Here we go again.
The EU trade commissioner Phil Hogan tells the world Boris Johnson will cave in. What’s that supposed to accomplish?
The EU failed to learn anything from Brexit, any step of the way.
- Had the EU given a bone to then Prime Minister David Cameron, the referendum would have gone the other way.
- Had the EU not played extreme hardball with Theresa May, the UK would likely be trapped in a customs union.
- Now, the EU is poking a stick in Boris Johnson’s eye.
EU Trade Commissioner Phil Hogan says Johnson will Abandon Pledge on Brexit Transition Period.
“In the past, we saw the way the prime minister promised to die in the ditch rather than extend the deadline for Brexit, only for him to do just that,” said the recently appointed EU trade commissioner. “I don’t believe prime minister Johnson will die in the ditch over the timeline for the future relationship either,” Mr Hogan said in an interview with The Irish Times, referring to the need to negotiate the terms of the UK and EU’s future relationship within a transition period.
The former minister described as “very odd” the British government’s decision to include a clause in legislation ruling out an extension of the transition period beyond the end of 2020, suggesting the move was a political “stunt”.
“As things stand the UK wants to leave the single market and customs union. This move still baffles me because the full consequences of that decision are still not understood in the UK. Why trade a Rolls Royce for a second-hand saloon?”
Poke in the Eye
With those comments, Hogan just grabbed a stick and poked into Johnson’s eye.
Johnson made a political statement about a Brexit extension when he was not in position to deliver. It’s long over. There is no need to bring that up as a taunt.
And let’s not equate that with statements he has made since he became Prime Minister in a Blowout Victory and is now in complete control of the UK side.
Who’s the Bigger Liar?
The EU said it would never change the political declaration and it would not change the Withdrawal Agreement. In fact it did both.
So , who’s the bigger liar?
Arrogant Tones
“Why trade a Rolls Royce for a second-hand saloon?” is pure arrogance.
The EU is not a Rolls Royce. It is a mindless customs unions with masses of idiotic regulations.
Moreover, the organization is totally unwieldy, requiring 100% agreement among 27 nations to get anything done.
Deal Still Possible
Irresponsible tones makes a hard WTO fallback more likely.
However, I still expect a deal.
Why?
- Because it is in everyone’s best interest to negotiate one.
- The EU, especially Germany, will lose more than the UK in the event of no deal.
Straw Man Arguments
One of the things I keep reading is that it is impossible to negotiate a comprehensive agreement in a year.
I agree. But that is a strawman. Nobody pledged to negotiate a comprehensive agreement in that timeframe. The WTO allows for a basic agreement with and long as 10 years to finalize it.
Perhaps there is some small, say 6-month extension to ratify a basic deal. So what?
By the way, the chief negotiator for the EU will once again be Michel Barnier, not Hogan. Thus, it is not Hogan’s place to be running his mouth.
Delivering Brexit
As long as Johnson does not give up fishing rights or agree to let the European Court of Justice (ECJ), be the arbiter in disputes, Johnson will have delivered Brexit.
I expect that outcome and was one of the few who did all along.
My friend Pater Tenebrarum at the Acting Man Blog offered this pertinent insight in a comment to my post Labour Slaughtered, Corbyn Refuses to Admit He is the Reason.
Assuming Johnson does get Brexit done (and it seems he will), this will be the first time ever that a popular vote that went against the EU is actually respected (as opposed to “repeated until the result is to the EU’s liking”). It is actually quite a monumental event for that reason alone. And I think its importance is still underestimated. The EU now loses one of its biggest net payers. The remaining net payers henceforth will have to shoulder a far bigger financial burden to continue subsidizing the have-nots (and French farmers). I cannot imagine that this will be a friction-free affair. Particularly as the UK is bound to unleash the kind of tax and regulatory competition that is anathema to the socialist high tax “harmonizers” and centralizers running the bureaucratic Moloch in Brussels.
Counterproductive Comments
If Johnson takes offense at idiotic eye-poking maneuvers, especially if Barnier starts making similar statements, it increases the odds of not negotiating even a basic agreement.
If Hogan wants a deal, and he should, then he would be advised to shut his big mouth.
Finally, and to put Hogan’s “Rolls Royce” arrogance into proper perspective, please consider Margaret Thatcher’s Amazing Prophecy on the EU.
