Only Way to Bridge the Backstop
Last Friday, Eurointelligence commented:
We would agree that the risk of a no-deal Brexit on October 31 is vanishingly small, but risk of it happening eventually is rising. At Eurointelligence we have been warning for some time that the risks of a no-deal Brexit have been widely underestimated. But we were cautious not to elevate the no-deal scenario to becoming our baseline.
If the EU were to reject the current proposal flat out, that would change. The EU should consider very carefully that Johnson yesterday managed to receive support not only from the DUP, but also from the rebel Tories who lost their whip over the Benn extension legislation. The EU does not want to give Johnson a believable excuse for a no-deal Brexit: having come up with a reasonable proposal whose rejections indicates that the EU was not serious even to engage with the idea of a dual border – one for customs and one for regulation. We think that duality is not only a reasonable starting position, but in fact the only way to bridge the differences over the backstop.
The amount of trade between the UK and the EU was over £600bn. Intra-Irish trade flows were about £5bn. Should the EU really want to endanger a large portion of the £600bn on the grounds that it is possible to blame Johnson for a no-deal Brexit? That would strike us as an entirely irrational strategy.
Last Minute Magic Deals
My position has been that deals in the EU magically happen at the last second after everyone gives up on them. I also cited trade differential noting in particular German Carmakers Warn “Seismic” and “Devastating” No Deal Consequences
We have seen that time and time again, with German Chancellor Angela Merkel or someone else moving from a fixed position at the end.
It almost has to be last minute because all 27 nations have to agree to do damn near anything. It’s a fundamental flaw of the EU that cannot be fixed because all 27 nations would have to agree to fix it, and they won’t. France insists on agricultural protections and German insists on budget protections.
France Enters the Fray
After movement towards a deal last week, France seems to have hardened its position. French President Emmanuel Macron told Johnson that his offer was not even a starting point.
The Guardian reported Macron gives Johnson until end of week to overhaul Brexit plan.
In response, Johnson warned ‘Don’t Be Lured Into the Mistaken Belief that the UK is Staying in the EU’.
Foolish Notions
Unfortunately, that appears to be precisely what has happened. The EU is taking its cues from Remainers who are hopelessly splintered.
Let’s check back in with the Monday morning Eurointelligence view, emphasis mine.
This morning, the Telegraph reports that he is now preparing to launch legal action against the Benn Brexit extension bill. We don’t think that this has any chance of succeeding, but the point of this action is political: he is seeking to demonstrate that the organs of the state conspire to subvert Brexit. The article suggests that Johnson may himself give evidence to the court. What appears to be a chaotic strategy has the sole purpose to demonstrate that he is doing his best to deliver Brexit.
So this is now our most likely scenario – from today’s vantage point: the EU does not agree to a deal; Johnson is dragged kicking and screaming into an extension; he wins the ensuing elections; a no-deal Brexit follows.
Most Likely Scenario – No Deal
That is the first time Eurointrelligence has held that view.
Wolfgang Munchau writes that the EU should not dismiss the underlying idea in Boris Johnson’s offer: the separation of a customs border from the regulatory border. The proposal itself cannot be a final offer.
Munchau writes the EU can only politically agree withdrawal agreements that keep the UK aligned as closely as possible with the EU. France fears that the UK might seek a competitive advantage after Brexit. The conclusion is that the EU will always extend the Brexit deadline but, as Munchau says, that strategy is short-sighted and ultimately self-defeating.
In particular, it critically misjudges UK politics. Opinion polls continue to show a widening lead of the Tories over the opposition parties. An Opinium poll in the Observer also showed that Labour has regained its lead over the LibDems. What we think is widely underestimated in Brussels is that the current alignment in UK politics strongly favours a no-deal Brexit. The chaos in British politics is benefiting Johnson more than it benefits opposition leaders. With every court battle, we expect Johnson to consolidate his political position.
Consolidating Political Opinion
Something happened today in the UK parliament that show the extent of political power consolidation. A Tweet chain has the results.
21 Expelled Tories Will Not Let MPs Seize Control
Political Reality
- The rebel ex-Tories will not go along with an Parliament takeover
- Jo Swinson and the Liberal Democrats have repeatedly rule against a caretaker government led by Jeremy Corbyn
- Jeremy Corbyn refuses to support any caretaker government unless led by him
- There is now actually Parliament support for the deal proposed by Johnson
Note the irony of point 4.
Theresa May and the EU had a deal that Parliament would not accept. Now Johnson and Parliament has a deal that the EU will not accept.
The DUP, rebel Tories, hardline Tories, and even some Labour MPs are all willing to go along with an Irish Sea solution.
As noted in Brexit Irony: EU Rejects Its Own Proposal the EU proposed a border in the Irish Sea and Theresa May rejected that offer because DUP would not go along.
Theresa May instead accepted the worst possible deal for the UK.
Miscalculation or On Purpose?
France may very well want the UK out on a hard deal for reasons we don’t fully understand. That said, Germany does get hit harder than France in a No Deal setup.
