Financial Times Goes Wobbly on Brexit; Runs Front Page Stories Claiming Theresa May Charm Offensive Is Winning “Fudges” When No Such Thing Is Happening

Hopefully UK-savvy readers can opine as to why the Financial Times has gone soft in the head on its Brexit coverage this week. This matters because for the most part, the pink paper has been generally sound on Brexit, which is rare in the UK. It has also done important original reporting, such as flagging very early on how the UK’s Customs IT systems would be unable to handle a Brexit and on the huuge number of international agreements that the UK would need to replace when exited them by virtue of leaving the EU.

Admittedly, the Financial Times has run planted stories, like its occasional pieces of what City lobbyist are trying to get the Government to do, but it’s been pretty even handed in those write-ups. It has also run two, maybe three optimistic stories that seems out of synch with the trajectory of events, of the “Ys, the EU is gonna be nice to the UK” ilk, based on reports from “EU diplomats”. In one story, the Financial Times named their countries, and they were clearly too uninfluential and too few in number to make a difference. I debunked one in passing and ignored the others, in part because they weren’t given prominent placement.

But the Financial Times has started pushing the line, hard, that the EU is going to give the UK concessions to get a withdrawal deal done, supposedly because EU leaders want to keep May in office as well as appease their business leaders. The newspaper published two articles in this vein this week, each as the lead story in the US edition.

From Wednesday’s piece, Brussels willing to accept fudge on vital Brexit pact:

The EU is willing to “fudge” crucial Brexit negotiations — and offer Britain a vague blueprint for future ties with the bloc — if it helps Theresa May avoid a “no deal” outcome and win parliamentary backing for a withdrawal treaty.

The development comes as the UK prime minister steps up talks with EU leaders, including a meeting with France’s Emmanuel Macron this week.

Since the start of talks last year, Brussels, Berlin and Paris have stressed the need for a “political declaration” on future relations that would unambiguously make clear what kind of trade relationship the EU and the UK will have after Brexit….

British officials are convinced that Angela Merkel, the German chancellor, is helping soften the EU’s approach after a more positive meeting with Mrs May earlier this month. One UK official said the chancellor was ready to give Michel Barnier, the EU’s chief negotiator, “more freedom” to close a deal.

Translation: The Financial Times has decided to throw its institutional weight behind the Government’s latest fantasy.

The Guardian begged to differ on Thursday in German sources deny Brexit deal offer amid warning from pro-EU camp:

Reports that Germany is willing to offer Theresa May a vague Brexit deal so as to prevent the UK crashing out of the EU with no deal have set alarm bells ringing among anti-Brexit campaigners in the UK and prompted denials from German sources…

German sources insisted that despite several reports from Brussels and EU officials, no instruction had been issued to the commission to back a vague blueprint, adding that clear guarantees about the planned future trading and security relationship would be required by Berlin.

Note that most of the story was about the Remainers’ freakout if the rumors were true.

And today’s, headlined EU shows sign of softer position on Irish backstop. From the text:

Michel Barnier, the EU’s chief Brexit negotiator, declared in an article published in 20 newspapers across Europe that he was now willing to “improve the text” of his proposal for a so-called backstop solution to avoid a hard border on the island of Ireland.

Mr Barnier also promised that the EU would seek a relationship with the UK that was “unprecedented in scope and depth” — seen in London as a sign that Brussels may go beyond existing models of co-operation with third countries.

This is sheer lunacy. I read a translated version of the Barnier op-ed in El Pais (hat tip Ignacio). He said absolutely nothing new. The Financial Times seems to have caught the Government’s disease of hearing what it wants to hear.

Richard North has ignored the Financial Times’ spin, deemed the UK to have gone past the point of no return on Brexit (which in pilot terms, means a crash or hard landing is baked in). Politico, which keeps close tabs on Brexit developments and hasn’t found anything newsworthy in May’s grand tour, roused itself to issue what looks like a rebuttal of the Financial Times’ story. First from its daily European newsletter:

THERESA MAY GETS A PRIVATE LESSON: British Prime Minister Theresa May has another chance to hear what the Continent has been telling her all along (including Germany, in which her government seems to have seen reason for fresh hope, judging from reports in the British press about a would-be Merkel about-face). May will meet Emmanuel Macron today at Fort de Brégançon, the French president’s holiday retreat.

