Tag: Financial-Regulation

European-Union, UK-Current-Affairs, UK-Politics

Brexit-Watch: Monday 29 June 2020

Brussels still hankers after British fish

Note: this article was originally published at The Conservative Woman on Saturday 27 June 2020

Choosing four recent Brexit-relevant media articles which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

NB: (£) denotes article behind paywall

 

Frost outlines the areas he won’t sacrifice as he faces Barnier – Daily Express

It’s reassuring that our chief Brexit negotiator David Frost is again insisting that, on three specific policy areas which can be grouped under the generic heading of sovereignty – the law, the courts, and fishing – there can and will be no concessions to Brussels.  As always, however, the devil is in the details.

In the context of the article, ‘the law’ means the ‘level playing field’ issue under which Brussels, for its own self-serving protectionist reasons, wants Britain to guarantee to maintain a business-regulatory regime equivalent to the EU’s.  Needless to say, the UK’s Continuity-Remainer big-business lobby has latched on to this and is pushing it, although thankfully with apparently limited success.

An independent legal regime and judicial system is a key manifestation of sovereignty.  Yet the EU has continued to try and bind the post-Brexit UK as closely as possible within the pan-EU corpus juris and thus keep domestic business-regulation germane to our EU exports under the jurisdiction of the integration-biased European Court of Justice.  Again, Frost’s repeated refusal to give ground on this is welcome.

The fishing issue is dealt with below, but the potential fly in the ointment in all this is Johnson’s increasing personal participation in the talks. His making disadvantageous concessions just for the sake of a deal, either out of his habitual distaste for fine detail or a desire to appease opponents of No-Deal purely for domestic political reasons, can’t be ruled out.  Hopefully, though, even he realises his stock has fallen so low because of his Government’s mis-handling of the COVID19 outbreak that he can’t afford to be seen to botch Brexit by fudge as well.

 

Britain still top dog in Europe for financial services investment – City A.M.

Well, that wasn’t in the anti-Brexit fanatics’ Project Fear script, was it?  Britain remaining the European country most attractive for foreign direct investment (FDI), suffering the least decline in inward FDI of all European countries in 2019, and beating the rest of Europe as the most attractive destination for financial services FDI post-COVID19 by a margin of 40% to a mere 8%. 

It isn’t hard to see why. Firstly, there’s the EU’s inherent ideological commitment to imposing regulatory harmonisation rather than accepting regulatory equivalence, and the fact that London is already pre-eminent in financial services, which tends to create a clustering effect.  Secondly, as I’ve previously pointed out, there’s the EU’s intention to introduce a disastrous pan-EU Financial Transactions Tax, already tried by Sweden but abandoned because of its innate flaws, distortions and disincentives. Why would any financial services business pick Europe over London?  

 

Recovery: we must embrace this opportunity for systemic trade renewal – Global Vision

Major exporter Alastair MacMillan is undoubtedly in saying that the urgent need for recovery from the self-inflicted damage caused by the Johnson Government’s panicked shutdown of the economy requires trading flexibility and innovation, not an extension of the Brexit transition period.

In fact, extending the transition period would not merely be unproductive but counter-productive. As our own economy struggles to recover, we would continue to be liable, both for current EU contributions and any additional ones the EU demanded as part of its own COVID19 recovery package, without any input into determining either their scale or qualification criteria.

That the EU much dislikes Britain now negotiating its own trade deals as an independent country, and is institutionally incapable of thinking innovatively on matters such as tariff definitions, is glaringly evident. We should be actively resisting any such obstructionism, and pushing for maximum flexibility at every stage.

 

The EU is attempting to capsize post-Brexit fishing – Get Britain Out

There appears to be an attempt by Brussels to effectively retain control over access to UK territorial waters, under the spurious guise of conservation of a species whose rising numbers no longer merit it to anything like its previous extent.  Considering the degree to which the EU’s fishing industry is dependent on such access, this looks like a blatant subterfuge, and should be dismissed out of hand.

The scale of leverage Britain enjoys over that dependence is such that it’s being suggested it should be partly traded away in return for major EU concessions on ‘rules of origin’ trade rules. Given that the EU has a history of either accepting concessions while offering non-equivalent ones in return, or of demanding even more, that too should be approached warily.  Time and time again Brussels has shown that it is neither honest broker nor reliable interlocutor.

Rightly or wrongly, fishing and the sovereignty of its national territorial waters are symbolic issues, by which Johnson will be judged whether he has either succeeded in extricating Britain from the authoritarian, rapacious maw of the EU or capitulated to it, however disingenuously the surrender would be spun.  We would be unwise to bet against the latter outcome.

 

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Economics, European-Union, UK-Current-Affairs, UK-Politics

Brexit-Watch: Friday 19 June 2020

Barmier from Barnier with a jibe at London

Note: this article was originally published at The Conservative Woman on Wednesday 17 June 2020

Choosing four recent Brexit-relevant media articles which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

NB: (£) denotes article behind paywall

 

London should not be a European financial hub after Brexit, says Michel Barnier – Telegraph (£)

This smacks more of either petulant obstructionism or even desperation from Barnier, rather than a credible threat.  However, it’s rather disturbing to see some UK commentators appearing to fall for it, by suggesting we should sacrifice both what’s left of our EU-decimated fishing industry and autonomy over our sovereign territorial waters in return for financial services.

I believe that this is both a false dichotomy, and an empty threat.  Compare the amount of EU-related financial business going through London with that going through, say, Frankfurt, which is the only even possible alternative. There’s no comparison.  And in any event, the EU’s intention to introduce a disastrous pan-EU Financial Transactions Tax would act as a massive disincentive for business to move from London to Frankfurt.

On this, Bottler Boris needs to hold his nerve and hold the line. 

