Brexit: Shambles

Thanks for your many kind wishes about my cat Gabriel yesterday. Unfortunately, as I explain at the top of Links, the news yesterday was not good, so today’s Brexit post is thin. Hopefully readers will add observations and links.

However, May’s and Parliament’s desperate moves to obtain a long extension from the EU next week ignore two options the EU said it would accept, a general election and a second referendum.

Parliament abandoned its “indicative votes” process. The vote was 310-310, with Speaker John Bercow, by custom, breaking the tie by opposing the motion.

Juncker threw cold water on May’s idea of getting an extension till May 22 to get her Withdrawal Agreement passed or otherwise faff around.

Parliament is trying to change the constitutional order by making itself a part of negotiations with the EU over an extension. The vehicle for this attempt is the Cooper-Letwin bill, which is up to be passed by the House today. However, this effort is so misguided that it is likely to fall apart or otherwise prove irrelevant, likely vitiating the attempted seizure of Government authority.

The Cooper-Letwin bill is a unicorn by virtue of trying to both negotiate with the EU over an extension, including changing the shape of the table. Na ga happen. Even at this late hour, it is remarkable to see how few people who ought to know better think the UK has leverage over the EU. The UK is a penitent seeking mercy from the EU, and the EU will dispose of the Brexit extension matter as it sees fit.

The bill is poorly drafted, but in vey short form, tells May to go to the EU to get a Brexit extensions, without specifying how long it should be or what her basis for seeking it is (aside from “no ‘no deal,’ which the EU does not deem to be a reason). If the EU makes a counterproposal or a demand, like “We said you needed to participate in European Parliament elections. We can say yes only if you’ve done what you need to do,” the Government has to go back to Parliament, get their approval for what to do next, and only then return to Brussels. That is an impossible timetable given that the Council meets April 10 and the drop dead time is April 12. The Daily Mail’s title and subheads do a decent job of skewering the bill:

Brexit minister warns that vote by MPs last night to kill off No Deal has actually INCREASED the risk of it ‘accidentally’ happening because new timetable does not allow enough time to sign it off

  • MPs backed a bill forcing PM to seek delay if she cannot strike a deal with the Labour leader Jeremy Corbyn
  • It passed by just one vote, 313 to 312, after it was hurried through the Commons in a series of votes last night
  • But as it was debated, the Brexit minister warned the backbench bill could lead to an ‘accidental No Deal’ 
  • Robin Walker said there might not be time to complete the extra paperwork needed for a delay before April 12 
  • Hardline eurosceptic Tory Mark Francois branded bill a ‘constitutional outrage’  in fiery scenes after it passed

A longer-form treatment from Richard North:

There is no sense, rhyme or reason in the behaviour of parliament, which has passed Yvette Cooper’s Bill through its third reading, by 313 votes to 312…

Now, this fatuous Bill will go to the Lords, then having to come back to the Commons before Royal Assent. If it survives the parliamentary processes, it is at this point that Mrs May faces a direct challenge to the authority not just of her government but to the authority of this and successive executives, further weakening the power of Crown prerogative.

Apart from its challenge to government, this is a Bill which should never have seen the light of day, seeking as it does to instruct the government to seek an extension to the Article 50 period, allowing parliament to decide on the length of the delay in our leaving the EU.

Thus, the Bill makes no provision – and neither can it – for the fact that only the EU-27 can assent to an extension to the Article 50 period, and then by unanimity. Further, as the situation currently stands, there will only be one opportunity for the prime minister to seek an extension, which will be by close of business on 8 April, and then against conditions specified by the European Council.

If the conditions are not met, then the European Council could simply refuse to extend the period, ignoring completely any request by the prime minister. But then the Cooper Bill triggers the ultimate in stupidity, requiring the prime minister to table a fresh motion specifying another amendable period and then go back to the European Council with it.

At this point, assuming we haven’t already dropped out of the EU without a deal, there is no requirement for the European Council even to listen to Mrs May again. Once it has made a decision, it need not re-visit it, no matter what might be in Cooper’s production, in the event that it becomes law.

Things are so bad that even Guido Fawkes is making sense:

Ultimately it changes little, May was always going to seek a longer extension at next week’s European Council in the circumstances anyway. Conspiracy theories that May’s Corbyn pitch is a trap or trick to run down the clock are operating in a parallel universe. Make no mistake, Number 10 is in total chaos and acting purely out of desperation now. May’s long-term strategy was always to trigger an 11th hour crisis in the hope of bouncing MPs – she never for a minute anticipated that it would be so utterly out of her own control.

Enough credible commentators thought that May’s overture to Corbyn was a trap (even if by accident) that I wouldn’t dismiss it. She also looked remarkably pleased with herself as she gave her speech yesterday, which was enough to raise suspicions. But a default is never to assume malice when incompetence will explain the behavior. As Clive added:

To boil it down from the awful sub-Daily Express copy, the current situation is (as a theory) a May-strategy of induce a sense of panic to bounce the House into voting through her Withdrawal Agreement, but she’s lost control of events and the supposed, to use an oxymoron, planned panic is now simply unmanageable disorganised chaos.

Gawd knows what meaningless chaff she’ll be posting off to the Council SHERPAs on Tuesday. Gawd knows what they’ll make of it, too.

The real problem is that the Copper-Letwin bill is displacement activity. As Jolyon Maugham points out in the Guardian (hat tip Richard Smith):

But the real problem with this bill is not that it has some gaping holes in it. The real problem is that it’s a sideshow.

We’ve taken almost three years to fail to decide what we want – how are we going to move forward? If we want a referendum, what is that referendum on – a question that the confirmatory public vote motion turns a blind eye to? If parliament won’t agree to a withdrawal agreement then the only options left are no deal and revoking article 50. Who gets to make that decision?