The EU’s line has consistently been that a new, special, deep, unheard-of partnership with the Union is more than welcome — as long as it doesn’t harm the integrity of the single market (plus Britain caving on the backstop to avoid a hard border on the island of Ireland). Some say that with a friendlier tone than others, but the core message has never changed ….

Michel Barnier, for his part, said in the nicest way possible, in an opinion piece for a range of European newspapers, that the Chequers white paper won’t fly as it currently stands.

And from the Politico story Brexit deal off the menu at May-Macron summit:

Theresa May can look forward to an excellent dinner at Emmanuel Macron’s holiday pad, but she shouldn’t expect a Brexit concession for dessert…. there is little sign that the U.K.’s latest round of grand tour diplomacy is shifting EU red lines.

“The only negotiation channel is through the EU Commission’s Brexit negotiator Michel Barnier,” said a senior European diplomat, speaking on condition of anonymity…

Barnier is also showing no sign of softening in the summer heat.

In an op-ed published Thursday and titled “An ambitious partnership with the U.K. after Brexit,” Barnier torpedoed May’s proposal on market access in the nicest way possible. It was the latest in the EU negotiator’s continuing effort to make clear that the core of May’s proposal is unacceptable to the EU27 without fully rejecting her white paper so completely as to potentially derail the talks or even imperil May’s government…

But most of Barnier’s piece was focused on the urgent need for a solution for Ireland and on why core aspects of May’s Chequers plan are unacceptable to Brussels because they threaten the integrity of the EU single market…

In Berlin too, there was no sign Thursday of a shift in mood music. Germany’s outgoing top Brexit official, Peter Ptassek, tweeted out a link to Barnier’s op-ed, stressing what has been the EU’s top priority in the Brexit negotiations since the start of the year: the need for a safeguard, or backstop, to prevent a hard border between Northern Ireland and Ireland.

And officials expressed surprise that anyone on the U.K. side might have detected a shift in Angela Merkel’s tone on Brexit after her July 5 meeting with May in Berlin.

“There hasn’t been any change whatsoever,” a German foreign policy official insisted.

The Guardian also saw the Barnier article as a slap to the UK’s pig-headedness. From UK’s Brexit proposals threaten future of EU, says Barnier:

Michel Barnier has launched his own appeal for hearts and minds in Europe by warning that Theresa May’s Brexit proposals, put forward in the UK government’s recent white paper, pose a threat to the future of the European single market….

Barnier’s line is a familiar one in Whitehall, but the publication of his article is incendiary given the push in recent days by May and her cabinet to try and forge a new approach to the negotiations with the EU27 states.

I read this differently. Barnier told May before she launched her charm offensive that her time would be better spent on going back to the drawing board. As we wrote last last week:

On top of that, May plans to go over Barnier’s head to get him overruled. Barnier saw fit to clear his throat about that:

Anyone who wants to find a sliver of difference between my mandate and what the heads of government say they want are wasting their time, quite frankly.

Theresa May tried this stunt before (there have been so many Brexit twists and turns I can’t recall over what) and it didn’t work then.

More important, May’s efforts to go mano a mano is hugely disrespectful to the EU. It isn’t simply that she’s trying to undermine Barnier. It is that the EU set forth at the end of April 2017 the guidelines for how the negotitions would be conducted, including the sequencing of issues. The UK grumbled a bit but did not attempt to renegotiate the EU deciding the shape of the table. That exercise included the EU27 giving Barnier his negotiating parameters.

The only way to change that would be at an EU Council meeting. May acting as if she can get waivers by talking nice to a few head of state again demonstrates how the UK acts as if everything should be done to accommodate its whims and foibles.

Barnier showed some pique in his earlier remark. It seems plausible that this article was meant as a passive aggressive slap at May, and that he’d have the full support of the people who count in the EU27. But the bizarre articles in the Financial Times, apparently based on Government whisperings, show that UK officials are so thick, they don’t even realize they are being dressed down.