 

Any more Brexit delays would be an affront to democracy – Daily Express

In focusing on the nuts and bolts details of the negotiation process, it’s easy to overlook the underlying electoral politics.  Arguably, they mattered less while the Tories were continuing to post polling-leads in double digits, despite misgivings about their mishandling of the COVID19 crisis.  Now, however, with Keir Starmer providing more effective opposition to a visibly struggling Johnson, and with widespread reservations over the Tories’ timidity over exiting lockdown, they start to matter more.

Against this background, the Centre for Brexit Policy has released its new paper entitled Do Not Delay Brexit – The View from the Red Wall, which backs up its Chairman Owen Paterson’s Express article by showing the extent to which the Tories’ December 2019 election landslide was largely due to ex-Labour voters in the Midlands and the North trusting the Conservatives to deliver a genuine Brexit.

The significance of this, of course, is that, with the opinion polls now tighter, and the proponents of an extension to the Brexit transition period trying to leverage the Coronavirus outbreak as justification for it, a failure to complete the implementation of Brexit on time will rebound adversely on the Tories electorally.  They would do well not to rely on the next election being 4½ years away and think they can take their recently acquired new electorate for granted.   

 

The Economic Case Against Extending the Brexit Transition –  Briefings for Britain

The case against extending the Brexit transition period isn’t only political.  As economist Julian Jessop points out, any theoretical adverse impact from the completion of Brexit on time, even based on exiting on WTO terms if a Free Trade Agreement cannot be reached, is dwarfed by the economic impact of COVID19 and the tremendous costs Johnson’s government has incurred in trying to mitigate it.

As Jessop also points out, the global economic downturn from COVID19 has also slashed borrowing costs still further, to the point where some gilts yields are negative.  This means that any additional Government borrowing as a result of completing Brexit on time may actually have been made cheaper by the Coronavirus crisis, apart from becoming relatively less significant when set against the extent of COVID19 borrowing as a whole.  There is simply no convincing case for deferring completion of Brexit on economic grounds.

 

Free trade is the key to Britain’s success. We can’t let our farmers and fishermen hold us back – The Times (£) 

The fact that this article is far more about farming than it is about fishing, which gets a mention only in regard to a possible trade-off against financial services, made me wonder if the Times‘ sub-editors took a small liberty with the headline to garner more clicks, fishing being such a touchstone issue.

Whether the case or not, the premise for that trade-off is questionable; firstly because the EU’s ability to hold the UK and City of London to ransom over financial services is limited, as I explain in the first link commented on in this article, and secondly because Brussels is now reported to be backing down on access rights to British waters anyway.

The validity of an argument linking farming with fishing, as though they were but two sides of the same coin, looks suspect in any event. Even taking into account the self-sufficiency case for, and the anti-protectionism case against, giving farming and agriculture special treatment, the two aren’t the same.  Fishing isn’t just a trade issue; given that it involves the ‘ownership’ of national territorial waters, it’s far more a sovereignty issue that it is merely one of trade and commerce, and if Johnson has succeeded in forcing Brussels to accept that it is ‘off the table’, that can only be a good thing.

 

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Brexit-Watch: Friday 22 May 2020

No extensions to Brexit transition. The deadline must stay.

Note: this article was originally published at The Conservative Woman on Thursday 21 May 2020

Choosing four recent Brexit-relevant press articles which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

NB: (£) denotes article behind paywall

 

The country cannot afford to extend the Brexit deadline – Centre for Brexit Policy

In its full paper to which the headline piece is a summary and introduction, the CfBP shows that extending the Transition period for 2 years would cost the UK economy £380 billion.

At any time, this represents a penalty which no democratic government should impose on its people unnecessarily and in effect in defiance of the mandate given to it by the people when asked. 

But this is not ‘any time’.  We are starting to emerge, painfully and hesitantly, from a Government-imposed COVID-19 lockdown of the economy which may not even have been necessary, which has seen the State intervene in the economy to a massive degree, and which will already burden the taxpayers with the costs of servicing and repaying at least £300 billion of additional borrowing.

On both economic and democratic grounds, there is scant, if any, justification for extending Transition and thus delaying full Brexit still further, even if that means, in the light of the EU’s continuing intransigence over a future trade deal, exiting to WTO terms.

 

Shameless arch-Remainers launch shock Brexit plot and urge Barnier to act – Express

It comes no surprise that the instigators of the latest plea to Barnier and the Brussels Eurocrats, intended to delay or preferably stop Brexit using COVID-19 as a transparently disingenuous excuse, comprise the usual suspects from the arch-Remainer, anti-democratic, minority parties of the ‘Liberal’, State-Socialist and Green Left.

Davey, Blackford, Savile Roberts, Lucas comp

The plotters’ claims of ‘significant opposition to the UK Government’s refusal to consider extending the timetable’ are tenuous at best.  Recent polling shows a majority in favour of ending Transition by 31 December or even earlier, particularly in the blue-collar electorate Red Wall constituencies which deserted Labour at last December’s election. Nowhere other than London is an extension favoured.

Moreover, the supplicants’ reference to the alleged backing for an extension from the (both Remainer and Socialist) Scottish and Welsh governments is irrelevant.  As both Brexit and trade negotiations are competences reserved to the UK’s national government, and thus indisputably outside the scope of devolved matters, the regional administrations in Edinburgh and Cardiff have no political equivalent of locus standi in them.  They, and their Westminster MP mouthpieces, should be ignored.

 

UK tells EU it will take ‘any measures necessary’ to protect fishing waters – Telegraph (£)

This welcome, if long overdue, pledge was included in the negotiating documents released by the Government last Tuesday, 19 May.  Given the considerable political significance notwithstanding the fishing industry’s marginal economic importance, of the UK regaining ultimate control of fishing rights applying in its own territorial waters as part of any trade talks, any retreat from such a robust promise should carry dire political consequences.

What ‘any measures necessary’ means, however, is left vague; the phrase will carry weight in negotiations only if it is made clear from the outset that it excludes undesirable concessions as a trade-off in other areas which are less politically visible.

