#Article50 and the end of the beginning

Theresa better off

Theresa May is finally ready to cross her Rubicon by notifying the EU of Britain’s intention to leave the Union, using the famous Article 50 process. Brexit minister David Davis told us last week that the possibility of a no-deal Brexit is not as frightening as some people think. Think about it this way, currently one can go online and order a fancy desk lamp from a French company and pay the price plus postage. If the lamp was coming from the USA however, customs duties will need to be paid by the customer (5.7%) once the goods have arrived in the UK but before they are delivered. She will also be charged import VAT at 20% and there will be a £8 handling fee to pay. The consequence is that buyers may well seek a domestically manufactured lamp instead. Wouldn’t this be a great thing for local manufacturers? It might, but it is likely that the domestic lamp manufacturer would incur similar charges when importing components to make their lamps. Further, they will find it more expensive to sell their lamps in Europe. Selling on WTO rules necessitates having appropriate licences and making export declarations to customs and following transport procedures. Increased demand from local customers will be probably offset by increasing costs of manufacture and a loss of market share in Europe. Mr Davis may not scare as easy as the consumers and businesses who will suffer the consequences. Brexit is happening regardless.

To summarise, we can say the following: Theresa May has selected two avenues for achieving Brexit. One is a so-called hard-Brexit (exit from the Single Market and the Customs Union) while the other is a presumed ‘no-deal’ Brexit (trade with Europe thereafter will be governed by WTO rules). Both options raise a series of significant dangers for the British economy, and crucially present a formidable challenge to the Treasury. The City has indicated that continuing business in London will require significant tax cuts as compensation for the loss of ‘passporting rights’ in the case of a hard-Brexit. Alternatively, a ‘no-deal’ fall back on WTO rules will cause significant upheaval to manufacturers, necessitating state aid to a number of industries. How will the Treasury fund either (or both) remains a burning question.

Good luck to all of us.

Art50

@iGlinavos

 

 

 

Behold the birth of the British Reich

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It has become commonplace to moan about how much the EU Referendum has changed politics in the  UK and Europe. There is also a fair bit of despair.

This post will not make you feel any better.

The referendum has changed things permanently. Politics and life in Britain will not be the same for anyone, regardless for whether they supported Leave or Remain.

Before you Google yourself way, hear me out.

The Brexit vote has woken up something nasty in British society, that was hidden under a facade of political correctness. Racism, violence, anger are now mainstream. From UKIP’s nazi style posters to daily headlines demonising foreigners, we have graduated to vilification of the judiciary for daring to have Parliament involved in defining what “Brexit is Brexit” means.

People on social media feel obliged to call out the Jewish judges who are also gay who are also pro-EU, who want to frustrate the will of the people as interpreted exclusively by the Brexiteer priesthood of Theresa May.

Is this a rerun of the 1930s as parody, or simply a re-run? Do we need to prepare for life under a British Reich?

My message here is simple. Nothing will satisfy Leavers or reverse this descent into undemocratic populism. If a hard Brexit indeed happens (by exiting for example without an agreement) the narrative that  will develop  will blame the  evil EU for the consequences. If we brand the judges enemies of the people, after just a couple of months, for asking what Leave supposedly asked for (Parliamentary supremacy), how far will be from pogroms in post Brexit dystopia?

Anything less than a hard Brexit will lead to a permanent rear guard action by UKIP and fascist Tories who have been denied their chance at utopia. The point I am making here is that no matter how his plays out, things will not normalise.

Where does this leave Remainers? I accept  the mantle of an enemy of the people. I will be in good company.

Am I exaggerating? Theresa May and the  Lord Chancellor are yet to condemn the attack on the judiciary. The government has made clear its intention to appeal the decision on Article 50 however. Taking back control indeed.

The question I am asking myself is whether to stay and fight for the country I knew, or leave.

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@iGlinavos

 

Why Hard Brexit is now impossible

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An unexpected thing happened today, the High Court in London passed judgment on a case involving the correct process of starting the British withdrawal from the European Union.

The court said that the government can only activate Article 50 (and thus start the 2 year countdown to exit) after Parliamentary approval.

What does this mean and what are the options Theresa May is faced with now?

The short of it is that the hard-Brexit trainwreck has been delayed, perhaps even postponed indefinitely. Why so?

In the current Parliament there is no majority for Brexit. This is both because the majority of MPs in the Commons stood for Remain, and because the Lords are likely to be strongly opposed to the idea.