Possibly it’s just a large last-minute bluff.
But perhaps Eurointelligence has this right. The EU has seriously misjudged UK politics.
And that’s another irony in this mess. It was the UK who for the longest time misjudged the EU.
The final irony is that by attempting to take “No Deal” off the table, Remainers just may have sealed the fate.
Even the expelled Tories have had enough.
Two Lies Exposed
It’s now clear that taking No Deal off the table was a gigantic lie from the start.
- Labour, SNP, and some of the expelled Tories did not want to block “No Deal”, they want to remain.
- If Ireland will not go along with Johnson’s offer, then it never would go along with anything. This exposes the Backstop for what it really is: A lie to keep the UK in perpetual limbo forever.
Polls Go Johnson’s Way
Mike “Mish” Shedlock
It’s comical that the whole outcome is being driven by two countries with whom we have long, historical emnities – France and Ireland. Both will end up goosed when the final results come in.
Ireland might dream of unification but the Brexit effects on their economy will just add fuel to the slow burn desire for an Irexit. Being an EU appendage, blowing round in the wind off the west coast of the UK will be hard, hard work.
Looking at the UK trade statistics, France is in for a kicking. Most of what we import from them is easily replaceable elsewhere (wine, fizzy wine, cheese, unreliable cars, etc.) and very amenable to a targeted replacement campaign. On the other hand the UK is a significant net foreign direct investor in France (which will dry up if they mess about with the City) and the country will explode when we bar their fishermen from UK waters.
But one question puzzles me immensely. Why has it all been the UK offering up deal proposals for Varadker and Macron to bat back? Why have we not asked the obvious question…….., “It’s your border and your problem, so what’s your solution?”
.
May’s agreement was their solution, which was rejected by UK.
To keep NI in EU for ever, while pretending to be looking for solutions
Lol ! What to expect from a amorph non thinking entity calling itself the EU ?
They leaked now why Benn’s law would not work… it is not UK side issue
Do you have a link?
Try this -:
https://briefingsforbrexit.com/even-more-problems-with-the-benn-act/
will not share 🙂 … but anyway it is just of one of many options… let me say that – you noticed that Goverment says they will not seek the extention? But at the same time they will send the letter! Draw your conclusions )
I’ve long since given up on the idea that I have any clue whats going on.
LOL
I’m not so sure this is a mistake by the EU. It would only be a mistake if the assumption is that they would settle for any temporary solution to the Irish border. I think that any temporary solution is unacceptable to the EU. They have such a solution anyway (i.e. “No Deal”), so why give up anything not to gain anything in return? I think that as soon (if) the UK offers a permanent solution there will be a deal very quickly. All the other stuff seems much easier to discuss in shades of grey, rather than in absolutes.
Also, the EU does not reject it’s own idea: they’re not rejecting the idea of a Sea border but the idea that such a border would exist only 4 years without any guarantees for the time afterwards.
found the link I was looking for
I hope, these two misfits on the front picture are not plotting some colonial carving up of the planet. Eh…probably not; you need intelligence, fortitude and discipline for that.
Either way, social cohesion is crumbling, trust in politicians is at an alltime low, the media pushes fearmongering and propaganda and are incapable of independent and unbiased reporting. Well done U.K. You are the joke of the world and your society is more polarized than ever before.
“I think the best that Corbyn could get is a VONC and an election. The next best option for Corbyn would be to support someone else who is Remain in a caretaker government, but an election will have to come anyway.”
I am unsure if CORBYN has a good option.
The Lib Dems do (if they could force it).
Remain is not realistically going to happen so the best the Lib Dems can do is trigger an election and crucify Corbyn.
accidentally said johnson in one sentence. Replaced in caps by CORBYN
Can Corbyn still get a VONC at this point? an attempt to wrest control of the parliamentary order of business failed yesterday when the 21 rebel Tories sided with the government.
From my crude maths, Johnson will be backed by a majority of commons if he can convince the EU to agree to something close to the present proposal.
I don’t understand this “LibDem election” variant.
The current poll numbers will drastically change depending on what happens on October 31. LibDems cannot let Remain go, and they won’t.
Very interesting, Mish. By all means do carry on.
God-all-bloody-mighty, why, at this point in British history, do we have Corbyn as the only viable alternative to Johnson.
You could have a monkey throw a dart at a list of Labour MPs and get somebody 100% better than this idiot.
I have been wondering about this too. I believe any half decent, moderate Labour leader would have really altered some of the dynamics here. Also, I think it would have been much better if Boris Johnson had been prime minister first, so the hard brexit approach would have failed first. A more moderate approach would then have succeeded more easily. If only Michael Gove hadn’t betrayed him….
“God-all-bloody-mighty, why, at this point in British history, do we have Corbyn as the only viable alternative to Johnson.”
Because the scum always rises to the top. The guy who rises to the top and stays there, is the guy who focuses the most singularly on nothing but what it takes to rise to the top and staying there. Anyone with even slightly broader goals and ideals, loses out; on account of not focusing 100% on nothing but the race itself.
