by Mish

After meeting with Theresa May last Wednesday, European Commission president Jean-Claude Juncker told German Chancellor Angela Merkel that May was “living in a different galaxy”. Juncker also stated he is “ten times more skeptical than before.”

That’s hardly a shocking revelation to Mish readers but it raised a stink in the UK over leaks.

Via Mish-modified Google translation from FAS, please consider EU Commission Fears Negotiation Failure.

The EU is very skeptical about the successful conclusion of the Brexit negotiations with the United Kingdom. The reason for this is the meeting between Commission President Jean-Claude Juncker and British Prime Minister Theresa May last Wednesday in London.

As reported by the Frankfurter Allgemeine Sonntagszeitung, Juncker, after two hours of talk, said, “I leave Downing Street ten times more skeptical than I was before.” After the presentation in Commission circles, May had shown no compromise at the meeting and unrealistic ideas about The course of the negotiations, the FAS writes. The probability of a failure of the negotiations was estimated in the circles to “over fifty percent”.

May expressed the view that according to the European treaties, the UK did not owe any money to the other states, which, on the other hand, the EU believes amouts to between 60 and 65 billion euro. She reiterated her view that the Brexit should be a success, but the conviction in Brussels is that this is not possible because Britain is a third country and must be worse off than it is now.

According to FAS, Juncker telephoned the Chancellor Angela Merkel the following morning. He told her his assessment that May was living in a different galaxy and was making illusions.

Galaxies Apart

It does not matter which side is in a different solar system, galaxy, or alternate universe.  What matters is the EU, not the UK, has imposed an impossible starting point that the UK cannot possibly accept.

Art of the Deal

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In response to Trump Cries Wolf – Backs Down On NAFTA Cancellation Already: “Trump’s Bluff Didn’t Come Off”,  a reader commented that I need to understand “The Art of the Deal”

That comment shows a complete misunderstanding of reality. In practice, what everyone knows is meaningless at best and more likely counterproductive.

Trump got to feed his ego when Mexico and Canada called, but nothing of substance was accomplished.

The Wall Street Journal commented on the real reason Why Donald Trump Decided to Back Off Nafta Threat.

Sonny Perdue—the agriculture secretary who took office two days earlier—and Commerce Secretary Wilbur Ross met with Mr. Trump and showed him a map indicating the states where jobs would be lost if the pact collapsed, according to a person familiar with the matter. Many were farm and border states that voted heavily for Mr. Trump.

Those conversations, along with a flood of calls to the White House from business executives, helped steer Mr. Trump away from an idea that some of his own advisers feared was a rash and unnecessary threat to two trading partners who fully expected to renegotiate the agreement anyway.

Saving Face

Trump got to back off while saving face because Mexico and Canada called him. Those phone calls fed his ego more than enough. It makes Trump look like he won something he didn’t.

The Brexit position is worse. There are 27 egos that need to be placated on one side. Solidarity and egos suggest that getting 27 to make a move is much more difficult than two.

Besides, the positions are galaxies apart.

The “Art of the Deal” says to start with a ridiculous proposition. The problem is obvious. Backing down from that extreme opening position requires 27 egos to bend, just after they all got together for a big kumbaya.

Once again, I repeat Brexit Negotiations: Why Bother?

Mike “Mish” Shedlock

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