The Backstop – Interesting Times

November 15, 2018

November 16 – EU officials have said the Backstop is unalterable, which is to be expected, but both Michel Barnier and the Irish PM have been referring  to it , raising the possibility that someone has considered making an amendment to the text.

November 16 am – Good to see the FTSE remaining calm and positive while political events unfold. There will be a deal before Brexit.

November 15 – 4pm – In response to the suggestion about amending the Backstop, EU officials have said there is no room for manoeuvre, but a group of EU states are reportedly already seeking alteration to the draft document in fishing.

November 15 – 10.45am – Brexit – So lots of disappointment that the Government Red Line over the Backstop was not observed and a non-unilateral review mechanism is included in the Draft deal between the EU and the UK.

Perhaps we will be looking to Parliament now and the ERG group in various ways. Or perhaps some took the ‘collective’ decision hoping/believing it would be stopped in the Commons.  I thought it was usually a consensus in Cabinet i.e. that no-one hugely objected, perhaps the Brexiteer ministers were outvoted. If it is stopped in Parliament, perhaps the Backstop, which is the main issue, can be adapted. If the extended transition comes in for 6 months, any backstop thereafter is non-unilateral for another 6 months, if for 12 months, then any backstop is unilateral from the start. But don’t give up, UK or EU, if there’s a bit of a problem.

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Italy, the EU Commission ad the Eurozone

November 11, 2018

Nov 11 12noon – Perhaps the EU will consider an extension to the time limit on the Italian Budget so that the pressure is eased on the situation. And perhaps Italy will consider a tax etc stimulus package that is presently appropriate, but not overly ambitious for 2019, putting the social improvements into 2020. A breathing space would allow this to be negotiated. Italy is not Greece and there’s enough going on as it is.

The Extension to the Transition

October 19, 2018

November 6 – More thoughts on Daniel Hannan’s Trading Anglo Sphere – As this has considerable potential, it would be essential for the UK to honour its realistic legal financial liabilities to the EU in order to make it feasible. Yes, in theory a no-deal could mean no money paid over, but if the UK intends to go global, it needs its excellent reputation intact.

November 5 – Here we go again. A transition of 21 months, an extension to the transition of 3 to 6 months? and then a backstop of three months minimum with a withdrawal mechanism which cannot be unilateral. It’s a Gordian Knot!

November 4 – The Anglo sphere – I found Daniel Hannan’s piece in the Sunday Telegraph today very interesting. He has proposed an initial trading Anglo sphere of 9 countries including the UK, which would constitute a third of global GDP.

October 19 – I read Dominic Sandbrook’s ‘Calm down dears – the plan may work’ in the Mail today and was disappointed he did not refer to the Backstop, although he did point out that the EU were probably looking for a year’s extension and the UK apparently no more than a few months (six maximum?) The Backstop, however, was omitted as if it were no longer relevant and that if the UK agreed to an extension of the transition period, it would fade away. Have the EU actually agreed to this?

The Backstop

October 14, 2018

October 18 – Evidently it is now suggested that the UK end date for the Backstop should  transform into a year long extension of the implementation period, with the backstop still to come into effect after the 31st of December 2021. If there were an end in sight, then it might be bearable, but there isn’t, is there? It would be much better for everything to be in place by the 1st of January 2021, but it simply can’t be counted upon.

October 15 – The PM’s address to the Commons – The UK expected end date for the Backstop is the 31st December 2021, although it would be much better for everything to be in place by the 1st January 2021. That will be the target of both sides I imagine. Hopefully, this will be discussed on Wednesday at the Council meeting and the EU will acknowledge that having a date in place is a formidable catalyst for getting things done.

October 14 – membership of the EU Customs Union after Brexit with no end date and no say, would be unacceptable and will not be allowed to happen. Hasn’t the PM already said this.

The Markets

October 12, 2018

October 28 – expect sentiment to improve and the markets to rise above 7,000 tomorrow and stay there.

October 25 – The Markets have been rather unsettled lately, but geopolitically things are reasonable – Brexit has a good chance of being negotiated successfully, Italy and the Eurozone of compromising, perhaps with a a quid pro quo, the US tariff issue becoming more likely to be solved, and the Fed most likely to keep to the 3% for 2019.

