Article 50, Backstop, Brexit, British Government, Customs Union, Irish border, Single Market, Theresa May

Now #Brexit shifts from omnishambles to megashambles

This blogpost was written on Thurs March 21, 2019

May

How did it come to this? Just eight days before the UK is due to leave the EU and we still do not know whether it will leave on agreed terms or leave with no deal. What a megashambles!

A megashambles is beyond an omnishambles, it is on route to being a blackhole-shambles, into which everything disappears. If that happens there is every chance that the UK, as we have known it, will never be seen again.

That would be a great pity because, leaving aside dark times past and crimes in foreign lands, in recent times the UK has given the world so much. I am of the 1960s generation. When Ireland was still a closed, introspective, Catholic-dominated country, the UK in general, and London in particular, opened windows and showed us that other lives were possible. Clothes that went beyond the drab, rock concerts in Hyde Park, the West End on a Saturday night. Magazines and writers suited to all tastes. Best of all, no church on a Sunday.

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Article 50, Brexit, British Government, Theresa May

Our first #beergbrexit blog flagged up the issues that have plagued #Brexit

Issue 1We started this online blog just after the Summer of 2017. If you scroll back though the archive you will see several BEERG Brexit blogs from June/July/August 2017 which we posted on here in late August 2017.

These first few blogs were based on Brexit Briefings prepared for BEERG members across both the EU and US. There were some earlier editions of the Briefing which we did not post, including the very first one. It was written as a general primer on Brexit and at that point we did not envisage these papers being more than occasional thoughts on the brexit process – but that situation changed in the latter part of 2017: hence this blog.

Here is that very first BEERG Brexit Briefing No 1 from 3rd April 2017. We also include the text of that briefing below.  Looking back at that first briefing we are surprised at how much of our analysis has withstood the test of time. Back then we highlighted a simple reality that very many UK politicians and pundits still fail to recognise, namely that the two negotiations on exit and trade, would run sequentially, not in parallel.

Moreover, when we looked at the three component parts of the Exit negotiation:

  1. Settling the bills
  2. Citizens Rights 
  3. Irish border

we cautioned that the it was the third one, the issue of the Irish border and its range of political, economic, trade and societal consequences would be the most difficult one to resolve.

Sadly, we were right.

  • Our next regular BEERG Brexit Blog will be posted after the EU Council, either late tonight or early tomorrow. 

 __________________________________________

The Text of BEERG Brexit Briefing No 1, 3rd April 2017

INTRODUCTION

On March 29th, UK prime minister, Theresa May, sent the letter to Brussels which formally notified the European Union that the UK was starting the procedure which would see it leave the bloc by March 2019. The following day, March 30th, the UK government published a White Paper setting out details of the “Great Repeal Act”, which will take effect when the UK leaves the EU. The Act will see the incorporation of all existing EU legislation into UK law, which the government/Parliament can then scrap or amend in its own good time.

It is clear from May’s letter to the EU that what the UK wants is a trade deal with the EU that mimics membership of the Single Market and the Customs Union in all but name. However, such a deal would leave the UK free to disregard the principle of free movement within the EU and allow it to control immigration from the European Union. It would also leave it outside the jurisdiction of the Court of Justice of the European Union (CJEU). Further, the UK wants to be able to negotiate trade deals on its own with third countries, something not allowable to it as an EU member. The EU negotiates all trade deals on behalf of the bloc. Put it this way: The UK wants to cancel its club membership but it wants continued access to all the club’s facilities, while being free to ignore the rules committee. If you could get such membership terms at Mar-a-Lago it would be a deal of some art.

As she made clear in her letter to the EU, May wants negotiations on the metrics of the UK’s exit from the EU and on a future trade deal to run in parallel.

On Friday, March 31st, the EU gave its initial, draft response to the UK’s exit letter. The draft made it clear that the two negotiations, exit and trade, would run sequentially, not in parallel. Further, the trade negotiations would only commence when sufficient progress had been made on the exit deal, which needs to cover three items:

  1. A resolution of the UK’s ongoing financial obligations to the EU after it leaves. These obligations arise from commitments made by the EU, with the UK as a Think of it as a mortgage signed for by two people. Just because the relationship between the two comes to an end, it does not mean that one of the parties can simply walk away from their mortgage obligations.
  2. An agreement on the rights of EU citizens living in the UK and UK citizens living elsewhere in the
  3. The potential return of a “hard border” between the Republic of Ireland and Northern Ireland. This border will be the only land border between the EU and the UK after The reintroduction of a hard border, which all parties say they want to avoid, with police checks and custom controls, could have significant consequences for political processes on the island of Ireland.