Noone ever won the Tour de France, by stopping to help old ladies cross the road. Instead, they won it by being 100% focused on doing what it took to win it. Including doing every drug, and otherwise cheating, in every way that they figured they could get away with.
There is a shit load of confirmation bias going on with Mish and Brexit that sadly makes me take much of this column, and many others on this subject, with a pinch of salt.
This is where the value of Mishtalk on GDP analysis separates from Mishtalk on other subjects (climate denial anybody).
It is interesting to read the “we want no-plan Brexit so much we see it everywhere” side of the story, but that is what is it – a strongly biased view on the situation based on a desired outcome.
This will make Mish as fabulously wealthy pundit in the RT sphere, one assumes, but lose the followers who embraced his marco-economic insights – which is his real forte – Sean Hannitt wannabees are 10 a penny.
Mish could be right. Avidmremainer could be right. We’ll have to see. In time there will be an election, perhaps sooner, perhaps later. If Mish is right, the Tories will win handily. If Avid is right, Labour will win, and the Tories will be destroyed. Perhaps one or the other will be right, or perhaps something in the middle will happen, or something entirely different. In the meantime, I appreciate both their commentary, and will patiently await what actually happens.
Thank you, this is going to go to the one who keeps their nerve. Bye the bye I don’t think Labour will win. I believe the very best that can happen is a Labour Government in coalition with the SNP. The Tories have 13 seats in Scotland which they will lose at the GE. That would put the SNP at 50 seats. 326 seats is a majority so that leaves Labour to win 274 seats. Possible, but it is a stretch.
This is not an economic decision but hard strategic geopolitics. The EU must prevent any form of successful Brexit in order to survive. Moreover, the sabotage of Brexit would probably lead to further centralization immediately.
As I said more than once, I expect LibDems to blink and support Corbyn when “no deal” is close enough. This is a tactical expectation and it might be false. However, the deadlock is fully intact, so the default political scenario is extension.
Two things can break the deadlock:
As long as none of the two happens, extension is likely, regardless of the theater.
I agree with most of what you say, its just that history is full of politicians standing on their amour-propre and royally screwing things up.
Of course, we cannot exclude a screw-up.
It still isn’t enough for the LibDems to support Corbyn- even with their support he doesn’t have a majority to form a government. Corbyn would need the rebel Tories at the very least.
Johnson holds the upper hand since he is already the prime minister. I think the best that Corbyn could get is a VONC and an election. The next best option for Corbyn would be to support someone else who is Remain in a caretaker government, but an election will have to come anyway.
Opposition parties (Lab, SNP, Lib, TIG, Plaid, Greens) have 309 seats. Tories+DUP have 298. There are 35 independents including circa 20 Tories without the whip.
https://www.parliament.uk/mps-lords-and-offices/mps/current-state-of-the-parties/
It is quite chaotic (and I don’t know how they count abstaining MPs) but the most critical factor seems to be the question of LibDem/TIG votes.
I agree that “a VoNC and an election” is the target scenario of Corbyn. Actually, he tries to sell this since August. On the other hand, the second-best option for him is “no deal” under Johnson. It would annihilate LibDems and the Brexit Party who are his main foes at this point. The Tories would become probably stronger than today but they do not threaten the existence of the Labour party. A neoliberal/neocon/centrist government could probably break them up altogether.
Let me explicate- if the LibDems support Corbyn, they lose any chance of absorbing support from the right, which is, by the way, why they haven’t done so.
They can take him down after a few days. Remainers on the right could look away if the “no deal” threat is close enough.
By the way, I am not saying that it is good for LibDems in the short term. They will also lose support on the left if Corbyn gets to defeat “no deal” this time. On the other hand, the continuation of the Brexit circus is very promising for them in the long term. They might get to execute their decades-old plan to transform the two-party system.
Exactly. Her Majesty will not summon Corbyn unless she is sure and he can demonstrate to her advisors that he can command a majority, and it is plain he cannot.
The Independent is claiming that 20 or so Tories want to defect to the Libdems. If true, and it is a big if, this could be the start of the break up of the Tories. Don’t we live in interesting times.
I think you just made that up. I just looked and looked for any mention or reference to your comment, and there are none, anywhere.
Cretinous comments like that from remainers like you are why remain is in the position it is in. Reap what you sow…
Heidi Allen defects to Libdems. I don’t make things up.
…and the other 20? Like I said, just making stuff up.
Did you read the story? I thought not. The Independent is reporting today that 3 cabinet members and 50 Tories will leave the Tory party if the liar goes to the country on a no deal manifesto.
Ireland would love a no deal Brexit since it would very likely lead to unification with northern Ireland. As such, Ireland has very little incentive to agree to any deal which doesn’t leave northern Ireland within the customs union since they will be able to achieve unification in the case of a no deal.
Not forcing someone who does not agree to something, to live with it anyway, is anything but a “flaw.” People should do things they agree to. Not things someone else agrees to. Mob rule is never a good thing.