Wednesday, October 25, 2017


"It is highly likely that the Brexit negotiations will fail, imposing an abrupt shock on the UK economy and ruining relations with its neighbours. This view is condemned by those who insist we must be more positive. That is like advising someone who has just jumped off a building that, if only he thought positively, he could fly. To understand the state we are now in we need to understand the zombie ideas that hold so many Brexiters in their grip. The first such idea is that the EU is being unreasonable in insisting that the broad terms of the divorce (if not the details) are settled before moving on to transitional arrangements. David Davis, who is in charge of the negotiations for the UK, complained to the House of Commons that “they are using time pressure to see if they can get more money out of us. Bluntly that’s what is going on — it’s obvious to anybody.” Indeed, it is. Stop complaining: that is what strong parties do. A linked zombie idea is that the UK is really in a stronger position than the EU, because it runs a trade deficit with it. But, even in goods, UK exports to the EU are three times more important to the UK’s economy than vice versa (7.5 per cent of gross domestic product against 2.5 per cent). Even without the UK, the EU remains the second-largest economy in the world, with an economy almost six times bigger, at market prices, in 2016. The UK is negotiating with an economic superpower. How does that feel? Just ask the Canadians, now negotiating with the US over the North American Free Trade Agreement".
Martin Wolf, "Zombie ideas about Brexit that refuse to die". The Financial Times. 19 October 2017, in
"Even “no deal” would not mean no trade with EU countries. We have lots of options – even without a formal trade deal with the EU. Business, industry, and people’s livelihoods are at stake here, but unfortunately this bunch do not seem to care about any of this. They care just about making ridiculous headlines. The latest comments from Tusk come on the heels of the European Council summit, where it seemed tentative steps were made towards progressing negotiations onto trade talks. Now we have the use of words like defeat and victory, which have been studiously avoided in negotiations so far. This inflammatory and contradictory language displays just how fickle the EU leaders can be – and how far negotiations have to go. There is plenty of time for EU leaders to delay and frustrate these talks and return to their more usual belligerent tone. The EU needs to stop playing games with the livelihoods of millions on either side of the Channel. Unless the EU gets real’, they risk creating a no deal scenario which will do far more damage to them than to us".
Jayne Adye, "The EU must stop playing games over Brexit". Reaction. 24 October 2017, in
The chief economics commentator of the Financial Times, Mr. Martin Wolf is of course correct. And the egregiously naive or ill-informed Mrs. Adye is incorrect in assuming that (in her words): "a no deal scenario...will do far more damage to them [the European Union] than to us" 1. As Mr. Wolf cogently and ably points out, the statistics clearly show that the United Kingdom depends three-times as much on trade with the European Union than the European Union does with the United Kingdom. Already there have been plenty of noises coming out from the big Banks and other large companies who use their UK businesses as a platform to export to the rest of the European Union, that sans some sort of mutually agreed road map in place by no later than late this year or early next (say April 2018), then these businesses will commence making plans to move operations out of the United Kingdom rather than take the risk of a 'hard Brexit' or a no-deal Brexit occurring 2. As the pro-Brexit, but realistic Spectator columnist James Forsyth recently commented: "The EU knows that time is on its side. The two-year Article 50 clock strengthen its hand so it is happy to see it tick down" 3. The fact of the matter is that unless and until Prime Minister May makes a firm decision to seek the very best agreement with Brussels that will inevitably involve compromises that not everyone will like in her party, then there is a great risk of there not being an agreement in time to meet the deadline of the end of March 2019. And leave no doubt, for that deadline to be anywhere near approaching without the United Kingdom securing an agreement with the European Union will result in a catastrophic economic slide in the United Kingdom economy, based merely on the uncertainty. The fact is as the commentator Allan Massie recently & correctly noted:
"Mrs May became Prime Minister for an honourable reason : the Queen’s Government must be carried on. It may be also that she is, honourably again, attempting to secure a compromise: a soft Brexit which will enable us to retain many of the advantages of membership of the EU while freeing us of some of the unwelcome burdens. Such a compromise might well be in the national interest, but it will not satisfy the nationalist zealots. She cannot however draw back because even to hint at doing so would inflame the passions of those who believed that “Leave means Leave”. Yet to satisfy these passions and make the clean break – taking the “No Deal” option – will leave the 48 percent who voted Remain variously dismayed, aggrieved and angry. The truth is that there is no General Will. No outcome will please everybody. Every outcome will be felt as a betrayal by millions. We cannot go back to where we were before the politicians supinely chose not to abide by the principles of representative democracy and surrendered their judgement to the people who had elected them to exercise that judgement. So we are in a mess, confusion worse confounded. The best we can hope for is a very British fudge, a Brexit that satisfies nobody, but one that fools most of the people long enough to allow passions to subside 4."
A 'very British fudge' will be infinitely better than a no-deal or hard Brexit. That is a mere fact of life.
1. Jayne Adye, op. cit.
2. See a statement last week from Goldman Sachs chief Lloyd Blankfein, in: Martin Arnold & George Packard, "Blankfein heaps pressure on May over Brexit as he praises Frankfurt". The Financial Times. 19 October 2017, in
3.James Forsyth, "The plots thicken". The Spectator. 14 October 2017, in
4. Allan Massie, "A Brexit to please nobody". Reaction. 25 November 2017, in


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