Trade war with China, hmm?

"The EU has restated its readiness to launch a trade war with China over imports of cheap electric cars, steel and cheap solar and wind technology, with Ursula von der Leyen saying the bloc will “not waver” from protecting industries and jobs after a meeting with the Chinese president, Xi Jinping, on his multi-day tour of Europe ...

If she's serious, the cost of (inter alia) net-zero programmes across Europe will go through the roof: and in principle at least, that's non-discretionary spending.  It'll be made all the more acute by the forthcoming Carbon Border Adjustment Mechanism.  I presume it would also be the final nail in the coffin of German exports to China.  And who'd have any euros left over for Ukraine?  It's quite a bluff, if that's what it is.

If she means it, well all I can say is: assuming the UK would somehow get swept up in this rather than being a lucky beneficiary of ramped-up Chinese dumping, then not for the first time in recent years, I will be very glad of my substantial hedge against inflation.  (No, not gold - that's against Bad News.)

Incidentally, you gotta smile at the nasty conference-hall-style chair Macron gave Xi at the Élysée.  That wobbly table looks rather egalitarian, too ...   He gave Trump a much nicer time.

ND

Erdogan: the Transactional Turk

Erdogan has really excelled himself this time, the major obvious casualty of his machinations being Putin and his ever more flimsy stature & general political dignity.  Drones, Sweden, Azov, ... what is the full nature of the Turkish "trade package"?  Does he have it in writing (from Biden / Ukraine / NATO / EU)?  Or is he just positioning himself for a Cunning Plan he has in mind?

(1) Transactional politics has upsides - and downsides

As I've written before, in some political spheres - foreign policy generally being one of them - the 'lines of logistics' can be incredibly short: unlike most domestic policy-making, it can be stroke-of-a-pen stuff instead of months & years of hard, practical grind, with all the attendant implementational friction & risks of material long-term projects.  (Thus, to take one of a million examples, Lenin took Russia out of WW1 in a morning.)  Some politicians, indeed some human beings in general, heavily lean this way: there's no situation they won't try to deal their way out of (negative) or into (positive). 'Transactionality' is one facet of this type of approach: Sadiq Khan is perhaps the most prominent UK exponent right now.   

The upsides are clear.  A stroke of the pen requires far less blood-and-treasure to resolve a dispute than 'going to war' or its analogues, & gets quicker results, too.

The downsides are there, too.  Obviously, transactionalism appeals not least to politicians of the bone-idle tendency.  Ditto, the heavily-overlapping subset of politicians who have no principles or red lines whatever.

And what can be done at the stoke of a pen can be undone just as fast.  Sometimes, "with one bound he was free" clever-cleverness doesn't cut it: a fundamental solution is needed, the hard yards can't be dodged**.  To give a foreign-policy example:  what could be more convenient for NATO backsliders like Germany than a neat, stroke-of-a-pen "resolution" on Ukraine that would mean they didn't need to restore defence spending to prudent levels?  Very neat, yeah.

(2) Downside for Erdogan?  Oh yes there is

I'll give you at least one.  Turkey is essentially 100% dependent on Russia for gas (as well as a lot of oil).  It gets very cold there in winter.

Less obviously, since the economic recession Erdogan foisted on his country Turkey has been having the utmost difficulty in taking all the gas they've contractually committed to.  They owe Gazprom a bunch of money.  Thus far, it's been forgiven ... That's on top of a cold winter in Turkey.

Transactions, transactions.

ND

____________

** Also, the Clever Stroke often leaves a very nasty taste in the mouth:  in the Claudius novels, Graves writes of how on a particular campaign, Claudius engineered a lightning victory by having his men take the enemy camp at night by crawling up silently through the undergrowth, with total success.  The 'victorious' Roman troops hated it:  they wanted a proper conventional scrap in the morning.  Their triumph-by-subterfuge "smelled of the candle".  

Plans to "solve the energy crisis"

The EU and, we are assured, newly-minted PM Liz Truss, are hatching plans to cater for - I can't immediately think of a better phrase - the energy crisis this winter and maybe beyond.  Well, they certainly have to do something: "Devil take the hindmost" doesn't count as public policy (even if a handful of commenters seem to favour the bracing Nietzschean approach). 