Also welcome is the news of impending tariff reductions on up to 60 per cent of global imports, holding out the possibility of both food and household appliances being cheaper to consumers under new trade arrangements.

Finally, the opportunity appears to have at last been taken to reject the EU’s persistent negotiating intransigence, in which it has shamefully been supported by the die-hard Continuity-Remainer rump in the Whitehall, Westminster and media Establishments. Frost’s letter to Barnier embedded below is the letter which should have been written and sent 3 years ago.

 

In a crisis EU centralisation accelerates; Britain must not get left with the bill – Global Vision

Former Director of Special Projects for the successful Vote Leave campaign, Dr Lee Rotherham, locates the current drive for pan-European strategies on healthcare, ‘climate-change’ and taxation in response to COVID-19, being promoted assiduously by the Merkel-Macron, Franco-German axis, firmly within the EU’s history of exploiting international crises to increase integration and accrete unaccountable centralised power to itself at the expense of sovereign democratic nation-states.

Notwithstanding the setback handed to both the EU’s latest power-grab and the ECB bond-buying programme by the German Constitutional Court, the latest drives towards integration carry the inevitable connotation of higher contributions from member-states. The UK is already exposed through its European Investment Bank liabilities, and any extension to the Transition period would involve fresh UK contributions into the next multi-annual budgetary planning system.

Another reason – as if one were even needed – for refusing any extension and exiting Transition on time.

 

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Brexit-Watch: Saturday 09 May 2020

Note: this article was originally published at The Conservative Woman on Thursday 07 May 2020

Choosing five recent key Brexit-relevant story headlines which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

NB: (£) denotes article behind paywall

 

UK bans PPE exports to countries outside the EU, unless on humanitarian grounds – Daily Telegraph (£)

The ban is, reportedly, solely because of rule drawn up in Brussels.  So, disregarding the fact that the EU is increasingly in no position to control what its member-states do anyway, after so many of them have by-passed it in unilaterally taking anti-COVID19 action at individual nation-state level, it sheds an interesting light on Brussels’ much-trumpeted ‘European values’ that ‘humanitarian grounds’ are apparently enough to justify an exemption from its ban on PPE exports outside the EU, while Italy’s earlier requests for face marks and medical gear were met with a stony silence.

Far from being ‘left with no choice’, the UK government could, and should, be ignoring it.  After all, France and Germany ignore EU rules on state aid with impunity, so what sanctions could the EU bring to bear against a UK which did the same?  Become intransigent in trade talks?  It already is, and always has been.  Abandon those talks and end the Brexit Transition early?  Bring it on.

Inasmuch as it applies to Britain, this particular Brussels ban feels more symbolic than real. Ever since the 2016 EU Referendum, Brussels has tried to limit, if not veto outright, Britain’s ability to strike non-EU trade deals until it was entirely outside the bloc, and this latest development should be seen as a mere continuation of that process. 

 

Brussels’ ‘Level Playing Field’: A Strategy of Entanglement – Briefings for Britain

Despite the Continuity-Remainer claim, that conceding an ongoing close alignment with EU regulations is only a reasonable condition for getting a trade deal, this approach has long been regarded as just a backdoor means of keeping Britain entangled in the EU.

Just how un-separated from Brussels control that would leave the UK is revealed in this concise but comprehensive briefing note from the former Head of International Trade Policy at the Department of Trade and Industry.  Far from being restricted to trade,  it would cover a swathe of policy areas, from employment law, to mandatory pooling of pension funds, to domestic tax rates.

Writing recently for Global Vision, former Vote Leave campaign director Daniel Hodson suggested that, such are the repeated failures of understanding on the part of the EU machine and its UK Establishment cheerleaders that just one more Brussels negotiating blunder could see Transition end, on schedule, with a clean, WTO-based, Brexit.  The briefing note on how enmeshed in Brussels’ red-tape signing up to the so-called ‘level playing field’ would leave us can only heighten the advantages of that WTO clean-break option. 

 

Firms in EU tax havens cannot be denied Covid bailouts – EU Observer

Considering how vehemently the EU rails against even those so-called ‘tax havens’ – or more accurately, ‘competitively low-taxed international financial centres’ – lying within its own borders, it has so far sadly proved impossible for your humble scribe to stifle a certain degree of schadenfreude on reading this.

At one level, it provides a good example of the perverse contradictions inherent in much of the EU’s attachment to one-size-fits-all regulation: in this case where the free movement of capital comes up against the prohibition (frequently and openly flouted by individual member-states’ national governments) on state-aid.

At a second, it shows why Merkel’s latest initiative, for a Financial Transactions (‘Tobin’) Tax as part of a drive for accelerated pan-EU fiscal harmonisation during Germany’s tenure of the rotating EU Council presidency, is almost certainly doomed to fail, even discounting the innate flaws of the tax itself, which Sweden tried, only to abandon it.

 

UK-US trade talks begin, as COVID19 casts its shadow – Global Britain

And not before time, either.  Given that Frost and Barnier, after recovering from their own initial bouts of COVID19, were able to resume and continue UK-EU trade-talks via video-link, it remains something of a mystery why the UK-US negotiations on a post-Brexit trade deal were ever curtailed at all.

The resumption of UK-US trade talks  is essential for two principal reasons.  First, the USA is Britain’s largest trading partner in terms of export sales, despite the disingenuous practice of anti-Brexiteers trying to pretend otherwise by recording the EU as if it were one country by aggregating our exports to its 27 members.

Secondly, for as long as the UK-EU talks last, it is crucial to demonstrate clearly to Brussels that Britain considers itself an independent sovereign nation with the power to conclude trade deals with whomsoever it chooses across the globe, notwithstanding the EU’s attempt to restrict it in doing so until wholly outside its influence.

