Even though the Good Friday/Easter weekend is coming up and Brexit matters are thus in low gear, the UK still seems stuck in its pattern of confusing motion with progress.
A short list of updates:
Labour-Tory talks still going nowhere. I’m not sure it would be progress even if the negotiations were going somewhere, since Labour’s Brexit scheme is awfully unicorn-y (wanting a customs union that has pretty much all the goodies of the Single Market without having Single Market obligations). But independent of the substantive difference, it’s not clear that the Tories have incentives to compromise now, given the upcoming municipal council election. The party is already looking plenty battered. Why give Labour another talking point that will give loyal Conservatives another reason to stay home?
More Tory plotting to oust May. May has stared down so many coup attempts that she likely has a food taster. Nevertheless, as always, the noise is this time they really will get her. And in fairness, there has been so much wolf-crying that it would be too easy to dismiss the scheme that finally does May in.
The state of play, per the Telegraph:
Grassroots Tories believe they are just weeks away from triggering a little-known process that could help to bring down Theresa May.
Party chairmen are circulating a petition calling for the party’s National Convention, which represents the grassroots, to call an Extraordinary General Meeting to pass a vote of no confidence in Mrs May, the Tory leader.
If the petition motion is signed by more than 65 association chairmen, the party is obliged to hold the meeting. So far between 40 and 50 party chairmen have signed it, and the threshold could be passed as early as next week.
The wee problem is that even if this move succeeded, it would not remove May as Prime Minister, just as party leader. My understanding is there have been Prime Ministers who have not been the heads of their party. So this move would fall in the category of further reducing her authority…when it’s hard to see how driving her lower from her diminished position would make much difference.
Voter positions on Brexit largely entrenched. Admittedly, this item comes from a study written up in Politics.co.uk, but it’s a large scale conducted by academics who asked many of the same questions in earlier surveys.
Hard Remainers and hard Leavers have not changed their minds. There does however seem a shift in sentiment among Left Wing Leavers with a quarter them now ranking Remain as their top preference and also among Sovereignty Remainers. Leave voters who have changed their minds mostly voted Labour in 2017 while changing Remain voters mostly voted Conservative. This means that as Labour has become more Remain, the Conservatives have become more Leave.
But are voters still changing their minds? Not really. Last September, we asked people how they would vote in a new referendum. Back then, just over 80% of Sovereignty Liberals and 70% of Conservative Remainers said they would vote Remain again, while 20% of Left-Wing Leavers had changed their minds and would now vote Remain. Overall, the numbers now are pretty similar. While Left Wing Leavers now seem slightly keener on Remain, and Sovereignty Remain voters seem to prefer some kind of Brexit deal, there hasn’t really been a significant shift in sentiment.
Note I have trouble reconciling the text of the article with this chart, which shows the hard and near-hard Leave factions to outnumber the hard and near-hard Remain cohorts:
And we have this mess:
Following the repeated failures of Theresa May’s withdrawal agreement to gain a majority in the Commons, many have advocated a softer Brexit as the best compromise outcome. These range from a permanent customs union to the Common Market 2.0 proposal. But only 13% ranked a Softer Brexit as their number one option. Left Wing Leave voters were the only cluster to prefer Softer Brexit in significant numbers, with 27% of them ranking it top.
Nevertheless, Softer Brexit was very popular as a second-choice option across the voter types. Indeed, a majority of all voters ranked it second. Using an established ranked voting method, it was the overall population ranked voting winner. This is because Remainers strongly reject No Deal and Leavers strongly reject Remain. Remain voters also influence the ranking more than Leavers because they are more united in their rankings than Leave voters and heavily wanted Softer Brexit as their 2nd choice. Leave voters tend to prefer the withdrawal agreement to Softer Brexit.
Given how “first past the poll” thinking is so deeply ingrained in UK politics, it’s hard to see how to arrive at a consensus on a second-best option for most voters. And on top of that, “softer Brexit” is a unicorn-rich zone, so there’s a large risk that even if the pols were able to agree on something, that something might not be on offer from the EU. Richard North didn’t need a big poll to come to the same conclusion:
Therefore, much as we need a plan for Brexit, with the nation uniting behind it, this is not going to happen. Even if the system was capable of generating a plan which had a scintilla of credibility, the majority would oppose it. In this nation of ours, the idea of a national plan is neither a practical nor political reality.