Print Friendly, PDF & Email


  1. bold'un

    There are temporary fudges and permanent ones. Perhaps the FT believes that It is in the EU’s interest to grant some generous but temporary fudges to avoid a cliff-edge for a major client; they can subsequently reel them back piecemeal, a little like Trump playing with NAFTA. So even if Barnier is right that Chequers proposals threaten the single market, that does not mean that the EU cannot toy with them for a few years using a fudge that contains a subtle escape hatch. FTAs typically have a six month termination clause, for instance. Even better diplomatically the need for a future rethink could be framed as coming from others like the WTO or from an EU desire to sign a FTA with the Americas or Asia that ‘sadly’ renders the UK one unworkable…

    1. Yves Smith Post author

      No, the EU has said the transition period goes only to the end of 2020. The UK wanted 3 months more. It will mess up the EU budget cycle plus will cause havoc with the EU parliament to have the UK stay longer.

      Plus WTO rules forbid any country giving a special deal to one country and not others that have “most favored nation” status, so the EU has to set strict time limits on the transition deal, since its own members could demand concessions the UK has gotten.

      Having said that, the Article 50 language just says the withdrawal deal has to (forgive me for not looking up exact language, I need to run) be “In light of the future relationship”. This is pretty lax. And it was the UK that was insisting early on that they had to have a trade deal when that was impossible in two years if they were going to pay the “Brexit bill.” Those folks recognized the UK has more leverage re a trade deal before it departs the EU than after.

      Shorter: a fudge on that issue is an EU win short term, although given what a mess the UK is, it just means an even longer duration of stupid talking past each other. I should have spelled that out, that the FT has this backwards.

      Re Ireland, see below, I don’t see the EU fudging on that. Making language seem less harsh isn’t going to amount to a real concession, IMHO.

      1. Dave

        Having said that, the Article 50 language just says the withdrawal deal has to (forgive me for not looking up exact language, I need to run) be “In light of the future relationship”.

        “taking account of the framework for the future relationship”

      2. bold'un

        I was thinking more of a ‘fudging FTA’, applicable after the transition:
        So for instance clause 1) yes, we hereby authorize you to collect customs dues on our behalf till end 2023;
        but clause 2) audit necessary at your expense
        clause 3) We will inform you by end 2022 whether this clause is prolonged for another 3 years (hint – don’t count on this)
        My intuitive guess is that moving from member to 3rd country will probably take the UK and EU around 7 years to digest, so about 3 years of ‘fudge’ post 2020 is reasonable. This is about avoiding cliff-edges not about the final post Brexit state. If the UK manages to game the fudging clauses in 2022/23, this can be thought of as a small discount on the Brexit bill!

        1. Yves Smith Post author

          The EU is not going to let the UK have privileges that no one else would enjoy, which included cedeing any bureaucratic powers to the UK. Barnier was explicit and went on at considerable length why letting the UK collect customs duties was a non-starter.

          And in any event, as we’ve written, the UK fixation on a customs union is bizarre. That won’t produce frictionless borders. Turkey is in a customs union with the EU, for instance, and still has a hard border. A customs union does not solve the problem the UK is trying to solve.

  2. PlutoniumKun

    Thanks for this, those articles in the FT, etc., puzzled me. I tend to assume newspapers like the FT don’t print things like this without checking their facts, but silly me. Apart from anything else, the notion that Merkel would float the idea of compromise on Brexit without consulting other EU capitals first is crazy. It would be completely out of character for her to risk a backlash from other members of the EU27 who don’t like to be seen as Germanys poodles. They may be exactly that, but nobody likes to be seen as what they are.

    There seems to be two parallel narratives going on in the UK media – the ‘we’re all going to run out of food’ one and the ‘its ok, there will be a deal in the end, it will be a horrible one, but a deals a deal’. It seems the financial world has focused on the second one. Now whether this is wishful thinking, complacency, or even a plot to make more money out of Brexit, I’ve no idea.

    1. Colonel Smithers

      Thank you, PK.

      I will ask the FT about their fact checkers later this month. I am meeting one of the journos / your compatriots.

