Brexit: Send in the Clowns

Just when you thought the UK’s approach couldn’t possibly become more shambolic than it has been, its leaders manage to outdo themselves.

Even though Parliament delivered the expected outcome of voting against a no deal Brexit, the process got so utterly out of control that the Government whipped against its own motion. And it probably didn’t help that May had promised MPs a free vote….so why was whipping happening in the first place?

Moreover, as we’ll describe below, the amendment that caused the train to go off the rails, which provided for a more comprehensive “no deal” position than May had put forward, won by 312 to 308 despite the Government’s opposition, yet another black eye for May. And the main motion passed by a 43 vote margin…despite the Government whipping against that too. Even though the margin seems a bit thin relative to the supposed widespread antipathy for a crash out, it was still ample. Sterling went up to over 1.335 against the dollar.

May has managed the difficult task of reducing her weak authority even further. Ian Dunt (hat tip Richard Smith) walked through the train wreck of the day’s votes. Forgive me for quoting at length, but you’ll soon see why:

It was as if all the qualities of the Brexit debate came together in perfect unison…..It was a masterpiece of haplessness. Peak Brexit…

Once again, the prime minister tried to pull a fast one. Instead of simply ruling out no-deal, it [the motion] added a caveat. “That this House declines to approve leaving the European Union without a withdrawal agreement and a framework for the future relationship on 29 March 2019,” it read. So far, as expected. But then came the twist. “And notes that leaving without a deal remains the default in UK and EU law unless this House and the EU ratify an agreement.”

On point of law, this was simply a truism….But it was a pointless truism to state. This motion was about instructing the government…

The real meaning of the caveat was political, not legal. It sought to keep the possibility of no-deal open…

In response, Conservative MP Caroline Spelman put down an amendment. It scrapped the caveat altogether and replaced it with the following statement: “That this House rejects the United Kingdom leaving the European Union without a withdrawal agreement and a framework for the future relationship”. In other words: parliament would instruct the government to rule out no-deal in all circumstances. Firmer, tougher, more comprehensive….

The government hated it….it decided to whip MPs to defeat Spelman’s contribution…[Yvette] Cooper took the challenge and put the amendment forward for a vote….

Suddenly the moderate ministers you hear so much about were in trouble. They had briefed over and over again that they’d resign rather than accept no-deal. But now there was a motion stating exactly their view…They could either keep their job or vote with their conscience. But they could not do both.

It came in tight, but it passed. A total of 312 votes for the amendment versus 308 against.

In an instant, the government went into meltdown. The amendment was now attached to the original motion. That meant that when MPs voted on it, they would be voting for the version which ruled out no-deal in all circumstances, not in the heavily-caveated form proposed by May. Suddenly, in a matter of seconds, Downing Street had to do a 180 degree turn. In a frenzy of chaos lasting about half an hour, it suddenly started whipping its MPs to vote against its own motion…

Chaos reigned. Whips strong-armed ministers, desperately trying to hold the line. Labour MP Jess Phillips saw the prime minister enter the No lobby and told her she was a disgrace. Everything was falling apart.

In the end, moderate Cabinet ministers Amber Rudd, David Gauke, David Mundell, and Greg Clarke failed to go the whole way. But they did go half the way: They abstained. Sarah Newton, minister for disabled people, to her very great credit, resigned on the spot.

And then the result came in. Not only had the government whipping operation failed, it had lost the vote by an even greater margin than the first one. It was defeated by 321 to 278.

Once again, as regular as the tolling of the village bells, May was falling apart in plain sight.

Twitter lit up, poring over the evidence of the Government’s diminished state:

I hate to quote BrexitCentral, but to underscore the point:

The failure to discipline those abstaining ministers has caused consternation amongst much of the wider Conservative parliamentary party and signals a complete breakdown in collective responsibility and the Prime Minister’s ability to enforce it. Extraordinary times.

Richard North was in a minority, disputing the cheering in venues like the Guardian that Parliament was “taking back control”:

For Liam Fox, parliament yesterday was “engaged in is the most important democratic debate in this country’s history”. The British people had given our parliament a clear instruction. It was, he said, time for us to determine who is the boss.

And they blew it. A fractious House of Commons listening to Mrs May’s response to the vote sounded significantly less dignified than feeding time at the zoo. But, while they could compete on noise with the animals they were emulating, the would have struggled to match collective IQs, having just voted for the Spelman/Dromey amendment, seeking to rule out for all time a no-deal Brexit.

This had been disowned by its original sponsors but had been taken over by Labour’s Yvette Cooper, allowing the House their fantasy motion to resolve that: “That this House rejects the United Kingdom leaving the European Union without a Withdrawal Agreement and a Framework for the Future Relationship”.

The House managed to support this by 312 votes to 308, but then it came back as part of the government’s amended motion, whence 321 MPs then supported the “no-deal forever” fantasy, despite government whipping, with 278 against. That brought the final majority to 43.

The “no deal is dead” triumphalism is premature. UK journalists exhibit the same failing that the UK collectively has exhibited: acting as if it is free to decide what is happening with Brexit and the EU will of course fall in line.  As Politico’s morning European newsletter put it:

 

Riiiiight: Note the remarkable confidence British MPs have in their political decisions and parliament’s sovereignty. They may as well have adopted a motion to abolish all evil in this world.

Brussels unimpressed: The Commission “takes note” of the vote, a spokeswoman said. But the fact is, “There are only two ways to leave the EU: with or without a deal,” and “to take no deal off the table, it is not enough to vote against no deal — you have to agree to a deal. We have agreed a deal with the prime minister and the EU is ready to sign it

The motion was only a motion. The only way to put “no deal” to bed for good is to revoke Article 50 or complete a Withdrawal Agreement and get it approved by a qualified majority in the EU. Even to prevent a crash out on March 29, the UK has to amend all legislation that hard-codes the Brexit date (at a minimum the Withdrawal Act, but Keir Starmer claimed 50 bills were in play) and get the EU 27 to approve an extension.

Moreover, the Government had set up that if Parliament passed a “no deal” motion on Wednesday, it would vote Thursday on whether to authorize May to seek an extension. So that still has to get done.

Even though some ERG MPs think they’ve arrived at “game over” stage, it’s not clear how widely that view is shared. Rees-Mogg was still putting on a brave face:

Of course, this point of view obtusely pretends that the law can’t be amended, but even though Rees-Mogg is dense, he isn’t wrong. Steering out of a crash out has a lot of moving parts. Remember the dangers of any process with a lot of hurdles. Seven steps of 90% odds of each one being completed still results in a cumulative probability of under 50%.

May still has resources. Despite being bloodied yet again, May has not given up. She still seems to think she can get Parliament to approve her deal if she cuts off their exits. Her new gimmick is that she has shifted from proposing a short extension, which is acceptable to most voters in the UK, to a long one, which polls show is not. From the Financial Times:

Theresa May issued a final ultimatum to Eurosceptic MPs on Wednesday night, telling them to back her EU divorce deal with Brussels next week or face a months-long Brexit delay that would force Britain to hold elections to the European Parliament.

The prime minister’s challenge came after she suffered another humiliating defeat in parliament, with a majority of MPs defying her wishes by voting to take a no-deal exit off the table permanently. Mrs May had backed a more equivocal stance towards leaving the EU without an agreement.

Mrs May’s decision to hold a third vote on her Brexit plan next week, just days before she is due to attend an EU summit in Brussels, is a calculated gamble that she can finally bring the escalating Brexit drama to a head before formally seeking to delay Britain’s departure date from March 29 to June 30.

The prime minister said that if a deal was not agreed by MPs before the March 21 EU summit, she would be forced to seek “a much longer extension” of the exit process, requiring Britain to take part in May’s European Parliament elections.

This “punish the Ultras” reading is curious, to put it politely,since if you listen to or read what May actually said, she made a very commonsensical argument on where things stood, as in the UK’s position versus the EU’s position:

The Prime Minister: This is about the choices that this House faces. The legal default in UK and EU law remains that the UK will leave the EU without a deal unless something else is agreed. The onus is now on every one of us in this House to find out what that is. The options before us are the same as they always have been: we could leave with the deal that this Government have negotiated over the past two years; we could leave with the deal that we have negotiated but subject to a second referendum, but that would risk no Brexit at all—[Interruption]—damaging the fragile trust between the British public and the Members of this House; we could seek to negotiate a different deal, but the EU has been clear that the deal on the table is indeed the only deal available. [Interruption.]….

I confirmed last night that if the House declined to approve leaving without a deal on 29 March 2019, the Government would bring forward a motion on whether the House supports seeking to agree an extension to article 50 with the EU, which is the logical consequence of the votes over the past two days in this House. The Leader of the House will shortly make an emergency business statement confirming the change to tomorrow’s business. The motion we will table will set out the fundamental choice facing this House. If the House finds a way in the coming days to support a deal, it would allow the Government to seek a short, limited technical extension to article 50 to provide time to pass the necessary legislation and to ratify the agreement we have reached with the EU.

Let me be clear: such a short technical extension is likely to be on offer only if we have a deal in place. Therefore, the House must understand and accept that if it is not willing to support a deal in the coming days and as it is not willing to support leaving without a deal on 29 March, it is suggesting that there will need to be a much longer extension to article 50. Such an extension would undoubtedly require the United Kingdom to hold European Parliament elections in May 2019. I do not think that that would be the right outcome, but the House needs to face up to the consequences of the decisions that it has taken.