The EU will refine its the mandate for its negotiators over the coming month. It will be finalised at a meeting of EU leaders at the end of April.

Given that it is the UK that is leaving the EU and not vice versa, the EU can be expected to have the upper hand in structuring the negotiations. If the EU wants the negotiations to be structured sequentially, then that is how it will be. The UK has limited leverage to force the EU to do otherwise. “Open talks on a trade deal now, or we are leaving”. “But you are leaving anyway.” Reminiscent of the hold-up artist who threatens to shoot himself if you do not hand over your wallet.

To make matters worse for the UK, it is negotiating against a deadline of two years from March 29th, a deadline which can only be extended if the 27 remaining members of the EU unanimously agree. If there is no deal by March 2019 then the UK crashes out of the EU on March 30th. In reality, the negotiations may not seriously kick-off until after the German elections in February. They will need to finish by October 2018 to allow sufficient time for ratification. A year to try and finalise a Rubik’s Cube negotiation.

Given these circumstances, it is not surprising that some calmer voices on both sides are suggesting that there will need to be a transition phase for some years, during which a number of the British objectives for Brexit (such as its wish to escape the jurisdiction of the CJEU) will not be achieved and some membership benefits will be retained for a period.

THE EXIT NEGOTIATIONS

Settling the Bills

The first major roadblock to a successful negotiation is the resolution of the UK’s ongoing financial obligations to the EU after it leaves. Those who campaigned for Brexit never mentioned such an obligation. On the contrary, they famously proclaimed that quitting the EU would save the UK

£350m a week which could be redirected to the National Health Service. Little has been heard about such a transfer since the vote. There are those in May’s Conservative Party who will reject any exit or ongoing payment to the EU. The will be egged on in this by the rabidly anti-EU tabloid press. May has a majority of less than 20 in the House of Commons. She will do all she can to avoid splitting the Conservative Party. Caught between the EU’s insistent demand that financial liabilities must be honoured and the rejectionist stance of the ultra-Brexiters in her own party, May’s negotiating margin on this issue is slim, if non-existent. Never underestimate the negative effect the ideological purity of a raucous, parliamentary minority can have on political negotiations. American readers can think Freedom Caucus.

While we noted earlier in this paper that the UK’s obligation are somewhat akin to a mortgage obligation. Of course there may be shared equity in the property that needs to be taken into account in calculating who owes what. But if, after doing that, an amount to be repaid remains then that obligation must be met.

Negotiations could come to a halt very quickly if a solution to the issue of financial liabilities cannot be found. If the UK refuses to honour what the EU sees as financial obligations on the part of the UK could the EU take the view that the process has come to an end? What would happen then? Article 50 states:

The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

This language suggests that the UK cannot be forced to leave the EU before the two year period ends. But what if the UK decided that there was no point in further negotiations and decided to go sooner rather than later?

Could Brexit become a reality long before March 2019?

Citizens Rights

While it might seem that it should be a straightforward matter to mutually agree the rights of EU citizens living in the UK and of UK citizens living in the EU this is far from the case. For a start, residency requirements for non-EU nationals differ across the 27 member states. (It is still 28, but we are counting the UK out). If a deal were done when would it start and how long would it last? Would an EU citizens living in the UK, or a UK citizen living in an EU member state, be free to have relatives join him or her? Would they have access to state benefits? What about health care? Pensions? If they buy property what rights have they got if the UK/EU deal is time limited?

The UK currently requires that EU citizens who have been in the UK for 5 years and qualify for permanent residency fill out an 82-page form, complete with copious supporting documentation, to have the right to residency confirmed. 20% of such applications are rejected, often for very minor reasons. The process seems designed to deter applications rather than facilitate them.