Mike “Mish” Shedlock
On top of the reasons you cite Mish for the whole trading Rolls Royce thing, the weakness of the EU central government makes for a vacuum that is filled by bureaucrats and most especially by the ECB which is the real power in the Eurozone. If the ECB answers to anyone in the EU it is the chancellor of Germany and then only if it feels like doing so would be of mutual benefit. This leaves nobody in charge of vital issues like defense and how to contain an ever more aggressive Russia. Or, what to do about Erdogan who is taking Turkey rogue now that he has come to the conclusion that Turkey cannot ever be a part of the EU. His threats are a danger to the very heart of Europe and no one country has the power or authority to defend against the imminent subversion and attack by Erdogan. Last October Erdogan threatened the EU with the release of millions of refugees. He has not done it yet, but, all you needed to read of that was Erdogan threatened the EU. And there is no central government in the zone that can confront such threats. That can form a solid and universally accepted policy response to threats. Or that can form any real policy at all. Their hyper politically correct courts are a joke. The Court for International Justice has good intentions but makes absolutely every situation worse and makes none better. Were they able to stop Rwandan genocide? No. Syrian use of chemical weapons? No. But, let Trump defend American lives at the Baghdad airport in retaliation for attacks upon US lives and the court condemns US because of some technical and highly subjective rule about retaliation being proportional.
The EU can bluster all it wants to, it is on it’s last legs and close to failure. When it does fail all of Europe will see that the whole thing was never more than a massive Ponzi and all Euro holders are going to be screwed.
“It is a mindless customs unions with masses of idiotic regulations.”
Some regulations go to far, because that is the only way to get consenus.
Still, there were around 2^27 as many regulations without the EU.
Mish, You should not be surprised by his comment. Unelected officials who don’t have to answer to the public are completely disconnected from what public sentiment actually is. Phil Hogan in his ivory tower seems to think that Boris Johnson isn’t actually going to deliver Brexit. What he fails to grasp is that if Boris doesn’t deliver Brexit, he will not make it through his 5 year mandate. That’s what happens to people who get positions as commissioners in Brussels (where I lived for 8 years). It is very easy to lose touch with the reality on the ground for the public. So don’t be suprised.
Brexit is also a good opportunity to get a recession out of the way and blame the plebs. 52% are prepared to swallow it to get out of the EU. Things will bloom afterwards and Boris has 5 years to sit on it and turn it around like Thatcher did
Brexit is an anchor store leaving the EU mall. One point is never a trend ,but it may be the start of a trend.
As Mish says…” the EU is playing a dangerous and disingenuous game with the UK” … and as we speak sticks are being poked into BoJo´s eye.
This would have seemed UN-believable only weeks ago.
Now push is getting to shove, and animosity will pick up speed, fast.
The problem with the EU gold at the BoE is that no independent audit has ever been carried out in order to answer the following key questions:
(a) does the BoE still have the gold bullion that belongs to EU member nation states… or has it been sold off already as many experts insist is the case ?
(b) is the BoE willing to return the EU gold it may still have to legitimate owners ? Who are the legitimate owners ? Would the ECJ decide gold ownership ? On what basis ?
(c) or has the BoE lent out and/or re-hypothecated and/or encumbered such gold bullion with several / many alleged legitmate claimees waiting in line ?
For this “Brexit Gold War” the City, HMG and the BoE would probably act as one and the same, with extreme “golden” cohesion amongst all of these Old Etonian types.
On the other side, we´d have the different EU nation-states (with no political union bind behind them) each claiming partial or total re-patriation of its gold supposedly still vaulted at the BoE.
Of course, the ECB would simultaneosuly also claim it is “their” EU gold.
And the ECJ would also meddle, of course, jointly with the IMF and the BIS. So that promises to be a very interesting mess, doesn´t it ?
But however it unfolds, the “continental gold” now vaulted across the English Channel will most probably be weaponized by the UK during Brexit negotiations.
Imagine the conflict in no uncertain terms (and desperation) related to audit parameters and ownership, gold bar serial numbers claimed by more than one (supposedly legitimate) recipient, gold bar quality and purity, overdue custody costs, transportation and insurance costs, etc.
UK can’t easily re-orientate the economy whilst negotiating with the EU. Another reason I think this will be over much sooner than people expect. If the Tories want to have a majority at the next election in 5 years they need to waste no time now.
The EU will want the time wasted as it’s in their interest. If no sensible progress by mid-year we see what mettle Boris J is made of. Iron or mozzarella?
Signage has very recently changed at Calais.
The signs are to seperate UK sourced goods/lorrys and suggest WTO arrangement expected and NOT any trade deal. It’s to sepaerate foodstuffs and otential contaminants arriving from outside the EU and is specifically targeted to UK sources goods as if on WTO.
I think this will be wrapped up way before end of 2020 on WTO.
Teasing it out won’t result in a satisfactory outcome and the French want it done soon too.
Questions, not statements.