These are the real questions. The country we once were – and the parliamentarians they once were – would have faced up to them. But the Cooper-Letwin bill is an awful, awful distraction. I suppose I should find it poignant. But instead, when I think of the consequences for millions of people whose lives will be profoundly damaged by no deal and who are betrayed by the incompetence of those they trusted, it makes me furious.

May and Corbyn are having tea and cookies, um, “constructive discussions.” More displacement activity, per the Financial Times

Mrs May and Mr Corbyn met in the House of Commons for two hours on Wednesday afternoon to try and forge a consensus on leaving the EU, or come up with a series of options that would be put to MPs for a binding vote.

But the talks are also tearing both parties apart. The pressure on the Tory and Labour Brexit fault lines is finally leading to movement, as in earthquakes.

As Pavel said yesterday in comments:

I suggest NC readers check out the hashtag #BrexitBetrayal on Twitter to get a sense of the anger and betrayal felt by the Leavers — I thought it couldn’t get any more outraged and then May came up with the idea of consulting with Satan himself (a/k/a Jeremy Corbyn).

And from Avidremainer:

Guys, I have just watched PMQs. The folly of Mrs May’s actions were on display. The ERG are obviously spitting blood and asked a series of awful, searing questions which blatantly cut Mrs May to the quick.

Not that the feeling isn’t mutual. From Labour heading for bust-up as top party figures demand Jeremy Corbyn secure referendum in talks with Theresa May in the Independent:

Labour is on the brink of a major bust-up if Jeremy Corbyn fails to demand a second referendum as the price for any Brexit deal struck with Theresa May.

A string of senior figures – including shadow foreign secretary Emily Thornberry – believe securing a public vote is an absolute must, while 12 MPs, including four frontbenchers, have written an open letter to Mr Corbyn in The Independent saying “it would be untenable for Labour not to insist” on one….

Neither side had been prepared to set out a specific position in advance of the talks in an effort to be constructive, but as news of the meeting sank in on Wednesday, Labour backers of a new referendum were clear that it should be a fixed demand.

On top of that, as PlutoniumKun pointed out in comments yesterday:

It’s hard to exaggerate just how much the DUP hate and fear Corbyn – he represents everything that gives them nightmares – an English left wing Republican sympathiser. An even greater nightmare for them is that their supporters blame them for helping put him in power.

As Richard North summed up:

We have the babies in Westminster living in their fantasy world, pretending to legislate a no-deal out of existence, rather than face the reality of ratifying the Withdrawal Agreement, while the president of the European Commission was in Brussels, telling the other parliament that we were facing a no-deal exit on 12 April.

Both can’t be right, yet you would get no clue of the discrepancies from the media. MPs have banned a no-deal, and the poor dears are “mentally and physically exhausted” – to say nothing of being brain dead.

I really wish there could be a happy, or at least not bad ending. But this isn’t a Disney movie.

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  1. Andy Raushner

    May needs to renegotiate a harder deal. The Tory’s are the driver of this car and her party wants a harder deal. At least it won’t be default.

    1. The Rev Kev

      There-Is-No-Time. That particular boat sailed about two years ago. There are now only eight days left until it is all over bar the sweeping up of the fag ends. Time’s up!

      1. Avidremainer

        I fear you may be right. I hope you are not. It comes to something when the cry for “Sovereignty” and “take back control” have left us totally at the mercy of strangers.
        I suppose it boils down to whether the EU want a failing state on their borders.

        1. Richard

          There is another side to consider, does the EU really want to run the risk that people like Tommy Robinson become MEPs if the UK is given a longer extension and fields candidates in the European elections? I’m afraid a hard Brexit on the 12th has become the least worse option for the EU.

          1. Tom Bradford

            If Parliament declares by legislation that there can be no ‘no-deal’ exit and the Government is in a position of not having a deal in place acceptable to both Parliament and the EU surely the revocation of Article 50 is the only remaining option?

            The ethical thing for May to do would be to revoke Article 50 and resign. If, as a result, the Tory Party disintegrates completely a General Election called by Labour would be, effectively, a second referendum as anyone standing for any party would have to state where they stand on Brexit – either against or what they are for. If the Tories hold together sufficiently to resist the motion for a GE they will have to elect a new leader able to achieve what May couldn’t, and I don’t see anyone in their ranks capable of that.

            Of course, and unfortunately, ethics is a foreign concept to most MPs.

            I’ve seen many comments that the current shambles reflects of the Parliamentary system with calls for its replacement with something else, but to my mind the system is merely reflecting the state of the demos and the problem is the quality – or rather lack of quality – of the current crop of MPs who are unable to reconcile what are fundamental differences within it. While I would like to see some form of proportional representation break the two party stranglehold and, likely, bring better quality representatives into the House, I disagree that the system itself has failed.

          2. Temporarily Sane

            An aside….the bigot and “working class hero” calling himself Tommy Robinson is a fraud whose name is Stephen Yaxley-Lennon. Maybe he is from a working class background, but the fact that he changed his name, which sounds as traditionally working class as, say, Benedict Cumberbatch, seems to indicate that he is very aware of the role perception plays in the media landscape.

            At one point he publicly claimed to have seen the light and briefly “gave up” his trademark anti-Muslim bigotry. That only lasted long enough for him to collect a cash award and he quickly went back to being the charming crypto fascist alt-righter he is today.