In other words, actually taking the EU’s position on an extension into an account is a threat, according to the Financial Times. May may be tired and visibly irritable, but she does have a point.

Nevertheless, this what my Jewish lawyer called a “Come to Jesus” moment has the potential to backfire. It may be too late to table amendments, but if not, it’s not hard to anticipate that someone will seek to to attach an amendment to today’s motion to call for May to seek only a short extension, given the public’s mood.

Moreover, it’s not at all clear that May can hold a third vote. Recall that the second vote on May’s deal came after Parliament had instructed her to seek changes and she did get some not consequential ones. But a third vote would amount to a repeat of her second one. Speaker John Bercow could nix it:

This Government no longer can do much about how MPs vote, but it still controls Parliamentary time. May could fail to introduce secondary legislation to implement the “no deal” motion and force MPs to submit private bills. Either way, the Government sets if and when they are up for debate and a vote. What if she schedules them for March 28? Its’ a given that she doesn’t plan to let Parliament get to them before attempting to get a third vote on her Withdrawal Agreement.

If May’s “long extension” motion is not amended and fails (I see the odds as reasonable that she’s using the ERG as an cover for a different gambit), May could present MPs with the choices only of voting through her deal or pleading with her to revoke Article 50. Or she benevolently could still seek a short extension (recall the EU said they’d give only one), since the basic dilemma still remains.

And May has yet another tool at her disposal: she could elect to blow the formulation of her request for an extension. Of course, given how inept this Government has been in dealing with the EU, she could wind up reverting to her well established form of alienating the EU leaders when that was not her intent.

The EU has made clear May needs to give a reason for any extension, and by implication, they need to see a plausible reason to think that things will have changed by the end of the extension. Merely saying, “We need sixteen months to sort ourselves out” won’t do. Even if Bercow were to rule against yet another vote on her deal before the March 21-22 EU summit, if May were to come home with no extension, he’d be under great political pressure to come up with a “things have changed” reversal.

The Ultras have not given up either. From the Guardian:

Leading Eurosceptics are lobbying right-of-centre governments in Europe to see if they would veto a British extension of article 50 and so ensure the UK drops out of the EU at the end of the month without a deal.

In theory, only one country is required to wield its veto for any British request to be rejected.

It is highly unlikely this lobbying will succeed as the governments in countries such as Hungary, Italy and Poland have other more important battles to fight with the EU. But the lobbying underlines the precariousness of the British position.

On the one hand, the odds of these entreaties succeeding on their own merits is low, but I’d still put them as higher that Theresa May getting her Withdrawal Agreement passed. On the other hand, we said early on that it was possible that Italy could threaten to block an extension, intending to trade its vote for getting relief on its budget or government assistance to banks. The budget fight is over but the Italian banking implosion continues.

Or the EU may be so deeply ambivalent about giving an extension, particularly in light of today’s fiasco, which makes the notion that the UK might sober up seem even more remote, that they might not mind one of their supposed bad actors playing the heavy.

It isn’t clear that the EU will agree to an extension regardless. We pointed out that a natural ally of the UK, the Netherlands, was tasked to and accepted delivering a tough message on an extension. Readers reported that another UK ally, Denmark, has given up on the UK. May trying to get yet another vote on her Withdrawal Agreement next week means the odds are high that the Government will deliver its extension request right before the EU summit, which is yet another display of UK disregard for protocol and competent decision-making. If you want to let pique play a role, this is just the way do it, and too many EU leaders have been having to work too hard to maintain a veneer of politeness as it is.

More generally, too many people are not thinking straight, particularly those who believe the no deal bomb has been disarmed. And I would not trust the self-appointed sappers in Parliament.

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133 comments

  1. vlade

    Just one addition – on a direct question yesterday Gove said that if the extension motion was passed May would introduce legislation to remove the fixed date (and fix relevant stuff). So Moggie is technically right, but irrelevant.

    “Dominic Grieve, the Conservative former attorney general, asks Gove to confirm that, if the government motion is passed, it will amend the EU Withdrawal Act to amend the date of Brexit.

    Gove says May has given that commitment.”

    Reply
    1. Yves Smith Post author

      I could check the transcript but I need to turn in.

      Was that commitment made on the original motion, or the one the Government whipped against? The motion that passed was NOT the “government motion” so I could see May treating Gove’s statement as literal and therefore not binding given what transpired.

      Reply
      1. Clive

        Correct. I saw the live coverage in Parliament and my spider sense tingled (I’ll try to find the exact scene on YouTube and post it here later). Grieve asked the question about whether the U.K. government would table a Statutory Instrument to amend the Exit Date in the Withdrawal Act. I could actually see the cogs whirring in Gove’s little but not that little brain as he, if I were writing this as a script, was performing (“beat, character movement”), and then give the answer very carefully qualified:

        (from Hansard) https://hansard.parliament.uk/commons/2019-03-13/debates/31D9EDE0-5E57-4491-81E7-77DD7C279DBE/UK’SWithdrawalFromTheEuropeanUnion


        Mr Dominic Grieve (Beaconsfield) (Con)

        It seems to me that the difficulty that might be arising across the House is as follows. If the House passes this motion this evening, and I have no reason not to support the motion in the terms of its ruling out no deal, in order to achieve that two things have to happen: first, we need to get an extension to article 50; and secondly, we are going to have to make a change to primary legislation in the withdrawal agreement Act. I assume the Government are undertaking, if this motion is passed in its own terms, to do exactly that?

        Michael Gove

        I am very grateful to my right hon. and learned Friend for his intervention, because it allows me to underline and further elucidate the point. It is absolutely correct that tomorrow the House will have an opportunity, if the motion passes tonight, to decide how to seek an extension. Obviously an extension is not something we can insist upon and automatically see delivered; it is in the gift of the EU and requires the assent of all 27 other EU members. But of course there will be an opportunity further to debate that tomorrow.

        Mr Grieve

        Just to remind the Secretary of State: there was a second part to the question, which is equally critical. It is that the Government will have to bring a statutory instrument to the House to alter the departure ​date set out in the European Union (Withdrawal) Act 2018. In those circumstances, I assume that the Government are undertaking to do exactly that.

        Michael Gove

        The Prime Minister and others have said that previously, and I am happy to place on the record once again at this Dispatch Box exactly that commitment.

        My emphasis, last paragraph. Pure lawyerly parsing. There were several words in Gove’s last sentence. Not one of them was a “yes”. What was Gove “placing on the record”? That the Prime Minister has said something? And being committed to doing something isn’t the same as doing something. I’m committed to not having a biscuit with my cup of coffee. Readers can check back in later to find out just how strong my commitment was and whether the biscuit was eaten or stayed, as I’m committed to doing, not eaten.

        It’s like Downtown Abbey crossed with Days of Our Lives crossed with Shari Lewis and Lamb Chop

        Reply
  2. vlade

    Also, an interesting point was that when Clarke asked Gove whether if no extension was given by the EU, the government would revoke A50. it was “we can’t revoke it and then trigger it again”. It was not “we will not revoke A50”. I could be told I’m reading too much into how they put it, but for better or worse, that’s how it works, even if the result in the end is dumb.

    Reply
    1. Which is worse - bankers or terrorists

      I don’t see a reason for the EU to grant a major extension unless the the government changes, which the EU cannot actually mandate without looking like a major violation of national sovereignty, triggering outrage which could push the needle further to no deal (which reflects the fundamental contradictions of the situation). Therefore, we could see a long extension approved tonight, with the EU responding “NEIN”.

      Therefore, my sense is that May will spend the next two weeks eliminating choices with sequential amendments worded to “block the exits” until we get to a late evening March 29th choice that looks like this:

      “Unilaterally rescind Article 50” or “Accept the Withdrawal Agreement”

      …given that Article 50 revocation requires EU consent which comes with a price.

      Accordingly, MPs would have to pick the latter given last night’s commitment to a no deal.

      Reply
        1. fajensen

          Imagine Spain gaming out the new possibilities offered by the UK parliament:

          “If we don’t get Gibraltar, we will veto the extension” versus “If we do get Gibraltar, we shall veto the extension”.

          Then front-run by Italy: “Veto everything Unless we get to borrow & spend money!”

          Long: Popcorn! Beer!! Plastic Sheeting!!! Sawdust!!!!

          Reply
    1. Avidremainer

      You can see why Bercow ignored the man. Impenetrable and opaque and signifying nothing. If the words are the same then the motion is the same and therefore unacceptable. If the underlying reality is different then reflect this in the wording of the motion. You would then be voting on a different motion.
      If there is nothing new then the matter is settled by the second vote. Mrs May should face an uphill struggle to return to the commons for a third time on the same proposition.

      Reply
      1. Joey

        ‘Given that this body has rejected no deal and its late March’?

        Good luck not having that amendment challenged with myriad political side alternatives.

        Nothing simple is simply done (in parliamentary situations, especially).

        Reply
  3. PlutoniumKun

    The Guardian reported that an anonymous EU official said the UK Parliament was like the passengers of the Titanic voting for the iceberg to move out of the way. That pretty much sums it up.