Is there any mileage in the idea that;
a) Macron and BJ have back door deal to exit fast .
b) France benefits through more EU seats & weakened German block.
c) France and Southern Europe will push for fiscal consolidation.
d) LaGarde (placed by Macron) to work on Eurobond.
e) France becomes defacto leader of EU.
f) Outcome is weaker Euro and Tatget 2 imbalances addressed.
g) Germans have to go along – get the shaft as good Europeans.
It implies no deal exit that could lead to a credit event.
EU threatened to block City of London access but haven’t understood the ramifications to the EU if UK reciprocate.
Credit event straight ahead.
BoJo + Macron shenanigans = hard Brexit / NO deal = credit event = EU – BoE freaking GOLD War.
Now I guess we should agree…
“If BJ does not agree to customs union or give up fishing rights, it will be Brexit.”
Yup. I suspect the first public spat will be about ‘alignment.’ Boris thus far has proclaimed that the UK is not going for it, whilst the EU has been insisting that this has to be the basic default starting position for any sort of ‘free trade’ deal. This assumes that UK will agree to EU standards, rules and so on. UK is going to refuse this from the get-go in which case they might actually move rapidly into WTO as the starting point. In any case, from UK point of view, you are right that Brexit means they clarify that they are not under EU jurisdiction for anything – Courts, Customs Union rules, Defense, Immigration and so forth. As of Jan 31st 2020 that’s all over.
So if the EU are going to try to get Boris to get back into and under their tent, it will stop right there. He will be the first person they have dealt with like this since up until now they have been needling and finagling a UK still within their clutches. No longer!
So that is why the whole thing could be much quicker than people think. The big stuff is getting out from under their jurisdictional boot. That is what Brexit is and acc. to Boris’s recent statements, that will essentially be accomplished on January 31st. If they have to niggle further on specific trade items for the next year or three, so what? Brexit will have already happened, so much so that he won’t allow the word to be used in Cabinet any more!!
I agree with your probable scenario described above, give or take whatever.
But then I hope you also agree that the Great Gold EU-Brexit War will necessarily play out front & center.
Goldfare is coming, get used to it.
That’s above my pay grade! My impression is the the City is still the Big Dog in world finance and I wonder if any EU agencies have the clout to take on ‘The Crown.’ My suspicion is that they don’t. (And nor does the UK for that matter.) So I wonder how much it has to do with where it is exactly, rather who gets to decide these things. And that, again, is way above my pay grade!
Especially not with Trump’s USA behind Johnson, and it is one thing I level a serious charge at my own democratic party over; they knee jerk side with the EU rather than look at the larger picture and it is a suicidal policy to do this. It is yet another symptom of the far left socialist “progressives” taking over the party, or maybe a better way to put it is the sickness caused by political parasites that have infected the party on the left. And please do not suggest that is a great reason for me to switch parties because the republican party has it’s own far worse sickness but the extreme right rather than left. It has allowed itself to be infected as well, but it is now warped by it’s own leadership into a cult of personality and refuses to see even the most obvious tinfoil hat lies and conspiracy bullshit for what it is.
This is why Mish’s site is the ONLY right leaning site I will even bother to read no less respond to. As far as I am concerned Mish is one of the last true conservative voices left in America that is still reasonable, still functioning with a degree of recognition that what we all have valued in American politics, the ability to discuss without name calling and outright lies, a modicum of respect for your political opponents, and in the end compromise in order to fight another day, that is gone or dying in our nation and it is poison that will kill the nation if we cannot find a way to be civil and work through our differences. I see Trump and Sanders types as both our most dangerous people, their supporters just as blind and toxic as the other.
I believe BaronAsh has nailed it in his original post, but that there is going to be one area that is going to possibly give BoJo a lot of headaches that the EU is going to use as a wedge to break up the UK; Scottish North Sea fishery rights.
There may be a few other sticky situations that the EU will find just as effective but make no mistake, London won the years long Brexit divorce cat fight, and the EU which actually believed it held all the best cards now is wildly pissed off and wants revenge. So, you think it is okay to break up the EU? Which was what UK secession really was, no different from say Texas declaring independence and setting that example. Actually in many ways the EU did hold all the best cards and had no need to bluff but they bluffed anyway and got called, they played their hand very poorly, they probably even knew it at the time but pride and paternalistic stubbornness got in the way.
So, I see the UK and EU both as being on borrowed time. The EU will hold out long enough (or die trying) to see the breakup of the UK, but, the very act of doing that will just ensure the ultimate demise of the EU itself. If the EU breaks up first then there would be no real motive for the Scots to leave, and it is their ambition in leaving that will drive the northern Irish to also leave the UK. Though I think the reunification of Ireland is now only a matter of time anyway.
