the probabilities the same.

                Quite possibly what is also driving the shambolic negotiations.

              2. animalogic

                The US was determined to go to war with Japan. With the start of the European war, US war plans went into over drive. The naval move to Pearl Harbor, the various sanctions & embargoes were all US tactics towards this end.
                FDR had quietly “promised” Churchill to get the US into the war. Indeed, the pearl harbour attack was entirely expected – GIRLs estimate of the actual “when” was out by about 7 days.
                Commented are right to say Japan was between a rock & a hard place

        4. Steven B Smith

          the whole Allied military command somehow managed not to listen to updated intelligence that they were sending lightly armed paratroopers into the arms of a crack SS armored division.

          You don’t understand, wars are fought to murder troops and run up debts, not get strategic victories with the least amount of blood and treasure lost.

      3. BillK

        Re ‘national consensus’ – Britain doesn’t work like that (except WWII). The FPTP electoral system means that almost always Parliament is run by politicians that only a minority of the population voted for. The referendum vote for Brexit was much greater support than any political party ever gets.
        So what is an unfortunate politician to do? To get elected and remain in power they have to concentrate on maintaining their minority of supporters. Brexit becomes a side issue that they mainly just have to avoid getting blamed for. Make sure either the other political party or the EU gets the blame and re-election is secure.
        What do you mean – ‘they should be thinking about what’s best for the country’?
        Don’t be silly – this is UK politicians you’re talking about!

        1. Ape

          The point is that they are risking severe consequences – not just national but also personal. Worse case scenario of a constitutional crisis is shooting as many US liberals have pointed out to me when pressed on why the US constitution can’t be changed.

          So it’s not just stupid or even structure blindness – it’s delusional.

        2. Synoia

          What do you mean – ‘they should be thinking about what’s best for the country’?
          Don’t be silly – this is UK politicians you’re talking about!

          Unnecessary qualification of Politicians, possibly.

      4. liam

        The problem with that is Brexit *is* normal British politics, as messed up as it may seem. The Brexit vote was taken to quell one wing of the governing party. The vote passed, for a few reasons, of which two were: it put it up to elites, and, those self-same elites could now crush those putting it up to them :/ In only two ways is there a sense of national consensus: one, English nationalism that has been stirring since the days of Tatcher, and pretty much ignored by everyone who thought the Scots were the problem, and that self-same furtherance of English nationalism by the media. UKIP was merely the wing of the Tory party that weren’t allowed in because they didn’t wash often enough. If you’re wondering why there’s no negotiating strategy its because nobody else has got anything to do with it. The notion that there’s actually another party to the whole affair, hasn’t really sank in. The EU is merely a proxy for the other, and well, they’re all about keeping others out, not letting them in. National governments can only exist when there’s a coherent sense of we’re all in this together. The English haven’t felt like that for a long time.

          1. animalogic

            Ever since Thatcher the “shop” has been slowly run down – ie the quantity & quality of public servants & services has been slowly degraded.
            Why ? Ideology as a fig leaf justifying the selfishness of Elites (& their menagerie of creatures in the 10%)

      5. KFritz

        Perhaps it’s on account of their equally dunderheaded electorate–the ones who voted for Brexit in the first place. I recently saw an item that a majority of UK voters now oppose Brexit–think it was a mistake–but a majority are also against another referendum. They know it’s a mistake but don’t want the opportunity to undo it.

    3. George Phillies

      “The U.K is no longer part of the EU-U.S. open skies agreement, meaning that flights to American destinations are also grounded.”

      That’s up to the United States. Readers can be sure that President Trump will issue the needed Executive Order to allow flights to and from the UK to continue. People who do not like this are welcome to sue, but the DoJ arguments will be “national security” and “public Interest”.

      1. nervos belli

        He will do it of course (see ZTE), however the thing the UK should ask themselves, “how many golf courses and towers does it cost?”
        Not to mention what, again ZTE, does congress say? Are the bribes for them thought out as well?