    And in related news – Varadkar has pointed out that the UK’s new proposed tariff rules are actually implementing the offer the EU made last year and was rejected by London/DUP.

    The Taoiseach has said that there is a “supreme irony” in the tariff proposals put forward by the British government today.

    The proposed new tariff regime is on agricultural and other products being exported from Ireland to Britain if the United Kingdom leaves the European Union without a deal.

    Under a temporary and unilateral regime announced by the British government, EU goods arriving from the Republic of Ireland and remaining in Northern Ireland would not be subject to tariffs.

    However, tariffs would be payable on goods moving from the EU into Britain via Northern Ireland under a schedule of rates also released this morning.

    Speaking in Washington, Leo Varadkar said many of those who voted against the backstop did so because they feared Northern Ireland may be treated differently to the rest of the UK.

    However, he said that what the British government is proposing “will treat Northern Ireland differently in a few weeks time, in terms of customs rules and regulations.”

    The proposals have been seen in Ireland as a direct attempt to strong arm the government into abandoning the backstop.

    Publishing a tariff and Northern Ireland border plan now, rather than weeks or months ago, exerts maximum pressure on the Irish Government at a time when most of its members are scattered to the four corners of the globe – promoting Irish interests through the St Patrick’s Day brand – leaving little time for face-to-face huddles or hand holding of sectoral interest groups.

    Given the high level of preparedness shown by the Irish Government throughout this Brexit process, it’s not unreasonable to assume they have war-gamed such a British tactic and already have a plan to deal with it. But it’s still going to be a sweaty, uncomfortable time to be an Irish minster or diplomat.

    The tariff and border plan itself has more holes than a fishing net and is being pulled apart by trade experts. But it will probably have the desired political effect of causing the sectoral groups – particularly the always vulnerable farming and agri-business sector – to scream in pain, upping the panic factor in Irish politics (which is structurally super-attentive to constituents’ needs, sometimes to the disadvantage of the bigger picture).

    Reply
    1. vlade

      the “unnamed EU official” may have been Weyand quoting Dutch PM Rutte (who apparently said so in private).

      Reply
      1. Marco

        Unsurprising. On our state news channel he (Rutte) says:

        “The political, societal, financial and economic damage in the UK is unforeseeable. So much damage in that country. And then they still don’t don’t know what it is that they want. We should hear that for a change.”

        On the extension:

        “You will get a situation in which we will continue to talk for months as we have for months. What good is it to continue to jingle with each other for months, while you have been spinning in that circle for two years now.”

        “Of course we are trying to prevent a hard brexit, but to stumble around again for months with this tinkering with: ‘we don’t want a hard border in the Irish sea, we don’t want a custom union membership, but we also don’t want a backstop’, is pointless.”

        At least on this can I agree with the man for a change.

        Reply
  4. Ataraxite

    In a delicious irony, since Brexit was all about Britain “taking back control”, full control of the Brexit process, and the UK’s destiny has been handed to the EU. It is they alone who will decide if an extension is offered, how long it might be for, and what conditions will be attached to it.

    And Britain – and more specifically the Tory government – will have no option but to take it. The alternative is the national suicide of “No Deal”, and it’s obvious, as it has been for months, that if the UK seriously starts to move towards No Deal, either through action or inaction, then the current government will collapse. No Deal is possible in a legal sense, but its price is now the complete rupture of the Tory party.

    The EU must surely be wargaming all the various paths it could take. Tusk has just tweeted the following:

    “During my consultations ahead of #EUCO, I will appeal to the EU27 to be open to a long extension if the UK finds it necessary to rethink its #Brexit strategy and build consensus around it.”

    (https://twitter.com/eucopresident/status/1106115929539334144)

    But if the EU decides to take harder measures, as Yves points out, it may not be Tusk who plays the point on this. So it may yet be a fig leaf.

    If the EU wanted the UK back – and I’m not sure how much it does any more – it could do so: having seen the Withdrawal Agreement comprehensively rejected twice, it could withdraw it on the basis that any future acceptance would be under duress, and that’s no basis for a future relationship. Then the choices available to the UK become much simpler: revoke its Article 50 notification, or crash out.

    And, in that situation, I’d put the possibility of the former above 90%.

    Reply
    1. ChrisPacific

      That’s the same thing Tusk said a few weeks back, but with extra qualifications. “I will appeal to the EU27 to be open to…” I would read it as expectation setting around what he can and can’t do, something he carelessly neglected the last time.

      Reply
  5. Alex morfesis

    This is all the fault of David Cameron… the klown that failed ukistan…the wild card change since the original vote is Italy…did the majority of voters elect for “leave” to be truculent or did they tire of northern European fake Vikings rambling on about their fiscal responsibility while running massive pension deficits hidden in local and regional govt budgets, all hiding in plain sight… And did they tire of the (family blogging) genius in the wheelchair who insists everyone in europe point their prayor mats to kyffhauser…while everyone has taken cryptic orders from the goose stepping aide of Europe’s favorite drunk, an aide who really puppeteers and runs Europe…

    May has Chamberlained herself…

    Her last move is to withdraw article 50 completely and lead a full frontal assault in an ecumenical cross party election run for the European Parliament and then negotiating with an Italian side and the knife twisting former Comintern krewe for the changes inside the EU Cameron could not deliver…

    For all her fumbling and stumbling, she has had no capacity, wittingly or unwittingly, to be anything other than a school marm…

    It is time to correct Dunkirk…

    Time for the liveries to do what they know they must do…

    With no due respects to this kindergarten notion of the “rule of law”…

    The vast majority of the “European” people have zero interest in the disruption the kyffhauser huggers are insisting on and could care less on some mythical trade rules designed to keep some bureaucrat looking busy enough with rules designed to reduce costs for a few dozen tax avoiding multi nullnational corporate giants dealing with the fact there are no true multi-national tall building law firms capable of handling in a comprehensive manner all their paper shuffling needs…

    Kyffhauser temple priests of Europe have declared full throttle economic war on the humans of the continent…

    The notion the kyffhauser fakevikings krewe need to punish the citizens of the UK to keep the rest of Europe in line sounds very much of the ramblings some drunken arse burps out at a jurist in explaining why he had to put his (wife, kid, girlfriend, boyfriend, thingfriend, etal) in the hospital lest the neighborhood think he was weak when (she, them, she, him, ???) talked back in public…

    Reply
  6. Carlito Riego

    Quick question: what do you make of Donald Tusk’s tweet:

    “During my consultations ahead of #EUCO, I will appeal to the EU27 to be open to a long extension if the UK finds it necessary to rethink its #Brexit strategy and build consensus around it.”

    It appears to me at odd with previous statements of Euro leaders, the floating threat of making UK pay 1 billion a month for extending Brexit, and this blog’s coverage of Euro leaders being fed up with the UK’s stunningly low political performance. I’m not sure how to read this ? Thanks !

    Reply
    1. spratz

      My interpretation is that they would grant a long extension but probably reject a short one.

      It’s not surprising that the ERG are lobbying right wing EU leaders to reject a UK request for any extension. This almost guarantees a crash out and in their words “no deal is better than a bad deal”

      Reply
      1. DaveH

        My interpretation is that they would grant a long extension but probably reject a short one.

        Depends the context of the short one. If we get the pleasure of Meaningful Vote 3 With A Vengeance next week and it passes, a short extension will be needed and granted to deal with the necessary admin to put it on the statute book.

        If that doesn’t happen, or it’s rejected again then there isn’t any point in a short extension so they won’t do it.

        Reply
        1. spratz

          May’s deal has already been very heavily rejected, twice. It’s possible that the prospect of a crash out could concentrate minds and persuade some MP’s to change their vote. However the optics on their volte-face will be really bad politically.

          Even so, I’m not sure she has the numbers. A hard core of ERG head bangers will continue to vote against it and so will the DUP. She needs the support of a number of Labour MP’s if her deal is to pass. This will only happen if Corbyn allows a free vote. How likely is that?

          There is still a strong chance of crash out, more by default than design.

          Reply
          1. vlade

            It sounded earlier today like DUP are hunting for an excuse to vote for May’s deal, as it seems that it finally got to them that even their voters would hate no-deal..

            Reply
            1. DaveH

              The logic as I understand it goes as follows:

              1) The DUP are pushed into supporting it. The news the other day that the Government were going to treat Norn Iron differently to the rest of the UK in the event of no-deal wasn’t a coincidence in my opinion.

              2) That topples the ERG domino. With the DUP now supporting it, they can’t really be more angry about the unionist position of NI than the DUP without looking even sillier than they do already.

              3) There are believed to be a chunk of Labour MPs, who want to vote for the deal. Whether that’s for constituency reasons, “upholding democracy” reasons or “I can’t be bothered with this anymore and I just want it to stop” reasons. But what they’re not prepared to do is burn their party bridges, annoying the majority of members and voters just to turn a 150 vote defeat into a 90 vote defeat. Get the numbers closer and they might just move.

              It’ll be tight either way. But that’s the roadmap to getting it through. Unless they’re told they can’t bring it back. Which would be hilarious.