When Putin announced last week that his new weapons systems, the hypersonic weapons, were now online and functional he could have left the announcement at that, he did not, what he said was they were now functional and READY FOR WAR! The CNBC story as well as many others reads: “Russia claims its new hypersonic weapon is ready for war…” And you cannot read that sentence without reading RUSSIA IS READY FOR WAR!
Because the EU is a weak politically Goldbergian contraption that has chronically under spent on defense and now has alienated the US because of our official support for the UK, and has distanced itself from NATO which is falling apart in real time, what choice will the EU have but to approach Putin’s aggressive posture any other way than through appeasement which ALWAYS works so well there.
There is a lot of weeds in that old garden, Britain is getting out just in time, but I fear that geopolitical tectonics are about to cut loose with a major earthquake that damned well could mean WWIII which we who see it coming will not ever get the chance to say I told you so, because there will be a burnt out cinder where the Earth used to be.
Well, I think you do know Baron, same as every EU member which still continues to be the very same nation state that left THEIR gold in custody at the BoE many decades ago for them to “safe-keep” in custody.
And now that Brexit comes along they decide they want it back, simple see ?
Is it there freely available at their disposal though ? Nobody that knows anything about it thinks so. And therein lies the problem Watson.
The EU-Brexit Great Gold War will get interesting real soon…
It’s there and transferrable on demand.
Oh yeah ? How do you know ? No independent audit has ever been carried out at the BoE, so many key questions have an open-ended answer.
Oh, BTW, Germany had to wait many years just to get 50% of its gold back from the BoE and not one SINGLE gold bar received in Frankfurt matched the nomeclature of the original German gold bars deposited in custody at the BoE, which means such German re-patriated gold had to be found somewhere else….
Are you suggesting the BOE sold Gold that was deposited in their safe keeping?
Yes, Scoot, many world re-known experts say that that the BoE sold it with the idea of buying it back any time it wanted by just printing “money” and even at a lower price, as Gordon Brown has publicly stated while he sold out what was supposed to be exclusive British gold although many say that it was FAR more than that.
Or else the BoE could have lent it out such foreign gold or compromised it in oh so many ways, such as re-hypothecated and/or encumbered such bullion with several / many alleged legitmate claimees waiting in line ? Have you ever heard of the 1968 Gold pool debacle ?
Please do bear in mind that no independent audit has ever been carried out of such gold stock.
Sorry I’m not buying that, just another conspiracy theory in my view. I know you’re opinion so I won’t try & change it. We’ll have to agree to disagree. 😀
Scoot, this is not an opinion or conspirative theories, this is history. Check the 1968 London Gold Pool debacle and Gordon Brown´s sell-off of LOTS of gold at the lowest ever price with even the Queen objecting so such move.
BTW Scoot, with all due respect, exactly WHAT is it you are not “buying” ? For example, if there ever was an audit, where is it ? No one has ever seen an audit of the BoE gold nor from the US Fed for that matter. Ever heard of Ron Paul ?
Gordon Brown sold government reserves, (foolishly) not gold in custody.
The London Gold Pool debacle you refer to was an attempt by central banks to (foolishly) hold the price of gold down by using their pooled reserves. Reserves, not gold held in custody for other owners.
I’m “not buying” the notion that the BOE has stolen Gold held in custody for others and sold it. I think it’s nonsense.
Scoot, there is NO audit whatsoever not one shred of official data either so I rest my case. But at the very least when things begin to “happen” please do admit that reality was far different and that you heard it here first okay ?
I think the gold is there as however agreed between nations, however due to no audit cannot be certain. You mention BoE, try reading up on Italy’s public gold holding being handed over to ECB as part of the framework of the central bank of Italy accessing Euro. It is an ongoing dispute over ownership, public vs private CB handover (due to no currency reserves to be kept by Euro member states). Spain dumped its gold at lows also, not too long ago. “They” are all “up to something” it would seem.
Your Italy mention is quite pertinent though as an “ongoing dispute of ownership”(sic).
Me thinks they are all up to a “the gold´s gone folks” finale so the world financial system better not get anywhere near a gold or an SDR standard or else we´d have casus belli re WW3. Actually, for far FAR far less Europeans have engaged in long-standing wars amongst themselves.
Still, for this coming “Brexit Gold War” the City, HMG and the BoE would probably act as one and the same, with extreme “golden” cohesion amongst all of these Old Etonian types.
On the other side, we´d have the different EU nation-states (with no political union bind behind them) each claiming partial or total re-patriation of its gold supposedly still vaulted at the BoE.