        1. Clive

          I suspect we’ll just buy some more F35s, US exports of LNG to underpin “energy security” and be encouraged to develop a taste for chlorinated chicken.

          As we are all discovering, the degree to which our worlds are underpinned by this seemingly bottomless pile of quid pro quos, interdependent mutual agreements and not-quite-a-Treaty almost-treaties is startling. Did we really all think there’d never be a price to pay, that altruism would always win out over naked self-interest and that it would never occur to anyone that one party (or both parties) mightn’t try to extract leverage through exploitation of dependency?

          Time we all grew up, perhaps, and base actions on the world we live in rather than the one we wish it to be. If we don’t like it — and it is a little yucky — we can perhaps do something to change it. Our societies are way too eager to abdicate responsibility for how they function. (/finger-wagging).

          1. Synoia

            Umm..I’m all for responsibility, and accountability. But,I personally do not have, and know no one who has, national responsibilities of any kind.

            In other words, I don’t count. Nor do my personal opinions. I’m willing to bet that’s true of 99.9% of those who read this publication.

            I am however totally responsible for Trump, I voted for him in California, and an singularly responsible for the one vote which pushed him over the top. My choices were, Bernie, Bernie, Bernie, anything but Clinton = Trump, kill myself.

            I chose the easier of the last 2 choices.

          2. ChrisPacific

            If we don’t like it — and it is a little yucky — we can perhaps do something to change it.

            How’s that working out for you, Clive? Do you feel empowered to influence your own fate in the matter of Brexit?

            I agree with you, but in practice it can take years or generations, and it won’t typically happen quick enough to make much difference in the short term.

            1. Clive

              It’s a mixed bag, in terms of how it’s working out. And the next year, or five, or ten — well, we can only speculate.

              But one thing is absolutely certain — it’ll be a long, long time before (generally speaking, there’s no absolutes when you’re talking about cultural or societal norms) we reach the same point as we did in, say 2000-2005-ish where the population is quite so willing to abdicate it’s obligation to assess what the elite, political, credentialed and intellectual classes tell them about how things work, what’s in their best interests and how it’s all too complicated so it’s best to leave it to all to them. And besides, what they think doesn’t matter anyway, the system is the system it is and there’s no changing it because it’s all too well established and thus too difficult.

              And for Brexit specifically, to return to the subject of the article, everyone be they Leavers or Remainers are paying the price of their previous apathies. That lesson is going to reverberate for quite a while, too.

              1. vlade

                Absolutely on the last para.

                I keep saying “people get the government they deserve”. IMO, there are only two options for people – they (implicitly or explicitly) drop their responsibility (apathy is one of the signs of it), and get what’s coming.

                The other option is that you get engaged, and the benefits of it. But that’s work – sometimes pretty hard. I can understand why people don’t want to do it, but democracy is not free (as in effortless). In fact, it’s the least effortless of all regimes one can think of short of anarchy (anarchy in the Spanish-civil-war anarchy meaning of the word, not the chaos one).

              2. ChrisPacific

                Fair point. As I said, I don’t really disagree with you and things like the rise of Sanders and Trump in the USA are examples of the same phenomenon. But you definitely need to be in it for the long haul (not that I expect you need me to tell you that).

            2. beachcomber

              ChrisPacific:- “Do you feel empowered to influence your own fate in the matter of Brexit?”

              Seems like a non sequitur.

              If there’s anything that “empowers” the individual voter, it’s got to be a referendum, surely? That’s what those who demanded a referendum demanded it for. (Yes, you can nit-pick ’til the cows come home about whether the question was ideally-framed, how many lies each side of the campaign told, etc, but there’s no mileage in that philosophically-speaking).

              The snag is, of course, that more people might vote the opposite way from oneself resulting in oneself having effectively have had zero “empowerment”. The fact that any particular person was on the “losing” side doesn’t mean that s/he was never empowered – all were empowered alike when the starting-gun was fired.

