Disaster in Salzburg: Brexit Fog Lifts, Reveals More Fog

Eurointelligence says the fog over the English Channel is lifting as odds of "no-deal" rise.

The Independent says After Salzburg, Theresa May's Brexit Plans are in Shreds, and that a Norway or Canada Model is her only option.

> Theresa May looked shocked but should not really have been surprised by her humiliation at the EU’s summit in Salzburg. She was expecting warm words about her Chequers blueprint on future UK-EU relations, to give her political cover at home. British officials had naively talked up the prospects of going over the head of Michel Barnier, the European Commission’s chief negotiator, by appealing to the 27 EU nations’ leaders, and exploiting divisions among them.

> She could have lived with the EU’s original language on Wednesday night, that the Chequers plan would have to be “reworked”. But after she addressed her counterparts, they hardened it to a declaration that Chequers “will not work”. Britain’s hope that Germany’s Angela Merkel, worried about a no-deal exit, would inject more flexibility, proved another false dawn. Emmanuel Macron’s tough approach prevailed. “France won,” said one Brussels insider.

Five Problems

  1. The problem with the Canada plan is that it dumps Northern Ireland.
  2. The problem with the Norway plan is very few want such a customs union and it also requires freedom of movement which the UK will not allow.
  3. The EU offers no solution and demands absurd breakup fees.
  4. May insists on Chequers.
  5. May's opposition is circling, both left and right.

Despite the fact that the EU humiliated May, No 10 Says Cabinet 'Fully Behind' PM's Plan.

> May told ministers hers was the "only plan on the table" that secured the "frictionless trade" needed to avoid a hard border between Ireland and Northern Ireland.

> Former foreign secretary Boris Johnson said proposals put forward by the Institute for Economic Affairs on Monday showed there was an alternative to ending up as a vassal state with "colony status" through the Chequers route.

> The IEA, a free market think-tank, said Mrs May should change tack and pursue an advanced free trade agreement with the EU, with full reciprocal market access, no tariffs in goods including agriculture and maximum recognition of regulatory standards.

Fog is Lifting

It may not seem like it, but Eurointelligence says the fog is beginning to lift.

> There is a sense of satisfaction of sorts when a hugely confusing political situation begins to clear up. The morning fog over the English Channel has not lifted yet, but is beginning to.

> Salzburg could go down in history as one of the most disastrous EU summits ever, if it turns out to be the one which pushed Theresa May over the brink. May is now coming under domestic pressure to move towards the Canada option, which as we have pointed out before is not compatible either with the EU’s red line on Northern Ireland or with the British red line of avoiding a customs border inside the UK.

> According to a FAZ report this morning, Salzburg constituted a massive miscalculation on Donald Tusk's part. There was genuine surprise in some quarters in Brussels about the fierceness of the UK reaction to the summit.

> The single biggest diplomatic error during the summit in our view was Tusk’s wantonly aggressive Instagram posting, showing Theresa May at a cake trolley with a comment that there were no cherries to be picked. This was picked up by the Tories as an insult to the prime minister and the UK at large.

> By being seen to reject the Chequers plan outright, the EU has now manoeuvred itself into a position where it is under pressure to come up with its own Brexit proposal - for which we think it is far too late.

> Over the weekend, one of the newspapers carried a story that Number 10 was making preparations for a snap election if the House of Commons were to reject a withdrawal deal. We think that the more likely option today is for the talks to go well into the New Year with the UK confronting the EU with a take-it-or-leave-it option.

> The Telegraph reports in its coverage this morning that the Tories are preparing to align themselves behind a proposal to be published today by the Institute of Economic Affairs, a conservative think tank. The proposal is backed both by David Davis and Boris Johnson. It will argue that May should end the discussions, which she effectively already has, and accelerate trade talks with the rest of the world.

> Could the House of Commons still force a Norway option? In our view this is unlikely. There is no majority for Norway in the Tory party. The Telegraph calculates that, in the cabinet, a dozen members favour Canada and half a dozen favour Norway. That probably reflects the majority position in the party. Since neither the Tories nor Labour are committed to Norway, we see no chance for this.

> Our conclusion is therefore that the probability of a no-deal Brexit has risen strongly over the last five days.

Take it or Leave It

What's not clear is whether or not the EU believes May is serious.

If the EU does believe May is serious, then they are prepared for no deal.

More likely is that the EU will come back with some tweaks at the last minute that May might not be able to accept.

Clear as Mud

None of this seems particularly clear.

May is walking a fine line. In a BBC interview, May denied being humiliated. How realistic is that?

Nonetheless, since Chequers is her only option, she has to pretend as if that option is still on the table. Attacking the EU or Tusk will not achieve that end.

Will May Even Be Around?

On September 15, I noted a Labour claim that UK Prime Minister Theresa May Will Be Gone Before Christmas.

Today we learn preparations for snap elections are underway.

If May goes, the EU will not hang around for another Brexit vote.

So, yes, some fog has lifted, but it appears to have been replaced with more fog.

Best Possible Result

The best possible result for the UK is that everyone digs in and a hard Brexit takes place.

The UK could then take control of fishing rights, halt billions in absurd payments to the EU slush fund, and negotiate treaties with other countries as it see fit.