      1. Lambert Strether

        Please tell them that this America voracious consumer of news regards the FT as the only decent premier league paper he reads (and that includes the New York Times and the Washington Post. The Wall Street Journal is good only for hard business news, where the FT covers the waterfront).

        If the FT, as a journalistic enterprise, is going squishy and pear-shaped, it really is all up with civilization, and I might as well throw in the towel and make my own exit, pronto.

        1. animalogic

          “If the FT, as a journalistic enterprise, is going squishy and pear-shaped, it really is all up with civilization, and I might as well throw in the towel and make my own exit, pronto.”
          “Pear shaped”, “all up for civilisation” & “throw in the towel” reminded me of this article by Robert Hunziker (great writer for scientific illiterates like me).
          Maybe the FT is the canary in the coal mine ? Doesn’t matter – we are ALL in the poo…Suggestions as to realistic “exits” warmly received.

    2. jsn

      I was at a funeral a few weeks ago with a bunch of English financial types, all Tory Tory Tory Kamikazes, and to the person they all believed May would be able to go over the heads of the entire EU bureaucracy and make a deal directly with Merkel.

      I’m personally of the mind that no one’s really been fully at the helm of Western Post War institutions since the Truman Administration, and thus that institutional forces beyond the ken of our nominal leadership have been piloting the ship ever since. The shoals approach.

      1. Anonymous2

        I agree. The depiction of the EU as the Fourth Reich is IMO overstated. Surely Germany is the most powerful member state but that does not mean they get to call all the shots. Does California rule the US – similar situation although not identical.

        Germany’s power, like that of any member state, ebbs and rises with circumstances. When dealing with Greece, they, as the major creditor, were dominant. When parcelling out Syrian refugees? Err, no.

        1. PlutoniumKun

          Even with Greece, it wasn’t just Germany – it was countries like the Netherlands and Finland which led the hard line.

          Its really just goes to show the ignorance of many about how the EU works. Of course Germany and France are very powerful, but the internal dynamics are complex and vary according to the topic – even the biggest blocs don’t always get their way if they wind up the smaller countries sufficiently.

          There is no way Merkel would try to impose an agreement on the rest of the EU27 over Brexit, simply because it would mean having to use up lots of diplomatic ‘credit’ on a topic that just isn’t that important. Maintaining an EU27 concensus on Brexit is the no.1 priority for Germany – more important even than the wishes of BMW or VW. This is something the Brexiter strategists have never understood.

          1. jsn

            In my experience, the better one’s power skills are, ones abilities in the competition for social dominance, the less aware of systemic effects one tends to be.

            Thus, now, after two full generations of NeoLiberalism wherein will to power has been remarried to money, we’re left with a bunch of socially dominant loons running the Western world completely oblivious to the epic scale of destruction their misrule will continue to wreak through AGW for centuries to come.

  3. Frenchguy

    I was puzzled by the FT article as well.

    It might not be all smoke though. There definitely are some signs that May is laying the groundwork for caving in on the Irish backstop. The white paper pointed clearly in that direction:

    Taken together, such a partnership would see the UK and the EU meet their commitments to Northern Ireland and Ireland through the overall future relationship: preserving the constitutional and economic integrity of the UK; honouring the letter and the spirit of the Belfast (‘Good Friday’) Agreement; and ensuring that the operational legal text the UK will agree with the EU on the ‘backstop’ solution as part of the Withdrawal Agreement will not have to be used.

    And Bloomberg has also been pushing this line:

    British officials are considering allowing the EU to impose its market regulations on Northern Ireland, while the rest of the U.K. breaks away after Brexit, according to a person familiar with the matter who declined to be named outlining proposals that aren’t public.

    The Irish Times thinks a little sweetner might be given and everyone will pretend like it’s not a cave-in by May but the result of hard negotiations:

    The EU is unlikely to agree to British proposals to stay in the single market for goods, senior sources say, but may be willing to talk about access to the single market for agricultural goods only when Brexit talks recommence in Brussels later this month.

    It is expected that a new text for the backstop – which guarantees no hard border even if the UK leaves the EU without agreement on a future trading relationship – will be tabled when the talks resume in Brussels in mid-August.

    “They can call it the silly little Irish backstop that will never be used if they want,” said a Government source in Dublin. “That’s fine. As long as it does what it needs to do.”