Whatever these plans turn out to be in detail, by definition they will be epic in scope and scale.  In such extreme and complex circumstances, with so many moving parts, I don't trust any bureaucrat to do anything adroit; so we may be equally sure the "unintended consequences" will be monstrous.  We could all guess at a few.  Greta thinks she can guess, too - and she's not happy.

I particularly don't trust the EU in general, and Germany in particular, to do anything half-way intelligent by way of intervening in markets that are international (electricity, carbon) if not global (oil, gas, coal).    As opined here many times before, there is a profound shortfall in German understanding of how markets actually work, which is inevitably and amply reflected in Brussels.  

Come to that, the much-hyped G7 plan for a "cap on oil prices" also sounds cracked.

And do we trust Truss, to invoke a recent coinage?   

But of course we await details on all of this high-minded blundering; so perhaps we should calmly wait and watch, with equanimity and an open mind ...   

ND

A welcome back to Brexit and an EU sausage story

 Om my how much Covid-19 changed the world. For five years, the UK national conversation was nothing but the screeches of Brexit from all sides and endless comment and opinion pieces (I offer no defence, m'lud). Covid put a stop to all of that, we have heard little of Brexit since it was done.

Pre-dating even that, were the horror stories, originally more or less invented by one B. Johnson when the Telegraph's EU correspondent, about 'bendy bananas' and other such hilarious single market rules and regulations. This was a 20 year feast for British newspapers so to speak. 

And lo, here we are in 2021 and we get a perfect marrying of the two old trends. Firstly, the Northern Ireland compromise, never really a compromise and designed solely to get Brexit done as per instructions from the British electorate is coming unstuck. The EU have decided that the main reason for this is the importation of British sausages (and mince) to Northern Ireland that now require health certificates for Export to the EU - certificates which, um, don't exist in the EU.

This has long been a simmering issue and it a classic of its kind. The UK, on doing Brexit, knew there was this risk as the Industry bodies have highlighted it for ages. In a typical fudge, the UK extended a grace period whilst negotiations were ongoing. However, the EU does not have to budge and it has not. It will simply insist Northern Ireland imports from Ireland and the EU itself - after all that is the point of their closed single market! The Eu commissioner is wallowing in joy at being seen to be fair, yet beastly to the Brits. 

Meanwhile, the UK side can't believe the EU will be so intransigent and ignore all efforts to make exceptions for the UK. Lord Frost in particular, can't seem to understand the EU does not care about playing fair and sees the UK as a third country. 

In fact, the situation is about to get worse,  as for less high-risk meats such as frozen produce, the non-EU country of origin must be authorised for imports into the EU, and establishments that produce the meat must also be approved to follow EU standards. The UK has yet to be listed as such a country, which is cause of concern to British meat producers, some of which are heavily reliant on exports to the EU.

Brexit is back and back for good, I hope no one thought it would ever go away. Perhaps at the G7 meeting compromise will be reached, but it seems unlikely, the EU is being very tough, but is on solid legal ground on these issues and as we know, has past form for insisting on bizarre terms for food import and export. 

David Cameron is right - no new taxes now

Rishi Sunak, so beloved of the media last year as Chancellor giveaway, had a harder time addressing the media ahead of the UK Budget this week. over the weekend. 

He has been harassed by panicky mandarins into raising some taxes to plug the enormous deficit caused by the Covid pandemic inspired economic shutdown. 

However, as David Cameron said last week. We don't know how deep the damage really is until we re-open the economy. It might well bounce back fairly well. 

Of course, there are hundreds of billions blown on furlough and tax collection is well down, there is a huge hole in the Government balance sheet. But the same is true across the world. Raising taxes on business is his favourite idea, along with taxes on entrepreneurship. 

Given the current impact of Brexit, this is the worst idea of a tax rise. Right now, we need to stop businesses relocating to Luxembourg, Dublin and elsewhere in the EU. Having paying businesses leave the Country for the EU is a loss in a zero sum game. 

Instead, the Chancellor should be doing a mini-budget, introducing some austerity to public spending ex-NHS and reducing the furlough scheme from April. Then, when hopefully things are more normal in the Autumn better stock can be taken of what needs to be done to pay for the pandemic over future years. 

All that really matters is that we get Government income and tax rises at the right level to start reducing the debt as a percentage of GDP in 2022 - anything before that is likely to have a net negative impact on an already sclerotic economy. 