        2. tegnost

          re the mercy of strangers, I know this is anecdote, but seeing the tepid response to the homeless problem, i.e., that it’s their (the people who are homeless) problem. I’m wondering whether that’s the micro to the brexit macro, where the mean spiritedness of the neo lib/con zeitgeist has reached the country level. We saw saw hints of it in the situation in Greece, but that was fundamentally different as Greece, imo, viewed itself as a supplicant to the technocrats in the EU, while UK feels like it has some leverage or basic right (I didn’t say entitlement but you’re free to think that) to “a certain level of support” kind of like in a divorce when one claims to deserve the same standard of living provided by the more stable party. I fear brexit carries the seeds of the near future/decade and what’s the sane way out?

          1. Sanxi

            Interesting thought, the E.U. has quietly suggested that ok U.K. leave but ten you come back fully into the E.U. as you must, it will be minus your current privileged status you have now. Fits the Neolib narrative.

        3. Ralph Anske

          There are always options out there. Some worse than others, but they still give the appearance of free choice. Which should the EU prefer — a failing state on their borders or yet another in their midst? That’s policy; politics raise the question of how useful it is to have a boogeyman in sight down the road.

    2. vlade

      There’s no harder deal except no-deal. The EU has already said that under no-deal, it will not engage in any trade talks with the UK unless basically the WA conditions are met anyways.

      1. notabanker

        This is the tragic irony here. They’ve spent all this time complaining about a bad deal they are going to have to implement under extreme duress regardless. I can’t count the number of times I’ve seen this play out at the micro level. There’s no political will to change the actual deal dynamics and you get stuck being dictated to. There’s usually two factions that eventually are forced to capitulate. One that believes in the benevolence of the other side, the other that deludes themselves into thinking they are too important to be dictated to.

    3. Yves Smith Post author

      And pray tell, even if May had time, why should the EU make concessions? They’ve repeatedly said they won’t. The only path for the UK would have been to drop one of its red lines if it wanted a different arrangement.

      The idea that the UK had leverage is the fundamental delusion underlying the UK’s Brexit- train-wreck-in-motion. And it doesn’t help to exhibit the classic related behavior, “What about ‘no’ don’t you understand?”

      1. skippy

        Sigh ….

        What part does not compute with some people when A.50 was triggered without a plan before jerking the stoopid thing, then the ninny’s all have a bad case of I’m with stoopid T shirt day….

      2. Sanxi

        Yves, by your leave, I will tell. Leaving existentially means ‘letting’ go of something, Calling it a red line, a line in the sand, etc., it’s not a good way to frame it, which was an accomplishment of the old media. Richard North, defines leaving as getting rid of the political and maintaining economic. No easy feat. One that at first follows a very modified EEA/Efta (to which there many instances of, depends on what country we are talking about) would require, initially, some political alignment, like FoM. But, in EEA that can have limits on it. It isn’t about leverage per se, unless you want to make it about it, the E.U. wants to do trade deals, and ya it’s their gold and their it’s rules, but one gets access to their single market, that’s the prize. At least until it isn’t – another story for another day.

    4. Clive

      My dear Andy, I do sympathise because you’re trying to cast a mostly sensible thought-process onto this, but the craziness is so, well, crazy that even Leave’ers like Guido Fawkes and Remain’ers like the Guardian are united in decrying the parlous state of affairs as being the product of epic levels of disorganised chaos which is not just clutching at straws but bloody great boulders. Even here in the Comments, stalwart Leaver’es (erm, me, anyway; someone has to be just to even things up) and Remain’ers (everyone else) is completely united in our assessment. That should tell you something. That something is…

      There. Is. No. Plan.

      May can go to the Council next week and can faff around and spout her usual nonsense which would have even fortune cookie bakers saying to themselves “no, we can’t possibly put that gobbledegook in there…” and then the Council will decide, after possibly crying a little, what to do. There will be no “renegotiating a harder deal”.

      Opinions do vary as to whether the Council will kick the U.K. out then and there or give a very short extension for the U.K. to clear its desk and put its pens and stapler in a cardboard box or grant a much longer extension. I favour the latter for reasons which are too long to go into in a comment. Others think differently for different reasons.

      But both of these roads lead to Rome.

      1. skippy

        Bit more complicated Clive ….

        Across the waters some have moved past or trying too organize stuff post U.S. or U.K. direction and the eventual price tag and dirty rug at the front door, not to mention the tourist or late in life looking to stretch a pound.

        1. Clive

          Much more complicated than you can possibly imagine. What ever you think it is, in terms of complexity, you’re not even close.

          You might think it’s the upper classes on a smash ‘n grab. You might think it’s the squeezed middle trying to find a way to cling on. You might think it’s the working poor’s desperation to avoid being undercut. You may even think it’s those with nothing to lose mounting an illicit assault on the unobtainable bounty they’ll never stand a chance of getting their hands on.

          All wrong, all of them much too glib.

          It is, rather, the revenge of those of us who are forever destined to be but mere wallflowers in the ballroom of that most impenetrable social moire, the right-thinking intelligentsia. Too poor. Too rich. Too clever. Too stupid. Too knowing. Too clueless. Too outspoken. Too demure. We try. We try so darned hard. But we either never get within a gazillion miles or we get close, but not quite close enough. The ones who can only dream of being as certain of anything as those who are utterly convinced and cocksure about everything.

          Just so we can all finally say, without fear of contradictions, from whatever our station is in life to those resplendent in their unshakable certainties “Not so simple now, is it?”

          1. Sanxi

            No, complex not complicated, that is a conceit. The U.K. & EU are in a treaty now and will be in all possible futures. How is, what the ‘thrill of victory’ and the ‘agony of defeat’, is what ABC Sports used to say. This is a classic example of the mind creating imposing order where in fact there is none.

            1. d

              maybe, its also possible that it will a few years before there is a new one once the current one is gone. mainly cause the EU has so many others they already are working on, that they cant (or maybe wont) make time for one with the UK

          2. Synoia

            Too poor. Too rich. Too clever. Too stupid. Too knowing. Too clueless. Too outspoken. Too demure.