    Of course, the main problem is the DUP. I can’t find the source right now but I’ve read that they might accept a regulatory border in the Irish sea but they don’t want a customs one. Seems odd to accept one and not the other and not sure if that would be doable… Note also that May has won votes on Brexit despite some rebellion in her camp (thanks to few labor votes) so she might try to have a go at it.

    And, of course, all that ignores internal Tory politics…

    1. Frenchguy

      And I missed it but the Open Europe newsletter pointed out today that, according to the Times, the UK was also ready to cave-in on the governance part of the withdrawal agreement (which was, with the Irish backstop, the last thing left to agree on):

      Britain has privately conceded that EU judges will be legal arbiter of disputes over payments to Brussels and the residency rights of more than three million European citizens.

      EU negotiators now believe that the issue of dispute resolution has been settled. “If there is no consensus then disputes go to the ECJ,” said one. “This is an important development.”

      The question remains if she can get Parliament to swallow all that but she does seem to have a plan after all…:

      Brexiteers said that the concession was another climbdown by Theresa May. Sir Bernard Jenkin, a eurosceptic, said that it was unacceptable and that Brexiteers would reject it in parliament.

      1. Colonel Smithers


        Open Europe and its affiliate Open Britain have close links with the Tories and Remain camps. Mats Persson and Raoul Ruparel have advised the government, Cameron and May administrations. Nina Schick cancans as cheerleader.

    2. PlutoniumKun

      Thanks Frenchguy – I missed that Irish Times article – I think the most likely deal if it happens would be a UK cave in on the Irish border backstop in all but name. However, the DUP are hyper vigilant about ‘betrayals’ (so far as they are concerned, all of history is a long series of betrayals), so I’d be surprised if they would accept some sort of verbal fudge. Even if as individuals they were ‘persuaded’ (i.e. bought off), they are backed by the most hard core Brexiters.

      Its possible though that they would accept a ‘temporary’ arrangment in order to help NI farmers, which of course is likely to stay less than temporary.

      1. vidimi

        i think May is just waiting for the right moment to throw the DUP under the bus. if she does it now, then the negotiations can move on to other matters but the DUP will revolt and she will need to call a snap election, which she will likely lose to labour. she needs labour to fall in popularity enough to risk calling another election and the media are doing the best they can to aid her with this by associating labour generally and Corbyn personally with antisemitism.

        1. PlutoniumKun

          I think she will have to throw them under a bus at some stage, assuming she will do anything in the end to avoid a crash out Brexit. But I was surprised at her vehemence when she talked about the Irish Sea border a couple of weeks, she painted herself into an unnecessary corner (yet another unnecessary corner). I think if she was actively strategising on how to get around them, she wouldn’t have ruled it out so unambiguously.

    3. Yves Smith Post author

      The EU can’t give in on the backstop. The only solution that works for the EU is a sea border, and the backstop is their mechanism for getting the UK to accept that.

      The EU is no way, no how gonna accept Northern Ireland becoming the entry point for all sorts of non-compliant goods, particularly food. The French for starters would go utterly batshit.

      1. Dave

        The EU can’t give in on the backstop. The only solution that works for the EU is a sea border, and the backstop is their mechanism for getting the UK to accept that.

        How does the Hoey amendment to the trade bill impact on this?

        Although it’s not made it through the Lords yet, wasn’t it passed in the Commons saying that there legally couldn’t be any trade differences between Northern Ireland and rUK?

        There’s probably a way of fudging the language that I missing, but it would seem to be me as though it’s both in law (whatever they ended up calling the Repeal Bill) that there can’t be a land border, or being put into law (the Hoey Amendment) that there can’t be a sea border.

  4. vlade

    The closer to the deadline we get, the sillier ideas will be floated.. (the silly idea of the day today was a referendum that would say “crash out or May’s deal, whatever that is”).

    That said, we need to be careful. What matters for EU with Marc date is the withdrawal agreemend (WA). I’d fully believe that the EU is willing to fudge the _political_ statement of future relation, even appearing to give May some “winning points”, if it gets WA it wants – because it’s political, and is, at most, a starting point of any future negotiations. Which may end up with something entirely different, especially if it’s sufficiently ambiguous.