Tax rises during lockdown is surely the worst idea yet from the Treasury! If you had too, then maybe a digital tax on online sales as part of the great re-balancing around business rates and the changing economic model - but in theory these should be tax neutral changes in any event. 

AstraZenenca Contracts: Amateur Lawyers at Work

Declaration: I am not a lawyer...

... just an old commercial negotiator, fairly well versed in the 'anglo' commercial law that dominates world trade.  With these instincts, my ears pricked up when I heard sundry euro-wallahs stating rather unequivocally that AZ was in breach of its contractual obligations to make "best efforts" on their vaccine delivery obligations to the EC.

Now "best efforts" is not a particularly English-law phrase - I associate it more with the American jurisdictions (Texas, New York) which I meet in the energy business.  We tend to go for "endeavours".  But here's the point: best endeavours is a very demanding obligation.  Roughly speaking, it means, if you can (legally) do it, you must - at whatever cost to yourself.  In any sphere where obligations can be genuinely difficult to perform, you'd mostly want to be held only to reasonable endeavours; a middle course being all reasonable endeavours.  Then, there would probably be a contractual definition of what's considered reasonable; but in the absence of that, there's no end of case law as to what constitutes reasonableness.  It would rarely include willfully breaching properly disclosed pre-existing commitments.  So - taking the reports at face value, I'm starting to think AZ might be on thin ice.

Then ... a redacted version of one of the vexed contracts was published.  Of course, any redaction makes definitive interpretation impossible for the third-party reader**: but one couldn't but help notice that AZ had only committed to "best reasonable efforts".   Ahhhh.  And the contract defines "reasonable" in a fairly conventional way.  Now it has also to be noted immediately that the contract is subject to Belgian law, about which I know nothing whatever; but still.  Suddenly, this amateur is starting to suspect the euro-tossers are protesting too much - a feeling reinforced by their shrill, know-nothing tone as contrasted to the measured, thorough responses of the rather impressive AZ CEO Soriot (French) who seems to be comprehensively the master of his brief.

Still, a bunch of truly amateurish lawyers - German and EC officials (and their apologists on CiF, naturally) were thundering pacta sunt servanda ... yes, yes, we know about that.  Germans are very ready with this stuff, Latin and all, until they run into a situation where they don't like the consequences, e.g. as in this first-hand story I've recounted several times here and elsewhere.  It's then down to looking for some Civil Code let-out (when they're weaseling in a relatively civilised way); or just plain blustering and bullying, might-is-right.  It infects the whole of the EU - the "rules-based" EU as it likes to claim, hahah.  Until it suits them otherwise.

And then they wonder why the whole of global commerce is conducted under English / American law, wherever humanly possible ...  They've gone a bit quiet for now, anyhow. 

 ND    

___________

** As we now discover:  UPDATE - it turns out that in the contract, AZ was granted a sweeping indemnity from liability, the very thing the euro-wallahs claimed they'd been taking pains (and time) to keep out of their vaccine dealings, unlike, errrr, the reckless UK / US buyers ... 

Brexit, delivered.

So, I never thought I would really write this post. The UK is leaving the EU tonight!

After all the drama since 2016 I had long predicted the Remainers and the Establishment would get their way and that the UK would not leave. At best maybe a very soft Brexit.

Actually this is too off the table. The somewhat clueless Torres are not going to end up with a soft Brexit by 2021, they will go for a shallow Canada style agreement and if they have to negotiate hard it will still be a pretty decent exit.

I think too that the now rejoiners are going to fail to understand there is no way back. There are no votes in joining the Euro, the EU army etc. This idea we will go running back is for the birds.

Others have written better about the populism, idiotic remainer idealism and the dark period of British politics. Yet now there is a new peace, victory soothes many ills and 2020 is shaping up to be a good year for the UK.

Brexit bites back

Really not very convinced by Boris' new strategy:

1. Win Election Getting Brexit done - big tick
2. Hold immiediate vote on Withdrawal Agreement - big tick
3. Legislate to make sure we leave come what may Decemner 2020 - err...

Why point 3? It is of course the Cummings strategy, set the scene so those pesky Europeans are focred to do a deal in a timeframe of our choosing - stop them dominating the battlefield like they did with sad old Theresa.

However, I am only partially convinced, as it sets up another round of remainer remoaning for the middle of next year and beyond. It will be hard to do a swift deal with the EU as there are many trade-off's to be considered.

