Thursday 13 September 2018

Will May and Barnier really dance?

Poor Prime Minister May, forever trapped by Brexit. She never wanted to do anything other than a very small, Brexit In Name Only deal. Yet the suave Monsieur Barnier could see through only his francophone goggles, a way to smash the UK.

So, after nearly 2 years of negotiation we have actually done precisely nothing towards Brexit. A deal is on the table that will be rejected and there are not enough back-up options to fallback too The rock is rolled up the hill, only for it to come tumbling down again.

No side is covered in glory, the Remainers acting like a fifth column in the UK help egg on the EU to do their worst deal with the UK in the hope of forcing a second referendum. The Leavers in the Conservative party have hung around, unsure of their own position and too lazy to come up with a workable alternative to the BINO proposed by May. The EU themselves have sat in their smug utopia casually shrugging at what is actually an existential crisis for the Union.

But I can't see Chequers, as much as it is in reality a better deal for the UK than the EU would like to do, really working. The EU will insist it is watered down and that will mean it won't keep May in power if the Leaver Conservatives can manage to topple her.

Where this would leave the UK is in a bad place, the basics of an exit deal need to be completed to prevent economic and social dislocation next year. Perhaps Barnier will see sense, but I think this is hard as the current UK offer is not great from the other side of the channel - it is exactly the pick and mix they have said they want to avoid and so whilst is still BINO will create an itch for the EU.

After months of hiatus, Brexit is going to be sorted in the next two months at last - in terms of whether the UK falls into political chaos or a BINO deal is done. I reckon it is still 50-50 at best for May.


david morris said...

I really don't understand all this "negotiating" guff

Do the pols not understand the people can see through it & that any person/party complicit in the charade has zero credibility ?

Electro-Kevin said...

Brexit has been sabotaged.

A Remainer will say "Ah. There you go. Your impossible Brexit and now you blame everyone else but yourself."

To which "You pledged to honour the result when you made your mark on the EU Referendum ballot paper. You've done nothing but collude with the EU ever since."

Alas, here we are and I told you so from the day that Mrs May came to office. A stitch up.


He *could* win an election and defeat Labour. May never will.

So does pulling the plug on the Tory party now really make a difference ?

Lord Blagger said...

It's a crisis for Eurocrat's pensions.

That's what drives it all

Anonymous said...

I can't see anything being settled in the foreseeable future.

The previous attempt to escape from Europe, which was begun by Henry VIII, took until 1688 to complete.

Don Cox

Anonymous said...

This is the kind of stuff that [should] give you City types sleepless nights.

Unless you are a hedge fund.

Lots of money being made on the side here.

CityUnslicker said...

Anon - whwy would that give us sleepless night? In the event of no deal then not much changes except the jurisdiction of the Euro regulators...I would counter, no deal is super for most of the city - except the very large international banks and insurers for whom in the short term there is minor inconvenience.

The reason the City is behind the EU is for the most remainiac of reasons - the EU protects large firms by creating extra regulatory barriers.

Given the real future of finance is in technology and fintech, not being in the Eu will give the UK a competitive edge - says everyone not in the pay of the large US banks.

Anon 1:05 said...


I see where you are coming from and agree that the burden of extra regulatory barriers help large firms - not just those in Finance. But how do you explain the German exporting phenomenon where the Mittelstand have been quite adept at living within the EU and getting established in China - one of the markets held up as an opportunity for Brexited UK

It's beginning to sound like excuse after excuse for UK plc being piss poor at almost everything apart from shifting numbers over a page a.k.a. Banking. Where is the build, grow or make that we once had?

andrew said...

If the EU accept the chequers offer without changing it much at all then there will - just - be a majority in favour.

But these guys exist to negotiate and so they will and May is weak and so will give way and so there will be no deal.

At which point a measured degree of chaos ensues and the real deal is made.
The prize goes to those who hold their nerve.

The point when the penny drops is when the UK Army / Navy starts training for border duties (or maybe they have already).

CityUnslicker said...

Anon - that is a wider question. Mainly driven by the piss poor record of investing in innovation and R&D, over reliance on cheap labour rather than machine led efficiency (which we invented for goodness sake!) and the march of London over the rest of the economy whereas Germany, USA have multiple centres with different skill sets.

Brexit, whilst not helping with innovation or London, has ALREADY helped with the labour arbitrage. As labour prices rise, so will corporate investment as it at lasts becomes necessary as wages rise.

Electro-Kevin said...

It is almost as though there was a carve up in the early EU.

This region will do engineering, that region will do agriculture and that region will do banking...

DJK said...

CU (6:36) That just begs the question of why there is a piss-poor record of investing in innovation and R&D. Where world leading innovators are created in Britain (ARM) they tend to get fairly quickly sold off to foreign investors, as will be the fate of poor old GKN. Not that GKN was a world leader, but it was a fairly solid business.

K said...

The EU doesn't seem to investigate anti-competitive activity anyway as all our worst offenders are from the continent. They purposefully use language barriers to slice up regions and price fix and will cut off supply to anyone who sells in English to the whole single market.

Why is the BBC still going on about roaming fees and drivers licenses? Is this the best they can do and do they really think it affects the average Brit?

Sebastian Weetabix said...

The EU is a German mercantilist construct. It uses tariffs and over complex regulation to protect German industrial interests & French agriculture and between them they have been fucking us over since 1973. Spineless Quisling May is going to allow that to continue. And given that only 129 of the current crop of shits that passes for a Parliament are actually leavers, that’s what we’re going to get unless and until we start hanging them from lampposts.