 

Northern Ireland tensions threaten to derail long-term EU-UK deal – Financial Times (£)

On the face of it, just why the staunchly pro-EU and anti-Brexit FT should choose now to revive the spectre of Northern Ireland’s status, once Britain has wholly left the EU, potentially wrecking the UK-EU negotiations isn’t immediately apparent.  Until, that is, one remembers that the EU last week not only repeated its demand to retain an official post-Brexit presence in the Province, but also launched what was seen in some quarters as an attempted power grab over the Province’s fishing industry.

The FT appears to assume that the prospect of Britain exiting Transition without an agreement is unthinkable.  But, as other links cited elsewhere in this article suggest, the likelihood of a satisfactory deal is receding, due primarily to Brussels’ inflexibility and intransigence, while the prospect of a clean-break WTO exit from Transition is growing.

Note, incidentally, the FT‘s description of Northern Ireland as ‘British-ruled‘’, as if it was merely the temporarily occupied territory of another country, instead of that part of the United Kingdom of Great Britain and Northern Ireland sovereign territory which chose to remain so rather than follow the rest of the island of Ireland in seceding from what was formerly the United Kingdom of Great Britain and Ireland.  Is the Continuity-Remainer FT now so anti-Brexit and pro-EU as to embrace irredentist Irish Nationalist Republicanism, even though the Republic’s claim to sovereignty over the Six Counties was dropped as part of the Good Friday Agreement?

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Brexit-Watch: Tuesday 14 April 2020

Note: article originally published at The Conservative Woman on Tuesday 14 April 2020

Choosing four recent key Brexit-relevant story headlines which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

(NB: (£) denotes article behind paywall.)

 

Brexit breakthrough: How Boris Johnson will force Brussels to agree brilliant trade deal – Daily Express, 12th April

Well, maybe.  But even when Johnson is eventually discharged from hospital, he is likely to be hors de combat for at least a month in post-recovery convalescence after his attack of coronavirus. In his absence, his de facto stand-in Dominic Raab, albeit for understandable quasi-constitutional reasons, would probably be reluctant to adopt such a hard line with the Brussels negotiators, justified though it would be.

On the other hand, we’re only just approaching the peak of the coronavirus epidemic, so Johnson may well be back in the saddle by the time they resume in earnest with political involvement, although they wisely continue at negotiator level, despite cynical calls from Continuity-Remainers to call them off using COVID-19 as an excuse.

 

The UK has a winning hand: let’s not be bluffed out of playing it – CapX, 9th April

The authors correctly make the point that, in contrast to the long-trailed Remainer mantra that ‘the City of London needs to be in the EU’s regulatory framework in order to prosper‘, the boot is now effectively on the other foot, exacerbated by the Eurozone crisis and Germany’s refusal to mutualise EU debt, in defiance of the logic of the Euro’s creation, of which Germany was such an enthusiastic advocate.

With the Brexit-extension lobby currently vocal, it remains a mystery why this advantage is apparently being neither leveraged nor even publicised in response.  That advantage would be maximised if the UK-EU talks were held in parallel with the UK-USA talks, but the latter have just officially been postponed indefinitely.

Clearly, the hiatus in leadership and diversion of Cabinet attention to COVID-19 is a factor in both being allowed to happen; but equally, one can’t discount the possibility of the malign influence of Cabinet Secretary Sit Mark ‘Huawei’ Sedwill.  In a reprise of the worst aspects of Theresa May’s disastrous premiership, Britain possesses a good hand of cards, but is simply refusing to play them. 

 

The coronavirus crisis could blow the EU apart – The Times (£), 9th April

The Eurozone crisis, long simmering on the back burner, is on the verge of boiling over, as Germany resolutely refuses to countenance the fiscal transfers to financially weaker regions of the Eurozone quasi-polity which the currency’s economic logic always demanded, but which political imperatives always precluded.

As author Iain Martin observes, Germany in particular wants for itself all the national, competitive, advantages of the one-size-fits-all Euro, but not the obligations, inherent in a multi-state currency bloc, to support its weaker members.  With the precarious Southern Europe economies, especially Italy, likely to go over the edge from the horrendous direct costs and lost output caused by their own COVID-19 outbreaks, the already dysfunctional European banking system, overhung with debt, might not be far behind.

Britain will not escape the economic fallout from a Eurozone collapse in any event, but the imminent prospect of one ought to put even farther beyond contemplation the idea of a Brexit extension which could see us on the hook for hundreds of billions in Euro bank-bailouts.

 

Italy’s Conte threatens to derail EU summit over Coronabonds – Politico Europe, 12th April

‘European solidarity’ has always seemed a combination of convenient myth for British Europhiles and comfort blanket for their Continental counterparts, but seldom has it seemed more incongruous. Notwithstanding the Eurozone’s latest purported rescue package, the divisions between the bloc’s Germanic/Scandinavian north and Latin south on the subject of so-called Coronabonds – with France as ever straddling the two – looks intractable.

With the attention of Brussels Eurocrats grabbed more and more by the developing crisis in, or even potential collapse of, the Eurozone, the EU can ill afford the luxury of a lengthy, intransigence-driven negotiation with a Britain prepared to walk away.

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Brexit-Watch: Saturday 28 March 2020

Note: longer version of article originally published at The Conservative Woman on Saturday 28 March 2020

A weekend update on some recent key Brexit-relevant story headlines, choosing five which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

(NB: (£) denotes article behind paywall.)

 

Coronavirus: Welsh Government calls for longer Brexit transition – BBC News 

Despite being content to sit in a Welsh Assembly which owes its existence to a devolution referendum won by a margin of only 0.6 per cent, Welsh-Labour, whose 29 Assembly Members comprise all but 2 of the current 31-member ruling coalition, has never really accepted the decision of the Welsh electorate to leave the EU by a margin ten times greater than that.  The call by current First Minister Mark Drakeford for a Brexit delay needs to be seen in that context.

In any event, this has absolutely nothing to do with the Welsh Government, which, on this issue, arguably does not even reflect the decision of the people of Wales who voted 53:47 in favour of Leave, much less represent them.  UK-wide constitutional matters are totally outwith the devolved competencies of the Welsh Assembly and the Welsh Government.