Firstly, do we really want free movement or not. If not then many roads are closed, if we want a full Free Trade Association only this is compatible, but with much ECJ oversight and a distinct limit to the point our own trade deals with the US, Canada etc.

With much potential disagreement in Westminster and Brussels, we could well face another false cliff edge in December 2020.

For me, the issue is  no longer political - a great victory for Leave has ended that. For the economy though we are crying out for certainty, as was seen by the fall in the Pound last week when Boris announced this plan.

On balance, there was no need for it - it is pure showmanship with a potential downside. The battlefield was already won and this is a small mis-step.



Merry Xmas everyone, our light touch service may become even lighter touch this week and next!

Dominic Cummings speaks

So, Dominic Cummings has decided to try and game the coming General Election by releasing a statement to The Spectator. it is very rare I would post like thism but given the state the Government has found itself in, this is quite some statement. Read it for yourselves:

‘The negotiations will probably end this week. Varadkar doesn’t want to negotiate. Varadkar was keen on talking before the Benn Act when he thought that the choice would be ‘new deal or no deal’. Since the Benn Act passed he has gone very cold and in the last week the official channels and the backchannels have also gone cold. Varadkar has also gone back on his commitments — he said if we moved on manufactured goods then he would also move but instead he just attacked us publicly. It’s clear he wants to gamble on a second referendum and that he’s encouraging Barnier to stick to the line that the UK cannot leave the EU without leaving Northern Ireland behind.

There are quite a few people in Paris and Berlin who would like to discuss our offer but Merkel and Macron won’t push Barnier unless Ireland says it wants to negotiate. Those who think Merkel will help us are deluded. As things stand, Dublin will do nothing, hoping we offer more, then at the end of this week they may say ‘OK, let’s do a Northern Ireland only backstop with a time limit’, which is what various players have been hinting at, then we’ll say No, and that will probably be the end.

Varadkar thinks that either there will be a referendum or we win a majority but we will just put this offer back on the table so he thinks he can’t lose by refusing to compromise now. Given his assumptions, Varadkar’s behaviour is arguably rational but his assumptions are, I think, false. Ireland and Brussels listen to all the people who lost the referendum, they don’t listen to those who won the referendum and they don’t understand the electoral dynamics here.

If this deal dies in the next few days, then it won’t be revived. To marginalise the Brexit Party, we will have to fight the election on the basis of ‘no more delays, get Brexit done immediately’. They thought that if May went then Brexit would get softer. It seems few have learned from this mistake. They think we’re bluffing and there’s nothing we can do about that, not least given the way May and Hammond constantly talked tough then folded.

So, if talks go nowhere this week, the next phase will require us to set out our view on the Surrender Act. The Act imposes narrow duties. Our legal advice is clear that we can do all sorts of things to scupper delay which for obvious reasons we aren’t going into details about. Different lawyers see the “frustration principle” very differently especially on a case like this where there is no precedent for primary legislation directing how the PM conducts international discussions.

We will make clear privately and publicly that countries which oppose delay will go the front of the queue for future cooperation — cooperation on things both within and outside EU competences. Those who support  delay will go to the bottom of the queue. [This source also made clear that defence and security cooperation will inevitably be affected if the EU tries to keep Britain in against the will of its government] Supporting delay will be seen by this government as hostile interference in domestic politics, and over half of the public will agree with us.

We will also make clear that this government will not negotiate further so any delay would be totally pointless.  They think now that if there is another delay we will keep coming back with new proposals. This won’t happen. We’ll either leave with no deal on 31 October or there will be an election and then we will leave with no deal.

‘When they say ‘so what is the point of delay?’, we will say “This is not our delay, the government is not asking for a delay — Parliament is sending you a letter and Parliament is asking for a delay but official government policy remains that delay is an atrocious idea that everyone should dismiss. Any delay will in effect be negotiated between you, Parliament, and the courts — we will wash our hands of it, we won’t engage in further talks, we obviously won’t given any undertakings about cooperative behaviour, everything to do with ‘duty of sincere cooperation’ will be in the toilet, we will focus on winning the election on a manifesto of immediately revoking the entire EU legal order without further talks, and then we will leave. Those who supported delay will face the inevitable consequences of being seen to interfere in domestic politics in a deeply unpopular way by colluding with a Parliament that is as popular as the clap.

