Boris Johnson Throws Down the Gauntlet: No Backstop, Not Even Temporary

-edited

Boris Johnson laid down the ground rules for discussion with the EU. The EU says it won't accept them.

On Thursday Boris Johnson threw down the gauntlet with a call for the total abolition of the backstop. He also said the Government was “turbocharging” preparations for a no-deal break on 
Oct 31 if the EU refused to engage.

The Telegraph asks Will the EU blink first as pressure builds towards 'no deal'?

At a stroke, Mr Johnson appeared to sweep away the camp, nominally led by the Attorney-General Geoffrey Cox, that still believed that with a tweak - perhaps a time-limit or a unilateral exit-mechanism - the backstop could be rendered acceptable.

Not only did he announce the Irish backstop must be abolished, but he went further, turning the tables to set conditions for any future talks with the European Union.

EU diplomats and officials in Brussels have been clear that this will not happen, even if that puts the UK and EU on a collision course towards ‘no deal’ over the apparently intractable problem of the Irish border.

It is a wearingly familiar argument. Mr Johnson contends that the entire UK should be able to leave the EU customs union and single market while preserving a status quo border in Ireland.

The question now, is who will blink first as pressure builds towards an impending ‘no deal’ in the autumn?

Diplomats and officials were clear on Thursday that Mr Johnson’s statement, taken together with his decision to purge the Cabinet of all forces of compromise, could only be explained by a desire to create the conditions for an election.

The only question in European minds is whether that election comes as a result of Parliament blocking ‘no deal’ - and Mr Johnson being forced to request an extension to Article 50 - or after a ‘no deal’ has already happened. 

Perhaps No One Blinks

Without a doubt, Johnson laid the groundwork for an early election.

But the notion Johnson will seek and extension other than for a week or so tie up loose ends in preparation of no deal seems silly. Also silly is the notion parliament will block no deal.

Parliament has no such power other than to force an election. And it's now likely too late to force an election in time to kill Brexit.

Besides, with Labour splintered, it's likely Johnson will achieve a strong working majority in the next election.

Meanwhile, as long as both sides believe the other side will blink, neither will.

It may take a crippling recession in the EU before it comes to its senses.

Germany, EU exporters in general, will get crushed in the event of no deal.

Mike "Mish" Shedlock

Comments (38)
No. 1-9
BlockchainBob
BlockchainBob

Since the Fed balance sheet still shows $2 to $4 Trillion in excess reserves, is there any need for interbank lending in 2010? Also, do all banks have excess reserves in 2019?
Is there any inter bank lending going on in 2019? (I ask because I don't know and I am not trying to make a point.)

Greggg
Greggg

The only thing the EU has to offer its members is a financial dumpster fire. Take, take, take.

Casual_Observer
Casual_Observer

There is likely a global recession and maybe global war in 2020. Whatever happens will be unpredictable from there.

we_will_be_Ok
we_will_be_Ok

Exiting is the easy part, then what? Sure, UK will regain sovereignty from the EU, does not mean it would be able to keep it for long, it may just lose it to the US. Trump won't let Boris to get a lopsided deal --- unleash tariffs on Stilton and British cars. Here's Boris' speech excerpts with some commentary:

"Leaving the EU is a massive economic opportunity - to do the things we’ve not been allowed to do for decades, to rid ourselves of bureaucratic red tape, create jobs, untangle the creativity and innovation for which Britain is famous."

-- sure blame the EU for your own failings, when after Brexit things don't work out, will Boris blame the EU again for 'hard' exit?

"And we do not need to wait to start preparing to seize the benefits of that project. So we will begin right away to create the free ports that will generate thousands of high-skilled jobs - and revitalise some of the poorest parts of our country."

-- 'free ports'? Why aren't they free now? Does he mean 'free economic zones', what for and with who?

"We will begin right away on working to change the tax rules to provide extra incentives to invest in capital and research. We will double down on our investment in R&D, we will accelerate the talks on those free trade deals"

-- free trade deals with what countries? Cross out EU (major trading partner now), China (Jeremy Hunt just pissed off China over Hong Kong; major partner) and potential major partners such as Russia. What's left is the US, and see above.