Of course, the ECB would simultaneosuly also claim it is “their” EU gold.
And the ECJ would also meddle, of course, jointly with the IMF and the BIS. So that promises to be a very interesting mess, doesn´t it ?
But however it unfolds, the “continental gold” now vaulted across the English Channel will most probably be weaponized by the UK during Brexit negotiations.
Imagine the conflict in no uncertain terms (and desperation) related to audit parameters and ownership, gold bar serial numbers claimed by more than one (supposedly legitimate) recipient, gold bar quality and purity, overdue custody costs, transportation and insurance costs, etc.
Is the BoE willing to return the EU gold it may still have to legitimate owners ? Who are the legitimate owners ? Would the ECJ decide gold ownership ? On what basis ?
Or has the BoE sold off for later re-purchase, or lent out and/or re-hypothecated and/or encumbered such gold bullion with several / many alleged legitmate claimees waiting in line ?
I agree with you. Gold is there and accessible to the owner.
Poland pulled back 100 tons, no problem.
It’s sitting, waiting.
Get this crap over with already.
Bureaucrats over the last several decades honestly believe that they are the most important people in the world, akin to when kings and nobles believed that their power came directly from God.
It is quite disgusting. And far too many of them, also.
Agree. There should be a law that limits govt employment excluding soldiers to x% of the workforce, with x set in law at something like 10%.
They are the most important people in the world. Along with that other group of similarly central bank enabled leeches: “Investors.”
When all purchasing power, up to and including the power to purchase political outcomes, are handed out solely on account of closeness to some money printing central bank, rather than on account of any form of real merit, such an outcome is inevitable.
While the rest, those designated as saps and pawns in the progressive project, are being not only literally disarmed, but are even indoctrinated sufficiently to be clamoring for more of it.
The EU has a Green Deal that will make us all rich….
With the UK gone, Italy will take their spot as the 3rd largest net contributor to EU budget (almost on par with UK). I am sure they will be happy to pick up the slack 🙂
Without the UK chipping in, the EU budget needs some untimely review and revision (…and reshuffle…) which won´t be easy to sell amongst EU member states.
Easy, just turn Poland into a net contributor and problem solved.
But seriously, I can’t see any of the large contributors willing to add a lot more. Well, maybe the Germans will. It seems they are sufficiently broken to eventually agree to anything. They don’t want to be seen as bad people. Just a few magic words and they do anything they are asked to.
Maybe the European Commission can just start issuing its own debt. The ECB needs something to buy after all
You mean something like EuroBonds…oh, wait…remind me, what exactly is Fru Fru LaGarde up to at the ECB…?
By the way: Where the hell is Avid Remainer?
well, let’s hope he’s not there!
I could never figure that dude out…does he and his ilk not read the accounts of what the EU did to Greece and Cypress?
Sadly, he slashed his wrists on election day December 12, and while he survived the attempt is in an insane asylum in Normandy muttering the same thing over and over; kill Boris, kill Boris……
What´s really coming up now is the “EU-Brexit Great Gold War”, the NATO intestinal infight over the EU gold “supposedly” (hehe) still vaulted at the BoE after many decades.
This will involve the weaponization of the BoE´s gold repatriation policy and other EU gold-related issues of whatever gold is still left over at the BoE vault.
The Brits would not want to return the EU gold unless highly favorable Brexit terms are agreed in favor of the UK.
Or quite simply the BoE cannot return such EU gold supposedly kept in custody for the past decades because it has been sold off or compromised.
I don’t think the BoE or the City will play fast and loose with the gold stored in the City. If they do, it will destroy the faith that the whole world has in London as a financial centre. This faith is the only thing the City of London has going for it, it is the source of their wealth and power.
Correct, rule of law etc.
Rule of law ?
Of course they won´t grab it like a market thief would. I bet that as we speak they are word-crafting every possible spin explaining the ENORMOUS convenience of the BoE extending forever the custody of everybody´s gold because of this and that and bla bla yada yada with excrutiating “reasoning”
I´m convinced we shall hear the term “Singapore-on-the-Thames” and other similar spins…
Oh, wait. And what if the BoE does not have such gold because it sold it or lent it out ? Or compromised it in oh so many ways, such as re-hypothecated and/or encumbered such gold bullion with several / many alleged legitmate claimees waiting in line ? Have you ever heard of the 1968 Gold pool debacle ?
Please do bear in mind that no independent audit has ever been carried out of such gold stock.
I guess the EU will want to extend so we pay in for longer, would that be the case? I think you’re correct Mish, the UK won’t be extending the 2020 date. We’ll be in the “will there, won’t there, be a deal” period for the year anyway. Everyone wants to move forward now.