    If the EU gets its WA (including NI, which is the real square-circle problem), then it can use the 21 month transition period to prepare for a crash-out Brexit, as it assumes the political declaration that goes with WA will not achieve anything in the end (a good guess based on what we have seen so far), and avoid having to unanimously extend A50.

    So the EU avoids crash-out Brexit it’s not yet prepared for, and the UK can’t do much during the transition period (there’s a hard date, and no provisions to extend/shorten it in the current draft of WA). Which is why I believe that fudging the _political_ statement is entirely possible. Fudging WA? Not so.

    1. PlutoniumKun

      I think you are right that the EU would ideally like a WA, and would be willing to give May some ‘victories’ on the basis that it gives them more time to prepare. Thats why I wouldn’t rule out a December surprise of some kind or other. But I do wonder whether they will see that as granting more time to prepare, or just dragging out the pain. At this point they must be sorely tempted to just walk away without a glance back.

      1. vlade

        Well, if I was them, I’d use it to prepare – especially since there’s zilch chance of doing a proper FTA or anything like that in those 21 months, as Tories (and Labour) would be as split come April as they are now.

        So basically, it would be time to get the basic treaties (like the airspace, energy etc.) out, which likely could be done (at least between the UK and the EU) reasonably quickly unless the UK dithered (always a possibility). It would also allow the Channel ports to get on with getting some basic infra up and running.

        Anything extra would be a bonus. Of course, the problem is if the UK would continue to act entirely irrationally (i.e. dickering in the Parliament over stuff that the Parliament has no say), then it would be added pain – but even so, it would allow more companies to move, and those that could not, prepare better.

        1. Ignacio

          Thank you Vlade and PK for your analysis and ideas. I am in your camp in the sense that something will be signed before march 2019, almost certainly in the eleventh hour. I wonder if the DUP is able to realise that they will, almost certainly, be thrown under the bus. May is just buying time and all those meetings with Macron and Merkel are cosmetic. As to Yves concerns about the FT coverage, I believe they have agreed to play the waiting game and concede some cosmetic positivism to May. Whether the FT should stick to stricter reporting or join the political game for some kind of better outcome is a legitimate question to argue about.

  5. makedoanmend

    “Brexit: Bank of England Boss Mark Carney Warns No Deal Outcome Will Mean Higher Prices and ‘disruption to trade as we know it'”

    “”The Bank of England governor says a no-deal Brexit will mean higher prices and “disruption to trade as we know it”, in a stark warning of the impact on the country.

    Mark Carney urged Theresa May and other governments to “do all things to avoid it” – just hours after No 10 again insisted she was ready to crash out of the EU with no agreement if necessary…

    …Mr Carney also highlighted the pain already inflicted by the vote to leave the EU, saying: “We have gone from the fastest to the slowest growing [economy] in the G7.”

    The UK economy had “grown by a percentage point less up to spring of this year than we had projected prior to the referendum”, he said – with a “real pay squeeze on British households”.”


    “Noel Whelan: Anglo-Irish Relations Hit a New Low”


    “EU to Explore Brexit Deal on Single Market for Agriculture”

    “Such a move is likely to be welcomed by the Irish Government as it could overcome many of the potential difficulties at the Border after the UK leaves the EU. However, it would require the EU to move on some of its red-line issues, which it has not been willing to do until now.

    On Thursday, EU chief negotiator Michel Barnier signalled a willingness to “improve the text” of the backstop with the UK, echoing a declaration by the Taoiseach earlier this week of flexibility on the issue.

    In an op-ed piece carried in several European newspapers, Mr Barnier said the EU was “ready to improve the text of our proposal with the UK”. It is expected that a new text for the backstop – which guarantees no hard border even if the UK leaves the EU without agreement on a future trading relationship – will be tabled when the talks resume in Brussels in mid-August.”

  6. Colonel Smithers

    Thank you, Yves.

    “The Financial Times has run planted stories.” You mean the expose of the Presidents’ Club. That was an interesting diversion. I am catching up with one of the hack(ette)s involved later this month and will ask what else thy plan for our entertainment.