Germany making tough noises about “no further extension.” Mind you, I don’t believe this until Merkel starts making similar noises, and even then, I’d have doubts, since Merkel is a cautious politician who prefers incremental moves whenever possible. But it could be that by October, enough things have changed that the EU decides that continuing to drag Brexit out is just too costly. Perhaps the EU Parliament elections look like a validation of Macron. Perhaps Barnier’s successor is less conciliatory towards the UK. But change on the EU side could just as easily strengthen the tendency to engage in neverending extensions.
Germany’s foreign minister has warned London that there will be no Brexit extension beyond October, sending out the strongest signal yet that Berlin’s patience with the UK’s deadlocked political system is starting to wear out.
“They will have to decide what they want by October,” Heiko Maas told the Financial Times in an interview. “You cannot drag out Brexit for a decade.”
Angela Merkel, German chancellor, fought hard to secure a six-month Brexit delay at last week’s European summit against French insistence that the UK should be given at most until the end of June to secure an orderly withdrawal from the EU. Mr Maas’s intervention suggests that Berlin will side with the harder French line should the new Brexit deadline of October 31 draw closer without progress on the UK side.
He also cautioned British leaders that an appeal for a further Brexit delay would be read as a plea to remain in the EU: “Another extension could send the signal that they plan to stay in the EU after all.”
Now this comment could reflect the fact that some Europeans allowed themselves to believe the Corbyn-May talks might get somewhere, when anyone who knew UK politics would see that odds of that happening as very remote. Or this could be more messaging to encourage the Remain faction.
So expect another confused next six months. And May seems likely to still be nominally in charge.
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And in the meantime the costs are rising:
https://truepublica.org.uk/united-kingdom/brexit-the-truth-about-the-economy-and-whats-next/
and will reach:
which might be a low estimate considering the above.
Thank you, Peter.
I have heard from number crunchers at three City firms, two foreign and one local, estimate at 10% by the 10th anniversary of the referendum.
Has the pain been shared equally or is it mostly the wealthy and the financial sectors that are paying this time?
you’re joking, right?
Yeah, but it’d be safe to say that certain types of wealth are more exposed than others(?), in such a scenario the economically weak aren’t necessarily the only ones who are weakly positioned, someone has to lose in a short trade.
Vlade, I know that normally that question would be a joke, but all I hear about is the Continent trying to pick off pieces of the UK’s financial sector with only a few major manufacturing jobs lost in an already depleted manufacturing sector. Meanwhile, I don’t think austerity has increased during this time though it surely will if Brexit turns into a catastrophe.
So, as of right now, April 2019, I wonder if the estimated 2% loss of GDP isn’t primarily in the financial sector.
That would have great consequences for how the populace responds at this moment in time, if they personally haven’t felt the pinch of Brexit yet (though they surely will eventually) while the least sympathetic sectors of society have taken the biggest percentage hit so far, it would all be consistent with the populist narrative of some left Brexiteers.
I am going to object in principle to this study’s core framing: a completely counterfactual comparison of projections out to some distant target date, rolling up a big number out of ever bigger numbers as the projection extends out.
Wrapping up an argument that Brexit will be costly into a mass of calculation regarding an imagined future armors that opinion without actually improving its analysis. The analysis of why Brexit will be costly and become more costly over time is lost, no longer exposed to critique.
Wielding such projections from prestigious sounding organizations as if they reflect discovered facts instead of they are, regurgitated prejudices, is not helpful to understanding or persuasion
Thank you, Yves.
“My understanding is there have been Prime Ministers who have not been the heads of their party.”
Churchill succeeded Chamberlain as party leader a year after becoming PM. The constitutional convention merely states that someone should command a majority of the House of Commons.
I think that’s right, although your example is the only one I can think of in recent times. The distinction is between inviting the leader of the largest party to form a government, as is routine, and effectively sacking a PM who is no longer leader of their party. The latter as far as I know has never been done and is probably impossible politically. The only circumstances I can think of that might produce such an outcome would be if the government completely collapsed and a new one had to be formed. Then it would be normal to ask the new Tory leader to form a government. The trouble is there’s no definition of ´collapse.´
During the prolonged realignment of Britain’s party system that began during WWI and continued between the wars, the position of the Prime Minister as the leader of some Party, any Party was repeatedly called into doubt. The positions of Lloyd George and Ramsay MacDonald in relation to their respective nominal Party loyalties/support and in relationship to the dominant Parties in their governments were somewhat irregular by the standards of the regular order that has obtained since then. The relevant precedent is more about party alignments than about the position of a Prime Minister, per se. The fixed terms act is the new complication to game-play: if your plan is topple the PM, having no ready means to force the issue is an obstacle. Still a struggle to realign is underway.
