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?