  7. Anonymous2

    I can see some inventive wordsmiths being asked to come up with words that appear to ‘fudge ‘ one or two issues where agreement is difficult but without changing the underlying reality. For example the present EU wording on the Irish backstop reads pretty starkly. I imagine someone bright could come up with words that have the same effect but read more emolliently. But is anything other than optics at the heart of this? I would be surprised.

  8. vlade

    Seems my comment got lost, so tldr version:

    I believe the EU could fudge the political statement (which can be as ambiguous as they want, since it’s statement of intent, which politicians are masters of ignoring) to get the withdrawal agreement they want. Less likely to fudge WA.

  9. Mirdif

    My guess is that it’s silly season as the MP’s are away so the papers need to find something to print to keep their readership entertained lest they go elsewhere.

    1. Anonymous2

      I believe WTO rules now also impose restrictions on state aid which would hinder many of Corbyn’s ambitions.

      Richard North calls it the double coffin lid. HIs line is that even if the UK leaves the EU it will find it is still trapped.

      1. Shane Mage

        There is nothing outlawing nationalization or state aid in the EU rules. Outlawed are subsidies prejudicial to competition and discrimination in favor of particular companies. But nothing can interfere with a country’s social legislation governing such things as salary scales, hours and conditions of work, types of employment contract, unionization, public access to all relevant information, obligation to act in all respects to further the public interest, worker participation in management, etc. As long as “private” or cooperative enterprises were to be treated equally under those laws, nothing in EU membership could interfere with the ability of a really populist government to carry out really radical social transformation and set an example for the rest of Europe of what a people’s movement could accomplish within the EU and without unscrambling any more omelettes. Possible? Not so long as Labour is led by centrist social democrats a la Corbyn! Is there anyone in Labour who even starts to understand what Varoufakis is saying about Europe?

    2. PlutoniumKun

      If they really think this will worry EU negotiators, then they are even more clueless than they appear. Whether on a WTO regime or some sort of bilateral agreement, the EU would call all the shots on trade across the English Channel. They can easily tarrif any product if they think its getting excessive State aid.

      1. vlade

        Not to mention that state aid is restricted under WTO rules too, although less so than under EU. But really, the EU has a number of countries with state companies – there’s no law against nationalisation.

        The only law there is is against ANY (public or private) companies receiving state-aid that no other competing company gets. That still doesn’t stop say Germany or France to run a very efficient rail – mostly public, etc. etc.

        I’d point out that the National Rail, the company owning and running the rail infra in the UK already is public (was re-nationalised after the privatised went bust), and still is run like sh1t (“failed signals” anyone?). Same for Tube. Managers can loot public companies just as well as they can private.

        1. Mirdif

          For a long time it’s clear that the Tories are as interested (perhaps even more) in preventing a Corbyn government from emerging as they are in Brexit. FWIW, I disagree deeply with Corbyn but his economic policies surely cannot be any worse than the rubbish we’re lumbered with at the moment. The National Rail example is one of the best, whereby nobody is sure where responsibility lies and it’s all just a game of finger pointing. So much of modern Britain is like that and this in no small way contributes to the very poor productivity in the country.

          TheTories, however are currently busy cutting the legs off the state aid ideas that Corbyn has and they have also killed his idea of restricting bidding on government work to British companies by signing up to WTO GPA a couple of months back. Furthermore, most of what Corbyn wants cannot be achieved once Britain crashes out and on to WTO rules whereby Britain becomes subject to SCM rules which prevent government from providing any goods or services and thus no nationalised utilities or railways…and perhaps the NHS is a goner as well.

          This is yet another reason why I think a goodly amount of the Tories are likely to prefer a crash out. I actually think the Tories are likely to win the next election and Corbyn will likely not be around even in the even of an epic crash out. Those who talk of the Tories being out of power for a generation need to bear in mind that the various forms of the Tory party are second only to the monarchy in longevity and will in all likelihood outlast the monarchy.

  10. jfleni

    There is a good reason that the Irish are proclaiming that the island is actually a single entity from north to south;
    all the machinations of perfideous Albion notwithstanding
    it’s a glaring fact, and politicians including DUP cannot change that blunt fact. Tiny statelets left over from the religious wars of antiquity won’t change it either.