In all likelihood, either this is a smokescreen for Drakeford trying to deflect attention from the dire state of the Labour-run Welsh NHS, particularly with Gwent being a COVID-19 hotspot matching Italy in infection rates, or Drakeford is adding his voice to those hoping to stop Brexit by using the Coronavirus outbreak as an excuse to demand its deferral.

 

Coronavirus crisis demands extended Brexit transition – Financial Times (£) 

Oh dear, they’re never going to give up at the irreconcilably Europhile Pink ‘Un, are they?  Tony Barber is the FT’s Europe Editor; a quick glance at his output on the FT Writers’ Page somewhat gives the game away about where he’s coming from.

Parsing the latest article, his clinching argument for claiming an extension to Transition is necessary is that the head of a Brussels-based think-tank [part-funded by the EU] claims that an extension to Transition is necessary.  However, he then somewhat undermines his own argument by stressing how far apart the two sides are on fisheries, financial services, and business-regulation in general, prompting the question that, if they are indeed that far apart, and likely to remain so given the negotiating intransigence Brussels has consistently displayed hitherto, what is the point of an extension anyway?

In his similarly-themed article of 11 March, Barber labelled anything other than an ultra-soft Brexit-in-name-only as ‘the radicalisation of Brexit‘.  Now he refers to opponents of an extension types as ‘Brexit millenarians‘.  It is hard to see this as anything other than yet more evidence that the COVID-19 crisis is being cynically exploited by Continuity-Remainers as an excuse to ‘delay’ Brexit with the ultimate aim, of course, of stopping it entirely.

 

Brexit in Hindsight: Historial Reflections – Briefings for Britain

Another magisterial contribution from Professor Robert Tombs, separating two distinct questions which are often conflated: why, generally, did Britain vote to leave the EU, but also why specifically did it vote to do so in 2016?  Professor Tombs has little hesitation in locating the answer to the first question firmly within the very different experience of Britain compared with Continental Europe in the first half of the twentieth century, having neither succumbed internally to totalitarianism nor been militarily defeated and subsequently occupied by it, and therefore not seeing pan-Europeanism in terms of almost existential survival.

The second he sees as lying within the contrast between the pessimistic, lacking-in-confidence Britain of the 1960s which saw European integration as the remedy for economic decline, and the near-reversal of this perception by the early 2010s, in the face of visible and growing evidence of the bloc’s economic sclerosis and pursuit of political integration at the expense of democratic legitimacy.

What this suggests is that the popular determination among 2016 Leave-voters to leave the EU in fulfilment of the 2016 mandate persists at a deeper, more atavistic, level than the purely transactional considerations which Unreconciled Remainers condescendingly assume to be the main drivers of public opinion.  On this basis, the latters’ siren calls for an extension of the Brexit Transition ‘because of Coronavirus’, in the secret hope that Brexit can somehow thereby be diluted or prevented are destined for failure, making any delay superfluous. We should leave on schedule anyway.

 

EU Coronavirus summit exposes fundamental divisions – Global Vision

As if the EU’s hesitant response to the Europe-wide Coronavirus crisis – posturing but dithering impotently while sovereign nation-states’ democratically elected governments moved swiftly and unilaterally to meet the need to protect their own citizens – wasn’t bad enough, the third EU Coronavirus summit predictably revealed more discord than harmony.

Rather than micro-improvements such as facilitating the easier exchange of medical information or the freeing-up of supply-chains from bureaucracy, the Council instead proposed yet another comprehensive centralisation package, predicated on a common debt instrument, which has created the usual friction between the fiscally more conservative EU countries and its more fragile economies. The crisis is exposing how little nation-states can depend on an EU so often found wanting when it comes to action, despite all the talk of unity.

 

Downgrade warnings raise fears of European bank nationalisations – Telegraph (£)

Moody’s downgrade alert for banks in no fewer than six EU member-states, based on an anticipated slump in profits but a surge in bad debts linked to the Coronavirus-induced recession, comes on top of the burgeoning credit-crunch from the Eurozone’s bank-debt overhang. The author of the article, Ambrose Evans-Pritchard. has also been reporting this week on the cracks appearing in the Eurozone’s institutions, now rapidly coming to a head with a stark choice between strengthening monetary union with fiscal union, with all that that would entail, or risking EMU unravelling.

The danger here for the UK is of an extension to the Brexit Transition leaving us still on the hook for a massive contribution if necessary to stave off a Eurozone banking collapse. There are numerous bad reasons for delaying our exit because of the Coronavirus emergency, and few, if any, good ones.

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Brexit-Watch: Saturday 21 March 2020

Note: article originally published at The Conservative Woman on Saturday 21 March 2020

A weekend update on some recent key Brexit-relevant story headlines, choosing four which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.

(NB: (£) denotes article behind paywall.)

 

Far from requiring delay, coronavirus strengthens our hand in post-Brexit talks – Daily Telegraph (£) 

Former Brexit Party MEP Ben Habib is right to say Britain enters its COVID-19 emergency response in a stronger position than the EU. Not only do we embark on it with lower unemployment and lower public debt than the main EU member-state economies.  Having, correctly, not joined the Euro, we also retain our own currency and thus control over both interest-rate and monetary policy, giving us the independence and flexibility to cut rates and launch a monetary expansion quickly, as seen this past week.

When the EU bloc emerges from the Coronavirus crisis, it is likely to be in a weaker state, economically, than the UK.  To re-stimulate its economies, it will need more urgently a trade deal with the country with whom it enjoys a substantial trade surplus, and also be in far less strong a position to go on insisting on its shamelessly protectionist ‘level playing field’ regulatory equivalence.