Those who pushed the Benn Act intended to sabotage a deal and they’ve probably succeeded. So the main effect of it will probably be to help us win an election by uniting the leave vote and then a no deal Brexit. History is full of such ironies and tragedies.’

So basically, Cummings has gone BDS to denying the EU want a deal which they really do and instead now moving to blame everyone else for No Deal. Whilst there are elements of truth to this position re Varadkar, the threatening of EU members who will or won't entreat with us is just mad. After a No Deal Brexit the only thing on the Government's agenda will be seeking a deal to mitigate the downsides - blasting your future negotiating partner like this is very poor strategy. Yes we all know the Mad Parliament has created this situation unnessecarily but this is still not the only way out of the situation. 

Send the Remainers and EU mental, then onto Victory?

This seems to be the strategy of the new UK Government. Just this morning it has announced the UK teams will stop attending EU meetings. In the round, with Brexit, this makes sense. To the large number of people never attuned to this idea of actually leaving this has caused a very negative reaction. Even MP's are on the airwaves decrying the move.


It comes hot on the heels of the signing of the law to leave the EU on Monday; again it is symbolic more than meaningful, but it lays out the truth that Parliament has already voted for a No Deal Brexit and as such has legislated its way into a big hole of its own making.


The ideas behind these moves are simple; cause Remainia in the UK to go into meltdown and encourage it to try to topple the Government in a couple of weeks time. At the same time, allow the EU enough time to dismiss all our activities out of hand now, but with enough time to reflect on what they may do before Halloween.


If the Remainers manage to topple the Government, then it seems to me we will end up with Prime Minister Farage in 2020, the sheer affront to democracy will be to great to bear and the Remainiacs will find their victory short-lived. But Boris is betting he can beat Farage to be leader of the populists if the Tories are defenestrated by a rainbow coalition.


If they fail in their bid then the EU itself will be forced to consider how to make the best of a poor situation - the hardball negotiating will have failed and some decisions will have to be made as to how to mitigate the UK exit which will now be inevitable. Of course, the EU may remain intransigent, but politically they will bear some responsibility for that.


So both plans may work well in the medium term which is why the Government is taking what appears at first to be such a risky and divisive strategy.

They are refusing to negotiate...with reality

So says Michael Gove yesterday. Boris's new team are really on a roll, sadly it is downhill to nowhere.


Apparently the EU wont negotiate  - but negotiate with what? They can hardly just drop the Backstop having died on a hill for it for 2 years. Politically, this will be very hard for them to do and I would guess prove impossible. It is the wrong choice of battlefield.


There are no other demands from the new UK Government, so there is indeed nothing to negotiate. How about a side discussion on moving to EFTA for a start as a part way move - something to give the EU their own political cover to make some moves?


Gove used to be smart, but Brexit Derangement Syndrome has claimed another victim.


But it is not just the Government who need to engage their brains a little more, the classic August summer story is that we are going to get a Government of National Unity led by Ken Clarke or Caroline Lucas. I have expected for a long time that the Remain majority in Parliament would find a way to revoke Article 50 but desperation grows strong now for the Remain MP's.


But this wont be the way, there are just not enough Tory and non-Corbynite Labour votes for a GNU to make this work - let alone the insane spectacle of Parliament over-ruling the Referendum and the commitments make by most Parties at the last 2 elections - much as it would be fun to watch there are too many dark downsides to this outcome.


In 2015, Margaret Beckett and others swiftly regretted allowing Corbyn to stand for Labour leader and thus destroying her own party. I wonder how many MP's are at home this summer regretting their cavalier attitude to May's deal?

Euroland updates

One interesting side-effect of Brexit has been the sharp drop in interest in the actual runnings of the EU. Now that the #FBPE crowd are all around, there can be no criticism of 'the project' to do so is to undermine everything.


And on the Brexiteers side, having sort of won the vote, the focus on just how rubbish aspects of the EU are has fallen away - sadly in favour of infighting and mass navel gazing.