            None of those. Wrong Parents.

            The fetus choose poorly.

      2. Avidremainer

        Clive you are wrong. It is raining in London and Parliament’s roof is leaking. The sitting has been suspended. God is on our side.
        Surely our inability to make age old technology work will make the EU sorry for us.

        1. Avidremainer

          Update, Parliament has been suspended for the day. Just when you need a little more time…

    5. mpr

      Andy, its not the hardness but the backstop which is making the current deal unacceptable to the Tories. Under the EU’s position the backstop always has to be there, even under a “harder” Canada style trade deal. Barnier is saying it will be a pre-condition even in the event of no deal ! Sabine Weyand, Barnier’s deputy has said

      This requires the customs union as the basis of the future relationship.

      Meaning that the CU arising from the backstop will in fact form the basis of the future relationship.

      Maybe they should rename the Eagles’ song ‘hotel EU’

      You can check out any time you like, but you can never leave …

      1. Fazal Majid

        Only for Northern Ireland. It has many other peculiarities compared to the rest of the UK, just like Gibraltar, the Isle of Man or Jersey, one more isn’t going to kill them. The DUP is opposed, but they also opposed the Good Friday Agreement.

      2. Sanxi

        Barnier, isn’t saying anything. The RoI made it an issue right or wrong for the E.U. Oddly, the RoI and UK have been in the E.U. from the beginning, but border issue wasn’t settled until the GFA, which if you read, never eliminated any border. Read it. What happened was there was an option in the GFA to just forget about the border and so it was. There is nothing per se preventing from that continuing. But, as the U.K. had no plan offical plan on leaving and no understanding on how the E.U. worked of course the Gvt picked the stupidest WA possible proving they had no idea how the E.U. worked and sadly that MPs of the ERG were a malicious narcissistic psychotic lot. Like the Republican’s very own Teabaggers – a menace to society.

        1. d

          actually there is some thing that will mandate that a hard border exist is the WTO rules. without some treaty, they will punish both, allowing others to impose punishing tariffs

          1. DaveH

            To be completely clear the WTO won’t punish anybody. Other countries may raise objections to any eventual solution via the arbitration framework that the WTO provides.

            And they will raise them if they feel that it offers them a commercial or diplomatic advantange in doing so. And won’t if it doesn’t.

  2. Redlife2017

    Yves – thanks for the re-cap. I seriously couldn’t make heads or tails of this over the past 24 hours. The reporting here is shocking (as in sh*tshow awful). No one here understands what’s about to happen.

    But I will add in, that even if May didn’t think she was trying to trap Corbyn, it certainly came off that way. In reality it was her just saying – “it’s not my fault, guv! It’s the other bloke’s fault!”. Which is not a plan. That’s a childish reaction. I think people would rather think she is really evil rather than completely incompetent. It gives people at least some comfort to think there is planning involved rather than uncontrolled flailing.

    I am worried about the outcomes (as I actually care about, uh, people). But, in the dark heart of the City, what we are looking for is certainty. In or out. Will someone just MAKE UP THEIR MIND.

    Dr. Thompson saw this in the US 1972 Presidential campaign:
    “The main problem in any democracy is that crowd-pleasers are generally brainless swine who can go out on a stage & whup their supporters into an orgiastic frenzy – then go back to the office & sell every one of the poor bastards down the tube for a nickel apiece. Probably the rarest form of life in American politics is the man who can turn on a crowd & still keep his head straight – assuming it was straight in the first place.” Hunter S. Thompson “Fear and Loathing on the Campaign Trail ’72”

    1. PlutoniumKun

      Be assured you are not the only one who can’t make head or tails of this – even the trading system algos are having a breakdown!

      Brexit is so confusing it is even confounding the robots.

      Machine-driven trading systems in the $5.1 trillion-a-day global currency market are struggling to cope with the blizzard of headlines about Britain’s efforts to extricate itself from the European Union.

      This is making it more expensive and risky to bet for or against sterling.

      Prime Minister Theresa May’s failure, after three attempts, to get her divorce deal with Brussels through parliament has sent the UK’s planned departure careering off-piste.

      It has also raised questions over who is in charge and when, how or even if the UK will actually leave.

      As a divided government battles a divided parliament over away forward, the chorus of characters who can now influence events has grown.

      This is flummoxing news-reading algorithms, or ‘algos’, which are designed to parse phrases from recognised speakers before executing a trade.

      “The model signals are more quantitative driven and rely on historical data feeds,” said Neil Jones, head of hedge fund currency sales at Mizuho in London.

      “Brexit headlines have thrown a spanner in their works for the sheer number of characters moving the currency on a daily basis,” he said.

      1. skippy

        Rational agent models having a melt down – ?????? – obviously humans need to up the meds …

    2. skippy

      The – self awarded – managerial class suffering a post traumatic episode of what is this thing you call introspection meets “I”deological constipation ….

  3. vlade

    Since hardly anyone now remembers the first king of Britons, Canute (a Dane), and those that do mostly take the whipping of the sea in entirely opposite as it was originally intended (demonstrating lack of control over elements rather than trying to stop the unstoppable), I propse to change the metaphor to “MPs whipping against no-deal Brexit”.

  4. paul

    If you you’re curious where Bunker no 10 gets its impression of the will of the people, have a look at this thread:

    Robbie Gibb’s colour television

    From wikipedia:

    Gibb was head of BBC Westminster in overall charge of the BBC’s political programme output – Daily and Sunday Politics, Andrew Marr Show, This Week and Radio 4’s Westminster Hour. Prior to joining the political team at Westminster he was Deputy Editor of BBC2’s Newsnight.

