In the classic game of [Chicken](https://en.wikipedia.org/wiki/Chicken_(game%29), the first person to blink loses.
The name “chicken” has its origins in a game in which two drivers drive towards each other on a collision course: one must swerve, or both may die in the crash, but if one driver swerves and the other does not, the one who swerved will be called a “chicken”, meaning a coward.
That’s essentially the game the EU is playing with Theresa May and the UK.
Chicken Brexit Style
May has blinked so damn many times the EU fully expects here and the UK parliament to blink again.
May gave away 39 billion pounds, agreed to an odious backstop that has the potential of keeping the UK in a customs agreement forever, and received nothing in return.
May is headed back to the EU now with her head tucked under her legs in a posture of defeat in a futile attempt to win backstop changes that the EU has already nixed.
What’s the point?
Brexit Plans
The Guardian reports One in three UK firms plan for Brexit relocation, IoD says.
That’s a very good thing. The more planning for Brexit, the less fear and pain there will be.
Short-Term Pain
The UK has a choice: Walk away and have a bad 1-2 years with 39 billion pounds in hand, knowing the EU will have a far worse two years, or be made permanent fools of.
That is the choice.
The EU played May for a fool and she was then and remains now. May is on the EU’s side. So why should they blink?
The only chance for a deal is if May and the UK parliament is willing to play chicken accepting a “crash” if the EU does not blink by removing the backstop.
No Chicken Crash
Here’s the most Absurd Brexit claim Ever: “30-Year Recession, Worse Than 1930s”
Contrary to discussion of no food, no medicine, no air travel, and dogs trapped on the wrong side of the English Channel, the process will be relatively smooth.
Sure, there will be some short-term pain.
But the long-term gain is the UK will be able to negotiate its own trade deal, it can control its fishing rights, it will not be under pressure to join the Euro, and it can escape the massive idiocy of EU agricultural policy and over-regulation of virtually everything.
Choice at Hand
- Short-term small amount of pain with enormous long-term benefits
- Long-term idiocy
So UK, which is it?
Mike “Mish” Shedlock
Also the “project fear” claim there will be shortages of food in UK is completely stupid since French farmers would riot against Macron if this were to happen since they would lose a huge market so food will flow freely from France and other EU countries to UK through the French port of Calais.
If UK does not create a slowdown there will be no slowdown and food will arrive as before in those categories where UK is not self-sufficient
Biggest loser in a WTO-trade-Brexit is Germany but either Merkel is thoroughly incompetent and has not realized this yet OR Germany is still hoping May will be incompetent enough to take the crappy deal so UK can be kept chained to EU and used as an example and Germany and EU can tell other EU countries “see how bad UK ended up, there is no point for anyone to ever again leave EU”
Very well written Mish.
I would add that drugs will flow freely and without tariffs since EU is part of “Pharmaceutical Tariff Elimination Agreement” in WTO which guarantees that all countries in it allow all WTO members to export drugs to them without tariffs so UK medical industry will be just fine.
UK can join that deal immediately after leaving to keep EU made drugs flowing to UK without tariffs OR charge tariffs and put the money in a drug benefit through NHS that negates the effect of tariffs.
Here is details about Pharmaceutical Tariff Elimination Agreement:
There is already also a deal where flights will flow as before since EU countries airlines can not afford to lose their profitable market in flights to UK and they especially can not lose the right to fly over UK or through UK when flying to USA so UK airlines will also fly freely to EU destinations from UK (they just can not do flights inside EU from point in EU to point in EU but this does not happen much anyway.
details:
UK and USA also already agreed an open skies deal:
UK and EU citizens can travel visa free to each other:
WTO-Brexit will be OK.
Brexit is coming and it will be good for all parties in the long run. The ECU sits with the equivalent of our own problem after 1781: The Articles of Confederation. While we had enough in common to enable eventual correction of most of it’s flaws, excepting slavery, with the Constitution, adopted in 1789, Europe lacks that cultural critical mass yet struggles on under the pretense that it does. Brexit is a symptom. There will be more, but that’s apparently the only way forward toward the original goal: A Europe no longer the launching pad for world war.
Ooops 39 billion not 9 billion
Your assessment of the 1/2 years of pain is at least more reasonable than what JRM suggest that the British economy will soar after Brexit. There is absolutely no doubt that the UK can leave Europe, stg 9 billion otherwise. I seriously doubt your timeframe, but then again you predicted that Trump would win!
I think that a 10/20 GDP contraction (with the UK being such an open economy) can be a reasonable assessment of what will happen. There are very few historical examples anywhere. However, dislocation will occur as European” company relocate their UK operations (which serve the continent) to the continent.
GDP contraction, rise in unemployment, correction of the housing market…these will be the consequence of an exit. On the right side…
The personnel giving the services can mostly stay in UK and the companies in UK just create a company in EU area to sell the services with some positions.
For products UK exports much less to EU than EU exports to UK therefore it is in vital interest of Germany and France that products flow as freely as possible between EU and UK and vice versa after Brexit so even in WTO-trade-Brexit they will keep disruptions to a minimum.
The manufactured uncertainty with “project fear” claims of “crashing out” is worse than actual WTO-trade-Brexit.
There will be 6 months of hiccups while most things will run smoothly.
Hiccups can be corrected with several small individual deals between EU and UK just like Switzerland has tens of deals with EU to make everything work smoothly.
UK economy will soar afterwards while EU will get another case of Euro caused economic meltdown starting in Italy and spreading elsewhere in Euro area.
The Ireland and Northern Ireland border will stay open as before since both UK and Ireland have promised this and government parties creating a hard border would be voted out and punished politically for the next 50 years so nobody will close that border.
Ireland is out Schengen area of free movement just like UK so no troubles with groups of migrants either.
Based on the past several years of global events my vote is for long term dumbass. Those in power do anything to save the status quo. Why should they care as long as they still get to call the shots and keep getting paid? Have to admit the **** is getting old.
1 Short-term small amount of pain with enormous long-term benefits
2 Long-term idiocy
Long term idiocy wins the day. In 2008, the U.S. chose the idiocy of QE, over a 1921 short, sharp depression, which cleared out the WW1 era excesses. Now the talk is of MMT- a Magic Money Tree. Long-term idiocy is in the lead. Kick the can always wins out these days. May has managed to turn Brexit into Wrecks-It, by design.
Here’s my .02 cents.
Individual European countries will realize the disaster in Europe itself in the event of No deal Brexit. Pressure will be put on the Brussels Eurocrats.
German industry will put pressure of their Brussels representatives – There is too much tied up between Germany and the U.K.
The EU has put a price of 39 billion on U.K. exit.
The U.S. government deficit goes up by yearly Trillions
Game of ‘Chicken’
Sort of off-topic here but Chicken could also be the path to nuclear Armageddon. Elements the US military, repeatedly provoking Russia and stepping back to see what they do. Each time the Russians fail to respond invites another, stronger provocation. Just as everyone is convinced the Russians will let US Libyanize them rather than be destroyed in nuclear war, Americans finally learn what it like to bombed – as the US military has been doing on to others.
до свидания, жирный русский тролль
I don’t know Russian but the US government is NOT America.
“Short-term small amount of pain…”
It is possible that Brexit could become the trigger for a world-wide economic crisis that many have been predicting as a result of global debt. Such a trigger would be seen by many as the cause