Edging Closer to a Brexit Deal (Might Even Be a Fair One)

-edited

Movement by the EU, by Boris Johnson, and most importantly by Ireland suggests a good chance of a reasonable deal.

Compromise Movements

  • Boris Johnson has had a series of good discussions with Ireland.
  • Out of the blue, Jean Claude Juncker gave an optimistic interview even to the point of scrapping the backstop.

Eurointelligence has an excellent discussion this morning on the political events. Emphasis is mine.

For a short moment last night, it appeared that the whole Brexit process was about to be solved. We don’t normally care much about interviews here at Eurointelligence, but Jean-Claude Juncker was well worth watching on Sophy Ridge's show on Sky News.

He confirmed that a deal is possible. He said no-deal was catastrophic also for the EU. He was very clear that a deal would be based on a single market for agrifoods, with borders checks away from the border. He said the backstop was not sacrosanct, only a means to an end. And he said that he works on the assumption that Brexit will happen.

It looks to us that we are moving towards a deal vs. no-deal scenario by the end of the month. The whole dispute currently unfolding about prorogation and the Benn legislation is very much a sideshow. We will report on the UK Supreme Court's ruling next week when it happens, but we are thinking the political process is much more important than procedure.

If a deal were agreed, we assume that the EU will agree to a demand by Boris Johnson to foreclose formally the option of an extension - except a short technical extension to make time for ratification. We have been arguing that the main loophole in the Benn bill is not procedural but political. The biggest loophole in the legislation is the European Council, whose operations are poorly understood in the UK, and not understood at all by the legal profession which obsesses with domestic procedure.

What would the UK parliament do? Would they try to test whether the EU is bluffing? This is quite possible, but that game is dangerous. They could vote against the deal, and the next day pass a vote of no confidence in Boris Johnson. But Johnson is at that point under no obligation to resign. Under the fixed-term parliament act, the parliament could pass a vote of confidence in another MP with a specific mandate to seek an extension for an election. But would they? Would the EU relent, having committed itself in a Council conclusion not to do so? We cannot answer these hypothetical questions, but note that this would be a risky course that might backfire on those who take it. Would that course of action really advance the election prospects of Jeremy Corbyn?

Maybe the answer to all these questions is Yes. Stranger things have already happened in the Brexit process. But time is playing against hardline Remainers. We also get a sense from Juncker's interview and other reports that the EU’s patience with the Remainer strategy is wearing thin. We think what tipped the balance was the EU’s gradual awareness of Labour’s policy that it would negotiate a deal only to allow Labour ministers to campaign against it. Labour obviously formulated this policy having not even consulted with the EU.

The big question is: could an agreed withdrawal agreement find a majority in the House of Commons? The math of this situation is the same as it always was. Johnson will need to get the DUP on board, quell his own rebellion, have a larger number of Labour MPs to support the deal. He can probably count on the group around Stephen Kinnock. Kinnock and Caroline Flint MP yesterday visited Michel Barnier to talk about the chance of a new deal. The hard-core group of Labour MPs in favour of a deal is around a dozen, but there may be up to 20 or 30 Labour MPs who could support a deal.

But we don’t think the Labour Party or the other opposition parties will come to Johnson’s rescue. The Remain campaign yesterday issued a dossier to warn Labour MPs against the right-wing policies that would follow a deal.

One possibility is that MPs might choose to abstain. In doing so they would still distance themselves from Johnson's deal, but without being accused of triggering no-deal.

What Happened?

  1. The EU now realizes Boris Johnson really wants a deal. Johnson may have been forced into that position by Parliament but that is the state of affairs.
  2. Boris Johnson, DUP, and Ireland are coming to terms on how to remove the backstop.
  3. The EU realizes the losses will not most be on the UK. Germany is outright scared as I stated from the beginning.
  4. The EU understands the Liberal Democrats will not win the election.
  5. The EU realizes that Boris Johnson is likely to win an election and the result will be No Deal unless it happens now.
  6. Labour's position of promising a referendum with a pledge to campaign against it makes no sense to the EU (or any reasonable person).

Point six was likely the last straw but point three is what forced the issue. Still, this was all a no-go without point two.

Fair Deal Increasingly Likely

Removal of the backstop is now a given. That's going to happen.

But the backstop is not the only odious thing. At a minimum, Johnson needs to insist on removal of language that puts the UK at the mercy of the European Court of Justice (ECJ).

Johnson also needs to strive for a Canada-style deal. This does not have to be resolved now, just the groundwork.

The closer he can come to that, the better things will be for both the EU and the UK.

Finally, and importantly, the EU needs to come up with a deal that Parliament will ratify.

If the EU wants a deal, it has to bend.

Juncker signals the EU really wants a deal.

Increasing Odds of a Deal

Yesterday I wrote Increasing Odds of a Bad Brexit Deal as Liberal Democrats Leap Ahead of Labour

That is still true.

But the odds of a fair deal have increased as well.

Thus, the odds of No Deal have fallen.

Ironic Setup

I told people for months the EU would deal if someone would back them into a corner.