    Gibb is a long standing Brexiteer

    Gibb is the brother of Conservative MP and Schools Minister Nick Gibb.

    Labour (dis)missed two chances to rule out no deal, I doubt they will fool many with the Letwin/Balls attempt at handwashing.

  5. DaveH

    “But I will add in, that even if May didn’t think she was trying to trap Corbyn, it certainly came off that way. In reality it was her just saying – “it’s not my fault, guv! It’s the other bloke’s fault!”. Which is not a plan. That’s a childish reaction”

    “Jeremy, in the national interest will you please come and hold this can of petrol with me while we wait for the police and fire brigade to arrive at this burning building?”

  6. Winston Smith

    By all appearances, a no-deal is on the near horizon. Does anyone where to find a summary of its consequences for the UK-without sarcasm or hysteria? I am trying to explain to some american friends the issues. Thanks

    1. vlade

      The problem is that no-one really knows. All we know is that there’s 40 years of laws and regulations and international treaties (trade and otherwise) that might (but some might not) disappear overnight.

      One clear impact is that if April 12 is Brexit day, on April 13 almost no shippment from the UK will be able to be processed in the EU, w/o much more hassles (and it’s unknown what sort of hassles would apply).

      1. Winston Smith

        Indeed. This might be what french intellectuals would call “la chute dans les ténèbres”-free fall into darkness.

    2. Yves Smith Post author

      There’s a great series of videos, 3 Blokes in a Pub, but videos are inefficient. But viewing one or two gives a sense of what a hairball it is.

      To add to vlade’s point, another issue is the EU plans transition procedures in 8-9 areas, all to suit the EU, like aviation. That will blunt the impact a bit. The EU also expects the UK to seek what amount to interim breaks in other areas. But how quickly those come together and what the EU extracts for that is up in the air. They do anticipate making accepting the Irish backstop a condition for any of that.

    3. skippy

      Trade shock self induced… w/o any contingency plans to offset disruption of flows … save some booklet of ideological pontification about some path and utopia around the corner if one believes [tm] strong enough.

      Failure is always about lack of dogmatic belief regardless of repetitive failures …

    4. PlutoniumKun

      Not quite what you are looking for, but there is a pretty good compendium of advice and links at the Irish Department of Foreign Affairs:

      Brexit & Business; Brexit and You.

      Even a quick flick through though should show you that it is a maddingly complex topic. And this just identifies ‘linear’ risks there are all sorts of non-linear potential impacts that nobody can really predict.

    5. shtove

      The inputs are unprecedented, so it’s impossible to say. My biggest concern has always been a sustained interruption to cashflow, with a knock-on to debt servicing.

      Good luck, everyone. And a miaow-out to Gabriel!

  7. David

    OK, I suggest we step back from the craziness for a minute. I understand it no better than anyone else, and I’m not sure that anyone really has much idea what’s going on. But I think we may be at one of those political moments where the content of what is going on, which is produced partly randomly, and partly by accident and lack of forethought, is less important than the form.
    What’s going on below the surface, in terms of redistribution of power? Two things are obvious. The government has effectively stopped functioning, and would be incapable of collectively booking a table at a restaurant. May has been humiliated into having to make overtures to the Price of Darkness ™ Leader of the Opposition. Whether you think this is purely cynical or not, it’s an extraordinary indication of her lack of power and control that she’s looking for a majority outside her own party. Second, Parliament has entered the game. This is a constitutional earthquake, even if its practical consequences are unclear, and even if it is quite true that there are unicorn breeders among the MPs responsible. This earthquake was only possible because of the rebellion of 20 Tory MPs, and, as Ian Dunt points out this morning, 17 of them were former Ministers. As he also argues, if May had displayed just a smidgeon of good judgement and reason, and one of those ex-Ministers had voted “no” the result would have been different.
    This will not have been lost on Brussels, where the standing and influence of different actors are keenly watched and analysed. Until the last visit by May, EU policy had to be constructed on the basis that, no matter how weak she was, she was the leader, and she effectively controlled all the UK’s proposals, and the treatment of the EU ones. The fact that she was in many respects a puppet of the Right, as well as totally lacking in flexibility and imagination just complicated things. So the last offer, with the twin deadlines of 12 April and 22 May, was constructed to try to trap her personally in a resolution of some kind.She was given a final chance to sell the WA, or failing that chance to come up with something (almost anything) to justify an extension. Neither seemed likely when she was in control, so a crash-out was a very real possibility.
    The game has now changed, into a configuration that’s not been seen before. Brussels will be able to convert the discreet discussions with Corbyn into open ones, and feel justified into talking to UK MPs. There’s nothing May can do to stop it. This means that between now and 12 April, the EU will be looking for signs that there is a road-map to a proper resolution. May’s idea of a short extension is unlikely to fly, but a longer extension imposed on May, with the UK humiliated into taking part in the EU elections (another strike against May) can open new possibilities. This doesn’t mean there will be a resolution, its doesn’t mean that any special flavour of Brexit, or a second referendum is any more likely. It’s just the removal of an obstacle which made progress impossible up until now.

    1. shtove

      That’s a very interesting post. If we get to a point after the weekend where all sides accept the European Parliament elections are to proceed, then lots of assumptions shift. As one judge said in the Supreme Court in the Millar case, another twist of the kaleidoscope.

  8. Redlife2017

    The Labour Whips office has noticed that:

    “The UK is due to leave without a deal on Friday 12 April. The Commons Leader has just announced the business in the House of Commons for next week. Currently there is no scheduled debate on how to break the deadlock.”

    But also Alex Wickham from Buzzfeed has said this:
    “NEW: May/Corbyn looking at a “devo lock” that would give Scotland, Wales and NI a veto on a future Brexiteer PM tearing up a customs union deal, say two Whitehall sources.