I may have missed it, but I find it curious that the UK media seems to have largely ignored/overlooked Nancy Pelosi’s comments yesterday that no US/UK trade deal which ignores the Good Friday Agreement will get past Congress. Historically the Irish embassy in Washington has run rings round the British embassy due to its direct line via the diaspora. So far as I can see, the BBC only reported the story in Northern Ireland, not on the ‘main’ channel or webpages. The fact that she highlighted this shows that the Irish political mafia in Washington has been hard at work (and they are just as influential with Trumpites as they are with Democrats). The Clintons see the GFA as one of their big achievements and don’t want to see it undermined. I suppose its the usual situation we’ve seen where the UK media overlooks the real underlying story in favour of ‘what happened today in Parliament’, but I’m sure key businesses will have seen those signals. No doubt it will come as a ‘surprise’ to UK politicians if and when they finally get around to negotiating independent deals that they hit a brick wall like this. Certainly Airbus will be paying very close attention as so many parts (including wings made in Northern Ireland for ex Bombardier aircraft) come from or via the UK.
If nothing else, the Euro elections will be fun. I doubt if there has ever been a more truly bizarre election for bystanders to enjoy. For reasons I don’t quite follow it won’t be on the same day as the local elections so a low turn-out is guaranteed, and the only voters will likely be those on either side of the graphs published above. Expect around 30%, and maybe much more to vote for UKIP or the Brexit Party, a big surge for LibDems and Greens and a lot of general confusion. I suspect it will be an absolute disaster for the Tories, and probably not great for Labour either. And there may be knock on confusion in the local elections, which is not good news for Labour, as in mid term they should be looking forward to gaining control of a lot more urban authorities.
As for May and the rabble in London – they will waste the next 6 months just like they did the last 3 years. I think little short of a nuclear device will shift May from No.10 before December, and even if she did go, not one of the likely successors is any more competent or capable of coming to an agreement. I suspect though that when we get to October, the EU may, as a last resort, decide to give another 6 months to see if a new leader or an election could clarify things. But I’ve little doubt that they advice they are getting behind the scenes is that there is simply no prospect of getting a coherent agreement through Parliament, so they choice they face is to keep muddling through, or cut the cord.
It’s odd that given that the EU had gone on about how a second referendum is an acceptable (as in clearly encouraged) reason for an extension, they haven’t worked out that six month is only technically enough time and in practice way too little time.
I think they know this, or at least the more organized states do. But they strengthen their position by putting forward potential solutions and looking reasonable in the face of the UK’s incapacity to come up with any sensible ideas.
And it’s already 17th April. Pretty soon that “we have six months to prepare, legislate, and actually run the famous “People’s Vote” [what was the first referendum, then, the Zombies’ Vote?] turns into “we have five months…”
Granted we had the Assange arrest last week and the Notre Dame fire this week, but I’m astonished at how the Brexit news has dropped from the headlines. There seems to be zero sense of urgency. The UK will shut down for a week over the Easter break (and NB how the cheeky Brits take off both Good Friday and Easter Monday!). This must be May’s grand strategy… just faff about endlessly and hope they eventually call the calling off off simply out of boredom.
Latin America takes off all of Holy Week, so maybe the Brits aren’t really that cheeky.
I never heard of Easter Monday, though.
In Australia both Easter Friday and Easter Monday are Public Holidays.
And all pubs and bottle shops are closed on Good Friday!
Unlike the US, in the rest of the world, Good Friday is the more rigorously-obsserved holiday.
In New Zealand as well, Good Friday is one of the most restrictive holidays in the calendar. Practically nothing is open, except for garden stores for some reason (going to garden stores illegally on Good Friday has become so much of an unofficial tradition that most of them just stay open and pay the fine as a cost of doing business).