Two current issues demand some attention. The first is economic, as we approach the top of the cycle (sadly for much of Europe as EU members have stagnated for over a decade, shame), members need to get their act together. Italy is the key concern - it has a debt to GDP ration of 130% and increasing. The new populist Government is trying tax cuts to remedy the austerity which has not worked for them for 10 years. The jury is out as to whether it will work, but abandoning the policy chosen by the Bundesbank EU Central bank is not going down well. There are real threats of fines as well as much hand-wringing. Longer-term, France owns a third of Italy's debt - should Italy go the way of Greece we will have 2011 Euro run part two, run harder!


Then there is the result of the EU elections - without going into the huge detail here is an excellent article on Politico.


My main takeaways from that are the EU is entirely made up of smoke-filled rooms and driven by the whimsy of Merkel and Macron - but only at a distance. The likely EU President of Guy Verhofstadt should be enough to even make Remainers take a sharp breath - the guy is a maniacal integrationst zealot. The democratic will of the EU - increasing the share of anti-EU parties in Parliament only to see the most pro-integration President ever get elected in the back room deals - seems to be a winding river indeed.


Remaining will be such fun!

Tusk does show how broken UK politics has become

Donald Tusk's intemperate outburst on Wednesday is a good sign of the pressure being faced by the EU leaders - he said there should be a special place in hell for Leavers who led the UK referendum without a plan.


Behind the scenes plenty of member states are asking why the progress is so bad and if indeed it really is all the fault of the UK or whether Junker and Tusk are culpable. This pressure is telling.


However, it still does not make their comments right. Remoaners are loving the leave take down as it matches their internal narrative perfectly. Actually, it shows the huge fault line in UK politics. After all, whilst easy to say the Leavers did not have a plan, the point is they were never in charge, ever.


After the Referendum, a remain voting PM took over and decided the red lines- unicorn ones at that. Many of the leavers suggested a Canada+ deal, which the EU offered. But no, May went for a bespoke BINO deal that would be very hard to negotiate - the Leaver's slowly left her cabinet in protest and she ignored them. Right up until she los the key votes in Parliament that are pushing us to crazy no-deal position.


In Labour too, a cynical Corbyn has really had nothing to offer, no realistic plans or aid for the Government, just partisan noise. He has fended off the majority in his own party as we all know he both wants Brexit and the Tories to be blamed for it. This strategy may yet work, but the politics of it is awful, it demonstrates in very large writing that he is the very opposite of a Statesman.


So in the round, Tusk is right but for the wrong reasons. The Referendum caused a split between political parties and also between the populace and the government. May has failed so far to square this circle and of course the EU, true to their bureaucratic mantra have not tried to help. However, if a Leaver had been Prime Minister we would now, having suffered from a few doses of reality along the way, be moving to either Canada+ or an ever softer Brexit - after all Boris could have done that.


The huge mistake for the Country was making a Remainer PM - the time called out for decisiveness and instead we got wibble. Still, hopefully there is time for either Labour or the ERG to realise the only game in town is May's deal rather than the chaotic no-deal Brexit.


As much as I don't want another General Election, we desperately need to see the Country re-align around political parties who represent leave or remain rather than vote for the current two who are split which causes a fatal inertia.

Thoughts needed; What do we need to do to stop a rigged referendum?

Fast coming up the aisle today is the failure of May's agreement in Parliament.


There are too many Tory rebels, too few Labour rebels, hatred from very different angles by the various nationalist parties (including Lib Dems in this group as  EU Quisling/Vichy nationalists) for any vote to pass.


As such, the Tories are going to be very reticent to force and General Election on the back of a confidence vote  - but that may come about.


The DUP, surely, will not make the Government fall in order to get the Irish Nationalist supporting Corbyn as PM - if they think Brexit is bad news for them....


So then we will be at the point where another referendum, which not long ago I bet money on not happening (!), will come to pass.


And here is where the remainer game is, in referendum you need a decisive result, so the two options the remainers will get is this:


A) Leave the EU with May's Withdrawal Agreement
B) Remain in the EU


May will agree to this as she will think A) vindicates her position and she can win. B) Pleases remainers and is May's preferred option to no deal.


For the country as a whole, it is a disgrace as it is a classic EU stitch up to which Barnier, Weygand and Selmayr will say the following -


"Here English plebs, is your choice between two things that you don't want. If you choose not to participate then, ha!, you don't really believe in democracy after all. So now vote and betray yourselves you racist scum..etc etc."


There is a decent chance of the above happening and the ERG folk have shown themselves not competent to oppose this (they would not have the votes in parliament to stop this bill for a start).