Officially, 300,000 UK citizens live in Spain. Some put the number nearer a million. Many are retired, living on a UK pension. They have already taken a hit because of the fall in the value of the pound against the euro since the Brexit vote. They are concerned, rightly, about their continued access to the Spanish medical system after Brexit. Today they can access that system on the same terms as a Spanish citizen, as a result of their EU citizenship. They will lose that access after Brexit. Will the UK be prepared to buy them access to the Spanish system? How much would that cost? The same applies to UK citizens living elsewhere in Europe, though the Spanish case is exceptional because of the number of retirees.

As always with any negotiation, the devil is in the detail. This is a matter of major importance for BEERG members. They have many EU employees in the UK and UK employees in the EU. We already know the uneasy that many of these employees are expressing to management about their futures. It is difficult to offer any reassurance when there are so many unknown unknowns. But we can listen to their concerns and let them know we understand and that we share these concerns.

Irish Borders

Post Brexit, the Republic of Ireland will be the only country to have a land border with the UK, the border between the Republic and Northern Ireland (until Scottish independence?) Ireland and the UK have long had a common travel area, without controls, whether between the Republic and Northern Ireland or the Republic and the UK mainland. No passports required. (Which is why Ireland never joined Schengen as it would have put the Ireland/UK travel zone at risk).

But, post-Brexit, Ireland will still be a member of the EU, with full freedom of movement between Ireland and other EU countries. The EU, conscious of the political risks involved, is anxious to ensure that there is no re-introduction of a hard border on the island of Ireland. But, the driving force behind Brexit is to enable the UK to control who crosses its borders. Logically, that means the UK may have to re-establish a border with Ireland. Now that does not much matter if you travel from Ireland to anywhere in the UK mainland. You’ll just have to queue up and show your passport. Like any other European. Assuming that the EU and the UK can negotiate a visa-free arrangement. Not necessarily guaranteed if the divorce goes hostile (see Settling the Bills above).

But the Republic/Northern Ireland is another matter. The politics are deep rooted in a bloody history. Within living memory. The disappearance of the border between the two parts of the small island played a significant role in bring a degree of peace and stability where before there was everyday violence.

Will Brexit see the return of a hard border between the Republic and Northern Ireland? Remember, Northern Ireland voted to remain in the EU, in no small part because it has been a significant beneficiary of EU largess. A majority in Northern Ireland sees its future in the EU. And now it is going to be dragged out of the EU by England. And have a border, with custom and police controls, between it and the Republic erected. The relative peace and stability that has developed since the Good Friday Agreement could all too easily be put at risk as old animosities re-emerge.

The difficulties of finding a solution to this problem should not be underestimated.

BEERG – April 3 2017

 

Article 50, Backstop, Brexit, British Government, Conservative Party, Irish border, Northern Ireland

There is No Good Way Forward on #Brexit

This blogpost was written on Saturday, Nov 17th, 2018

MichelBarnierDonladTuskBrexitDealDraftNov18_largeUK politicians are faced with an impossible decision. There is no point pretending otherwise or wishing it were otherwise. There is no good answer to the problems the UK has created for itself when it comes to Brexit and to its relationship with the European Union.

It all comes down to this. How can the UK government, any government and not just the current government, deliver on the Brexit promises to take back control of borders, law and money from the EU, while not damaging trade in goods and services between the UK and its biggest market? It simply can’t. There is no way to square this circle.

Imagine if, for example, Sweden decide to leave the EU. I pick Sweden because it, like the UK, is not a Eurozone member and so is not faced with the problem of untangling its currency with an EU exit. The main withdrawal issue facing Sweden would be fixing its financial obligations on departure, paying its fair share of what it agreed to as a member. Secondly, would be the rights of EU citizens living in Sweden and Swedish citizens living elsewhere in the EU. Probably not a major issue. ABBA would be welcome in Europe, anywhere, anytime.

The most important question to be resolved in the Withdrawal Agreement would be the “framework” for future economic relationship between Sweden and the EU. That “framework” would be identified and thrashed out after Sweden left the EU. No doubt, there would be a transition period because one thing we have learnt from Brexit is that it is impossible to go from being an EU member to a non-member overnight. Life is just too complex.