              So does that mean “ban referenda”? Maybe – that’s been argued-over many times, but so far as Brexit’s concerned it’s too late. The deed is done.

              1. ChrisPacific

                Clive was actually on the winning side if I recall correctly. I’m not sure that what the Tories are currently in the process of delivering is what he voted for though (hence my comment).

                1. Clive

                  Winning is probably in need of careful qualification! I can’t think of a parallel in modern history where an entire country has taken such a leap into the dark (or off a cliff / in front of a train etc.)

                  But at least compared to the torpor which preceded it, it’s movement — of a sort — compared to a stagnant politics and economics we’d been subject to for a long while. Sadly, as with so much else in life, it’s not like a Disney movie where everyone is guaranteed to get their Happy Ever Afters. Miserable Ever After is a distinct possibility. I wish I knew for sure which it’ll be.

                  1. beachcomber


                    Ain’t life queer!

                    You were on the “winning” side and are miserable. I was on the “losing” side and am rejoicing!

                    Are we both equally perverse? I don’t think either of us is.

                    I would say that joining the EU (“EEC” then – a not insignificant detail) was no less “a leap into the dark (or off a cliff / in front of a train etc.)” than leaving it is now – it’s just that we who voted to join only came to realise in retrospect that that was what it had been. And that we had been lied-to by its foremost advocates:- what we got was nothing like what we believed we had voted for.

                    When we finally began to find out what we had really let ourselves in for many of us felt conned.

                    Perhaps history is going to repeat itself in the reverse direction (as many here believe). I don’t:- I think that the UK never fitted-in and is unquestionably going to be better-off outside – in the end.

              2. vlade

                Under New Zealand’s MMP system (Mixed Member-Parliament), I actually felt reasonably empowered – much more so than under FPTP in the UK, or even under pure proportional (which is rarely really pure proportional, as it very much depends on how the “proportions” are defined – you still can end up with “proportional” systems where say 20% of votes translates into 30% of seats or more).

    4. George Phillies

      “U.K. fishermen, fish processors and retailers go bankrupt from tariffs imposed by the EU on fish exports and reduced access to the EU market.
      Germany and Denmark also lose significant sales of fish products, as both countries are among the top five countries exporting to the U.K.”

      Does anyone happen to know the fish tonnage — by species may be needed — in each direction?

    5. Which is worse - bankers or terrorists

      There’s a danger in the EU pushing the point here. The problem is the lack of a viable solution for the Irish border given the practical and political requirements. In political terms, essentially requiring that May agree to a sea border sooner rather than later could cause the government to come down and you risk a UK government collapse, making it tough for the EU to negotiate with a new government.

      Maybe it’s just me, but because of the above, I would have expected these tactics a little later on the timeline.

      1. Synoia

        The boarder is the EU’s problem.

        As for the fish and produce (veg in the UK) exports, the UK is a net importer of food. Eat the food, don’t export it.

        Car parts, use them in the UK owned and produced cars (oops no UK manufacturers, thanks Thatcher).

        This is all quite cunning of the Conservatives. They cause an immense problem, lose the next election, blame Labor for the disaster, and then rule for another twenty years.

        The Senior Conservative are not stupid. They have a plan, and it includes Labor being blamed for the disaster, and they have done before.

        The Conservative plan could also include forcing millions of the “working class” to become refugees in Europe.

        1. Anonymous2

          The border is also the UK’s problem. If it doesn’t reach agreement with the EU it will have to put in border controls. That risks starting up the violence again. NI has the potential to become a powder keg again. If you look at NI politics you will see support has been moving from the moderates to the extremes. This is not good news.

      2. Yves Smith Post author

        The EU is not “pushing a point”. The alternatives the UK is serving up would allow Ireland to become a back door for smuggling all sorts of non-complaint-under-EU-rules into the EU. That is not on and will never be on.