They have shown with their actions that we are not a democracy in any meaningful sense of the word.

Sebastian Weetabix said...

I was using “hanging from lampposts” metaphorically but the more I think about it, the more I wonder if it will be necessary to go from metaphor to actually doing it. Our overlords have forgotten that they work for us, not the other way round.

Charlie said...

Mr Weetabix, it's the lefties who tend to hang people from lamp-posts, and even though the hard-left leader of the hard-left Labour party is a Leaver, most of its voters, being by definition unable to think for themselves, are pro-EU. So it's not going to happen.

Anonymous said...

EK - I have long believed this was the case. I think the UK got finance (The City) and gave up/gave away many other things.

SW - of course they have been fucking us over , starting with fishing the first big sell-out.

No doubt there will be a deal , but... I started to think about the continental business in the UK who could lose out if things start to get nasty:
Eurostar - they may stop the trains - ha ha ha
Heathrow (and ano)-Ferrovial still I believe - the planes may stop flying - ha ha ha
Hinkley Point - May's first and obvious surrender(cleraly showed she wasn't playing hardball) - could this still be banjaxed?
And the rentiers!My favourites.
Waste - absolute target here -EU sets the policy and we mugs pay the bills to Veolia

Yes I know there's Nissaan and BMW too.

Loads more to think about as it's not just one-way as the swine at the BBC speaking on behalf of the political establishment would have us think.

Anonymous said...

Brexit is becoming boring now. If you think the EU is the source of all our ills and then don't forget all the other ills that have come and gone - and the picture is the same.

(Excuses for UK plc - not in chronological order)

- Unions: all but gone now
- Miners holding the country to ransom: all but gone now.
- Over-regulation of banks: gone but look what happened.
- Under-regulation of banks: that was a classic
- City Short Termism: Partly gone ....etc
- The EU: soon to be gone.
- Low levels of educational achievement: when everyone has a degree

We're running out of excuses here but here is the key.

"Brexit, whilst not helping with innovation or London, has ALREADY helped with the labour arbitrage. As labour prices rise, so will corporate investment as it at lasts becomes necessary as wages rise."

We will either become a technological powerhouse with high skills and high investment -the Silicon Valley of Europe. Or as has always been the recent past - low wages, low skills, with screwdriver plants providing jobs with massive subsidies to foreign owners. And alongside this, trashing the currency.

Get as much of your pension off to hard currency areas as you can.

personalmusing said...

Leaving with no deal is by far the better option.

Every single company has planned and adapted on the basis of no-deal. Usually this is just creating a few new legal entities, often with no people. No-deal and then improvement bit by bit gives far more clarity then years more fog from the transition agreement.

There will be hicucps on day 1. But the big problems will be solved quickly (planes are going to fly) then there will be a tail of smaller issues that people work around. Picture the disruption from a bad snowstorm, of the volcano that shut down air traffic for a few days. Lots of headlines for a week or two, then tails off.

I see lots of people telling others what they should be worried about (e.g. see the competition point above which is nonsense - and I have done plenty of competition and regulatory work in my time). I see very few comments from people who are worried (other than those who for personal or government relationship reasons need to echo the government line).

So brief mild disruption and then the economy should do well so long as the government opens up to more trade and makes regulation smarter (this isn't about more or less regulation, lots of EU regulation is just dumb). Come the next election economy should be doing well and brexit will be a few years back. May is such a humourless control freak that I am hoping she falls on her sword when her chequers deal is squashed, making way for a leaver to run no-deal.

A transition period means that we get nothing but brexit for 2 more years, economy stuck in fog, then the disruption of the exit happens just before an election, the growth that might be unlocked doesn't have time to kick in before going to the polls.

Transition agreement is suicide of the tories.

Nick Drew said...

anon @ 9:24 - Hinkley Point - May's first and obvious surrender(cleraly showed she wasn't playing hardball) - could this still be banjaxed?

spot on - that's when everyone first knew the gig was up as regards May

I mean - faced down by Hollande!: at a time when he was a lame duck anyway

Jan said...

Did anyone catch Tim Martin of Wetherspoons on BBC Breakfast today? He was there to talk about Wetherspoons results (good) but most of the interview was about Brexit and he made the best case for Brexit I've heard from was quite inspiring! Ben whatsisname the business guy did his best with the other side of the argument ie the BBC Remainiac view but it didn't work. Maybe they should put Tim Martin to do the negotiating. We'd be out good and proper on March 29th.

Apparently Mark Carney's 35% loss in the value of your house is the "doomsday" scenario the BOE predict would happen with a no deal Brexit according to Kamal Ahmed the other key BBC Remainiac as if this would be a "bad thing". If the value of everyone's house fell by 35% it would be the best news ever for FTBs (first-time buyers). They then wouldn't need any of the "help" from the government which only serves to push up prices even further.

Electro-Kevin said...

It would be the best thing for mums and dads too. No having to bail kids out with the pension lump sum. "House equity - WE'RE RICH !" is the biggest falsity out there.

hovis said...

Anon 6.27: there may be some who are pro brexit who beleive it will magically transform the country; Beyond the media I see mainly a realistic view that the structural problems of the UK will not be solved by Brexit. Equally however they were not solved by being in the EU either. Brexit is at best a prerequisite for much wider change that is needed - of course when any real change is on cards nothing is certain.