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Backstop, Brexit, British Government, Customs Union, Irish border, Northern Ireland

#Brexit – The Fast Fading Fantasies

This blogpost was written on Sunday Nov 11, 2018

jo johnson

Just when you think there cannot be any more twists and turns in the Brexit saga, along comes the resignation of Jo Johnson (Photo): Transport Minister in May’s government and Boris Johnson’s younger brother. Jo Johnson is not, and never was, an attention seeker. Instead, he was a sober, industrious member of the government who voted Remain in the 2016 referendum.

His devastating resignation statement frames the choice May intends to present to parliament as one between “vassalage”, obeying EU rules with no say in their adoption, or “chaos”, leaving the EU with no agreed terms. Rather than have parliament vote on these two unpalatable options he wants them, along with the option to remain in the EU, put to the people in another referendum.

If a centrist such as Jo Johnson is taking this position, then there must be many other centrist MPs who see things similarly. Will they break cover in the coming days? If we add the dozen or so already declared centrists who want another referendum to 20 or 30 Hard-Brexiteers and the 10 DUP votes, it becomes increasingly difficult to see May getting the Commons to vote for any deal she manages to bring back from Brussels.

That is, if she manages to bring back a deal.

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Brexit, British Government, Northern Ireland, Single Market, UK Labour Party

A Never Ending #Brexit

This blogpost was written on Sunday Nov 4th, 2018
The Prime Minister Meets DUP Leader At Downing Street
Prime Minister May with DUP leaders

It is Sunday and the weekend papers are awash with suggestions that the Brexit negotiators are close to a breakthrough. The Sunday Times reports, almost breathlessly, on “May’s Secret Brexit Deal”. RTE’s European editor, Tony Connelly reports it somewhat differently – and far more soberly.

As usual, the potential deal-breaker is the Irish backstop.

Apparently, what is now being discussed is that the while the whole of the UK would stay in a “bare bones”, temporary customs union with the EU, Northern Ireland (NI) would stay within the full EU customs code and the single market for goods. Regulatory checks would take place in factories and businesses away from the actual border. Instead of the border being down the middle of the Irish sea it might be somewhere in a factory in, say, Liverpool. But then Liverpool was always part of Ireland, really.

Were this deal to be finalised between the negotiators it is being suggested that it would allow UK Prime Minister, Theresa May, to argue that her redlines of no divisions within the UK have been respected and that the NI backstop would never have to be used in practice.

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Article 50, Brexit, British Government, Michel Barnier, Northern Ireland

Now Impossible to See How a UK/EU Deal on #Brexit is Doable

 This blogpost was written on Tuesday Oct 23rd, 2018

commons

After Theresa May’s statement yesterday to the House of Commons, it seems more likely than ever that we are heading for a no-deal Brexit. Fast.

May effectively repudiated Article 49, the so-called “Irish backstop”, in last December’s Joint Report from EU and UK negotiators to Europe’s political leaders. It was this report which allowed the Brexit talks to move on. The EU will not accept the UK reneging on a clear undertaking, especially as the UK is trying to leverage talks on the Irish backstop to force the pace on its future economic relationship with the EU. (For a full history of the backstop see Tony Connelly here).

Nothing destroys a negotiation more quickly than when one of the parties is seen by the other as acting in bad faith. Renege on a commitment and all trust is gone. May with her Commons statement might have seen off a simmering rebellion in the Tory party over her leadership, but at the cost of breaking faith with the EU.

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Article 50, Brexit, British Government, Irish border, Northern Ireland

#Brexit and the Politics of Hard Numbers

This blog was written on Aug 26, 2018.

Commons voteIn the end, democratic politics comes down to the brutality of numbers… of hard numbers. Either you have the votes to get measures through parliament or you don’t.

Politics is about being able to count. Ask the Australian politician Peter Dutton about hard numbers. Last Monday he believed he had the votes to oust the Prime Minister, Malcolm Turnbull, and take the top job himself. He had the votes, as they say in Australia to ‘spill’ Turnbull but lost to Scott Morrison when it came to the decision as to who would replace Turnbull. Dutton counted the wrong numbers.

For a great part of the past 100 years parliamentary majorities and party discipline generally gave UK governments the numbers they needed in the House of Commons.

But not when it comes to Brexit.

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