Now, this does not mean that a majority of MPs cannot be found to vote in favour of activating Article 50. In the current circumstances, as the majority of constituencies in England voted in favour of Leave, it would be political suicide for most sitting MPs to vote against Article 50 activation.

An indication of how the Commons votes on Brexit issues is given by the failure of the proposal to protect the rights of EU citizens already resident in the UK recently. A narrow majority of MPs voted against common sense and decency. Why? Because they are afraid of their Leave voting constituents.

Is all this struggle in favour of Parliamentary involvement for nought then? Actually no. Saying that MPs will not want to openly defy the will of their constituents is not the same as saying that the majority of MPs will go along with May’s apparent desire for a hard Brexit.

From the point of view of an MP, suicide now (by voting against Brexit) against suicide after (once the consequences of a hard-Brexit begin to bite) is not a great choice. A better choice is to vote for Article 50 when given the chance, but with caveats that make participation in the Single Market a requirement for negotiations.

The logic behind this is that Brexit does in fact mean Brexit, but without meaning the utter destruction of the country’s economy. This is a sensible compromise between the public’s democratically expressed desire to commit suicide and the MPs desire for self-preservation.

This of course is relevant for the Commons. I am not investigating whether the regions will need to agree to activating Article 50, as it seems that they will not get a veto after the decision of the Belfast court. What the Lords will do is another question. The Lords do not need to (and do not) care what people think. They could block Brexit indefinitely, or force May’s hand.

Force May’s hand to do what you wonder? The answer is obvious. If the current Parliament cannot authorise a hard-Brexit and a hard-Brexit (translated as exit from the Single Market in order to achieve this fictional control over immigration) is what May wants, we need a new Parliament. We can get a new Parliament only by having an early General Election.

The chips are on the table for Mrs May. This court decision means that she buries any dreams of a hard Brexit, or she brings her hard edged dreams in the form of a party manifesto (for disaster) to the people and see what happens.

Now, the alternative avenue, appealing the court decision, is not a very clever move. The decision rests on an interpretation of Article 50 as the beginning of a process leading inevitably to irreversible loss of rights (everyone in this trial agreed this to be so). If May appeals the decision to the Supreme Court, then (as a matter of EU law interpretation) the nature of Article 50 (the crux of the matter in this case) will need to be investigated. The Supreme Court will have no choice but to refer the matter to the Court of Justice of the EU for an interpretation of Article 50. If the CJEU returns the opinion that Article 50 is irreversible, there is no basis for overturning the High Court decision. If it says it is reversible, then the decision will probably be reversed, but May will have opened an avenue for a different government (or political pressure) to stop Brexit within the two year period through another referendum, or executive decision.

You understand therefore that appealing is a lose-lose situation for May.

What is the outcome for the merry Brexit circus? Soft Brexit or an election.

What role can you play? 1- If you are against Brexit, or in any case not insane (and could live with a soft Brexit, if it cannot be avoided altogether), and 2- are lucky to be a resident of Richmond, then you could vote for the Liberal Democrats in the Richmond Park by-election on December 1st. This way you achieve two things with one vote. You ensure that another MP against Brexit joins this Parliament (need I remind you that golden boy Zac is a Brexit supporter?) plus, you send a message to May that a hard Brexit manifesto will not fare well in the ballot box.

I leave you with this thought. If May is ignorant enough to appeal this decision, how fun would it be to have the process of withdrawal from the EU become the subject of a CJEU decision?

50

@iGlinavos

An evil plan would have been better than this

idiots-in-charge

When we (by this I mean fellow Remainers) tried to reflect on Brexit post the fateful referendum on 23 June, we assumed that Brexit was part of an evil plan.

Such evil plan consisted of a Thatcherite take-over under the guise of a far-right coup. We did not think for a second that Boris really wanted out of the EU, or that May was really that keen to rain fire on the economy just to appease UKIPers. We thought this is all a rouse, a clever way to gain power and finish the Thatcherite revolution that Blair ameliorated, and Cameron distorted through the self-imposed pain of austerity, while keeping the state living (albeit at a barely capable level).

Boris, May and the rest of the gang (we though) is out for a final push in the deregulatory, privatising revolution that will establish Britain as the new Reaganite America, the Land of Opportunity for the rich, corporates, foreign dudes with deep pockets.

We were wrong.

The reality it seems is far worse than a Thatcherite revolution. It could even be worse than a far-right takeover by the likes of that scumbag Farage.