Every now and then we propose relaxing the regulations since, well, they make no real sense. This is always fiercely opposed on labour rights grounds, the argument being that retail employers will force people to work on that day if they are legally allowed to. There is a national outcry in solidarity with low wage workers, of a kind that is curiously mostly absent when said workers are engaged in industrial action or advocating for improvements in employment law or tax structure.
The issue with Good Friday is it’s a 100% Christian religious holiday, unlike Christmas which has millennial pre-Christian roots and very thin Biblical support. The only justification for a Good Friday public holiday that jibes with a secular outlook is that so many people would take the day off that they might as well make it official. But that’s getting less and less true, isn’t it? When I was little I was told we were supposed stay silent for a few hours on Good Friday in mourning of Jesus’s time on the cross, but I don’t see anyone doing that now.
Not at Byron Bluesfest where I will be :Norah Jones, Hozier, Gary Clark jr. and Iggy Pop on that day 2 of a 5 day festival. Enjoying the religion of music.
TIL Good Friday (formerly Black Friday before the retail sector took over the name) is called Easter Friday in some parts of the world.
The somewhat interesting Wikipedia page (which also introduced me to Dyngus Day) suggests that Easter Monday is informally observed in some areas of the USA.
In the UK we usually take our public holidays on Mondays. So ‘May Day’ public holiday will be 6th May this year.
The loss of urgency is precisely why Macron wanted end of June, and after all that’s what May asked for. This is just the EU kicking the can down the road as it is too often wont to do.
As for the entrenched attitudes towards Brexit, they don’t matter. To paraphrase Max Planck, Remain progresses one funeral at a time.
Their first decision was to go on holiday’: EU’s Verhofstadt fears UK will waste Brexit delay
https://news.sky.com/story/their-first-decision-was-to-go-on-holiday-eu-fears-uk-will-waste-brexit-delay-11695220
The reports of the encounter with the ERG all pretty much say that the Congressional delegation had to disabuse the lunatics of their conspiratorial notions about the whole world colluding to prevent Brexit and the lunatics, led by JRM, responded by saying, look we have Theresa Villiers and Spode, two former NI Secretaries. The meeting did not go well and I fear even this will not bring the lunatics to their senses. Maybe, when one of their number becomes PM, they’ll send a gunboat in against the Eastern seaboard of the US!
Heh, there are different US-side “elite” factions who are now getting into the fray and the UK politicians are about the last to find out about it? Will we get a ‘Regime Change(tm)’? Popcorn at the ready!
Incredibly, it seems like some shady, as in “who the hell is paying for all this?” pro-Brexit organisation is not only sponsoring politicians but is even setting up office space “within farting distance of Parliament”!?’
Only the Guardian and Opendemocracy are onto this.
I always thought that the EU’s idea/plan was to appease Macron and give the UK 6 months; and then to hope for a 2nd referendum announcement, so that they could persuade him to get on board and grant the UK another 6 months to complete the referendum process.
Agreed. There may also have been a second thread, of “if they haven’t even started on a referendum until Halloween, they need to go” – which may have been advanced by the other side, which would be consistent with the stern German huffing and puffing going on as per the latter part of the article.
I don’t have high hopes on the referendum, though. People’s Vote social media presence seems to be all about “referendums R ez-pz, m’kay” (which, to my cynical mind, is consciously leaving an opening for a Dolchstosslegende if the referendum fails to give an agreeable outcome to them). No discussions about how to frame the questions, no considering of them being challenged in court etc. I’m not sure if it is incompetence, malice or PR (if there’s indeed any difference between the three at this juncture).
It’s all a game. Brexit will never happen.
The EU deep in it’s heart doesn’t want Brexit. They are all about expansion and having new countries join, not about existing countries leave. Not to mention the unwanted precedent this would create. Imagine the horror of a country actually proving to be better off outside the EU. Once the first Brexit delay was agreed upon it became abundantly clear that a Brexit is not in the cards.
Theresa May doesn’t want Brexit. And I still wonder how a country serious about leaving could end up having the process executed by a closet Remainer. May embodies the saying “delay is the deadliest form of denial”. And even if she is thrown out, I see no successor daring enough to advocate a hard Brexit no matter what, so it will all remain mired in endless talks.
The EU spiel is known from the past. The EU constitution was originally voted down in referendums in the Netherlands and France as well, which was quickly obfuscated and subsequently quietly ignored. Just repeat any referendum or election or change the procedures until you get the required result. In this case, drag on Brexit until most people have forgotten what it was all about, then allow for some well-publicized contractual adjustments and quietly bury the original Brexit idea.