    Brexiteers accuse No10 of a blackmail attempt to win votes for her original deal.”

    No idea what the heck this is supposed to mean…

    1. Clive

      It’s trying to stop a future Conservative party leader or government reneging on any understanding between May and Corbyn to remain in the Customs Union.

      Which sounds like it would work. Unfortunately seasoned observers will by now have come to appreciate just how leaky these sorts of supposedly water-tight arrangements are. For one thing, treaty agreements are a higher authority than U.K.-specific law. Or devolved legislatures. So there is a get-out just there. But it’ll probably be sufficient fudge to act as a talking point on the inevitable questions there’d be around this risk.

      1. PlutoniumKun

        If you look purely in political terms though it seems to me that Corbyn is on to a winner if he can extract some concessions like this. If he does, he looks like ‘Mr. Reasonable’ who saves the UK from a no-deal. And into the bargain he gets to stoke up a Tory Civil War.

        If a future Tory leader unilaterally dumps the agreement later, politically speaking, so what? He gets to portray himself as the face of reasonable compromise while the Tories get to look even more untrustworthy from the perspective of the UK fringes. I don’t see there as being a great political loss to him if the Tories pull a double cross, there might be a significant gain.

      2. David

        I don’t think that an international agreement, similar to the one last month, can impose domestic duties on a government that go beyond the subject matter of the agreement. That’s to say that any eventual agreement with the 27 couldn’t set out rights for a Scottish veto etc. That would have to come from a piece of UK legislation, presumably that one which translates any final agreement with the EU into UK law. On the other hand, if the government were to issue a statement in parallel with the EU Council Conclusions (or whatever) and the Conclusions were to “note” the statement, well, you’d have a pretty robust linkage with a document which had, as lawyers say, “legal force.”

  9. Redlife2017

    And the BBC is pissing on some MPs unicorn of a customs union:
    Brexit: Can you have frictionless trade in a customs union?
    Money quote:
    At the moment, the UK has frictionless trade with other European Union (EU) countries because the EU is both a single market and a customs union.

    The customs union means that once goods have cleared customs in one country and the commonly agreed tariffs (charges on imports) have been paid, they can be shipped to others in the union without further tariffs being imposed.

    The single-market part means that there is free movement of goods, services, capital and people and all the members follow the same rules, regulations and standards.

    Having just one or the other does not give you frictionless trade.

    1. vlade

      Arguably the latter give you less friction than the former. While it’s a beaurocracy filling customs forms, it’s something that can be done relatively easily (for example, even within EU you have to deal with VAT and excise duty IIRC, and this is really not massively different).

      I.e. lack of CU means you have to do more in your logistic processes, but lack of SM means you have to change your product and product development process.

      1. larry

        Actually, Andrew Neill on Politics Live today finally got to the nub of Ken Clarke’s customs union motion. After pushing Clarke to clarify his answer by pointing out that the EU won’t accept this and the EU won’t accept that, it turns out that Clarke put it forward as a kind of lowest common denominator that everyone could agree about. That it doesn’t solve the Irish border problem, he doesn’t care about as it seems he thinks it nonsense anyway. As for the difference between being in or out of the EU, Clarke fell back on what takes place behind closed doors and the claim that our economy is too big to ignore. Even when Neil pointed out more than once that he was failing to distinguish between being in or out, he went back to his days when he nogotiated trade deals, even though as Neil pointed out more than once that this was when the UK was in the EU. Neill finally got there in the end, but it was as bad as pulling teeth. Now we understand it, and realize that Clarke thinks it trivial and only there to get agreement on something.

        1. Marc

          To me it’s been obvious for a bit now that, despite being a remainer, the best we can hope for is avoiding a hard Brexit. Clarke is just looking to achieve the same so we should just hold our collective noses and accept it. In end, to me, one of those “Nowhere” citizens living in the UK, the point is very simple. The EU is not viable if it doesn’t integrate a lot more. If you were to put that proposition (ie a Europe that integrates further) to the UK populace, it would, by a large majority, not accept this. So might as well get out but for God’s sake, let’s mitigate the damage by avoiding hard Brexit.

        2. shtove

          Yes, Neil does drive his points home effectively. Clarke was pretty dreary. But doesn’t that mean Corbyn’s version is closer to reality, if not quite there?

  10. Epistrophy

    Yves, you have written an excellent summary of events. You quoted Jolyon Maugham of the Guardian:

    These are the real questions. The country we once were – and the parliamentarians they once were – would have faced up to them. But the Cooper-Letwin bill is an awful, awful distraction. I suppose I should find it poignant. But instead, when I think of the consequences for millions of people whose lives will be profoundly damaged by no deal and who are betrayed by the incompetence of those they trusted, it makes me furious.

    I personally am not surprised by the chaos and lack of leadership. These are the ultimate outcomes for any country that places itself under, and yields to, the power of a supranational body. It will undoubtedly lead to the corrosion of leadership and accountability at the nation-state level while the real power coalesces at the highest governance level; in this case Brussels.

    The consequence of leaving Europe will be to install a new Parliament significantly different from the current one. Whatever happens with Brexit, whether a negotiated exit or WTO exit, there will be elections soon to bring in a new group of Parliamentarians who can run the country once again.

  11. DJG

    Yves Smith: Thanks for the tarot card, although I would never use that deck. Yet the card is the exact portrait of the situation in Brexit–death through illusions reflected and doubled to infinity. The English are a long way from Matthew Arnold and “Dover Beach.”