              Reply
              1. PlutoniumKun

                Recent polls show that even their own supporters are distinctly unimpressed with their no-deal stance. And yesterdays announcement on tariffs actually excludes NI, exactly what they are supposed to be avoiding. So yes, I think the DUP are looking for a face saving way to back out of the corner they find themselves in.

                Reply
                  1. vlade

                    ni vs britain
                    there’s very little suport for no deal in ni and dup doesnt give a hoot about voters elsewhere

                    Reply
              2. ChrisPacific

                I have no confidence in “fear of looking silly” as a brake on ERG behaviour. We’re talking about a group that includes the likes of Boris Johnson here.

                Regarding the Tusk tweet, as I said above I read it as walking back his statement of a few weeks ago for the purpose of managing expectations. Key message: it’s the EU27’s call, I’m in your corner guys, but I can’t promise anything.

                Reply
        2. Ciro Pantera

          Wouldn’t it make sense to grant the short extension either way? In the unlikely event of the deal passing, there’s enough time for the administrative work. If/when the deal crashes, EU can wash their hands once more and take no responsibility for the outcome. Otherwise the story will be that the evil EU with it’s intransigency threw the UK into chaos by rejecting a perfectly reasonable extension. On the other hand, I’m pretty sure the story will be twisted to put all the blame into the EU anyway.

          Reply
          1. Joe Well

            the story will be that the evil EU with it’s intransigency

            I haven’t seen that version in the US press. The UK is getting almost all the blame, the only question is if the blame is apportioned to May, the Conservatives, the Tories, Labour, etc. I imagine it’s similar in other countries.

            Reply
              1. Joe Well

                In the NY Times, certainly. May you find someone who loves you as much as the NYT hates Corbyn.

                And in comment above, I meant to say “Parliament” instead of “Tories.” The US media love both-sides-ism.

                Reply
                1. JohnC

                  The Brits put their man into the top job at the NYT a few years ago. Caused a stink at the time, but now it seems he’s free to gaslight you Yanks about Old Blighty.

                  Reply
          2. PlutoniumKun

            I think the EU is worried that a short extension will just make things worse – but you are right to say that they are determined not to allow blame to attach to them, so they’ll offer some kind of extension.

            It may well be that they only offer a long extension on the basis that the UK will find it hard to accept it. Its also possible that they are hoping than an offer of a long one will scare the Brexit hard-liners into voting for May’s deal at the death out of fear than an extension will rob them of their dreams.

            Reply
            1. Yves Smith Post author

              Given that May plans to tie up her time next week with trying to vote her deal again, she is putting the onus on the EU to make the offer, which despite the EU trying to look reasonable, allows the UK to paint them as bad guys: “Oh, they are interfering in our democracy by telling us what kind of extension we should have! Oh, they are giving us only a short one when May said a short one was no good [unless her deal was approved]! Oh, they are only offering us a long one which the public does not want because it will lock us into the EU and deny the public its Brexit!”

              Reply
  7. David

    Tusk has tweeted this morning that before the European Council he will “appeal to the EU27 to be open to a long extension if the UK finds it necessary to rethink its #Brexit strategy and build consensus around it.” The key is in the second half of the sentence, ie Tusk is signalling that if the UK wants to calm down and think again about Brexit, he will ask the EU to delay by as long as it might reasonably take. Now obviously this is only Tusk, but it’s hard to believe he would not have had consultations with some of the EU leaders. In addition, it obviously isn’t an open-ended commitment either, and would only be offered if some fairly fundamental changes of opinion or personnel, or both, had taken place in the UK.
    As I’ve argued before, a long delay would actually suit the EU more than a short one. Why? Three reasons.
    First, especially given the shambles of this week, the EU must realise that even if the WA is approved by Parliament, their troubles are only just beginning. All of the same tensions and more will be on display during the transition phase, and the negotiation of a new relationship will be so bitterly divisive that it could easily drag on exhaustingly for years. Tusk is clearly signalling support for a move to oust May and start afresh with a new government. This could be after an election or not, but either way it’s clear that the EU can only gain from a fundamental reshuffling of the cards.
    In turn, this is because the EU itself is heading for major problems even if the WA is approved. For the whole of the implementation period, at least, UK-EU relations will be in a state of permanent crisis, and the EU is simply not an organisation capable of managing crises. It is far too big, too varied and too unwieldy, and it has its own internal problems. In essence, you can’t manage a crisis at 27.
    Finally, things are not good within the EU itself. Let me mention one spat which hasn’t had much visibility in the Anglo-Saxon world. Ten days ago, Macron launched an ambitious “letter to the European people” in 22 languages, pushing his integration agenda. This produced a stinging reply from Germany, but penned not by Merkel, but by the head of the CDU, Annegret Kramp-Karrenbauer (AKK), rejecting Macron’s proposals, and also raising, again, the idea of having an EU permanent seat on the Security Council to replace that of France. It’s hard to think of any reply which could have been more provocative as regards form and content. It’s worth pointing out that, when rumours of such an initiative circulated on social media after a recent Franco-German summit, the French media and political classes fell over themselves to scornfully dismiss them, and claim that the willingness of groups like the gilets jaunes to believe them showed that they were all hopeless fascists deluded by fake news. Well now the proposal has been officially made. So with Merkel on the way out, and Macron under huge domestic pressure, worried about developments in Algeria and anyway young and inexperienced especially in foreign affairs, now is not the time for crisis management by committee.
    None of the above is certain, of course, and things may take off in a different direction. But there is some logic in the EU playing it long.

    Reply
      1. Colonel Smithers

        Thank you, David, and greetings from a wet 16eme.

        You are right about an extension suiting the EU.

        My EU27 TBTF’s Brexit plans are, to put it mildly, a mess, especially if Brexit is hard a fortnight tomorrow. The front office personnel and products needed to be in the EEA are nowhere near ready / on site and won’t be until the end of the year at the earliest. That is before employment contracts, tax implications and family resettlement are considered.

        Short term contractors are being hired in various EU27 capitals to service certain clients and products until a long term solution can be finalised, but that solution depends on what Brexit looks like. Many firms have been soft pedalling.

        Reply
          1. Colonel Smithers

            Thank you.

            I was at Barclays from 2014 – 16.

            I agree with that stance. The UK economy is much weaker than the so called official stats. I can see that investor aversion lasting years, not easing until not just the UK political class, but, frankly, the public, too, grow up and learn the world works.

            Grimstone is a former Treasury official and oversaw much of the privatisation of the 1980s and 1990s.

            Reply
            1. notabanker

              I saw this last night and thought it was strange. However, after seeing Tusk’s comments this morning, and yours above, I’m translating this differently.

              Thank you Ms May for proving to the Brits how shambolic this idea was, now it’s time to bring in a new government and convince the people to vote this out.

              Reply
            2. Avidremainer

              Colonel
              Why do you think that no one is calling out the Official Stats when the evidence of our own eyes suggests they are well wide of the mark?

              Reply
              1. Colonel Smithers

                Thank you.

                I have no idea.

                I am particularly puzzled by the Corbynites not doing so, but then they make a habit of missing open goals.

                Reply
                1. Clive

                  Could be that so much is hidden from view. Here at the grot end of the market in retail consumer finance at my TBTF, there’s incredible sensitivity to tightening of credit conditions. Delinquencies got spikey when Hammond tightened up on asset purchases and generally leaned on the PRA to wag the nanny finger of credit quality at the banks. Credit and yield management systems suddenly started declining credit limit increases and whittling down 0% offers to only the heighted of the high credit score holders.

                  Cue the beginnings of borrower pain.

                  It all then, strangely enough, got rowed back on a bit. Auto loans (PCPs) are still in hens’ teeth territory, at least the kinds of silly offers we saw a year or so ago (you know, the ones where a new Mercedes Benz C Class can be had for £250 down and £250 a month with a jumbo balloon payment of £20k supposedly lurking which the manufacturer is just giving away in margin because they can make margin elsewhere on the loan pool) but credit card limits and personal loans are now back in rollover heaven. Overdrafts are no problem either.

                  As if a wand was waved, suddenly borrower stress is all forgotten, at least in the middle class. ‘leccy bills get paid ‘cos the direct debit doesn’t bounce. The debit card isn’t declined in Waitrose. There’s enough left on the overdraft to put a deposit down on this year’s holiday. Everything’s right with the world. Or if not exactly right, at least the day of reckoning is put off for a fair while longer.

                  Suffice to say, you won’t read any of this in the Office of National Statistics wishy washy reporting. I doubt Corbyn really understands any of it either, as while it is a class struggle, it’s not the kind of class struggle he has in mind.

                  Reply
            3. Monty

              ‘grow up and learn the world works.’

              I was reading some “scary stories” about the dangers of an A.I. running amok recently. The fear being that it’s prorities might not align with our own. It might find a way to grow and defend against being shut down.

              I was struck by how much the globalized economy seems to be working in a similar way right now. It has already escaped it’s shackles and there is no way for any one nation to pull the plug.

              Reply
                1. fajensen

                  Current AI learns by sniffing the underpants of humanity!

                  It is such irony that there are clever designs and years of research behind the fact that one Donald Trump Tweet can move the DOW more in one afternoon than the FED can!