The reality is this: Incompetence, lack of vision, lack of plan, lack of intelligence, coupled with utter bollocklessness.

This is it ladies and gentlemen. The famous Brexit government of Mrs May lacks all of the above and is unlikely to grow the necessary bits within a relevant timeframe.

What has the victorious Brexit government actually done after it took over from yellow dog Cameron? It has celebrated the Olympic successes (well deserved). It has gotten into arguments about secondary schools (less well deserved) and has given speeches. Lots of speeches. Brexit means, eh Brexit, in case you missed that one. It has not actually done anything pointing towards what Brexit will be like, when it will happen and how the economy, society and foreign policy will reallign as a result.

For a government that demonstrates this distinct lack of bollocks, a lot of it has appeared in public pronouncements. Sadly, Fox and Davis seem to understand little, and know less of what is involved and what they are doing. May in the meantime is being disgraced in international fora as the obvious realities (to everyone but 52% the electorate) hit home.

No discussions with Europe prior to Article 50 activation

No trade deals with Europeans before discussions are completed

No trade deals with anyone else before a trade deal with Europe

No buffers or interim arrangements while this goes down

The only thing in plentiful evidence is damage control. The Bank of England is trying to keep the economy breathing. The government is promising everyone money (without explaining how it will find it) to plug gaps that will emerge after the end of European supports. Projects are announced and promises made. This smells a little like Tsipras of Greece. Listen to May explaining how everything will turn out ok, and then listen to Tsipras’ speech yesterday in Thessaloniki. No cigar for spotting the commonalities.

Meanwhile, back in the City of London Financials are packing their bags. Why you ask? Because they are not stupid. Banks and financial institutions are not going to stick around to see whether this band of jokers will manage to maintain their EU passports (financial ones) in two years time. They will do two things (trust me on this): 1) They will relocate the bulk of their business to European capitals to be sure that there is no disruption in their business. 2) They will keep a presence in London from which to run international business in a ZERO-TAX environment, which the government will need to institute as a sweetener to keep everyone from fleeing as the excrement hits the fan post Article 50 activation (which cannot be delayed post 2017). It is a win-win for the industry. It is a sorry deal for Britain.

Also, the Europeans are not stupid either. Brexit presents them with a golden opportunity to snatch resources, business and human capital. You will see not only preferential conditions offered to the financial industry to relocate, but also incentives for businesses and staff to set up in Europe. For example look at universities. We have been losing market share (international students) to European institutions teaching in English for a while now. Brexit gives a unique opportunity to institutions to expand their English business-focused programmes and there is a strong incentive for well respected staff from the UK to relocate to Europe. And they will, in droves.

Brexit was a crap idea even before everyone realised the entire thesis for it was lies, mistakes and racism. The total utter lack of ability to make Brexit happen is even worse than the stupid idea to begin with. Even if you were positively inclined towards leaving the EU, for whatever reason, before this summer, you ought to have realised now what it really means. If you are still a staunch Brexiteer, I am sorry to pass judgment on you, but you are an idiot. Further, you are an idiot that deserves what will happen to you.

An evil plan would have been better than  this.

pinky-and-brain

@iGlinavos

How Brexit became Brelimbo

There have been plentiful analyses on why navigating Brexit will be a nightmare, the latest one is a great piece on Vanity Fair. Brexit is such a spectacular own goal that even discussing its “merits” is an exercise in futility that prevented Remainers actually explaining what a stupid idea this is to the people stupid enough not to undestand it straight away. Yet, here we are in the post-referendum era trying to make sense of it all.

The con artists who pulled off this feat of populist self destruction and are now in power are finding things a tad difficult. They have no idea what they are doing, had no plan, have no plans and most crucially seem unable to rise to the task of organising what they convinced 17 million “natives” to vote for. 

The Times is telling us now that May is considering pushing back the invocation of Art.50 to the latter half of 2017 with the excuse that there are elections in France and Germany. The real reason is we are told administrative inability to commence the Brexit horsetrading.

I think this is a carefully constructed diversion by May to catch the opposition sleeping with a snap election. I have explained already that the reasons for an early general election are compelling. There is no way May can put off Brexit that long if she actually wants to do it. 

It has been suggested that indefinitely delaying Brexit may be a way to actually remain, but I don’t think this is a great idea. Holding on to invoking Art.50 past January 17 leaves Britain in perpetual Brelimbo. Not a state the economy or the political class can survive for long.

@iGlinavos