We should, therefore, be pressing home our advantage, not to exploit, but either to try to conclude a Canada++ style Free Trade Agreement or, if rebuffed, to declare exit on WTO terms, on 31 December 2020.  We have the leverage, and we should use it, ruthlessly if need be.  There is no room for All-England Tennis Club etiquette here.  We are in a hard-nosed negotiation with an uncooperative foreign power, not a genteel game of mixed doubles where you wait politely for your opponents to recover before continuing.

 

The Budget, The Virus, and Post-Brexit Britain – Briefings for Britain

Assuming, firstly, that Britain’s overall Coronavirus approach, a mix of mitigation and suppression strategies rather than one or the other, actually works, and secondly, that the Brexit Transition is not extended, our first year fully outside the EU should see faster than normal growth. Paradoxically, the fastest growth should, all other things being equal, occur in the sectors which have taken the biggest hit from the virtual shutting-down of the economy, like the travel and hospitality industries.

However, since Professor Gudgin’s piece was written, the Chancellor has announced his £330 billion business assistance package, and the Bank of England has launched a further £200 billion of quantitative easing. The former will overwhelmingly be funded by additional borrowing, which eventually means increased debt servicing costs to be paid by individual and business taxes.  This makes it even more critical to secure a post-Brexit trade deal which doesn’t impose ‘level playing field’ regulatory cost burdens on British business.

 

Britain and EU exchange Brexit Agreement drafts – Reuters

In a welcome counter to the multiple calls for a formal postponement of the Brexit trade talks, and consequently, of the date of full-Brexit itself, Johnson this week published a draft Trade Bill, whose effect would be to expedite and facilitate Britain’s ability to trade with other countries outside the EU. In addition, draft legal texts were also exchanged between Britain and the EU itself on how the two parties would conduct business after the end of Transition.

From the texts, it looks unlikely that a delay would be productive in terms of any softening of Brussels’ intransigence.  Britain fundamentally wants a sectoral agreement under which some issues would be wholly excluded from it, whereas the EU wants an all-encompassing deal from which almost nothing would be excluded.  With the two sides as far apart as this on basic principle, it is hard to see what a delay would achieve.

 

We must question suggestions the transition period should be extended – Brexit-Watch.org

Given that European responses to the Coronavirus crisis are primarily being directed by member-states’ national governments acting individually, rather than centrally from Brussels, it increasingly looks a weak excuse for deferring full-Brexit. Apart from that, every extra month we stay in Transition means a continuing financial contribution to the EU’s coffers, taxpayers’ money which, one suspects, taxpayers would rather see being spent domestically in Britain on healthcare.

On Friday morning, former MEP David Campbell Bannerman raised a further powerful reason for not extending the implementation period.  Late on Wednesday evening, the European Central Bank unexpectedly announced a €750 billion stimulus programme of bond purchases, after its €120 billion big-bank stimulus package of only six days earlier had signally failed to reassure volatile sovereign debt markets.

If – or perhaps when? – the Eurozone collapses, suggested Campbell Bannerman, if still in Transition, Britain is in real danger of having to pay hundreds of billions through European Investment Bank liabilities and/or EU Commission decisions on EU ‘solidarity’. 

When Britain is already borrowing another £330 billion to prop up our coronavirus-hit economy, that prospect alone should be enough to rule out any extension.

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Brexit-Watch: Saturday 07 March 2020

Note: Longer and updated version of the article originally published at The Conservative Woman earlier today, Saturday 07 March 2020

A weekend update on some recent key Brexit-relevant story headlines, choosing four which, while not necessarily meriting a full-length article, nevertheless warrant two or three paragraphs of comment, rather than merely a couple of lines.  (NB: (£) denotes article behind paywall.)

 

Brexit row erupts after Barnier accuses UK of planning to ditch human rights commitment – Politics Home

In a typically disingenuous combination of red herring and attempt to assert EU extra-territorial jurisdiction over the post-Brexit UK, Barnier has accused the UK of ‘refusing to continue to apply’ the European Convention on Human Rights (ECHR) after full-Brexit. This is arrant nonsense.

The ECHR is the creation of the immediate post-WW2 Council of Europe, is enforced by the Council’s European Court of Human Rights (ECtHR) in Strasbourg, and is separate and distinct from the EU.  The latter is not even a signatory to the Convention, merely requiring new member-states to be signatories, and the EU has no jurisdiction over it.

It’s conceivable however that, once freed of the obligation to be a signatory to the ECHR by virtue of its EU membership, the UK could decide after Brexit to enact its own Bill of Rights (possibly linked to a written Constitution) and, as part of that, withdraw from either the ECHR in full or merely from the jurisdiction of its ECtHR.

As Lawyers for Britain‘s Martin Howe QC explains, there’s a compelling case for such a move.  The Strasbourg human rights court has come to mirror some unsatisfactory features found also in the EU’s own European Court of Justice, principally a tendency to judicial activism rather than interpretation, introduction into European human rights law of concepts not present in the original text, and the predominance of the Continental Codified, rather than English Common Law, legal tradition.

Barnier in effect wants the EU to have the power to direct the democratically elected government of an independent sovereign nation-state on which international treaties and conventions it should or should not sign up to. That is an outrageous demand that deserves to be dismissed out of hand.

 

Paris versus London: the clash of the financial centres – John Keiger, Briefings for Britain

Having failed, in the immediate aftermath of the 2016 EU Referendum, to persuade many, if any, City-based European banks to move their London operations to Frankfurt or Paris, the French are now coming back, but cloaked in the EU flag, for another attempt.  The possibility that this is sabre-rattling as part of French domestic politics’ general background noise to the upcoming French municipal elections this month, where Macron looks likely to be embarrassed at least, can’t be ruled out.

Despite the European Banking Authority having made the move, London’s sheer size, global reach, expertise, power and capacity for innovation as an international financial centre compared to Paris suggests this will be a futile quest.  Even if this were not a factor, the far more onerous and restrictive, and significantly slower-deciding and less flexible, regulatory regimes covering both financial services and labour markets would surely be a disincentive.