What can be done if this comes to pass...thoughts welcome in the comments.

Brexit - Reloaded

The Blue Pill Option


The Tories are in a right bind now, their Prime Minister has played her really shit hand quite badly. However, a deal has been struck with the EU. One that creates a meaningful path away from the EU over the next 5-7 years, with little disruption to the economy or country in the meantime. Yes, lots of caveats where the EU have had their way and lots of anger that we can't strike trade deals and other such stuff for a few years yet. But Brexit is done and no Government is going to have the willingness or political capital to change this course back once set in stone.


Taking the Blue Pill is this option, the Government with the help of a few rebels passes the Deal, life goes on, May gets another year as Prime Minister and the government can take a look at some domestic issues for a change and maybe even try to legislate in a few areas and make a real difference.


The Red Pill Option

The Tories are in a bind right now, their Prime Minister has played her shit hand very badly. The Deal on offer is not a go-er for the ERG or Remainers. Sensing the winds of change, cabinet ministers start resigning to plot their own coup attempts. The deal does not get voted on and May is gone. Chaos ensues, the EU are exasperated that all this effort was for naught and walk off the stage. The Tories have no credible replacement for May who can deliver a deal when the EU won't play ball. Instead we head for the certainties of a no deal Brexit. The Tory brand looks in a worse place than 1992 - having decided on a referendum they can't deliver the result. So we get a Hard Brexit and a Corbyn Government to boot. Once we let the commies in they will prove very troublesome to remove and in any event the brain drain will knacker the economy even more than Brexit. Northern Ireland becomes a scene of the troubles again too as the gangsters sense their moment for a bit of larceny and extortion. Scotland too fancies another referendum and the SNP gain much support.


So really, when you think about it for more than a few seconds, the choice now a deal has been agreed is not hard. Eat horrid sandwich, the alternative does not bear thinking about.  

Death by Brexit - this time its real, part 94

Ok, so this is not what you think. Not that the discussion of Brexit might cause life-ending stress, although that is certainly what Dominic Grieve was saying at the weekend.


No, for today there is yet another Project Fear report out, this time from Oliver Wyman, saying no less than £1,000 will be taken from every UK family in the case of the hardest of hard Brexit's. Really that much!


Of course, if it not like they have form for this kind of thing. In 2016 Oliver Wyman managed this epic false flag, blaming Brexit for a 10% drop in its revenues and for 35,000 jobs being at risk.


On balance I reckon this is, as usual, very good for the Country. EVERYONE who voted to leave would have accepted there was going to be costs and minus' from doing so. Clearly leaving a frictionless single market would be challenging, but here even the most pro-EU hysteria can only generate this relatively small economic hit.


Maybe not death after all....

Everything is going swimmingly

That Donald!...what a guy. At least he did not agree to the mad free giveaway to lefty causes. Sadly, the approach to Diplomacy leaves something to be desired - I did right Whoops, Apocalypse on Friday as a joke...turns out, not so much.


So now Trump is very well-prepared for his meeting with the little Rocket Man in Singapore. It is not hard to foresee some "Great Progress" being made and thereafter followed by a "Great Reverse" and not much being achieved after all. But who knows, maybe his advisors are trying to get him the learn, he is a clever man, perhaps he can.


Then we are onto our own Prime Minister facing down Brexit rebels in possibly the most over-hyped vote of all time. After all, the EU have already vetoed the proposition the UK Government is proposing, so the success of getting through Parliament will be short-lived indeed.


In fact I can sense the real Brexit denoument is soon to come, when the reality of no deal or pure Brexit In Name Only is in play and the Government tries to foist BINO on the Country - that will be a sight to behold as it simultaneously ruins half the Tory Party but also the Labour Party leadership!


Should be a fun week ahead all round.

Custom-made Capitulation

There is really no end to Brexit and the stress it is causing our Government.


The EU are playing crazy hardball, the new Irish leader, Leo Varadkar is egging them on to do so. All in all, it appears the EU is very confident in its strategy that pushing the UK towards 'hard' Brexit will result in the Government falling and Brexit being averted somehow.


Now, honestly, this has come as a bit of surprise to many Brexiteers and soft remainers like the Prime Minister. They thought the EU would ultimately be rational and reasonable in its demands and they may have been correct to start with. But as time has gone on and the Remain capture of the Media has only increased, the EU has become more hardline, seeing this as a game it can win outright.