Many thought I was nuts. I don't blame them but I have watched the EU in action for years and just like magic there is a compromise at the 11 hour.

That's what is happening now.

Here's the irony: The person backing the EU into a corner might not have been Boris Johnson, but rather Jeremy Corbyn running on the silly platform of promising a referendum and campaigning against it.

Remain is hopelessly split. The EU is not blind to that fact.

The EU was finally forced to consider this would drag on for years with the UK and the Brexit party disrupting European Parliament the whole time unless thew EU compromised or accepted no deal.

Not Over Yet

Many things can go wrong but the odds of a (both good and bad) are now rising.

Boris needs to negotiate carefully. The backstop is not the only issue.

Brexit Central discusses other issues Boris Johnson should beware resuscitating the ‘dead’ May deal – even if the EU agree to scrapping the backstop.

Binary Choice

Here's the final irony.

Theresa May struggled for two years to produce a binary choice option for Parliament.

We may now finally have one thanks to the Tory revolt and and crazy stance of Labour leader Jeremy Corbyn.

Johnson and the EU need to find a solution that can actually pass Parliament.

If things go to plan, Parliament will have to accept No Deal or whatever Johnson can work out.

Pressure is on both sides!

Which is precisely what it takes to get a fair deal.

Kiss Remain Goodbye

Kiss Remain goodbye, it is not in the binary choice.

Mike "Mish" Shedlock

Comments (43)
No. 1-15
Deep Purple
Deep Purple

So now the vision is that the EU will break the deadlock. It would be very convenient indeed. I have my doubts.

You tend to ignore everything Brussels says until they say something that is vaguely promising for Johnson. It suddenly matters then. The Benn Act was supposed to be a "surrender document" that prevents any deal. Now it is the opposite. No Deal is supposed to be a bump on the road but the Germans somehow fear it like flaming hell. Farage rejects anything based on the WA but he is of no importance anymore.

Too many steps are missing, to me at least.

Je'Ri
Je'Ri

Brussels is secretly wishing for a new election: It's the EU way, to keep the people voting until they vote correctly, but if they don't then the legislature needs to step up and be the adults who vote correctly. Mr. Johnson has indeed backed them into a corner, despite the treacherous crap-weasels who surround him in Westminster.

Onni4me
Onni4me

Yet to come:

  1. UK parliament agrees to a deal
  2. All EU members agree to a deal
  3. Everything goes smoothly

I doubt the 1. and 3. Number 2. is given is Germany and France agree. Wouldn't necessarily bet on Macron.

liberty lady
liberty lady

If a last minute deal can indeed be struck, Brussels could then rule out a further extension. Parliament would then be forced to vote in favour to prevent a No Deal.

Waileong
Waileong

No, they don't have to vote between deal or no deal. They can revoke article 50 if the EU will not extend.

Quenda
Quenda

I'm a bit clueless but to me it would seem to come down to whether or not the EU really wants the UK at this point and I sort of think they might not. So with that in mind I'd see it as a choice between revoking article 50 or the EU herding all British political parties into an agreement by the threat of a no deal exit.

Waileong
Waileong

Nice piece Mike. But I have a question. The EU knows parliament is desperate to avoid no deal and dominated by remainers. So why should they negotiate at all? Is it more logical for the EU to say, no extension even if asked, either take Mays deal or no deal at all, and watch the remainers revoke article 50?

Sechel
Sechel

Backstop is not for the EU, its for Ireland to avoid a flair-up of violence

we_will_be_Ok
we_will_be_Ok

Sure, sure... As we learned from Trump and China, there is no deal, until there is a deal. This reminds of the Trump-China seesaw (well-documented here).

Mish
Mish

Editor

  1. The EU can of course say no - but they really want a deal.
  2. I typically respect the opinions of Eurointelligence which wants Remain
  3. France is tired of this all - it could refuse to negotiate but ...
  4. The EU cannot control the UK election - Boris is the favorite
  5. I said all along that if Ireland comes on board, there is a good chance of a deal
  6. Ireland is coming on board
  7. The EU does not want to throw Ireland under the bus, but Ireland had to move first
  8. Parliament can insist on a deal but it does not get to decide the deal unless it boots Johnson but even then, there is no majority for any particular deal
  9. Everyone, both sides wants a resolution - They are sick of this - a long extension is not resolution - there is no support for Remain - A referendum could take a year of more - with an uncertain outcome. The election outcome is uncertain except that Lib Dems won't win
  10. We are back to a binary choice with everyone wanting a resolution and a majority against No Deal
  11. Add that all up and what do you get?

A deal of some sort - good or bad is to be determined. There is one alternative - No Deal

Remain and Referendums are not really on the table - I never wavered on this My expectations on No Deal have varied

No Deal is still very possible.

Mish
Mish

Editor

By the way, Avid Remainer, call me "idiot" one more time and I will delete everything you have written.

An apology now would be nice.

Mish
Mish

Editor

"The Remainers are more interested in remaining in Parliament than they are remaining in the EU. To revoke Article 50 would cost at least half of them their seats."