                  The recently expressed concerns about fake news could be thought to be partly because those plonkers delving the depths of the human emotional landscapes (for their own advantage, to plot, scheme and predict emerging trends), they took the easiest way and just hooked up their clever machine learning algorithms to the unfiltered, uncurated, Internet!

                  They are sucking in the informational equivalent of bilge water and it is clogging up their machines.

                  Reply
  8. vlade

    So, four amedments today, two interesting ones (the other ones are about extending A50 and building some consensus on what Brexit may be acceptable)

    1) Sarah Wollaston’s – calling for an extension to article 50 to allow for time for a referendum on Brexit.
    Will show what support there is (or isn’t) for a second referendum. Will be interesting to see what Labour will do here, as in theory it should whip for it, but somehow I doubt it.

    2) Chris Bryant’s – saying Theresa May should not be allowed to put her deal to the Commons again.
    If this passes, it would be become interesting. Not that it could not be overturned, but it would considerably drop May’s maneuvring space.

    Reply
    1. Clive

      It’s still MPs pulling amendments out of a Christmas Cracker then.

      Re: Woolly Wollaston. No-one can tell how long any referendum would take and no-one can insist the EU27 go along with what is an open-ended commitment nor can an amendment force the significant fiscal expenditure inherent in any delay and nothing in any of that fixes the issue of having to have MEPs sat

      Re: Bonkers Bryant. Parliament could just pass a bill saying oh, never mind then, can we allow ourselves to have another vote on May’s Deal. Then they could vote on the Deal again.

      If I was an MP I would table an amendment saying that, as rainy days and Mondays always get me down, can we have no more of them. The E.U. is undoubtedly responsible for both of these ills, too. Either that, or if we Remain, the E.U. will issue a Directive banning them.

      Reply
      1. vlade

        Well, look at it this way, we have a lot of material for “Alice in Westminster”.

        ‘Have some changes,’ the May Hare said in an encouraging tone.

        Alice read all through the document, but there was nothing new in it. ‘I don’t see any changes,’ she remarked.

        ‘There aren’t any,’ said the May Hare.

        Reply
        1. Clive

          The Theresa Mayeshier Cat grinned inscrutability from an improbable perch on the tree above them and then said in a tone which suggested that the answer was obvious. “My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that“.

          Reply
  9. vlade

    and looking at the text of the motion, it’s actually an interesting one. It tells the govt to ask for extension _only_ if May’s deal is passed by March 20, which would imply another vote on it.

    If it does not pass by then, all it says is “[the Parliament] notes that, if the house has not passed a resolution approving the negotiated withdrawal agreement and the framework for the future relationship for the purposes of section 13(1)(b) of the European Union (Withdrawal) Act 2018 by 20 March 2019, then it is highly likely that the European council at its meeting the following day would require a clear purpose for any extension, not least to determine its length, and that any extension beyond 30 June 2019 would require the United Kingdom to hold European Parliament elections in May 2019.”

    Which, as you’d note, does not say anything about what the UK govt should do

    Hence Labour’s amendment that makes that explicit.

    Reply
    1. David

      It’s an extremely odd motion – I don’t think I’ve ever seen one like it. The wording seems to have been designed to be as inoffensive as possible, in “noting” what we already know to be the case. It’s probably also intended to frighten MPs with the prospect of European elections unless they vote for the WA. (I’ve seen suggestions this morning that UK MEPs could simply have their mandates continued, which would be an elegant solution). The government’s own explanation has just been published. , and which does actually list the alternative of a longer extension as an equal possibility.
      Meanwhile the ERG has dredged up yet another red herring (metaphor?) : Art 62 of the Vienna Convention, which talks about a “fundamental change of circumstances.”

      Reply
    1. flora

      adding:
      May has managed the difficult task of reducing her weak authority even further.

      Shilly-shallying will do that. My 2 cents.

      Reply
      1. a different chris

        Honestly, I wonder if Cameron, not a genius but a cut above what’s left, figured that handing the car over to May would guarantee no Brexit. She would drive around in circle, lost most of the time, and eventually get flagged down when she passed the starting point for like the 100th time. The keys would then be handed over to somebody slightly (this is modern Britain, after all so keep your expectations low) more competent and all would be like it never happened.

        Basically she was his underhanded way to Remain.

        What he didn’t expect was for her to be so incompetent that she would leave the roadways and drive right over a cliff.

        Reply
        1. notabanker

          I think that is giving Cameron way too much credit, but the theory is sound if it is attributed to the people who decide such things. More like Cameron was taken out after his vote thing backfired, and May was put in to drive in circles whilst the PR campaign was launched to show the British how painful this decision was.

          May takes everyone to the brink of disaster and walks out of this with a year long extension. I would expect the GE to be a test of the remain vote, or even an outright campaign on a second referendum. Remain Parliament equals second referendum. Leave Parliament and it’s time to batten down the hatches.

          A month of actual Brexit would accomplish the same goals, but the price to get back in goes way up.

          Reply
  10. George Phillies

    “…force MPs to submit private bills. …” But private bills are subject to objection, which is virtually sure to occur, either from opponents or from the MP who objects in principle to all private bills.

    Reply
  11. Matthew G. Saroff

    Considering Theresa May’s record of racism and xenophobia, she was the primary architect of the Windrush Generation Scandal while Home Secretary, I am wondering if her incompetence is actually a reflection of the fact that she has made restricting immigration flows, particularly of black and brown people, a priority.

    Reply
  12. Mirdif

    I thought May would not try for MV3 until some kind of extension had been granted but the sounds of things are that she will try again before the European Council. She’s already managed to wear some of the ERG down, DD, Nadine Dorries, Philip Davies to name three so I think she’s well placed to move some more of them next week. Once the likes of Ian Duncan Baker (IDS) and his squeeze (I’ll bet Colonel Smithers knows who I’m talking about) move then the majority of the ERG will move or abstain save the 20 or so lunatics (Bone, Cash Chope et. al.)

    An extension until the end of June will likely be requested if May wins MV3 and that is the carrot she will offer the ERG or she will get her deal through in MV4 with likely a longer extension. Once the deal looks close to getting over the line expect more Labour MPs to vote for it as well. I stated many months ago the DUP would likely be bought off and I still think this is the case. The DUP know well they will be destroyed at the ballot box next time should a crash out ensue.

    Tusk’s kinda sorta offer of a long extension is more to scare the ERG but I think if requested it would be granted if requested or maybe that’s wishful thinking (h/t Clive).

    Reply
      1. Mirdif

        Once upon a time Dubya called IDS “Ian Duncan Baker”. I insist on calling him the same because he is unable to workout whether his name is spelled Ian or Iain.

        Reply
        1. Colonel Smithers

          Thank you, Mirdif.

          I thought he was called George Smith until he reinvented himself at Sandhurst / the Scots Guards and married Betsy of the Buckinghamshire gentry.

          If you visit Buckinghamshire, you should go to his family’s pub.

          When, years later, I found out that George Smith had been commissioned into the Scots Guards, I was a bit miffed as I thought of joining the Grenadier Guards after school or uni, but my school cadet force thought a cavalry regiment was a better bet. I went to uni and the City instead.

          Reply
          1. Mirdif

            Interesting. But I take it you know who he was playing away with while Betsy was being treated for the Big C?

            Reply
              1. Mirdif

                No not him. Have a look at the list of junior ministers in DWP in the first Cameron government. Apparently, the tabloid journo who had the exclusive owed IDS so they’ve sat on the story or alternatively Murdoch nixed the story depending on who you believe.

                Reply
                1. Colonel Smithers

                  Thank you, Mirdif.

                  I was not aware.

                  I see IDS from time to time when doing the groceries. He lives on his brother in law’s estate between Aylesbury and Buckingham. He seems very family oriented.

                  Both IDS and JRM are Catholic by way of Irish mothers / grandmothers.

                  Reply
                  1. Mirdif

                    The (former) squeeze is also of Irish Catholic origins. I don’t think I need to make it more obvious than that do I?

                    Reply
                    1. Synoia

                      Brings to mind:

                      If we don’t hang together we shall surely hang separately.

                      There’s a wee bit of History in the UL of Catholics and Hanging together.

  13. Michael Morris

    are you serious the EU won’t go with the extension? Anyone who believes they won’t, knows sweet FA about the EU. Merkel already accepted it. thats what counts. You think macron is going stand in her way, both major car producers which will take biggest hit on the tariffs, published yesterday, if no deal agreed.

    The idea the EU might not give the UK a chance to stay is simply a red herring, and Yves disappointed in you now indulging in Guardian style Remainer propaganda.

    Reply
    1. Yves Smith Post author

      Merkel is damaged even in Germany, and this isn’t even remotely like the crisis where Germany was writing the biggest check so Germany had the say.

      This EU has countries that are being insubordinate. Did you manage to miss the row over Poland’s courts or the Italian budget? An extension require a unanimous vote of the EU27. We pointed out that members could use the threat of a no to extort the rest of the EU, but separately, the EU is already tired of Brexit.

      You also forget that the Greek bailout negotiations, which took place when the EU was more united, completely fell apart at one point and it was only Hollande running down corridors to get EU leaders who were going home back into a conference room that salvaged them.