    Typically, the Hanged Man is a more positive and mystical card: Stealing from Wikipedia

    This method of hanging was a common punishment at the time for traitors in Italy. However, the solemn expression on his face traditionally suggests that he is there by his own accord, and the card is meant to represent self-sacrifice more so than it does corporal punishment or criminality.[citation needed]

    In other interpretations, The Hanged Man is a depiction of the Norse god Odin, who suspended himself from a tree in order to gain knowledge. There is also a Christian interpretation that portrays Judas Iscariot, and include the bags of silver in his hands.

    There by his own accord? Self-sacrifice? To gain knowledge?

    The strangeness of the card you chose is that it is self-absorption, self-regard, and self-delusion: The Anglo-American elites, hoping that greed will conquer all.

    1. Yves Smith Post author

      I would have reversed the card (I can do so in the backstage) but I liked the look of the unicorns, so I let appearances trump the better meaning. The interpretations of Hanged Man reversed that I see are being stuck, futility of actions, blaming others.

  12. Mattski

    Question: If the UK is the world’s fifth-biggest economy and shrinks by ten percent, where would that leave it? Anyone have a rough and ready answer?

      1. Anonymous2

        Likely headed there anyway, as France was only a tiny fraction behind last time I looked and India is a dead cert to go above both if it has not already.

        Saying something is fifth biggest in a world where there are three giant trading blocs makes the UK sound more important than it is . Its GDP is about 3% of world GDP whereas the giants are more in the range of 15-20%.IIRC

      2. Avidremainer

        And you can bet your bottom dollar that being below India didn’t enter the Brexiteers calculation.

        1. Which is worse - bankers or terrorists

          You have to appreciate the irony of the UK dropping behind India in economic rank as a result of the Brexiteers goal to return the Crown to its former glory.

  13. David

    This is interesting, in the Guardian from the EU about Northern Ireland and milk:

    “A senior EU official has confirmed that if the UK crashes out of the bloc in nine days time controls will have to be in place on “day one” on milk and other animal products coming from Northern Ireland. They say it will “be difficult” to say how the giant co-operatives that currently exist on the south of the border could continue to do daily milk collections picking up both milk from farms on both sides of the frontier.

    1. PlutoniumKun

      Yeah, milk is a key issue. But I think the Irish government will push the Irish based processors to lead on this. This will leave the likes of Strathnoy (the UK company featured in that article) high and dry. The industry on both sides of the border is dominated by Irish owned companies and many dairy producers in Britain are Irish owned. So I think the Irish companies will be in a better position to control their supply lines.

      Whats often forgotten is that the UK policy of not doing anything on the border and pretending nothing will happen will mean that the border will become like a one way valve. Producers under pressure will send any products ‘in doubt’ north to the UK market, while keeping the Irish (EU) market ‘clean’. I suspect this will lead to a glut in dairy produce going into the UK (hey, forget eating tomatoes, have some more cheese…). The Irish dairy producers will probably have to live with a shortfall in milk for a year or so in order to prevent any problems.

      I’ve mentioned it here before, but I think the dairy/beef industry will be largely self policing in the short term. Anyone attempting to smuggle dairy/beef from the UK to the Irish/EU market will face the wrath of thousands of small farmers. These guys – especially in the border areas – don’t mess around. They will see milk smuggling from the north as threatening their livelihoods. They will deal with it their way.

      I predict though a lot of river pollution. Surplus milk disposed of into drainage ditches is more polluting than sewerage. I suspect we’ll see a lot of this happen, especially in the UK (which has more milk produced than it has processing capacity to turn it into cheese/milk for longer term storage). The shortages are most likely to be in the Republic.

      1. shtove

        The valve metaphor is interesting. What if the valve moves north and east, toward the shore of Lough Neagh?

  14. flora

    an aside: From Thatcher and Reagan on, pols in US and UK were told or were convinced to believe that government was subordinate to “the market”, and the market could more or less managing everything by itself. Turns out that ideology was wrong. (no surprise there.) After 30 years of subordinating govt to the market, now the govt, or the current younger politicians at least, no longer know how to do the difficult things only a govt can do. Govt devolves into mayhem when tasked with such. Are they still waiting for “market signals”? My 2 cents.

  15. David

    I posted a longer comment at lunchtime was never came out of moderation. I won’t repeat it all here, but just to say that, whilst I have no more idea than anyone else what’s going to happen (or even happening now) it does seem to me that we’ve passed a certain political threshold. There is, for practical purposes, no government, May has been forced to deal, however cynically, with Labour, and an alternative government seems to be in the process of installing itself in Parliament. May is a busted flush and no longer the single point of contact with the EU, which means that possibilities that were closed before may now be open. It’s not impossible that over the next week something may be painfully hacked out which satisfies the EU requirement for some kind of a roadmap. The price would be UK participation in the European elections, but those who were going to have a nervous breakdown about that have already had one for other reasons. This is not progress as such, and it’s certainly not a solution, but it does represent the removal of an obstacle which had prevented progress. Whether the system can make creative use of the opportunity remain to be seen, of course.

  16. ljones

    I still think may secretly wants crash-out.

    She knows full well her deal won’t ever get through (even less chance with people in her party resigning). The meetings between her and corbyn are just yet more can-kicking and time wasting. And even if it should go to more indicative votes by parliament they won’t agree anything either since everyone has their own take on brexit – none of which meet up.

    I’ll note too something which seems suspicious to me – the “anger” of some tories (for example the ERG) over the talks with corbyn but yet none of them have resigned. A few low-ranking MPs yes but no big names.

    My guess? May’s just playing for time and even if she goes back to the EU the first question will be – from the EU – “What’s your new plan then?” and she’ll just have to stand there twiddling her fingers as there is no other plan.

    So the UK either gets booted by the EU, or we crash out on the 12th. Deep joy. :-(


  17. Joe Well

    Yves said this won’t have a happy ending, because it isn’t a Disney movie.