The threat to withhold passporting rights from UK banks doing business in France looks similarly unlikely to succeed.  The French may have introduced this whole issue into the negotiating mix as a giveaway to be traded off in return for getting something else.

 

Negotiating deals with both the EU and the US will be tricky for Britain: but it does have a trump card – Shanker Singham, Telegraph (£)

The overriding difference between the two sets of negotiations is this: that while both parties in the UK-US negotiation will focus on economics and trade, both parties in the UK-EU negotiation will not.  For the EU, this deal isn’t about economics and trade, but about politics, in particular, Brussels’ semi-existential political need to try and limit the competitiveness of an ex-member on its north-western doorstep, even at the price of harming its own member-states’ economies. That is bound to maintain, if not incrase, its tendency to intransigence.

Britain taking up its seat at the WTO this week, for the first time as an independent member in nearly 50 years, has sent what ought to be a powerful signal to Brussels that, if it continues to try to insist on setting both our regulatory environment and legal order after Brexit, then we are quite prepared to walk away and go WTO.

 

We must not allow the EU to bind our hands in trade negotiations with other partners – Stephen Booth, Conservative Home

In what’s been appropriately described as a ‘multi-dimensional game of chess’, and despite the demands likely to be made on our trade negotiating resources and expertise, for Britain to conclude, or at least substantially conclude, as many overseas trade deals as possible during 2020, in parallel to the trade-talks with the EU, must be an imperative.

In macro terms,  one vital fact should not be overlooked. Time is not on the EU’s side. The Eurozone economy is suffering its slowest growth in 7 years. Internally, its rate of GDP growth continues to decline, while externally, it accounts for an ever-diminishing share of global GDP growth.

EU quarterly real gdp growth 2016-19

EU declining share global GDP growth

Seeing the UK reach trade deals with the parts of the world which are growing, not stagnating, is essential towards disincentivising the EU from continuing to insist on its absolutist level-playing-field on, e.g.,  state aid, environmental and labour standards, an approach which is intended, not so much as to facilitate trade, as to protect its own heavily regulated economies from competition.

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Brexit-Watch: Saturday 29 February 2020

Note: Longer and updated version of the article originally published at The Conservative Woman earlier today, Saturday 29 February 2020

A weekend update on some recent key Brexit-relevant story headlines, choosing four which, while not necessarily meriting a full-length article, nevertheless warrant a paragraph or two of comment, rather than merely a couple of lines.  (NB: (£) denotes article behind paywall.)

 

Dealing with the French: Frost versus Barnier, Bacon versus Descartes – Robert Tombs at Briefings for Britain

Few are better qualified than Professor Tombs to expound on the historically different approaches to philosophy and law which govern the respective attitudes of the French and English towards the negotiating of treaties.  The former view the opening text as sacred, to be departed from only minimally, if at all: for the latter, it is merely a starting point from which give-and-take bartering can proceed towards, eventually, a mutually acceptable outcome.

Personally, I find it a curious paradox how, when it comes to the nuts and bolts of trade negotiations, it’s the British who are pragmatic and transactional, while the Brussels Eurocrats are institutional and inflexible: but that, when it comes to the philosophical question of EU membership per se, it’s the Eurocrats who are transactional, emphasising alleged economic advantage, while the British are constitutional, prioritising the principles of sovereignty, democracy and self-government over the risk of temporary economic disruption.

Anyway, to the schism identified by Professor Tombs must be added current domestic politics among the main EU protagonists. In Germany, Merkel’s originally anointed successor as CDU party leader and Chancellor having withdrawn, the contest has now degenerated into an unedifying struggle between two fairly unimpressive male apparatchiks.  In France, an already unpopular Macron faces municipal elections in late March from which he is likely to emerge weakened.

The two diametrically different approaches, coupled with more volatile both French and German domestic politics, could well turn the Brexit trade-talks into a dialogue of the deaf.  In which case, the likelihood of Britain deciding that further negotiation is pointless, and walking away to WTO terms, will become even greater.

 

EU’s uneven playing field revealed – Germans, Belgians, Italians, French are the worst offenders – Facts4EU

This is about the EU’s restrictions on the power of member-states’ national legislatures on state-aid and competition. Yet despite the insistence by Barnier on ‘red lines’ for a ‘level playing field’ regarding his demand for continuing UK-EU ‘regulatory alignment’ after Brexit, the EU is, as ever, the greatest breaker of the rules it purports to impose on others.

Germany, France, Belgium and Italy all receive favourable state-aid dispensations at between three and four times the rate Britain does. Some ‘level playing field’. . . .  Moreover, identifying where responsibility lies for administering the rules is typically shrouded in bureaucratic obfuscation. It would be futile focusing on this area to the detriment of others in negotiation.

Once again, it’s possible to envisage this issue causing Labour some trouble domestically, especially if the party, though nominally united, has ongoing tensions between the soft-Left faction of presumed winner Starmer and the defeated hard-Left camp grouped around Long-Bailey.  Remember, Corbyn repeatedly appeared torn between his desire as a Remainer to stay within the EU’s ambit and his desire as a socialist to use taxpayers’ money to prop up failing businesses.

 

UK-EU: a question of trust – Financial Times (£)

Briefly, for those unable to breach the paywall, the article references the spat between Britain and the EU on the former’s accusation that the EU resiled from its offer of a Canada-style Free Trade Agreement, and the latter’s accusation that Britain is resiling from a previous agreement not to re-open aspects of Theresa May’s Political declaration. It goes on to regret the end result of the document supposed to guide the negotiations being at the centre of a feud.

It’s hard not to see a combination of naïveté and anti-Brexit EU-philia at work here.  These negotiations were always going to be conducted in an atmosphere of bad faith on the EU’s side.  The reason isn’t hard to discern.  Going back to Professor Tombs’ article, for Britain, these negotiations are transactional: for the EU, on the other hand, they are near-existential.

As the Bruges Group remarked this week. . .   