        The sea border is the only realistic solution among the not great options available. The only other remedy would be a hard land border which is out per the Good Friday agreement plus super costly and difficult to make work even if you didn’t have the political impediments.

        1. vlade

          There’s another possible solution, but I don’t think Irish would be thrilled by it – EU creates a hard border between Ireland and the rest of the EU.

          This it can, but only on a temporary/emergency basis (basically it can be used as emergency powers for exactly these purposes – stopping circulation of non-EU compliant products in the EU, usually used for food but can be used for other stuff too), so it still does not solve the long term problem.

      3. animalogic

        Can’t help but feel there’s more than a Penny’s worth of poetic justice that the Irish, in the shape of the Tory’s collation partners & the border question are such a large thorn in the English side….Well, God bless the Irish !

    6. The Rev Kev

      I can guess how this is all going to work out. In the same way that Cameron led the UK to this situation and then resigned, I suspect that just after Brexit when things start blowing up, Theresa May will also resign and be consigned to the dust-bin of history. Problem is that some 65 million people in the UK will not have the same option but will be left with the job of trying to unscramble this rotten egg. It won’t be so much as “put on your life jackets” as more like “Brace! Brace! Brace!”.
      I have heard this procession to Brexit as akin to the Charge of the Light Brigade and maybe there may be more truth to this than you might think here. The guy in charge, the Earl of Cardigan, led the Light Cavalry Brigade into the “valley of death” and to its destruction. What is not generally know is that having led them into the battle, he then proceeded back to the main lines and leaving his men to the fighting as he did not consider doing the actual fighting as part of his job. The relevance? Isn’t this what leaders like Cameron and May are doing?
      Being a believer in the saying of preparing for the worse while hoping for the best, I would say that the best option is for the average Brit to make as many preparations as possible and not to depend on the UK government to be solving many problems. If affordable, it might be worth while stocking up on stuff that will likely be in short supply after Brexit. There is a blog called Surviving in Argentina ( and if you ignore all the stuff for sale, he has a lot of good advice in his topics about what it is like for a country to go through really rough times and how to adapt as he experienced it all in Argentina at the turn of the century.

      1. Synoia

        At the time of the Light Brigade the British Army commissions (officers) were purchased, that is promotions and rank were based on money. The Royal Navy promoted on competence and skill and hanging (Admiral Byng).

        After the Light Brigade the British changed the Army officer corps to one of merit, and things improved somewhat (Lord Roberts is an example of the improvement). Somewhat, until the British lost the First Boer war and abandoned the “red coats” because “red” was very visible at long distances on the South African high veldt, then bringing in Kitchener.

        Kitchener promulgated the concentration camp, designed for the Boer women and children.

        1. beachcomber


          A small correction:- Adm. Byng was executed by firing-squad, on his own quarterdeck. Those were the days!

          @Rev Kev

          Cardigan did, I believe *lead* the charge (but survived it). If I’m right it would hardly be fair not to acknowledge that he a) he did his duty and b) displayed exemplary bravery in doing it. There being very little left of his brigade, what else could he be expected to do after the charge – except retire from the battlefield? He could (and should?) have averted the disaster by disobeying the fateful order, but that would have required a different kind of courage. It probably never even entered his head to do that.

          1. blennylips

            You can learn loads studying military incompetence:

            On the Psychology of Military Incompetence
            It demonstrates the pithy, unequivocal force of the book. The writing is powerful but elegant, direct and yet subtle. This excellence of style, plus the impelling way in which the contents are arranged, make the book a comparative rarity—a factual and theoretical treatise which can …

            Here is an extended quote on the Charge’s aftermath:

            It seems that the charge of the Light Brigade, from which only fifteen per cent of the original force of 673 rode back, was the end-result of faulty communication between five men: Raglan, his Quartermaster-General Airey, Lords Lucan and Cardigan, and the impetuous Captain Nolan. Raglan’s contribution was that he issued orders the precise meaning of which has remained a matter for debate. The fourth and more disastrous of these orders Airey wrote out on a flimsy piece of paper. In so doing he made no attempt to unravel the enigma posed by the words of his master. Which front? What guns? In its new written form the order was then passed to the unbalanced Captain Nolan, who loathed both Lucan and Cardigan. This glittering young officer of the 15th Hussars, who made up in arrogance what he lacked in perspicacity, delivered the order to Lord Lucan. Lucan, whose comprehension of Raglan’s wishes seems to have been minimal but who was not going to demean himself by bandying words with Nolan, conveyed his interpretation of the order to Cardigan. Cardigan, to give him his due, realizing that he was being asked to charge the Russian guns down a valley flanked by enemy artillery, expressed considerable astonishment at what would so evidently be the coup de grâce for his brigade. But once again communication foundered on the rocks of mutual dislike, pride and jealousy.
            Joined, and then overtaken, by the irrepressible Nolan, Cardigan led his brigade into the ‘jaws of Death’.

    7. Newton Finn

      As Mitchell and Fazi cogently explain in “Reclaiming the State,” the era of globalization, of which the EU is but one part, has run its course. Perhaps the humiliation of Greece was the last straw in some hearts and minds, for others, perhaps, the hollowing out of the American heartland, but the myriad manifestations of the linkage between globalization and plutocracy have proliferated to the point where millions of people across the world no longer believe in, or desire to remain within, a neoliberal new world order, which undermines national sovereignty and saps the vitality of more localized modes of life, all for the purpose of enriching a cosmopolitan and controlling global elite. Brexit will happen despite numerous bumps on the road, and once it proves viable for a developed nation to break the bureaucratic/plutocratic stranglehold, other nations will follow suit. E.F. Schumacher was right after all: small is beautiful. And it is also a necessity for human freedom and dignity.

      1. Anonymous2

        ‘once it proves viable for a developed nation to break the bureaucratic/plutocratic stranglehold,’

        I am afraid I think this is misreading the likely consequences of Brexit which are much more a matter of transferring power from one elite to another than any radical overthrow of the rich and powerful. If anything it is likely to strengthen the power of such people as Murdoch. In fact it already has done just that. I wish I thought differently.

        1. jabawocky

          I tend to agree with this view. It always seemed galling to UK press barons that they had no influence over the EU: thus the EU became the no 1 barrier to their hegemony over the UK political process. And while the UK justice system can be affected behind the scenes with a quiet word with the right people, no such luck with the ECJ.

          Brexit is about exploiting anti-globalisation sentiment, not about doing anything to reverse it.

        2. Newton Finn

          While difficult indeed, it’s far more feasible to overthrow oppression within one’s own nation than to attempt to overcome oppression imposed from afar, over which one can have virtually no influence or control. The process by which the left can again seize the reins of national power–via a sheltering, nurturing, and inclusive form of patriotism, as opposed to that of a xenophobic or militaristic stripe–is laid out quite convincingly in “Reclaiming the State.”

          1. Synoia

            The process by which the left can again seize the reins of national power–via a sheltering, nurturing, and inclusive form of patriotism

            Yes, but the left the, UK Labor Party, also get the blame for the condition which brought them to power, and languish in opposition after their, “dismal performance.”

            Attlee’s and Wilson’s Governments come to mind, followed by lengthy Conservative Rule.

          2. beachcomber

            @Newton Finn

            I agree, and I too believe this to be the clinching argument.

            Too much of the opposition to the referendum result – on this site and elsewhere – plays-down, or willfully ignores altogether, the glaring deficiencies and the inherently oligarchic nature of what the EU has turned-into.