I am pretty sure that Boris Johnson is a fine statesman and understands the problems. But why should we care about any of this in the US?

avidremainer
avidremainer

Johnson says he will get a deal with the EU before 31 October. His opening gambit is to tell the EU that he will not talk to the EU unless they drop the backstop. What a dipstick! Your choice Mr Johnson you want a deal but you don't want to honour a deal made in good faith with the previous administration. Johnson is guaranteeing a no deal Brexit. As to why the US should be bothered well if everything goes tits-up in Europe do you really think that the US will not be affected?

Carlos_
Carlos_

So no really surprise that Mish wants a hard Brexit. After all his hate for the EU is well known. So I ask how is he going to solve this.. https://www.bbc.com/news/world-europe-49141172 In other words this is my take on hard Brexit Ireland pushes for unification and hard border with GB lets hope without bloodshed https://www.theguardian.com/politics/2019/jul/28/support-no-deal-brexit-scottish-ruth-davidson-boris-johnson Scotland calls for a new referendum to leave the UK and makes it.

So at the end hard Brexit gets you GB under WTO. I would love to see them negotiate any treat with the US that is any good for them. IMO first thing Trump will ask is the NHS to be sold to american interests. So at the end GB will no longer be under EU where at least they have a voice just to become a US colony talking about role reversal...

Yancey_Ward
Yancey_Ward

Mish, as you might remember, I have long been skeptical that the British government would ever implement the results of the referendum. However, reading these new stories and the comments in this thread, I have now judged that no-deal Brexit is coming. The Remainer faction has now jumped the shark so to speak. The Remainer comments in this thread are at peak craziness- I take this as a good sign.

PatchesRips
PatchesRips

"Germany, EU exporters in general, will get crushed in the event of no deal."

Oh, good God, Mish; can you hear us all the way back in there in 2016? I hate to tell you this, but here in the future, the German car manufacturers did NOT rise and crack the whip and come charging over the hill like the US Cavalry to save the British from their own stupidity. It turned out that they, and almost everyone else in the EU, would rather take the hit of diminished British business than see the Single Market begin to be unraveled. Yes, that's right... British trade, it turned out, was really NOT the be-all and end-all of the European Union; that vastly more trade goes on that doesn't involve them than does, and THAT is where the interests of the Union, right on down to German carmakers, actually lies. Come November 1st, they will still have dozens and dozens of countries they can still sell their cars to, and eventually those markets can, and will, take up the slack for the percentage of cars priced out of range in Britain... and they know that. But where are the British going to sell THEIR cars, or anything else, when come November 1st, every country on Earth has to raise WTO tariff barriers on pretty much everything Britain wants to export to them? Do you understand how this works? By disconnecting from the EU, Britain has in effect decided to isolate itself from pretty much the rest of humanity, an be a tiny island of 65 million people who have no free trade ties with pretty much anyone else on Earth. And it's going to take YEARS, literal years, for Britain to come anywhere near the kind of global access it enjoys RIGHT NOW, this very minute, as an EU member. Britain is about to become a horror show that the rest of humanity to can sit back and watch, munching popcorn and shaking its collective head. It's going to be brutal, and ugly, and it's going to go on for a generation or more. And the saddest thing of all is going to be that it was totally, utterly unnecessary, and that they did it to themselves.

msurkan
msurkan

There is no chance the EU will agree to remove the backstop so I guess we’ll just have to see if the British political class is willing to carry through on a no deal outcome. Never forget that a prosperous post Brexit UK is an existential threat the EU will never allow. Thus, the EU will NEVER agree to Brexit that allows the cessation of EU sovereignty over UK law while granting free trade at the same time.

I guess we’ll just have to see how successful the new PM will be in getting a parliament with a majority of members who support Remain to allow a no deal outcome. Without a new election that increases the number of Leave oriented MPs the currently constituted parliament will stymie any PM who attempts to allow a no deal outcome.