      From our Richard Smith:

      Let’s assume a) we make it through the next few days without a Govt collapse, b) May deal fails at the third try (or never gets a third try) and c) Parliament decides to go for an A50 extension.
      The duration of it will be yet another massive bone of contention in Parliament, of course, but let’s assume grandly that they sort something out.

      How would it go with an extension request, long or short?

      1. Mixed views from Europe https://twitter.com/guyverhofstadt/status/1106145647722295296 FWIW Tusk seems to think Yes but Verhofstadt thinks “Nope”.
      2. Barnier also sceptical https://www.politico.eu/article/eu-negotiatior-michel-barnier-brexit-extension-for-what-no-deal/ None of this points towards unanimous agreement to extend!
      3. Story that Tory MPs went to Poland to lobby (but apparently unsuccessfully) for a block to any A50 extension https://twitter.com/patrickwintour/status/1105809429830750208
      4. Carole Cadwalladr thinks the Northern League have been lobbied by Banks and co to block an extension https://twitter.com/carolecadwalla/status/1105797205712093184 . I think she’s just guessing, both about the Italian trip and its results, but if Parliament does indeed go for an extension, we won’t have to wait long to discover whether she’s guessing well, or not.
      5. Hungary is another obvious target for a lobbying trip but no info about whether there’s been one, or not.

      If the extension is turned down then it will be a stark choice between crashout and revoke A50 (also repeal or amend European Union (Withdrawal) Act 2018, hope no-one forgets that in the rush), with an unknown small number of days to make and implement the choice. Accidental crashout still very much on the cards.

      There are only 15 days to Brexit. There are a lot of moving parts and two sides who aren’t unified…and may not see eye to eye when each side finally gets to a position. Even with a will to do a deal, disarray and a short runway mean the odds of an agreement not coming together are real.

      Reply
    2. Daniel F.

      With all due respect, I seriously doubt the UK is a big enough market for German cars.
      As for German-owned automotive manufacturers, those can be moved anywhere. BMW is supposedly opening a new plant in Hungary, plus the Audi TT, also being produced there, is going to be phased out.

      And that’s only assuming they wouldn’t invest in some of the other “emerging markets”, in accordance with their new immigration policy of “bring help and fix things there”.

      Reply
        1. Mirdif

          Translation:”They need us more than we need them.”

          Incredible how this level of hubris cannot be penetrated by even the emergence of reality on the horizon.

          I’ll give you a clue as to BMW’s strategy: the UK will be a premium model market only. Manufacturing will be wound down.

          Believe it or don’t. But this is what is coming and it’s all for attempting to do something in 2 years that more reasonably needs at least 22 years if not 32.

          Reply
        2. Yves Smith Post author

          The spokesman for Germany’s automakers and for Germany’s industrialists both said in an article last fall that the UK needed to get real. Coded but that was the message. They have stood behind the government from the get go.

          A recent poll of German businessmen showed that Brexit was not in their top ten list of concerns.

          Reply
        3. Avidremainer

          Under the proposed WHO schedules post exit German cars will only be 10% more at current exchange rates. What they will cost when the pound falls God only knows. This is not something to worry German manufacturers.
          Do we need Siemens more than Siemens need us?

          Reply
  14. Jeffrey Fisher

    I looked up the timeline on the EU elections. There appear to be two important dates there.

    The election happens May 23-26th.

    The Parliament is seated July 1.

    EU law is set to not seat UK members if it is out before July 1, some member states would get additional members, other seats would just go away (and might be used for future EU expansion).

    EU Parliament elections happen every 5 years, so they are stuck with whatever happens for quite a while.

    So a pretty hard date of June 30. Later than that means that re-apportionment (which gives a bunch of countries a bit stronger representation) would be delayed and disrupted along with whatever disruption from having UK reps in, and from them potentially leaving in the middle of a session.

    A softer date is the late may election day. The question there becomes, I think, what EU countries politicians want this resolved before that election. On the other hand there may be countries who’s politicians want it to be ongoing through the election. I’d think the obvious move for the former would be to block any extension. For the latter to grant any extension. But it’s a situation where every country has a veto, so just one blocker wins.

    Reply
    1. Tony Wright

      What about Italy? From what I have read in financial newsletters they are in deep financial manure and there is a ‘disagreement ‘ between the populist Italian government and the ECB regarding the Italian budget deficit. Is it not conceivable that the Italian govt. will use the threat to veto a Brexit extension as leverage to get the EU to’massage’ budget deficit rules? A last hurrah from Mario Draghi to his motherland before having to hand over the ECB Presidential baton on October 31st perhaps?
      I am also sure that there must be others within the 27 EU membership with local concerns to use as leverage within a Brexit extension date ‘discussion’.
      Politics is always a ‘Whats in it For ME’ exercise in back room horse trading when push comes to shove.

      Reply
      1. fajensen

        The EU might welcome Italy vetoing an extension because it gets them off the hook from being that bad people being unreasonable about that the UK cannot express what it wants to do with an extension and maybe being fed up with the whole thing, wanting to end it.

        There is some merit in: “Sorry, Guv, Those Italians making a mess again. Poor show but nothing we can legally do about it, rules are rules, unfortunately”.

        Reply
  15. phichibe

    I’ve watched the debate in Westminster over the interwebs and it has been fascinating; at another time I’d like to see a discussion of the relative merits of the Westminster style of debate versus the mechanisms used in our House and Senate (I lean toward Westminster at this point myself, as most debates I’ve seen in the our organs of democracy seem not debates but rather tag-team speeches, carefully managed by the two floor managers of the bill being debated with little if any give and take between and amongst speakers).

    But back to Brexit. I have only two points to contribute to the many contributions of those who know far more than I. The first is to call attention to a passing remark of an ERG MP (I believe it was the odious Mark Francois, whose father we all know fought at Normandy) who denounced the motion yesterday to take “no deal” Brexit off the table. This latter-day Palmerston said, and here I quote as closely as possible from a fallible memory) that taking the threat of the UK leaving without a deal reduced its ability to “bring Europe to heel”.

    The insensibility of this notion was only matched by its virtue as a moment of clarity: this is how the Brexiteers view the relative balance of power between the UK, a nation of 65 million with a corresponding economy, and a political union of over 500 million, with a wealth nearly 9 times as great. It would as if California thought it could dictate to the rest of the United States on terms of equality. The “penny dropped” when I heard these words, not that I’d thought otherwise, but nonetheless it was remarkable to hear someone in 2019 speak with the pretense of a British lord in 1910 discussing the rabble of the Continent.

    My second contribution is to follow up on something the esteemed Ms. Smith wrote in her post of Tuesday discussing the possible new referendum, and the possibility that in a choice of three or more options, “Remain” might win a plurality but not a majority, and where would that leave the UK? My suggestion, which I made in a comment here some weeks ago, is that such a referendum seems to be the best argument possible for employing stacked ranking, whereby voters indicate not just their choice but also their “backup” choice in case their choice comes in last. This mechanism is not without its problems, particularly in ordinary elections (see the result in the recent San Francisco mayor’s race, where a 4th tier candidate ended up being elected as the supporters of the top candidates all refused to support their choice’s closer rivals) but here it is just what is called for. Indeed, I think I saw some reference out of the UK to this idea just last week where it was referred to as “ranked choice” voting.

    Finally, as an argument for the Second Referendum, I think John Maynard Keynes is the best man to quote to the Brexiteers who challenge its moral basis: “When my information changes, I alter my conclusions. What do you do, sir?” Ir is clear that the original Brexit referendum was based on information that, to put it charitably, no longer holds in accordance with any sensible reality. That’s why a new referendum is not just moral, but imperative.

    P

    Reply
    1. Clive

      It is a flavour of U.K. exceptionalism that the EU27 actually wants the U.K. to remain a member. It’s entirely possible they’d be quite happy to get shot of us. “They” is covering a multitude of sins in that last sentence because views in Europe do vary. But there’s certainly a view within the centrist, integrationist grouping in the European Parliament that sending a new cohort of despicables from the U.K. eurosceptics’ wings of U.K. politics would result in such a clutching of pearls that they would risk garrotting themselves.

      Shorter, the U.K. is nothing but a right royal PitA. If it stopped round my house for tea, I’d put away my best china. In fact, anything else even vaguely potentially breakable.

      Reply
      1. David

        Historically, there have been times when, for different reasons, both the smaller EU nations, and those from Scandinavia, saw the UK presence as a useful counterweight to the traditional Franco-German axis. That doesn’t mean that they liked or valued the UK necessarily, just that it was helpful to have a major EU state with different views. Likewise, there’s a difference between “wishing the UK was not a member” and “willing to put up with all sorts of agony to get rid of the UK.”

        Reply
        1. Colonel Smithers

          Thank you and well said, David.

          From my time working with and in Brussels, I attest. EU27 acquaintances say that the dynamics are changing without the UK.

          The UK managed protect the City cash cow by playing on this (fear of Franco-German domination), but Cameron and Osborne p’d it all away.

          Reply
      2. Jim A.

        It is a flavour of U.K. exceptionalism that the EU27 actually wants the U.K. to remain a member.

        It also seems quite likely that over the last two years several may have gone from the “Keep ’em in” to the “Kick ’em out,” camp.

