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It’s perplexing to see the cheerful tone of the press after Theresa May gave her evening talk to the members of the EU27 because nothing bad happened. To be more accurate, nothing happened except everyone for the moment got less cheesed off with each other. That is helpful for getting an agreement stitched up but vastly short of what needs to happen.
But what is outright troubling is that the EU27 has decided not to meet in November and no one seems very bothered by that. Recall that this was originally planned as a last-ditch extension of the original date for the agreement to be settled, at this very summit. Then at the disastrous Salzburg meeting, the European Council told May she’d better have shown enough progress by this Council meeting or no talks in November. Some papers speculated that the Council would meet in November regardless, to do Brexit crash out contingency planning, and to allow for the possibility to consider better UK proposals if May could somehow get things sorted out.
The next European Council meeting isn’t until December.
The way things seem to be moving is that the EU now seems to be falling into a sense of complacency. Having the November emergency session, even it it would be a nuisance for the parties involved, would be an important hedge against a crash out in terms of preparedness. It would also put pressure on May and more important, the recalcitrant Ultras. Polls are now showing that UK voters who aren’t undecided now split 40/60 for Leave v. Remain. That’s a big enough shift to potentially change the political calculus, even though the recognition of waning support for Brexit isn’t yet well reflected in the press. If, and this is a big if, the press were to turn even half as fiercely against Brexit as it was for it right after the referendum, it could change what is possible politically.
The other reason the EU backing off its earlier timetable is worrisome is that negotiations befit from a sense of urgency. The EU had set deadlines for moving the negotiations along. It now has no deadlines for hepherding the negotiations to resolution.
Worse, the UK side seems not to appreciate the operational requirements on the EU side. Richard North took May’s desire to present again to the EU27 leaders as a failure to comprehend that any proposal will have to be presented in a detailed form to the sherpas, at least a day ahead of any European Council meeting, so they can analyze it and advise their bosses. So the next maybe-sorta deadline for having the open terms settled is shortly before the December meeting, although the EU did say it was prepared to call a special meeting. However, the UK may well interpret that as meaning it can push things until January or February.
As commentor NormandChris said on Richard North’s website:
It is a terrible state of affairs when at what should have been presentation of a contribution, yesterday, from the Maybot towards solving the NI border backstop, that the only successful conclusion was she did not insult all the other leaders this time and the atmosphere was cordial.
According to the Financial Times, the EU thinks the ball is in Theresa May’s court:
EU leaders shelved plans for a special Brexit summit next month, saying they were waiting for Theresa May to make a decisive move in a negotiation that could still take some “weeks or months”.
The decision came at a short, low-key dinner on Brexit in Brussels, where Angela Merkel, the German chancellor, noted that talks had hit a “deadlock” and other leaders expressed frustration at political paralysis in Westminster, according to diplomats briefed on the meeting….
However, in the discussion over dinner after Mrs May had left the room, the German chancellor struck a pessimistic tone, saying that London needed to bring “new ideas”, according to two diplomats. A third said that Ms Merkel had advocated the EU’s holding firm in coming weeks.
Juha Sipila, the Finnish prime minister, said it was almost not worth holding the meeting “because we knew all the things we have been told”….
Dalia Grybauskaite, Lithuania’s president, articulated a frustration felt by some EU leaders when she called for “concrete understanding of what the UK really wants”.
“We don’t know what they want,” she said. “They do not know themselves what they really want. That’s a problem.
The Financial Times stressed that the negotiators would keep talking. But it’s not clear how long they can keep talking past each other, particularly since the UK may interpret Barnier’s effort to come up with creative solutions as a sign that the EU is anxious to get a deal done and will cede more ground if the UK keeps being intransigent. Perhaps I missed it, but I didn’t see a press report of any EU leader correcting the record on Theresa May depicting what she had agreed to in the Joint Agreement of last December as a new demand by the EU on the Irish border. Nor did I see anyone go so far as even tut-tut the UK for threatening to reopen the agreement on the so-called exit bill.
This section of EU’s morning European newsletter is what really got my juices going:
BREXIT FATIGUE: How did Wednesday evening at the European Council summit go? Well, there were no “humiliations” and a lot of goodwill. Is that a sign of “fatigue,” as one EU diplomat put it?…
The positive assessment: Unlike during September’s Salzburg summit, May didn’t appear to be putting on an act for her home audience. She didn’t repeat that the Irish backstop had to be temporary, or refer to “frictionless trade” (read: the single market). Tajani observed that her “body language” was “more positive than in the past.” Kurz said on his way out after the dinner that “a lot of what she told us was known to us. But the most important is that she wants to bring about an agreed solution.”
But but but: Leaders “expected more,” said one diplomat. “She was disappointing.” Some were expecting May to move beyond the known British position. In Salzburg all 27 leaders intervened, but “merely half of them” took the floor Wednesday night, one diplomat said. May left at around 8 p.m. The rest wrapped up their debate at a record-early 10:30 p.m.