    8. John

      Just as an aside, amidst all this talk of taking back sovereignty. The people of the United Kingdom are not sovereign. Queen Elizabeth is Sovereign. That is why everyone swears an oath to the Queen personally. Parliamentarians, judges, police, armed forces, privy counselors, civil servants all swear an oath of allegiance to Queen Elizabeth. When it comes to sovereignty, it is Queen Elizabeth alone that matters. Nobody else

      If you keep that in mind, it becomes much easier to understand what is going on. For example, the European Court of Justice impinges on her personal sovereignty: hence it must go. That leaves only the European Court of Human Rights, which is why Brussels will make security cooperation contingent on the acceptance of ECHR judgments.

      The UK is a make believe democracy. Parliament has no power (the Whips are actually employees of the Queen’s household) but makes a useful front behind which the real powers operate virtually unnoticed.

      1. vlade

        You’d really read your law and history. Parliament is Sovreign, not the monarch (or the people). They royal poweres were removed in 1689 (Bill of Rights), and there is, few times a decade, a discussion to kill royal prerogatives which the government uses right now to be executive (and reframe it more explicitly).

        There’s plenty of case law for the above.

        1. el_tel

          Indeed you’re correct. And in any case, the two Parliament Acts went through (although opposed by the Lords) without any apparent complaint by the Monarch. Indeed there is now plenty of evidence to show Edward VII was – for all his philandering etc – very keen not to get out of touch with the people and his death at the time of the first Parliament Act was extremely inconvenient for those who wished for proper democracy, though in the end it didn’t derail things. Indeed there is a very interesting counterfactual here as to what British democracy would have looked liked if Lloyd George *had* created 1000 Liberal peers at a stroke to get rid of the 2nd chamber permanently or replace it with something more akin to the US Senate.

          No monarch would dare go against the will of Parliamentary procedure – it would instantly precipitate a Republic. Talk of “real” power of the monarch is all wishful thinking. As is that pertaining to the power of the Lords ultimately – if any government felt it had sufficient support across the country and that the Parliament Act was not sufficient to drive through govt legislation quickly enough against a repeatedly recalcitrant House of Lords then it’ll be bye-bye House of Lords. Whilst the BREXIT negotiations have served to show what the “retired statesmen” in the Lords can do to mitigate effects, their interference in the face of a hypothetical huge party majority with an unequivocal mandate in the Commons might make their position look distinctly different to a lot of people.

          1. Synoia

            The UK’s Monarch’s job is to ask difficult questions of the Prime Minister in private, in addition to being a non-political figurehead.

            While the system has its quirks, the alternative, such as the US presidential system is not regarded favorably. The previous republic (Commonwealth) in the UK did not go well, or end well.

            The Commonwealth did establish one principal of the UK’s governance. Bashing the Irish was not the exclusive purview of a Monarchy. Sigh. Or it was just another example of “when in trouble at home, go adventuring abroad.”

      2. John

        Yes, yes and yes, and thank you.
        That is the party line, I know.

        Dominic Grieve.

        Under my model, Mr Grieve has been let know that Her Majesty would look disfavourably upon the passage of his amendment, and that he could be in breach of s.3 of the Treason Felony Act of 1848.

        Then Grieve rose to his feet. The Tory backbencher with the reputation for being one of the sharper brains in Westminster. A man who prided himself on both his intellect and his integrity. A man who had been misled by the false promises of the prime minister on this very issue just a week previously and had declared to the world that he wouldn’t get fooled again. A man with the determination to take on the government a second time. The Luke Skywalker of the Rebel Alliance.

        His was a brilliant amendment, he said modestly. Not just brilliant, but necessary to protect the sovereignty of the parliament he adored. He paused to allow himself a theatrical wipe of the forehead. MPs from both sides of the house leaned in, hanging on to his words. Luke cleared his throat. There was just one problem with his brilliant and necessary amendment. He couldn’t actually vote for it because the government had promised him another compromise that wasn’t worth the paper it was written on.

        How does that work, under the sovereignty of parliament?