        Reply
  16. David

    The Guardian is reporting that “Simon Coveney, the Irish deputy prime minister and foreign minister, has said the EU may offer the UK a 21-month article 50 extension. In an interview with RTE, he said a long extension was “likely to happen” if there was no agreement in the UK parliament on a deal.”
    Any offers on the significance of this coming from the Irish?

    Reply
    1. PlutoniumKun

      It was reported by RTE today, but other newspapers don’t seem to have taken it up to any extent.

      In the context, I don’t think it was off-the-cuff, from other comments I think the Irish government are now on the side of pushing for a long, not a short extension if one is offered. Although it causes particular problems in Ireland as some of the extra Euro Parliament seats (those distributed from the UK) are already on offer in the coming Euro election.

      I would guess the thinking is two-fold:

      1. Its impossible to make any progress with the existing UK government, therefore an extension long enough for an election to take place can only improve things. Varadkar and Coveney can’t conceal their horror and despair at May’s antics these days, so far as they are concerned I think even Boris would be an improvement, at least he gives some certainty. Plus, they recognise that only an election can politically emasculate the DUP. If that happened, whoever is in power in London could then revisit the Irish Sea border option, which was always Dublins preferred option.

      2. The Irish government is getting jittery about its own election fortunes – the longer the uncertainty, the more likely it is to hit Fine Gael if and when an election happens (none are scheduled, but the coalition is increasingly unstable). A longer extension reduces the chance of border trouble coinciding with an election, which can only benefit Sinn Fein.

      Coveney no doubt had a long chat with Barnier last weekend (Barnier was in town for the Ireland v France game, lets hope he wasn’t too angry with the performance), and Tusk is now talking about a long extension, so I think its reasonable to assume that Ireland, Tusk and Barnier are singing from the same songsheet over this, whatever the views of Merkel, Macron, etc.

      It also occurs to me that the strategy may be simply to scare the Ultras into voting for Mays deal if they think a long extension is on the cards.

      Reply
  17. JBird4049

    Who has gamed out what might happened to everyone else’s economy if the whole mess flattens the British economy? As I see it the American economy is hiding a lot of weakness and to a lesser amount the EU. Then there is China. If the British go down, it might push everyone else down. It has the same feeling to me as the pre-1929 economy. Great Depression II?

    Reply
    1. Monty

      My bet is on a global flash crash, taking every stop order in the market, followed by massive central Bank interventions and new all time highs.

      Reply
      1. JBird4049

        A repeat of 2008 where they just prevented Earth’s economy from freezing up with maybe less than an afternoon to spare? Followed with the policy of printing money with the hope that the banks would lend it instead of hoarding it?

        If The Powers That Be succeed in doing that I will be happy not visiting food pantries again or seeing shabbily clothed children camped out at the library; I will have my belief that “The Markets” have f***-all to do with reality confirmed.

        Reply
        1. Gary Gray

          They never printed money. They just forgave 7 trillion in banking debt. That should have never been allowed to happen. The system should have been liquidated.

          The printed money myth cracks me up. It just won’t die. We had a debt jubilee for the banks.

          Reply
          1. John k

            Real tarp money passes thru aig to the banks and to the creditors, sufficient to make banks and creditors. That money was just as real as any other money gov spends.
            Granted it showed gov can cure any amount of debt.

            Reply
          2. JBird4049

            I know that just saying that they were just given cash oversimplifies what happened. However, they effectively got trillions of dollars of what essentially was money for getting with-in a half day of imploding the economy of the world. They had all the profits privatized and all the losses socialized.

            Reply
      2. Chris Cosmos

        There’s little chance of that. The international financial system is ten times more robust than it was in ’08. They learned their lesson and that was unity of all sovereign funds, international organizations, big banks and so on. The use extraordinarily sophisticated and networked AI programs that were not available ten years ago. Fundamentally, this highly networked system can modify markets fairly easily and stop any flash crash from happening barring major disasters of major wars.

        Reply
    2. Gary Gray

      US corporate debt is inflation adjusted to the previous 3 cycle peaks. Generally though, the 1990 and 2000 are more similar to this cycle in terms of debt composition than 2007 when that was a RRE/consumer driven bubble. The point? Corps can’t borrow for buybacks anymore and CRE. CRE is the one to watch this cycle for triggering a downturn as I suspect they got plenty of overinflated assets by the excessive debt creating commercial mortgage companies who are probably feeling squeezed right now.

      This is why debt servicing is so important in the long run. When it gets too high, the credit card is turned off.

      Reply
  18. Ape

    Can’t the ultras push for a no confidence? Labor plus ultras bring down the government, May loses the authority to do anything for something like 6 plus 2 plus 2 weeks – and thus hard Brexit unless a national unity government against the ultras is formed.

    Reply
    1. Yves Smith Post author

      That would be a last ditch jam the controls move. I have thought that could happen but don’t know enough re UK politics to judge how that would go over. Those MPs would presumably be deselected by the party….so they would be writing off their future in Parliament (can anyone confirm?)

      I’ve seen no evidence that they would do this and a plan like this (even among the Ultras) would need to be cooked up in secret, not something that UK MPs seem to be able to do.

      Reply
      1. Clive

        You’d think that voting against your own government in a Confidence Motion would mean instant political death through deselection. But this is the Conservative party we’re dealing with here, so things are rarely that sane.

        The power to deselect doesn’t in fact rest with the constituency members but rather the Executive Council of the local association. These, depending on the association concerned, do vary but some are nutsy beyond words. They really do think the EU is Cthulhu incarnate and would view such otherwise obvious treacherous actions as a badge of honour.

        So it isn’t totally out the question.

        Given the chaotic state of both Labour and the Conservatives, events which hitherto would have been incredulous are now, just about, possible.

        I’d view it is a total outlier (maybe less than 10% probability) that a gang of the worst ERG members could do the We Had to Destroy the Village to Save It scorched earth option. But it’s not completely inconceivable. We might, in those circumstances, even end up with the bizarre prospect of Labour abstaining in a vote to avoid a No Deal because they realise that forcing a General Election would bring about exactly that.

        Reply
        1. David

          What hasn’t really been thought about much yet is how May’s umpteenth shopping trip to Brussels is going to play out. If I were the 27, I would make May suffer for all of the confusion and disruption she has caused. She’ll have to beg, and may well have concessions forced on her which will look humiliating or will be presented as such in the media. However she spins it, the ultras will be able to present it as a surrender. If they are clever, they will vote against the UK legislation to implement the delay, assuming that it will be passed anyway, and then try to bring the government down in a vote of confidence, knowing there are three months at a minimum for an election and to form a new government. They will assume May is dead anyway, and will be hoping to win the election on a tidal wave of patriotism, complete with reference to Churchill in 1940, and install one of their own as PM. You don’t have to think this is realistic, or even faintly possible, just that the combination of ignorance, arrogance, bigotry and ambition that animates these people might lead them to choose this or a similar tactic. Remember that in the UK the outcome of general elections is always hard to predict: this time it will be like rolling a dice.

          Reply
          1. vlade

            I don’t think there’s any new shopping trip. She’s now past that pretense. I think it’s now to ERG and DUP more of – if you want Brexit, you need to vote for my deal now. Anything else means long extension, which likely means soft or no Brexit.

            She thinks, again, she holds the cards. But as discussed above, ERG/DUP have the nukes, and may not be afraid to use them. Which is something I’m not sure May can even contemplate.

            Reply
          1. vlade

            It is possible that May will be given a choice – we will vote (or at least abstain) on your deal, if you step down on B+1 day. I’ve seen such noises before. The Tory party could afford the carnage of the next few months as no talks with EU could really start until Sept earliest anyways, so timing would be ok.

            Reply
      2. vlade

        Ah, but here’s the beauty of FTPA. If they vote no-confidence, it just jams controls for 14 days. But they can unjam it anytime during that time with bringing in a new government. So they can say “we don’t want new GE, we just want a different Tory government, w/o May. If it’s a new GE, it’s her fault”.

        It would be great fun watching Labour then, as on one hand they keep screaming about GE, but when they would support the no-confidence motion there, they would be clearly supporting no-deal. And they still would not be sure whether they would get the GE anyways!

        Reply
  19. Joe Well

    Businesses have “goodwill” as an asset. Is there anything comparable for countries? And has anyone tried to calculate how much the UK’s has declined since all this started?

    Reply
    1. David

      It’s worse than that, I fear. International politics is pretty unsentimental, but it does work in part through historical closeness of interests and perceptions, and favours done and slights inflicted. May has pretty much trashed the UK’s status with her mulish and needlessly aggressive behaviour, and it’ll be a long time before many nations will voluntarily do the UK any favours again. But worse is the staggering decline in the UK’s image as an organised and realistic player of the international game. The UK was historically seen as a capable and well-organised nation, able to take a lead when necessary, and come up with sensible proposals and compromises. It’s this that was meant when people talked about the UK “punching above its weight”. Crudely, you’d get much more value out of talking to, or cooperating with, the UK, than with, say, Italy or Spain. This was less true in the EU, to be sure, but even there the British were usually clever enough to realise when there was an immovable object ahead of them. This reputation must now be in tatters, and it’s going to undermine the UK’s position all over the world, and for a very long time. Having people dislike you is bad enough, but having them laugh at you as well is much worse.