No urgency: Once May took off for the British ambassador’s residence, the EU27 weren’t all that interested in hearing about the Commission’s plans for no-deal preparedness. The message is supposed to be that they want a deal — but feel no urgency on their end to strike one. “We’ve done so much under time pressure in the financial crisis,” said a diplomat who stuck around for a while. “We won’t be pushed.”
If that diplomat’s statement is representative of thinking in Brussels and in European capitals, it’s a very bad sign. Wanting a deal and getting one are two different things. And as frantic as the various bank and government rescues during the crisis were, they were not anywhere near as politically and operationally complicated as getting a Withdrawal Agreement completed with the UK parliament so divided. Having a central bank that you can deploy makes rescues like that feasible.
It seems as if at least some key people in the EU who ought to know better are falling into their own version of the pathology we’ve seen in the UK: “A crash-out would be so terrible, surely it won’t be allowed to happen.”
And we’ve seen too much of clever ideas that fall short of being solutions nevertheless being touted as the real thing, like a longer transition period. As PlutoniumKun pointed out yesterday in comments:
Taoiseach Leo Varakdar has said he could support the idea of a one year extension to the two year transition period which will run after 29 March next year.
However, it could not be a substitute for the backstop, he said.
“From Ireland’s point of view we’re willing to hear any proposals that might help to bring about a solution.
“A lot of us feel that negotiating a new economic and security relationship between the EU and UK within two years would be a real challenge and bear in mind within those two years you’d have to negotiate this new relationship, and it also have to be ratified by 28 parliaments.
“But I really need to say though that any extension to the transition period couldn’t be a substitute for the backstop. We would still need to have that, but perhaps it would allow people to have greater confidence that it would ever need to be invoked.”
The more I see of this, the less it seems. Barnier is simply throwing out the idea of giving more time if there is an agreement, he must know well this doesn’t in any way address the issues of the DUP/Ultras. I think we’ll see a string of these stories essentially offering minor concessions, the primary aim being to keep up the appearance of progress and EU flexibility.
And we also have the wee problem of the Ultras. From the BrexitCentral daily newletter (emphasis theirs):
However, some reports are talking about a year’s extension, which would mean vassal state status for the UK extended until the beginning of 2022 and the idea is already provoking deep hostility from Brexiteer voices back home, not least because of the additional financial cost involved: even an extension of a single day into 2021 would take us into a new seven-year financial framework, in all likelihood without the UK rebate taken into consideration any more. The bill for one year would be at least £10 billion (and some suggest it could be nearer double that) while having to continue to abide by all EU rules, including freedom of movement, without any say.
And Labour’s Shadow Chancellor isn’t keen either, and point about the business community not being keen about a prolonged transition being a negative for the business community is yet another complicating factor:
John McDonnell has ruled out the notion of extending the Brexit transition period beyond March 29 2019.
European Parliament President Antonio Tajani commented on Thursday that “both sides mentioned the idea of an extension of the transition period as one possibility which is on the table”.
However, the shadow chancellor does not believe this is viable and told ITV News Political Editor Robert Peston: “Everyone I talk to now – business leaders, investors, trade union leaders – all of them are saying the uncertainty and insecurity at the moment mean that decisions are not being taken about long-term investment.”
“There is a real issue if this drags on that uncertainty drags on – we need a deal.”
And we have the press continuing to flog the UK misapprehension that a customs union would keep the UK in the single market and prevent the need for a hard border, such as in this Politico story, UK, EU take tentative steps toward a backstop compromise:
Brussels is prepared to write a new clause into the Brexit divorce agreement allowing for a legally enforceable, U.K.-wide customs arrangement to give London certainty that the Irish backstop will never be used, two senior officials familiar with the negotiations said.
Help me. A customs union won’t produce “frictionless trade”. Richard North must have produced a week of posts with different example of customs union arrangements showing border stops.
Now having said that, some countries are not slacking off on disorderly Brexit planning. Again from the Financial Times:
France published a draft bill to handle a no-deal exit in March 2019 that empowered the government to use emergency decrees to reimpose customs checks and impose visa requirements on British citizens visiting France.
The lack of any momentum is also a bad manifestation of the Soros concept of reflexivity. Reflexivity is a fancy word for market dynamics feeding on themselves, oftentimes disconnected to fundamentals or other real-world issues. As vlade and other readers have stressed, one thing that would shake the UK out of its torpor would be a sterling crisis. But it appears that the UK businessmen who are clued in enough to be alarmed are afraid to express it in a public setting for fear of being hammered in the press and if they do business with the Government, of being punished commercially. Similarly, if EU officials act as if the lack of progress is no big deal, Mr. Market will take that as proof that an agreement will come together at the 11th hour and/or a crash out isn’t as terrible as the worry warts say.
In other words, serious financial wobbles have the highest odds of getting UK MPs to hold their noses and vote through whatever deal May can get done to secure a transition period (not that I am sure that will happen; the Ultras seem to be as dogmatic our NRA or Freedom Caucus, but it might lead Labour members to cross the aisle). And events seem to be moving in a direction to prevent that critical source of pressure from kicking in until too late.