Time Running Out for Brexit Deal and That's a Good Thing

There is still no Brexit deal and if there isn't one soon, the world will not end.

At 11 PM local time on March 29 2019, the UK is scheduled to leave the bloc. A deal is still not in place.

Preparing for a No-Deal Brexit

Eurointelligence has an interesting take called Preparing for a No-Deal Brexit Between Friends

The truth is there are simply no newsworthy Brexit developments. The reason is that, as of now, there is still no majority for a deal.

So let us focus instead on smaller pieces of the puzzle that might become relevant later.

One of those was a small item in the Financial Times from the Hauts-de-France region in Northern France, whose president is demanding a constructive attitude by the EU in the case of a no-deal Brexit. Expect to hear more of this as we approach the Brexit deadline. If the EU plays it tough to the bitter end, not only Hauts-de-France will be clobbered along with the UK.

The EU could in theory turn a no-deal exit into a de-facto blockade of the UK. But a far more likely scenario would be a no-deal Brexit accompanied by a multitude of mini-deals to keep goods and people flowing for a short transitional period (not to be confused with the 21-month transitional period now under discussion in the Brexit negotiations).

The simple reason is that this would be in the best interest of the regions of northern France, Belgium, the Netherlands and parts of Germany, all of which are very keen to keep the disturbance to their economies to a minimum.

The FT has interviewed the president of Hauts-de-France, who wants a no-deal transition until the French and UK governments have a border infrastructure in place to guarantee orderly flows. He has calculated that an extra clearance time of just two minutes per truck would produce vast queues on both sides of the channel.

The trucks, companies and factories that will be blocked will be those of the north of France, the whole of France and Germany."

The Cards

As I stated all along the EU does not hold all the cards.

If anything, the UK has stronger cards because the UK is Germany's biggest export partner.

Now, even France is showing concerns. Solidarity was a big bluff all along by the EU.

Moreover, the longer the delays in reaching a deal, the more likely there is no deal.

Why?

Because of all the preparations both sides must make for a no-deal scenario. The more preparations that are in place, the less scary a no-deal Brexit becomes.

There still may be a deal, but it would take a concerted and foolish effort by Theresa May.

The best scenario is a series of mini-deals.

According to Eurointelligence, Philip Hammond reiterated yesterday that the UK would pay its exit bill, or parts of it, even in case of a no-deal. This is a sign of the willingness to agree if needed a no-deal type of deal.

Four Options

  1. Pay part of the Brexit Bill and get significant concessions from the EU in a series of mini-deals.
  2. Pay none of the Brexit Bill, close fishing right, etc, and keep the money with repercussions.
  3. Cave in further to EU demands in return for some kludge on Ireland.
  4. Prolong the agony

I did not list another vote because it's not going to happen.

It is unclear if either the EU or the Tories would accept number four. An attempt by May to enter a prolonged Brexit period could bring down her government. And prolonging the agony still does not solve the Irish border problem.

For the most part, Theresa May has done number three, but it still has not solved the Irish problem because the EU hasn't budged.

Other than to ignore the Irish border, which I propose in the even of no carve-out, there is no realistic solution.

Theresa May wants a deal.

She would be better off with a hard Brexit and a series of mini-deals now that Germany and France are finally scared of the consequences.

Mike "Mish" Shedlock

Comments
No. 1-6
frozeninthenorth
frozeninthenorth

I'm always amazed that those who are for the no deal Brexit think that all this will be easy and simple. That "mini-deals" are the solution. Sure, but it takes time to get these things done, and invariably people (and companies) can suffer irreparable damage.

Trade (in goods or services) are complicated

Kinuachdrach
Kinuachdrach

Bored with Brexit. What all those Little Englanders lined up on the White Cliffs of Dover with pikes in their hands ready to ward off Johnny Foreigner have forgotten is that, once separation takes place, they will be left to the tender mercies of the likes of May or someone like Blair or Brown. The Brits real problem was never with the EU – it has always been with their own incompetent Political Class.

Once they stumble into separation, then the Brits will have to face the problem that current polling shows the majority now want to stay in the EU. That is the problem with making big changes based on very narrow majorities. Since there will inevitably be a short term hit to the UK economy following separation, the situation there could turn nasty. Fortunately, the UK is no longer globally significant, so the damage will be limited.

gregggg
gregggg

Britain was saved by the 100% EU 27 vote requirement. What a comedy.

27CAV8R
27CAV8R

"...a concerted and foolish effort by Theresa May." Stand by......

JL1
JL1

There is NO Irish border problem since both Ireland and UK want to keep the Ireland- Northern Ireland border open and since Ireland is also out of the Schengen free movement area so there is ID checks before coming to Ireland like coming to UK from the rest of Europe so there will NOT be hordes of migrants coming through that border.

UK should tell EU that there are NO further EU payments and that Merkel and Macron and German and French taxpayers can pay that 40 billion UK was supposed to pay to EU.

Germany (mainly manufactured products and cars) and France (mainly wines, cheeses and other agricultural products) export much more to UK than UK exports to them so Merkel and Macron will be making a political suicide if they make exports to UK difficult for German industry and French farmers.

If the exports will be under WTO rules UK will collect so much money from tariffs that the UK government can pay all the tariffs for UK companies that export to EU and still have lots of extra funds.

May is totally INCOMPETENT to even be in the situation fighting problems she herself has caused herself by her incompetent negotiation style of waving the white flag and inept plans by ex-communist Olly Robbins that May has taken as gospel and only choice.

The cost of having NO customs controls on Ireland- Northern Ireland border will be LESS than the plans by May to pay 40 billion to EU and chain UK to EU rules and directives permanently.

If one wants to collect customs on that border it can be done through mandatory self-reporting customs for companies and just have some spot checks at the border or after the border.

Individuals should be given a customs free allowance of 500 pounds or 750 euros so individuals need not be bothered at all.

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