Brexit is only good to sell newspapers and fill talkshows.
Imagine the horror of a country actually proving to be better off outside the EU.
Not much chance of that in the UK’s case. It is proving to be quite the cautionary tale: declining GDP, hopelessly divided internal politics, soured international relations.
@Joe Well, I agree that the overall UK picture does not look rosy. But ask the average Greek or Italian their opinion about the EU and you might get some disconcerting answers as well. The EU overlords want to avoid these kind of unsavory comparisons at all costs. Which is one of the reasons they will quietly keep obstructing Brexit forever, in the hope that it will silently fizzle someday.
I’d really like to know where you take that “ask average Greek or Italian.. “.
Guess what. Greeks are pretty much pro EU (they may be less pro EUR, but it’s a differnet story). Italians are pro EU too – both government parties had to tone down their anti-EU campaigns.
From this article in december 2018:
https://www.ilpost.it/2018/12/10/eurobarometro-dato-italia-ue/
Do you think that your country’s membership of the EU is:
ITALY
a good thing: 64%
a bad thing: 15%
neither: 18%
don’t know: 2%
GREECE
a good thing: 57%
a bad thing: 14%
neither: 27%
don’t know: 2%
I think you overstate anti EU sentiment in Greece and Italy.
It might be that these answer to an eurobarometer poll are biased, but still they are not an “hate the EU” result.
I think the fundamental distinction that most Italians and Greeks are making that most Brits are not, is between the current leadership of the EU with its current governance structure on the one hand, and on the other, the union among these neighboring countries with its inherent peace dividend, at least domestically.
Why most Brits and the British press don’t draw this distinction is the greatest mystery of this whole thing, at least for me.
The English newspapers have their own agenda, which in the case of Murdoch, is clearly to increase his grip on UK politics by isolating UK processes from EU influences.
Correct. And make buckets of money in the process.
You’ve explained it, thank you. Deeply depressing, but thank you.
But why aren’t these proud British subjects concerned about the implications for their sovereignty of an Australian-American controlling their media?
I’m beginning to compare the promises made to gain passage of the EU vs the reality with the promises made in US to pass the No Child Left Behind bill vs the reality.
In the US case, promises were made that the bill would increase funding to school districts in need in order to raise educational attainment for more students. Bill was passed. Bill was championed by Sen. Ted Kennedy, an old style New Deal Dem.
Then the switch happened. Suddenly there wasn’t funding for the bill, and the new standards were used to CUT funding to under performing schools, and teach to the test became mandatory.
When I think of the promises made and the hopes kindled in order to create the EU and see that instead too many countries got austerity and reduced living standards…. People in US want No Child Left Behind to do what they voted it to do instead of how it’s been used to bludgeon public schools.
Please outline point by point the obstructions. Seems to me it’s the British politicians and especially the shouty Brexit types who continually refuse to ratify the agreement to leave. Of course. the government could just decide to not continually seek extensions but then we know that won’t happen because back here on Planet Earth that would ruin the country forever and the politicos know it very well.
As for Greece, I’m so surprised that there are so many people, like you, here in the UK who wanted the government to loan Greece money at rates better than the EU. It’s a pity this view wasn’t so pronounced in the media at that time.
The main obstruction is caused by the fact that Theresa May and the EU have cooked up a deal that is completely unpalatable, and they know it. That is not an accident but a strategy. So the whole process keeps vacillating between an unacceptable deal and an unacceptable crash-out…until the whole Brexit idea is given up.
I do not understand at all how you get to the subject of lending money to Greece and my supposed opinion on that. But that’s probably just me.
Stop this.
It’s that the land border in Ireland + GFA creates a bloody mess. The EU actually did a lot of fudging re NI and no one gives them credit for that. There aren’t tidy solutions except a “sea border” which the DUP and the Ultras rejected. This is due to the ruling coalition’s red lines, which due to their tiny majority, could be dictated by minority factions with very strong views.
Oh, but, Brexit is happening, at least the ‘economic decline’ part of it: Nobody are going to invest in the UK for as long as parliament is faffing around. Not the people who really believes in Brexit, because they might not be getting it in the end, and not the people who wish use the UK as a gateway to the EU since they might get shut out in the end.