    9. David

      I suspect that this is aimed, at least in part, at the governments of the EU 27. These are “first draft” Conclusions, presumably prepared by the Commission to be circulated to EU 27 states in advance of the Council meeting. The “EU” hasn’t actually said anything yet. Many of their governments would be surprised to know that they are “concerned” about the pace of the negotiations, because they have other priorities, and simply haven’t given the issue much thought. In France, for example, Macron’s European priorities are the migrant spat with Italy, the relationship with Merkel, and, linked with that, his ambitious EU reform agenda, or what’s left of it. The French media hardly covers Brexit apart from occasional despatches covering political manoeuvring in London.
      But the kind of dislocations referred to in the Politico article will also affect Europeans. Planes that can’t fly will have EU27 citizens booked on them. Congestion at Dover will catch French school trips. And so on. I think Barnier is trying to avoid a situation where complete insouciance gives way to panic at the last moment.

      1. Clive

        I think that’s certainly a possibility. I read the EU briefing as a Trojan horse whereby it was a heads-up to the EU27 that it needs to pay attention to planning for a no-deal (we’ve been saying that here at Naked Capitalism for months) masquerading as lecture to the U.K. (although the U.K. needs that, too).

        It didn’t mention the budget shortfalls which a crash-out will foist on the EU27 governments of roughly 5 to 10% of the EU’s expenditure, which is committed spend. The exact figure depends on how you measure what the U.K. pays in vs. what it could be said to get back (you can run what-if and goalseek scenarios here). As the EU doesn’t have borrowing powers per se, it would have to pass the collection box round the remaining EU27 if there was a crash-out. Obviously it would cancel and seek to claw back funds paid to the U.K. but that’s not a certainty (some will be payments under contract or Purchase Orders to commercial companies; it’s the EU they’d want to see in court).

        It could even be said that with a crash-out now a material risk, the EU should be cautious about entering into anything which generated a medium term liability to the U.K. as there’s no guarantee they will get the corresponding funding either from the U.K. contributions or in lieu through a negotiated agreement with the EU27. Good luck, for example, trying to get (say) £5bn out of Germany and France each right now plus another £3bn from Italy and another £5bn from the others. Or some emergency cuts in the EU budget would be needed.

        Sure, the EU27 could ride this out. It’s not, in context, a big hill of beans. But they’d need to start planning for that contingency now.

          1. Clive

            Yes, definitely. But customs systems changes will be needed to allow levying of these — that work would need to start right now to be developed and tested in time. And they need to be aligned right across the EU27 from Greece in the south to Denmark in the north. Plus Turkey in the Customs Union. If there’s any holes in the bucket anywhere you get leakages as importers exploit them to evade duties.

      2. Yves Smith Post author

        I agree that this is for the EU27, that’s what I said in the headline: “EU to Members…..”. David Davis has repeatedly depicted EU warnings about crash out and other really bad outcomes as posturing. After Cameron, Johnson, Farage, and May, he’s probably next on the list of people to have their heads on pikes post Brexit (although Rees Mogg is a strong competitor).

        And that’s why I used the life jacket metaphor in my summary. For the UK, my metaphor has been “assume the brace position”.

    10. EoH

      Shakespearean human failings and competitive drama go only so far in explaining the Tories’ persistently fantasist positions. It becomes hard to avoid the conclusion that they want this hard, no-deal Brexit.

      For the extremist neoliberal, it creates fire sale opportunities. The Trumpian chaos would destroy at one go the remnants of the post-WWII institutional arrangements and social security systems. The rubble produces the most opportunities for profit-taking. A few broken eggs, perhaps, but what an omelette.

      Kissinger and Friedman would have longed for such an anonymous systemic upheaval when they recreated the Southern Cone’s economies. They had to resort to coups and muskets. The shock therapy didn’t work out so well in Russia, either, but then oligarchs, so good outcome.