I believe Yancey is correct on that important point. But there are 11 ex-Tories who are willing to fall on the axe or resign in disgust.

Let's return to my observation 2 days ago. The number 1 concern of Swinson is not really to Remain, it is to do away with or win seats from labour and Remainer Tories.

This is what prevents Corbyn from becoming the temporary PM. Do the math: The 21 Tory revolts will not vote for Corbyn, nor will DUP, nor will the Lib Dems.

If Corbyn will go along with someone else, then there can be a Temp PM, but only if this happens before Oct 19.

Why? Johnson can run out the clock. Inside the 14 day window it is too late to force him out. He can refuse to resign. The Fixed Term Parliaments Act does not require Johnson to stand down.

Of course, there can be emergency legislation to change the Fixed Term Parliaments act. But the closer we get to Oct 31, the more likely it is Johnson wiill not stand down.

Prior to Oct 18, Johnson has no legal choice. But this of course depends on Parliament to agree to a caretaker.

Yes, this is a mess. That's why I am confident of little other than it will be the Binary Choice.

Referendum and Remain are not on the table. There are insufficient votes and a huge lack of time for a Referendum.

Once again, add it up and some sort of deal is possible if not probable, especially if the Deal Johnson comes up with stipulates no further extensions.

Johnson will not accept May's deal nor will he ask for an extension. Parliament can perhaps force May's deal but no one really wants that.

All that remains is : How good of a deal can Johnson negotiate?

It has to be good enough for Johnson to accept, the EU to accept, and Parliament to accept.

This forces compromises. Everywhere. Johnson's mission is to kill the backstop and the ECJ - That is the start of a "fair" deal for everyone

Expat
Expat

So, now what? Now you LIKE deals? I really don't understand your position other than to constantly hope the EU crawls at Britain's feet or collapses spontaneously. And now you suddenly claim that Johnson wanted a deal all along when you have been cheerleading for No Deal and claiming it would be the best solution. If the EU gives up on the backstop, that does not mean it will accept an open border. It may simply give up on the backstop and close the Irish border, just like the British claim they want. The EU, whatever your imagination might say about their level of patience with Remainers (are you so desperate to sustain your fantasy and delusion that you now imagine the EU is angry with Remainers?), has no incentive to give the UK any kind of "fair" (I can't recall if you ever traded anything, but who gives a rat's ass about "fair"...you take a deal or leave it..."fair" is for whiners) deal. A preferential deal would push other marginal members to renegotiate and tear apart the EU. While this is something you, as an American living in a US state which is part of a Federal union, might want for reasons which have no relationship to the reality of Europeans living in Europe, it's not what the EU wants.

Do you have a position? Or are you just flailing around like Johnson and hoping the EU ends up looking bad whatever the cost to Britain?

Alaric89
Alaric89

My view on the EU position is that they see no deal approaching. They think that it will badly damage the UK and they don't want to be blamed for it. So they keep saying that they want a deal so that if no deal happens, they can say that it is not their fault.

Regarding the impact of no deal on the EU, I have my doubts: I really can't see what EU companies are buying from the UK but couldn't buy from another country in the EU (it is just called switching supplier). And if there are a few things that can only be bought from the UK, it will still be possible to buy them (there will just be a delay at the border and a bit of taxes).

Also, people buying German cars in the UK would keep buying them, even with a bit of taxes and longer delivery times (you don't buy a Mercedes for the price). Overall, the UK represents less than 10% of other EU countries exports ; besides, after the Brexit, the UK will still need to import some supplies, and even if there is taxes, distance does matter in trades.

Bottom line: if there is no deal, the EU will not be hugely impacted, but the UK will be badly impacted. The EU doesn't want to be blamed for whatever happens to the UK so it pretends to be working to avoid it (but not really believing in it).

Only UK politicians and UK journalists are claiming that the EU is just as impacted as the UK by the Brexit. Just read newspapers from the US or from China if you want to have an external appreciation on this point.

Herkie
Herkie

To me it looks like the EU is trying to play good cop; bad cop with Johnson. A week ago Barnier was hitting every media stop he could find to say that Johnson was not negotiating in good faith. Yesterday he softened his stance a bit, but between he and Junker they look like the classic good/bad cops.

34 minutes ago Johnson lost the court decision that prorogue was illegal.
Barnier is claiming this is a huge relief.

The EU commission declined comment saying it was an internal matter for the UK WINK WINK NOD NOD!

But Mr Verhofstadt, the Brexit lead for the EU's elected legislature, goaded the prime minister over the decision.

"At least one big relief in the Brexit saga: the rule of law in the UK is alive and kicking. Parliaments should never be silenced in a real democracy," he said.

"I never want to hear Boris Johnson or any other Brexiteer say again that the European Union is undemocratic."

Where to now? We will see now just how chaotic Labour can actually get. And I am pretty sure the queen is not very happy to be made to look like an idiot who swallowed a lie from BJ, or else was biased and complicit with an unconstitutional move to shut down a "democratic" Parliament. Because those are the only two possible explanations for her approval of the prorogue.