The only incoming investments made will be in agit-prop, fake-news and insidious lobbyist organisations representing God-knows-who (but absolutely not any majority of people living in the UK, since they are the marks), whom will be fanning the flames from every possible side of the issue!
Five, Six years more of this and the UK will become Venezuela!
Venezuela Without the Oil, but Keeping the British climate and what remains of the land over the next century.
As an aside, I read that James Dyson has purchased much farmland in the UK, including East Anglia (where he is from). I wonder if her has considered that East Anglia has an average elevation of 8ft above mean sea level, and the long term implications of his land ownership and Climate Change.
This forum is more and more like FT, everything and anything that does not adhere to EU Commesariat is evil, bad, must be destroyed and we’ll all laugh at it when it’s destroyed.
I just watched Timmermans and Webber on France 24, explaining why they should be head honchos of EU. The self aggrandisement, display of entitlement, laced with utter disregard to any european citizen who may disagree with huge numbers of overseas people simply placed in amongst them in europe, at europeans cost, was so breathtaking that even Sun God Toby Chair would have cringed.
People in UK are not dumb or lobotomized. They are not impressed by patronizing armchair generals telling them they are. They want out of this EU marxist ship, sinking quickly and steadily.
All the strawmen predictors tabling their highly qualified and intelligent scenarios will be changing their forum nicknames lest they be seen to be related to nonsense they are so happily spewing out today.
Cheerio!!
If you think Yves or the commentariat here is dyed-in-the-wool hardcore EU forever proponents, I really want what you’re smoking, friend.
Yves in particular has pointed out that Juncker and others in the EU only seem like good statesmen because they’re compared to the absolute drek that is their counterparts in the UK (in reality, I would say the EU team is middling-to-OK on the political side and really good on the negotiating side).
It is also somewhat curious to see the EU be the more transparent and more coordinated party in a non-trade negotiation (from what I can tell, in stuff that does not pertain to EU core competencies, the EU usually goes into Monolith Mode – becoming a big silent brick – while people scurry around until some sort of consensus emerges, usually quite late in the process).
To admit that the EU side seems to be more competent is not to say that they’re great. To say that the UK side seems to have dropped the ball into the Mariana trench does not mean that the other side is on top of everything. The main issue is that the EU got together and prepared for Brexit, whereas the UK seems to have decided to save that discussion for last.
Sometimes I think only a crashout and the inevitable chaos and decline will be enough to counter the delusion of right wing brexiteers, even then I guess they will find someone else to blame…
love the ‘Cheerio!!’ at the end, obviously not sticking around for any pesky facts
… and what “pesky facts” have you or your preceding commentator offered?
None at all. Zero.
I have made a comment that the forum is becoming just like old days FT where any and all commentators that dared to field something out of the NWO liberal narrative, got flooded with “you are dumb and know not what you are talking about” type of commentary. Always just noise, no facts.
…and you two guys are the (small) sample of proof.
So, cheerio, again!
Rapid EU expansion was something the British advocated, precisely to keep the EU as a mere common market and stop it from becoming a political union by having too many members for consensus to emerge. A continuation of the UK’s traditional post-Waterloo divide-and-rule policy towards the Continent, old habits die hard. From that point of view, the current ineffectual EU was a success, and that’s what the strong federal EU Giscard d’Estaing’s EU Constitution was designed to address.
There’s another reading of the same point: the UK pushed for EU expansion to dilute the influence of France and Germany, who when they agreed on anything, could generally get other member states to follow.
wow, interesting, but not all that surprising
I saw this tweet this morning, and asked myself how UK is going to organise the next Christmas season wrt this October deadline.
But this is hilarious/deranged. They displayed the signs anyway? Is it incompetence or something more sinister ?
The UK lacks the capacity to negotiate in good faith, about the best that can be hoped for from this extension is a reasonably functional answer to the Irish Border question.
And in EU Brexit news: ESMA (EU Regulator) tightens MiFID 3rd-country Rules (from a paywalled article in http://www.igniteseurope.com).
Basically, the EU is tightening the rules around how third-country asset managers can operate in the EU as they want to avoid regulatory arbitrage post-Brexit. National regulators as well as ESMA can now block third-country asset managers.