      Reply
      1. Avidremainer

        Very perceptive as usual David. Add pay back to the mix and we are in a pickle. Does anyone think that the Chinese might like to right the wrongs of the unequal treaties? India might want to recover the riches looted by the Nabobs?

        Reply
      2. fajensen

        My sister is very annoyed with the UK. She works with approvals of chemicals and according to her, the British consultants she works with are very good a crafting sensible opinion papers and application rules they use for getting things approved. Much of the current EU legislation on REACH and ROHS was crafted by the British and it is not bad either.

        Now she sees that everyone in the UK has all gone several flavours of nuts and that expertise in doing good work within the EU rule-making-machine that her employer pays for will likely go down the drain.

        Those UK consultants, now “homeless and lost”, are likely to be picked up by lobbyists outfits in France and Netherlands, which will make their contributions unbalanced and no longer of the pragmatic, sensible, stuff that is really needed long for the long term, also to keep China and the USA in check.

        Even when one is an evil chemical company, one wants good legislation because it is less likely to be changed. Chemicals are a low margin business, and it takes decades to pay for investments in plant, processes, documentation and equipment.

        Reply
  20. ChrisPacific

    Corbyn decides to join the madness. From the BBC:

    Following the votes, Labour leader Jeremy Corbyn reiterated his support for a further referendum after earlier ordering his MPs not to vote for one.

    Reply
  21. Joe Well

    Parliament votes to delay Brexit without deciding a date.

    May wants to hold another vote on her twice-rejected WA next week.

    Corbyn is pushing for a second referendum “People’s Vote” and some of his MPs resigned in protest. However, he and the rest of Labour abstained from a vote on a Second Referendum saying now is not the time.

    I can’t wait to here the NC opinions on this latest chapter in the soap opera, because I’m seriously confused, particularly as to the Corbyn/Labour position.

    Reply
    1. Gary Gray

      Basically in 15 days, the UK will default out of the trade consortium known as the “European Union” and release of its subsidies, rules and laws henceforth.

      Nobody wants to deal with the aftermath of debt liquidation. Non-governmental debt is badly under reviewed by MMT followers. It basically has powered things since 1950 after the industrial revolution ended in the 1923 and the metals based monetary crashed in 1929 due to it. This is what drives the global economic system. It drives how production is applied and rooted. It drives people globally. This is why when people talk about immigration, I said follow capital flows, you will get your answer……..I get a strange look. People just don’t get it. They whine about government debt, but rarely understand that is just underwriting non-governmental debt. They need to open their minds.

      The Ultras are stupid for going against the EU. Their lust for hard neoliberalism and nostalgia for the “empire” is blinding them to the fact the EU is their best chance for neoliberalism’s advance. In the purview of debt liquidation and permanent recession, you can lose power and the general ‘show me’ of capitalist liquidation supports anti-capitalism on a high scale: the bourgeois were not playing fair since 1950 and indeed when we see the food shortage, the famine you reach the point of wondering if you were duped. I guess it was all a lie. It is something that will take years to come to grips with, but the lost power the ultras are risking isn’t worth it imo. Let them eat their cake.

      Reply
    2. Jeff

      The Guardian lists (implicitly) three options:
      1. Parliament adopts the WA next Wednesday and May will then ask (and obtain) a 3-month extension to implement things.
      2. Parliament rejects the WA, but adopts the legislation to hold EP elections (less obvious) and May will then ask for ‘longer’ extension (another 2 years? to do what?)
      3. Crash-out Brexit still on schedule and on the books if Parliament doesn’t take meaningful action. This one is not described by the Guardian, but still the default.

      Reply
  22. lampoon

    Followed along Ian Dunt’s live tweets of the Commons debate and votes yesterday and today; brutally funny, if you enjoy potty-mouth gallows humor. His summing up article in politics.co.uk is bleak. After going over the non-zero risk of an extension not being granted by the EU, he concedes: “Chances are, they’ll offer an extension on the condition that it is quite long and contains a set idea of what will take place to change the situation. But let’s be clear what this means. We are no longer the ones who decide what happens to our country. In just over two weeks we face the most severe economic and political event of our post-war history. And our ability to prevent it is not up to us. It is up to foreign leaders, from other countries, with their own domestic agendas.Not so long ago, we would have thought this was impossible. But after just three years of nationalist political leadership, that is the status of Great Britain. It is a stark moment of humiliation.”
    So much for taking back control.

    Reply
    1. Oregoncharles

      they could still cancel Art. 50 and not leave. of course, that would be just as humiliating and doubtless the sudden end of the Tory gov’t.

      OTOH, who wants to be in charge the next few years?

      Reply
  23. John k

    Angels dancing on pins.
    Wake me up on fools day so I can find out what the many and varied fools have wrought.

    Reply
    1. ambrit

      Sorry but the “Revised Parliamentary Calendar” now has a plethora of “Fool’s Days.”
      Just stock up on stimulants and not sleep.

      Reply
  24. FREDDO

    Surely, after backing Ireland to the hilt for the last two years, the EU is not going to say: sorry we’re not going to grant an extension and you get the hard border you’ve been dreading. That would be insane.

    Reply
    1. JBird4049

      From the very little I can understand neither sanity or common sense is being used. And I thought my local, state and especially the federal governments were goofy. Governor Newsom, Speaker Pelosi, Majority Leader McConnel, and Trump were bad.

      Reply
  25. Savita

    “Macron launched an ambitious “letter to the European people” in 22 languages… produced a stinging reply from Germany, by CDU, Annegret Kramp-Karrenbauer (AKK), rejecting Macron’s proposals, and also raising, again, the idea of having an EU permanent seat on the Security Council to replace that of France. It’s hard to think of any reply which could have been more provocative as regards form and content… the French media and political classes .. dismiss them .. the gilets jaunes to believe them showed…all hopeless fascists deluded by fake news. ”

    Hi David. Hope you catch this, Australia time zone makes it hard to fit in with commentators. Edited your paragraph for brevity. Enthralling and fascinating and pertinent – particularly given most of us readers are Anglo-Saxon. I don’t fully follow. Forgive my naivety.
    So I think I get that Merkel not responding directly was a insult. And that that AKK /CDU are contrary to Macrons political values. But how does an EU permanent seat on the security council replacing France constitute an aggressive provocation towards Macron/Macrons ‘Establishment’ ™ ? Following from this, I also don’t understand the nature of your leap there (for me) for the ‘gilet jaunes’ to be accepting of this development, and obviously aligned or supportive of it. The final sentiment affirms this constitutes a crisis for Macron, I can grasp that much :-) Thank you.

    Reply
  26. David

    Ok, but politics nerd alert for the readership as a whole.
    France’s international posture since WW2 has been based on permanent membership of the UNSC, and subsequently an independent nuclear capability. The two are now effectively intertwined, and no serious French politician would give up either.
    The EC (as was) was originally a deal between French agriculture and German industry. It was also a means (like NATO) of political rehabilitation for Germany after WW2. The latter point enabled France to be the dominant partner politically, even if Germany quickly became a stronger economic force. The Franco-German “couple” was widely recognised to be the key building block of peace in Europe, and the French put enormous effort into retaining it.
    In the 90s, this system started to fray. German dominance of the financial system became more pronounced, other nations with very different values to the French began to enter the EU, and the balance of power began to shift against France. As the post Cold War world started to define itself and people talked about a new international order, and the EU became a political unit, France’s UNSC seat came under scrutiny, either directly (replaced by the EU) or indirectly (supplemented by one for by Germany). With the tact and delicacy for which German diplomacy has been famous since, oh, about 1870, German leaders raised the idea from time to time.
    Relations between the two countries have been strained since Merkel took over: she and Sarkozy famously did not get on, and relations with Hollande were not great either. Macron, fervent European, not only wanted to do something about this, but also wanted to launch an ambitious programme of European reform which would, among other things, rein in German influence in economics a bit. His proposals, as I’ve said, were published everywhere. The German reaction from AKK (assumed to be the next Chancellor) was clumsy and more or less guaranteed to annoy the French by raising, yet again, the idea of them giving up their UNSC seat, for an EU one where Germany would have a great deal of influence.
    Where do the gilets jaunes come in, I hear you ask? Well, there was a relatively routine Franco-German summit about a month ago which discussed ideas for future cooperation and for Europe. Jupiter (as Macron is called here) couldn’t resist playing it up to resemble something like the De Gaulle-Adenauer summits that united Europe. Quite quickly, the social media was full of allegations that Macron had given way on the question of a UNSC seat. This was not in fact true, but widely believed, and appeared on some of the Facebook pages used by the GJ. At that point, the Establishment piled in, mocking and dismissing the GJ, as well as various right-wing politicians including Le Pen for having believed “fake news”. Technically, the Establishment was right, but this reply from AKK makes it clear that the subject is not dead and the Germans will pursue it.
    All this is very embarrassing, and dangerous for the Franco-German unity which is still the motor of Europe (if anything is). My point – in passing really – was that if complex and sensitive decisions have to be taken about how to deal with Brext, then the two most important countries in Europe really have to be on the same page, not sneering at each other and making rude gestures. Otherwise, unity for the 27, never easy, would be much more difficult. There you are.

    Reply

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