      1. BillC

        Time to dust off and reread “The Shock Doctrine.” Unless Labour can quickly and competently pick up the pieces (a very tall order for even a cohesive party with exceptional leadership), the results are probably already described in one of Naomi Klein’s chapters; we’ll just have to wait and see which one (hopefully not Chile).

      2. animalogic

        I think commentators here have mentioned that there is a question of degree to post brexit chaos. Too much, and a genuinely revolutionary environment might be created – suspect neoliberal elites might not be overjoyed with that….

    11. Mirdif

      My own guess is that for aviation there may well be enough of a fudge to keep planes flying in the main. However, this may well be moot with Brits being priced out by a crashing pound.

      As for budgetary shortfalls, I would guess some projects would be put on hold and some bridges and roads would get cancelled in Eastern Europe. The €40 Bn figure is on the lower side of the estimates we saw soon after the referendum so I guess some of the hit has already been factored in. The EU would most likely use tools like the Paris Club to recover the money by other means. The financial services bods can probably think of some other arm twisting measures.

      I get the impression that the EU is the partner in a divorce that didn’t want it to go ahead but eventually became resigned to the fate and has now mentally moved on. Michael Heseltine was correct when he said the most dangerous thing is if they (EU) stop caring. I get the impression that point has now passed and with Verhofstadt’s statements today about reform indicates they are already thinking of the future and in their minds have factored in whatever hits they are going to need to take.

      I was speaking to my brother about Brexit and even though he follows the news daily, he still said “They’ll never allow the worst cases to pass” and “Look at the GFC, none of the things happened”. Very sadly these attitudes are very prevalent in the country. Very likely, there will be a mad rush for the exits come February and March next year. That is the best case scenario. The worst case is a mad rush post-Brexit day…they’re usually called refugees in that case.

      1. Anonymous2

        Worth reading the recent letter from ADS and GAMA to Barnier. It is not just all flights in and out of the UK that could be grounded but all planes anywhere using UK made parts. The whole world could be affected one way or the other.

        1. Mirdif

          Agreed. However, I think there will be some kind of fudge to mostly mitigate the issues. My view is based on statement of Donald Tusk some time ago where he spoke about the absurdity of this issue and the following part of a comment a few days ago on Richard North’s site. The commenter was prior to retirement a postholder for aircraft maintenance.

          UK Pilots and Engineers have UK issued d EASA licences which can before exit be freely converted to Irish or Latvian EASA licences which will have to be accepted by UK after BRexit . Ownership of Aviation in this country will be change do to European countries so that the work and certification continues .A large engineering organisation in the UK already has large subsidiaries in Latvia and Hungary . The UK organisation will become a subsidiary of the Latvian one with the engineers having Latvian Part 66 licences.
          Aviation won’t stop but UK owneship of it will.

          My guess is that aircraft that will be afflicted with this issue will more likely be found in Africa and Asia and they will continue to fly using the usual mitigations for not maintaining in due time. These mitigations mean that airlines with such aircraft operate in their own domestic and sometimes regional markets only and are usually not allowed to fly over or to European routes and in the cases where this happens their airplanes are inspected with a fine tooth comb before being allowed to return.

          1. Anonymous2

            I agree that work-arounds would be sought and often found, perhaps involving the US. My main worry at present here is that people seem to be assuming that the CAA will play an enhanced role but the CAA is saying it cannot be ready by 2019.

            The UK seems only now to be recruiting a civil servant to lead on UK/EU air negotiations. To me that suggests they are assuming that a withdrawal deal will be done which gives the UK and EU the transition time to do such a deal.

            Time will tell.

            As I think Yves implies below it could take just one oversight or gap in the documentation to ground a plane.

      2. Yves Smith Post author

        I would not be so optimistic. Airlines are very strictly regulated for safety reasons. The airlines themselves may be unwilling to participate in a fudge for liability reasons. Ditto aircraft lessors.

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