Monday 11 December 2017

BREXIT 'DEAL' NOTHING BUT BELGIAN FUDGE.

Is Teresa May a saint or sinner ? It's hard to tell from the assorted stories now emerging about the supposed 'deal' reached between the UK and EU last week.

In truth, it seems likely that the 'deal' was little more than a political fudge, capable of being interpreted according to the prejudices of the reader. Agreement over the Irish border question, a problem which would almost certainly be on a par with the 19th century's 'Schleswig-Holstein Question' in its incomprehensibility, is absolute according to Irish politicians but not according to the UK's Brexit minister, David Davis. The UK has agreed to cough up something like £37bn according to some but more or less according to others; the rights of EU citizens living in the UK, and UK citizens living in the EU have been protected or are still open to debate even though some nebulous nonsense has been agreed. As has been said by some, 'Nothing is agreed until all is agreed', so what is really going on ?

Both the UK and EU were actually desperate for an apparent agreement on Phase 1 of the Brexit negotiations to enable progress to Phase 2, the all-important trade negotiations. Consequently, both sides had an interest in being able to present some sort, indeed any sort, of deal last week and the fudge was the best that could be found (keep in mind that the Belgians do make excellent fudge !). Whatever the rhetoric spouted by the representatives of either side, the only thing that really matters to the makers of German, French and Italian cars, French, Italian, Spanish and German wines, French cheeses, Italian and Greek olive oil and lots more, plus the owners of hotels across the continent, the Spanish, Italian and Greek holiday industries and the purveyors of vast quantities of meat and vegetable produce across the continent, is a trade agreement that avoids disruption and potentially catastrophic effects on their livelihoods.

The UK has an enormous trade deficit with the EU, that is the UK buys much more from EU member countries than it sells to them. Ergo, the EU has a huge vested interest in maintaining a good trade relationship with the UK though it also wants to discourage other states from thinking of having their own exit plans - Grexit, Spexit, Frexit are simply out of the question. Therefore, the EU's negotiators have been making all manner of unfriendly noises towards the UK while secretly knowing that the UK has a much stronger hand than is publicly stated; perversely, the UK's government appears to have also followed this line, "Why ?" is a major question that no one seems willing to address.
 
The good news is that talks will now move on to trade, the bad news is that progress is likely to be every bit as tortuous as before, with much huffing and puffing, much rhetoric and little substance until, that is, we reach the point at which a deal must be done for fear of there being no deal; that, of course, is a scenario that the EU dreads above all else. The UK simply needs to hold its nerve and it will get the deal it wants. The question is whether it has the stomach for the fight.

Ding-Ding : Seconds Out, Round 2 !


Btw, the 'Schleswig-Holstein Question' was about the complex relationship between 2 European duchies to the governments of Denmark and Germany. The one-time British Prime Minister, Lord Palmerston, was reported to have commented : "The Schleswig-Holstein question is so complicated, only three men in Europe have ever understood it. One was Prince Albert, who is dead, The second was a  German professor who became mad. I am the third and I have forgotten all about it" 

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