The Customs Union is a classic one, for all the talk of trade there are about 5 solutions such as Swizterland, Norway, Luxembourg, New Technology or new Free Trade agreement that could solve it if both sides chose to. None of these are acceptable to the EU for the UK, even though they have been implemented elsehwhere in the Union currently - this is pure political grandstanding by the EU and at all times the blame is laid on the UK. The anti-British hysteria in Brussls appears from afar not so different to that of Moscow.


Equally, for the UK Government, they are too terrified to say that the real reason they can't agree the EU terms are the four freedoms and so lack of control over immigration.


This is the Irish dilemma, solve the created 'Irish Crisis' (it is created, we had no border with eIreland bar for security before the EU, it is the EU, see link above, suddenly deciding it is the arbiter of the Good Friday Agreement when in reality of course it was the yanks pulling IRA funding) and with it allow free movement. Or stop free movement but only at the cost of an economy punishing hard brexit.


It is very tough and I note, that as much as there is far more good work being done behind closed doors than ever being said in public, that the EU constantly say the UK has no answers when in reality they just reject every offer made and have none of their own bar splitting the UK or taking the Remain option.


Weirdly in the current scenario, Corbyn is a good thing, as a useless pro-Brexit populist it means the EU has to be consider what it is wishing for - my personal worry is it is wishing for a very realpolitick outcome. A hard brexit then a hard left Government to lay waste the UK and bring opportunity to France and Germany instead.

Not a great look for Germany or its politics

The Telegraph have an excellent story out today on the Gazprom-Germany-EU shenanigans. It is well worth reading and here is a link to the full story on a non-paywall site.


I won't rehearse the whole article because it is very clear. The Germans have been happy to stiff Eastern Europe in complicity with the EU. Now that the whole story is out (which must be some miracle for the EU and I feel for the team who pressed publish on this), the EU are going to have to bury it or else end up with 30% income sanctions on Gazprom and State Aid charges against Germany.


The piece to add to it is some people context.


For a long time Germany has been well in with Gazprom. This has been arranged by Gerhard Schroder, the ex-Chancellor, who has long been in Putin's arc and is indeed now Chairman of Rosneft (replacing Putin late last year, natch). The picture here is from 2005, working closely with all the worst of the Putin Gang.


He is indeed a founder member really and today is in the inner cabal, always defending Putin. Angela Merkel has called him out once, saying she does not approve of what he is doing. But the reality is that he has done these sweetheart deals for Germany who look to have gladly lapped them up. Of course, readers here will know of the crazy "EnergieWende" policies in Germany which have left the Country desperate for Russian (low-carbon) gas.


As much as there is loathing in the UK for Tony Blair, he has not actually represented state actors that have hostile intentions. Yes he joined a few Bank boards - but even here Schroder has managed to be an Managing Director of Rothschilds to match. It is quite incredible really what has happened politically.


Of course, there are real world impacts in addition to the economic splintering of the EU that this has been creating, see just today where Germany refuse to join with US/France/UK in considering what action to take against Syria and their Russian supporters. Whilst there are plenty of solid reasons to avoid getting involved in Syria, the German-Russian gas relationship will always now allow for a lack of credibility to German political positions when we know how compromised they are with their Russian engagements.

Do we care if it is Brexit surrender?

With a Remain Prime Minister, Chancellor and Home Secretary, the days of worrying/hoping for a hard Brexit have long since passed.


The EU are good at negotiating too (short-term, long-term their game is terrible, hence Brexit in the first place).


But Remoaners are going to complain what is the point if we end up with worse terms than we had, so they will never be happy.


Arch-leavers will be unhappy with all the concessions, but they always would be. Hard Brexit was the worst option in many ways and with such a close referendum would have caused as much split in the Country as a pure remain vote.


Personally, I voted mainly to gain some control over immigration, despite all the concessions, when the transition period is over this will be the case. We will be able to hold our own politicians to account for border control once more.


If we had to make plenty of concessions elsewhere, then that in the round is a good negotiation strategy. I am sure plenty of the Government's red lines were never intended to be such a thing, just as the EU's were not.


In the round then, things seem to still be going as well as can be expected. I can't see how they could be going better in the circumstances, once you filter for all the media noise.