Interestingly this is all taking place after the date we were supposed to have Brexit and yet you get a German MEP (Markus Ferber) noting “With the investment firm review, the EU gets Brexit ready.”
And what is this investment firm review (and why the above legislation before the review is completed)? The review will set out new prudential requirements and supervisory arrangements for investment firms (which will be coming into force over the next 18 months). If I may quote from the pay-walled article: “Valdis Dombrovkis, European Commission vice-president for financial services, said the review would introduce a stricter regime for third-country firms providing services under the equivalence framework. Mr Dombrovkis added that the measures included in the investment firm review would be more appropriate to fund firms [i.e. asset managers] as they would no longer be covered by banking rules.” And they need to be able to stomp on 3rd country firms ASAP to be able to action this…
Which makes me think there are other interesting pieces of Brexit related laws coming into play over the next 6 to 12 months. I have yet to see a list of the future legislation that is up for vote that is related to Brexit and/or third-country rules. I am sure that exists, as these things are slowly going through the pipeline in the European Parliament…
Its outside my direct field, so I only get second hand information, but I get the impression there is an enormous amount of work going on behind the scenes to prepare for a slow asset stripping of the most attractive UK international business roles – most of them in services. Certainly in Ireland the Central Bank has been engaged in a very intense ramping up in its regulatory capacity – they were chastised last year by the government for being too obstructive with applications for banking and other licenses, but they seem to have stood up to that and are playing a longer game, aimed at getting crown jewels rather than just job numbers, especially in more ‘flighty’ and dubious sectors. I’ve no doubt Amsterdam, Paris, Frankfurt etc., are doing the same. They seem very aware of the dangers of just allowing nameplate offices, which would allow for regulatory arbitrage – they are taking a hard line on this so far as I can see.
The one physical indicator I’ve seen here in Dublin is a very big upsurge in office building – mostly quality rather than quantity buildings (i.e. well located city centre offices rather than big floorplate suburban offices). Building rates at the moment are super high so they only make financial sense if they can make top rents – so certainly the industry thinks there will be a market for them (the investors are mostly non-Irish so its not just a case of local irrational exuberance, the current lot don’t build unless they are pretty certain they have a tenant).
I have maintained for some time that the main reason for transition period is for the companies to transition from the UK to the EU. It will not be a cliff edge moment, it will be more slowly turning the screws over the next 12-18 months.
Thank you and well said, Redlife, PK and Vlade.
The British government’s strategy of building up asset management as a national champion, alternative to banking, and allying with Switzerland, Hong Kong and Singapore, the G4, as a counterweight to the EU27 and US won’t go far with a proposed crack down on third country asset managers.
I agree with Vlade’s timescale and could lengthen that by another year or two, as has been discussed. It allows EU27 regulators to scale up and get the experts in place.
So I’m lost. Please Col, will you translate this down a bit. “Investment Firm Reviews” sounds like a re-assessment of assets so they are not overpriced. But still, what point? All of this shuffling looks to benefit the non-political world of international finance. Leaving fiscal politics stranded. And the post today about the greening of the banks also seems like the same flavor… Since the finish line is in sight with Brexit, one way or another, this has to be a big-protection effort. Using finance jargon.
I think this link is an interesting analysis of project management applied to Brexit:
The fundamental problem with Brexit is not that it’s impossible: nothing is impossible, and if Remainers tell you it is, they’re not being honest. Of course we can leave the EU. Obviously we can.
But we cannot leave the EU on the basis it was sold to us.
https://heterocephalusgabler.wordpress.com/2019/01/28/brexit-cannot-break-the-iron-triangle/
adding: I also think the link below gets something right about the driving forces. True in the US as well.
Behind Brexit lies a yearning for a past we destroyed.
From the 40s through to the 80s, governments built up to 250,000 houses a year. They owned and defended major industries on our behalf, and the key strategy of any government was to have full employment and proper apprenticeships for anyone who wanted them.
…
Where did this utopia go? How did it all end?
Let me explain.
In that period the top rate of income tax was 95%: it’s now 45%. Business tax was 50%: it’s now 20%.
Since 1980, tax avoidance by the wealthy has doubled. Combined with those giant tax cuts, this means we now get 25% of what we used to from those who own the most.
https://heterocephalusgabler.wordpress.com/2016/12/14/behind-brexit-lies-a-yearning-for-a-past-we-destroyed/
Thanks for those links, that’s a really interesting blog – I pay attention to anyone who can quote from Robert Persig (who seems to have gone mysteriously out of fashion).
adding adding: neoliberals love to talk about self interest, but they never talk about enlightened self interest. Odd.