    When Ireland opens up its dozens of viable ports, the jobs and ferries will swarm all over nearby EU ports, (France, Spain, Portugal) and the Irish will get the jobs and business that Albion ignores. The EU will make the investments needed, and even the UK will benefit in the end.

  11. templar555510

    The FT like all newspapers is fighting a losing battle for those who want to be ‘ better informed ‘ because it can’t deal with reality any more than any other mainstream media. Just try attempting to get a letter published that doesn’t fit somewhere within the mainstream consensus and see how far you get. I got to ‘ your letter is under consideration ‘ recently with the FT on the topic of UK government spending . In my letter I said that our government ‘ spends and taxes ‘ in relation to increasing the spending on the NHS which the government had said was coming out of a ‘ Brexit dividend ( I know, don’t do yourself an injury laughing ) . I posed the question why is this the ‘ dirty little secret ‘ of how government spending and taxation works. Needless to say my letter didn’t get published. It simply fell too far outside the mainstream consensus . The FT et al are going to hold the line until such time as they either expire, or undergo some sort of Damascene conversion.

  12. Tom Stone

    I’m reminded of a T shirt I saw decades ago that read
    “Bulimics have their cake, and eat it too!”.

  13. flora

    I suppose FT knows Brexit is going very badly, and that the stumbling block is the UK govt. If FT wants to encourage its readers to blame the EU for the disaster instead of blaming the UK govt or the Tory party or May for the disaster, then this nonsense “reporting” is good preparation work. (‘It’s all the EU’s fault because they were going to offer concessions but then they didn’t. They tricked us.’ That will be the next series of FT stories once the Brexit ship runs aground. imo.)

    It’s nonsense but it has short-term political utility.

  14. shinola

    Again, I would like to thank Yves & UK commentators for educating this ignorant Yank on Brexit. If I had only the US MSM to rely on, I would know nothing about it except ‘Britain has decided to leave the EU.’

    I have a really dumb question; it seems that this thing was not really well thought out so why doesn’t “Not such a good idea after all – so, never mind” seem to be an option?

    1. windsock

      Apologies if this appears twice. I think mh first attempt got eaten.

      1) It’s a political impossibility for the UK Tory Government to admit it was wrong to implement the referendum result – it can’t admit it is wrong about anything.

      2) The government would have to tell the 51.9% of those who voted for Brexit that they can’t have what they voted for – and in their eyes, deserve to have, in a democratic result.

      3) Some Brexiteers maintain Brexit could be good for the UK – but the government is doing it wrong. EVERYONE agrees the government is doing it wrong.

      4) The other 27 EU governments, and possibly the European Court of Justice would have to agree to let us withdraw our notice to exit – and some might not be disposed to agree to that.

      5) The UK is now hopelessly split. Leaving the EU will happen at some point, even if minds change this time. Those who want the UK to leave will make it happen, by hook or by crook, even if the EU has to crumble to allow it.

      1. Yves Smith Post author

        RE #4, the other 27EU governments would agree. The body language from the EU from very early on has been that if the UK asks to rescind its invocation of Article 50, they’d let it out up to the last minute. It would be a monster win for the EU: demonstration that the UK recognized that Brexit was too costly and difficult, and the UK as a bin economy with its own currency, is in a better position to depart than anyone else. Both the “be tough with the UK” and the softer factions (the ones who trade a lot with the UK and would lose the most) would be delighted with this outcome.

        1. windsock

          I see your argument, but as we have always been a member of the awkward squad and we have so many exemptions from EU protocols anyway (Schengen, the Euro), I can easily see, say, France, putting up barriers (such as losing such exemptions), which would make it difficult for the UK Government, which ever way it jumped.

  15. Synoia

    Financial Times Goes Wobbly on Brexit; Runs Front Page Stories Claiming Theresa May Charm Offensive Is Winning

    Theresa May and Charm Offensive in the same sentence? Interesting juxtaposition.

    What caused it, Necrophilia, magical potions, or the threat of being hit with her broomstick?

Comments are closed.