Indeed.  But that’s also slightly to miss the point.  The EU is conceptually incapable of treating us like any other country.  Alone among other countries who joined it, we have chosen to repudiate and quit their to them noble but to us neo-imperial Project.  For that, in their world-view, we are heretics who must not only be punished for our apostasy but be seen to be punished for it.  If that sounds quasi-religious, it’s because it is.  These negotiations were pre-destined to be acrimonious.

 

The UK and EU Negotiating Mandates Compared – Global Vision

It’s clear from this comprehensive, up-to-date summary, including all the developments of the past week, that behind the spin disseminated via the headline/soundbite-wanting media lie some potentially insoluble points of contention.

Fishing is the obvious and arguably also the most difficult one since, despite its relative insignificance economically, it is hugely important politically and even almost symbolically, given its public profile: one can easily see it being the bellwether by which the whole deal is judged.  The UK has rejected both keeping current levels of access for other EU member-states, and sequencing.  It could be the difference between an agreement and WTO.

The so-called level playing field and rules of origin issue, and I think we can expect EU obduracy on financial services, torn as it is between mercantilist envy of the City’s dominance and knowledge of EU firms’ dependence on it. Generally, if the EU refuses to budge on demanding its own legal order be supervening, the UK has made it clear there will be no agreement.  Don’t delete your online WTO guide just yet.

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Brexit-Watch: 22nd February 2020

Note: Longer and updated version of the article originally published at The Conservative Woman earlier today, Saturday 22 February 2020

A weekend update on some recent key Brexit-relevant story headlines, choosing four which, while not necessarily meriting a full-length article, nevertheless warrant a paragraph or two of comment, rather than merely a couple of lines.  (NB: (£) denotes article behind paywall.)

 

The EU’s absurd and ever-changing position reminds us why Britain voted to leave – Telegraph (£)

Global Vision’s Shanker Singham on how, having originally offered Britain a Canada-style free trade deal with add-ons, the EU has backtracked to the extent of demanding a provision which it doesn’t insist on even in its FTAs with China and the USA: namely a guarantee that whenever the EU changed its laws, the UK would follow suit, in perpetuity.  This would in effect subordinate our own trade’s legal architecture to EU state aid rules and ECJ oversight.

Brussels also demands what it calls ‘dynamic regulatory alignment’; meaning in effect that, to secure a FTA, the UK would need to become a rule-taker from Brussels with no say in how those rules were set.  Both moves are perfect examples of the intransigence which caused us to vote to leave in the first place.  But Johnson will need to be watched to ensure there is no backsliding or dilution of our refusal to capitulate to this.

 

The EU isn’t interested in free trade with the UK, just political domination –  Briefings for Britain (formerly Brexit)

An argument whose first premise has been amply borne out this week by Brussels’ attempt to move the goalposts, firstly, by trying to hedge a Canada-style deal about with onerous conditions, in what looks like a naked attempt to hobble Britain’s ability to compete against an over-regulated, sclerotic EU.

Secondly, by Barnier’s ill-tempered refusal of a Canada-style trade deal on transparently spurious grounds of geographical proximity.  And thirdly, by even demanding the return of the Elgin Marbles to Greece as part of any trade deal. 

With the growing presence of nation-state populists in both member-state and European parliaments, making Brussels desperate to make life outside the bloc as difficult as possible for Britain, the argument’s second premise is no less valid.

 

Post-Brexit funding row breaks out in Brussels – Times (£)

Very much at the forefront of Eurocrats’ minds, in the sense of trying to show the remaining 27 member-states, by its treatment of Britain, just how difficult it will make life outside the bloc for any other country which decided to emulate Britain and leave, taking its contributions with it.  Brexit leaves a €75 billion-sized hole in the next 7-year budget.

The implications for member-states’ internal politics are significant.  Germany’s extra payments are 6 times France’s, and Merkel’s CDU is under electoral pressure from the Eurosceptic AfD.  France’s low-level Gilets Jaunes insurrection each weekend shows no sign of abating, and the Marion Maréchal (Le Pen) led Rassemblement Nationale expects to make big gains in this year’s French municipal elections.  Just to make life more difficult for Macron, the Dutch, with an economy only one-third the size of France’s, are objecting to paying EU contributions 70 per cent higher than France’s.

 

What Keir Starmer would mean for Britain – FT (£)

To which headline must of course first be added the caveat: if he becomes Labour leader.  Admittedly, it looks unlikely that he won’t, but Rebecca Long-Bailey has the endorsement of Len McClusky’s Unite Union and, as far as I can establish, no candidate has ever won the Labour leadership without it.

In the short term, Starmer as leader will impact more on Labour’s internal politics than on the course of Britain’s exit.  Johnson has a compliant Parliamentary party with an unassailable majority, so Starmer won’t be forcing any change of policy.  He will however be far more soft-Brexity and even Rejoin-inclined than Corbyn, so could arouse some disquiet among Labour MPs in Brexit-voting seats who narrowly survived December’s massacre and could be the next bricks in Labour’s Red Wall to tumble.

What he will bring to the table, however, is a lawyer’s far greater ability than Corbyn possessed to absorb the fine detail of any agreements, and then subject Johnson to forensic questioning on them.  Boris is a big-picture blusterer, not a details man, so he could well under-perform when put under this kind of pressure.  Coupled with growing resentment at his eco-policies, this could well cause his popularity and approval ratings to dip.  So Starmer could impact internal Tory politics as well.

 

What these four articles taken together show is that the EU is visibly in big trouble on several fronts.  Not mentioned in any of the four above is the mountain of bank debt on the books of the ECB, which potentially limits it from engaging in any further quantitative easing to try and boost currently slowing growth in the sclerotic Eurozone. 

If only our own negotiators would recognise it, and leverage it to drive a harder and more advantageous deal for Britain.  Though if the evident intransigence of the EU is a guide, it surely increases the chance of our eventual exit on WTO terms.

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