    But for a lot of people around the world, the UK is reflexively seen as the bad guy, and so Britain slipping beneath the waves and other countries making off with bits of its economy would be a Disney-style happy ending where the heroes are rewarded and the villain is definitively humiliated.

    This might not be fair, and if more people knew of the depths of poverty in much of the UK these attitudes would soften, but attitudes are what they are. Even without any anti-UK sentiment, everyone likes to see arrogance punished, and the British establishment is arrogance incarnate.

    Why aren’t more people in the UK aware of this?

    1. shtove

      I recognise the British Empire has been a terrible burden on the world, but the UK’s democracy has lit up the place and must keep shining that light. We are unsquashable!

  18. Monty

    They should just do a “Hard Brexit”. Crash out, and let the perpetrators face the music. We will never hear the end of it if they do it any other way. A never ending chorus of, “If we had done hard brexit, none of this would have happened”. Let them have it, watch it crumble, and then when the dust settles, round up the instigators, freeze their assets and try them for treason.

    1. Fazal Majid

      Your quaint faith in the Anglo-American justice system would be charming if it were not so obviously misplaced. Did the perpetrators of the Iraq War or the 2008 Great Recession face the music? No, it was David Kelly and Bernie Madoff (only because the latter had the audacity to steal from the rich).

  19. lampoon

    Apparently, May has up until now held fast to ‘my deal is better than no deal, and no-deal is better than no Brexit.’
    If reports are to be believed, her reaching out to Corbyn is a result of a change of heart on no-deal, brought about by concerns over no-deal requiring direct rule in NI, and coupled with the economic chaos of no-deal motivating a majority of NI to support a border poll on reunification, which might also lead to an independence vote in Scotland, thus risking breaking the Union completely.
    May seems to be willing to blow up the Tory party to avoid no-deal and avoid the break-up of the Union. Maybe she is hoping that she and Corbyn together can convince the EU to grant a long extension, because now with Labor’s help, Parliament can eventually find a majority supported ‘way forward.’
    Isn’t next Wednesday the drop dead date for agreeing on an extension? If so, it seems highly unlikely that any substantive or procedural way forward will be decided by then (even if a procedural way forward would be sufficient). And Commons can’t even sit until it gets its plumbing fixed.
    So if no WA approval (apparently a given), and no extension (seems highly unlikely at this point), May will be faced next Friday with the choice between no-deal and no Brexit. As I understand it, only May can revoke Article 50, but her doing so would certainly be a shocking about-face.

  20. Pinhead

    Lawyers know that multi-year litigations, where both sides refuse to compromise, are often settled on the courthouse steps minutes before the hearing is scheduled to begin.

    Brexit could die abruptly if, on April 11, the MPs are faced with the stark choice between a crash out or tearing up Article 50. Most of them, and probably a majority of voters by now, would be relieved.

  21. Sanxi

    ‘But this isn’t a Disney movie.’ Having you seen the recent Disney produced ‘Dumbo’, that well is set in hell, with Satan, being Old Walt himself. We live in strange days.

  22. IsabelPS

    This is probably a very stupid question. But because of my bet with this guy that is convinced that this is a cunning plot, or rather, that there is method in this madness, I’ve thought of clouds of starlings and the chaos theory:
    It’s way above my pay grade, of course, but I wonder if any of the members of the distinguished comentariat has heard of anybody applying mathematical models to Brexit.

  23. Sanxi

    Yes I do, I am a member of the Santa Fe Institute, where A few of us run a models based on Sytems Theory, one part of which is chaos math, as the Brits might say, there are many ‘maths’ to the models, many ‘algorithms’ too. It is all run on a large super computer. One input that may or may not surprise you is we construct profiles of people based on research started by Standard University in the 1950s that continues to this day. One of the components is what people do under different degrees of stress. The value of any of this is in making predictions so as to take actions. One of the ways we describe our results is in terms of Game Theory, which is like it sounds kind, of a game of winners and losers or not in various ways. Avengers: Endgame, is based on Dr. Strange’s running a game zillion times over to get the one solution that will work. We do that. We even generate movies of the results.

    1. IsabelPS

      Do you think this whole process could be studied like that? What made me think of it is the notion of something that looks random but it is deteministic.

      1. Avidremainer

        The UK treasury has done mathematical models. They give ranges of outcomes depending on the type of Brexit.
        All the ranges show that the UK will be poorer than it otherwise would be if the status quo continued.

        1. Sanxi

          The have a models of effects not actions actions by organizations by date and overal outcome. We have only one outcome on one date.

  24. Marko

    I was looking at the Brexit odds offered on a betting site today (with no intention of playing, to be clear).

    No deal Brexit on or before April 13 had 9/1 odds (meaning £100 returned for a bet of £10). Do the bookies know something we don’t?

    1. PlutoniumKun

      Sometimes the bookies do get it right, but sometimes (such as the last UK general election), they buy into ‘received wisdom’ and get it horribly wrong.

      So my feeling is that a little like the financial markets, they assume something will turn up and there will be a fudge. The Irish Central Bank today said they expect Sterling/Euro parity to occur if there is a no-deal crash out, and yet the currency trading markets themselves are not pricing this in – i.e., they don’t expect it to happen.

      I’m not a gambler, but I’d consider those odds well worth a flutter.

  25. F.Korning

    May is either delusional or deceitful. It’s all obfuscation and misdirection on her part. She’s not compromised an iota, and she’s lied through her teeth about meaningful votes -postponing and ignoring votes with impunity. Plebiscites are only binding when she feels like it. That is autocratic tyranny, and it’s from a mad woman, heading straight over the cliff’s edge. I think she has a martyr complex and it’s feeding her. The more adversity, the more she’ll doggedly rush off the precipice.

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