The world will see that life will be better after Brexit. And that is precisely what the EU fears.

Mike "Mish" Shedlock

Comments (9)
No. 1-5
ML1
ML1

Who is surprised that May's "let's wave a white flag to EU and agree to be shackled to EU directives and EU rules FOREVER and hope they smile at us nicely like good little poodles we are" plan did NOT work?

May has horrible advisors. May's Chequers Brexit plan which would have kept UK shackled to EU was written by former communist Olly Robbins.

Previously May had a Tory majority but was advised by her advisors to call early elections to increase the Tory majority. Then those same IDIOT advisors gave May an election plan that included cuts in pensions and cuts in benefits. Then all idiot advisors were surprised when May LOST the Tory majority and became a hostage to small Northern Ireland party called DUP.

Now Olly Robbins the communist May advisor wrote a stupid plan that would keep UK shackled to EU and expected the EU to be happy for this and the plan's stupidness was directly coming from the need to keep Ireland and Northern Ireland border open to please DUP and due to the fact that Olly Robbins has the innovativity of a garden gnome when it comes to policy he only thought the border could be kept open by keeping UK shackled to EU.

Macron and Merkel and Druncker and Donald "cherry" Tusk made a favor to UK by rejecting May's incompetent plan. Hopefully there will be a hard Brexit and trade will be on WTO rules and UK let's German and French taxpayers pay the extra 50 billion Euros to EU bureaucracy that EU wants.

UK will collect much more tariffs than UK companies will pay out. German manufacturers and French farmers will eat Merkel and Macron alive unless exports to UK work smoothly since they export so much so EU would have to be IDIOT to do anything to make trade with UK difficult so all the scaremongering about some UK factories not getting parts and holdups at customs are silly.

May needs to go unless she fires her communist advisor and starts planning for a NO DEAL Brexit.

ML1
ML1

May has HERSELF made the situation with Northern Ireland difficult because she thinks only customs border on Irish Sea that leaves Northern Ireland inside EU customs union would be the alternative to keeping UK shackled to EU.

This belief is due to policy innovativity of a garden gnome from May and her communist advisor Olly Robbins because they have NO creativity in solving the Northern Ireland peace agreement requirement of NO hard border between Ireland and Northern Ireland

There is a very simple solution: Get out of EU. Have a flexible customs system where large factories and companies have customs officials on site doing customs so no delays at the border. Have middle sized companies visit customs officials in their cities after self-reporting online so no delays at the border. Have small companies self-reporting and either visit some points on the border or in their home cities.

Have some spot checks in the border to ensure compliance.

Have ordinary people and small businesses have a 500 pounds or 500 euros customs free allowance so no need to declare and no need to pay anything. This will leave 95% of crossers crossing the border with no delay.

Ireland is also outside of Schengen like UK so there is no danger of criminals or asylum seeking opportunists coming through the Ireland- Northern Ireland border. If some polish plumber uses EU free movement to go to Ireland and then sneaks to Northern Ireland after UK has stopped free movement of people from EU this is not a big issue.

Also if there are some customs evasion at the border that is NOT a big issue.

May and Olly Robbins have made problems worse than they are in their heads and then gave as only solution shackling UK to EU forever...

ML1
ML1

As a further example of the TOTAL INCOMPETENCE of all Tory policy wonks advising May there is now rumours of May declaring ANOTHER snap election to strenghten her hand.

If May calls another snap election the most likely outcome is that the Tory majority (which May originally had and squandered in previous snap elections with incompetent election program) will not be achieved but most likely Tories will lose more seats and will NOT have majority even with DUP.

May is damaged goods politically and her advisors have been incompetent and for some reason May keeps getting new incompetent advisors like communist Olly Robbins so May is really bad at reading people and really really bad at seeing which policies are good ones.

May needs to go with internal Tory change of leadership and Brexit needs to happen by the current UK parliament with WTO rules unless EU wakes up.

If Macron and Merkel manage to destroy one of their biggest export markets in UK with some idiotic desire to punish UK or make an example of UK then most likely Macron and Merkel will be eaten alive by German industry and French farmers.

If French farm products do not reach UK markets quickly and without hassle then Macron will see lots of manure everywhere he goes in France. If German manufactured goods do not reach UK markets without hassle Merkel will have some German factory owners complaining to her every day.

UK has all the aces but May playes like she doesn't even know what an ace looks like. There is much more exports from EU to UK than exports from UK to EU.

Kinuachdrach
Kinuachdrach

The separatists should remember Professor Handy's Sigmoid Curve. Let's stipulate that separation from the EU will be good in the long run for the UK. Even so, per the Sigmoid Curve, in the short run there will be pain from leaving the EU. And the nearly half of Brits who voted against separation are going to scream bloody murder when the pain bites.

How much short-term pain there will be may be controlled to some extent by how smart the London Political Class can act. But based how they have behaved in the last few years, realistic expectations have to be low. That means the outcome of separation is going to be very hard to predict.

Maybe the Brits really should go for the Canada option -- see if Canada would accept them as a Canadian province on the wrong side of the Atlantic?

killben
killben

"The world will see that life will be better after Brexit. And that is precisely what the EU fears."

Yup! Imagine the countries that would make a beeline to the exit should Brexit end well.