October 12 – Pleased to see the Markets are rallying a little today and that there are reports the US and China are likely to hold meetings next month and that the ECB and the Eurozone are keeping a watchful eye on Italy, no policy particularly in play at present, but hopefully, prepared to be responsive if needed. The European Central Banks seem fairly placid for now and the Fed, having gone up, could if required, reduce later on.

US and UK and EU

October 2, 2018

October 3 – UK – Brexit – hope in the PM’s speech there is a layman’s explanation of why Chequers is justified in compromising UK sovereignty somewhat, as many reports say. Why it is necessary.

EU and Brexit – A gentle reminder it is only two weeks until the October Council Meeting. If the EU is going to make an offer, after today would be the time. Perhaps on borders, which would be appropriate to Chequers and to the Super Canada deal that others are bringing forward.

October 2 – Pleased that NAFTA was agreed and that the tariff issues are presently paused and on the UK, wonder if there will be a rebuttal to Boris’s speech. We have reached a vital point in the debate.

US Trade Initiatives

September 24, 2018

September 24 – Perhaps the US will pause now and assess the initiatives already taken.

Brexit – I like the IEA’s proposals on international trade, although I thought this was already happening to some degree. Perhaps the PM will run a extrapolated and enhanced CETA alongside Chequers, that could prove a workable compromise for now. Don’t think there will be an election later on, Yanis, and the Conservative party Conference will be satisfactory in the circumstances.

Thoughts on Brexit deal options

September 16, 2018

September 21 – Still hopeful there will be a satisfactory deal, the UK has to be seen to be exploring every avenue before a no-deal is the only option. With  reference to that, the PM rightly said that a basic CETA (Canada deal) would be unacceptable, but perhaps the EU will offer an upgraded one? They evidently like the idea of using the template of deals already forged. If this option is negotiable, it would be very helpful to know and if not, and Chequers is really not going to succeed, the way would be cleared for a no-deal option without unnecessary delay.

September 19 – Not sure about Peter Foster’s piece in The Telegraph today – Chequers or Corbyn. The PM said she would persevere throughout the Brexit process and if it does come to a no-deal scenario, which presently I doubt, there will be sufficient notice for the UK to add to the considerable measures already drawn up for such a contingency and set a date for their implementation; and for the EU to do the same. The no-deal scenario will be a well-cared for, if unlikely alternative.

September 16 – 11.35am Six months to go and there seem to be three options standing out from the others.

The Chequers deal would perhaps yield moderately more growth, but compromise sovereignty to some extent, which might in itself restrict UK global enterprise. A CETA type arrangement would need intensive negotiating to achieve an enhanced (Super) version, but doable within the time-scale and likely to bring the various schools of thought together; and a no-deal scenario would be less concerning than supposed because the EU and UK would manage its progress and ameliorate the downsides.

Hopefully the Informal Meeting of Council will hold thorough and informative discussions, which will prove reassuring and ease the uncertainty.

The Brexit Bill

September 8, 2018

Sept 8 – It was good to see Michel Barnier acknowledging the likelihood of the £39/40 billion being contingent on a satisfactory trade deal. I suggested this in mid July on Twitter and until now it has not been a possibility on the EU side. A similar step forward on the border issue would be very encouraging.

Sept 13 – Recently read David Campbell Bannerman’s article about a Super Canada deal in the Telegraph and found it interesting. What are the pros and cons? Later on this month,  Shanker Singham is reportedly bringing out a document on what an enhanced CETA (Canada Deal) would look like. It should prove enlightening. A plain CETA maybe not, but a ‘super’ one seems much more acceptable. The PM said she was looking for ideas from those opposing Chequers.

It was sensible for the EU to say nothing is agreed until everything is agreed, which supports what Michel Barnier has indicated regarding the financial settlement being contingent on a satisfactory trade deal.

Thoughts on Brexit and the October Council

September 2, 2018

September 2 – Hopefully the October Council will go well and a satisfactory deal will be confirmed, but should it not and the timescale slip into November without substantial progress, perhaps we will see M. Barnier saying he had done his best and handing over to a replacement EU Chief Negotiator. This would leave several months for the EU and the UK to make a big push and get a mutually satisfactory deal ratified. If this were not possible, the UK could say they had explored every avenue and a comprehensive deal was not achievable at this time. There are other alternatives of course, but this one does come to mind when looking at the continually shortening timescale.

Does Chequers fully allow global trade deals?