Thanks for heterocephalusgabler link. Common sense lives. I actually think the neoliberals are beginning to talk about enlightened self interest – out of necessity. Romantics turning classic!
Enlightened self interest would mean consider the other – not a thing in neoliberal/neocon speak.
What is the difference between a neocon and a neoliberal? So far the only real difference I can make out is that both want wars of “interference”, one for the glory of empire, the other for the glory of what they call “protection of human rights” to the last of the humans they claim to protect.
Interesting. I have also been looking at Brexit from a project management perspective (I have an interest in large scale failures, as I think studying them teaches lessons about how to avoid repeating them). I think the iron triangle view is oversimplified, and the basic problems are more fundamental. In theory yes, you can sacrifice schedule for price and quality, but it only works if you have all the lower level stuff correct and can actually use that time to make meaningful progress.
In IT terms, there are some more fundamental problems that prevent meaningful trade-offs like this, and mean that in practice, you can maybe have only one of the three, or none at all. These include: incomplete and/or misleading information (nobody properly understands what all the constraints and factors involved are, so it’s impossible to make truly informed decisions, and opposing positions are often irreconcilable or not directly comparable because each is based on a different interpretation of the facts, or sometimes outright fantasy), poor governance (it’s not clear who is in charge, what the decision making processes are to break deadlocks, or whether such decisions can in fact be made at all) and unclear success criteria (if accomplishing Brexit at all costs was the goal the UK could have done so on 29 March – the fact that it has asked for delays suggests that other criteria exist that are equally or more important, so what are they?)
In a nutshell, people haven’t properly understood the problem, nobody agrees on what they want, and there is no mechanism for resolving differences and deciding on a single course of action that is effective in practice. This is not iron triangle territory. The iron triangle describes different flavours of success, while projects delivered under these conditions typically end in failure.
Thanks. Your comparison brought to mind an old poem*: imagine a Brexit directed by 6 blind men who have never seen the problem whole but only bumped up individually against its different parts.
* https://allpoetry.com/The-Blind-Man-And-The-Elephant
(adding: the arts and literature express eloquently what I stumble to say in technical terms.)
No one challenged my earlier statements–maybe because they looked too naive–but I continue to see it as a strong possibility that October is it. Again, this gives the likes of Ireland and the business community time to get its houses in order, and allows the EU to say it did all it can.
If the idea is to raise pressure for GB to reach some decision, I suppose, the noises should become louder that May & Co. have made their own bed. And must place a countdown clock beside it.
The big north EU countries like France and Germany must be dimly aware that the EU geographic peripheral countries are starting to crumble under their neoliberal “leadership”. (And things aren’t entirely rosy in France and Germany). my 2 cents.
Even in October, the EU won’t want to be seen as pushing a mentally unstable UK of the cliff. Kun, vlade, and Smithers, are right that much of EU business want some kind of transition period (and these delays function as that) for asset stripping, and some kind of larger cousin that you might call industry stripping.
Points taken. But there has been a great deal of complaint about the lack of a firm date. I suppose my own analysis allows for the possibility of a quiet meeting or meetings between times where readiness is assessed. . . and another extension offered. But the delays have a distraction and potential looming deterrent to unity, esp. between the French and Germans.
The reporting on Brexit is so muddled in the USA that until this post I didn’t realize that there are six more months of this. UK’s EU Parliamentary Elections will be held. Corporate media is intent on not letting us know what is really going on. My take is there are three major factions at play: 1) Self-interested “Leavers” who want to scavenge among the left overs, 2) Victims of Neoliberalism who need relief from Austerity and 3) “Remainers” who believe in the free movement of people, capital, goods and services and who have had 73 years of peace. There is no majority. The problem is that Austerity is due Oligarch’s seizure of the EU and the British Parliament. They used the free movement of people, goods and capital to their advantage and transferred their private bad debt on to the state. Also, no one is planning for the future. Climate change and resource depletion means that if civilization is to survive at all, economies will have to be regional. To keep any kind of modernity, the British Isles have to be in the EU and the people have to take control of government back from the plutocrats.
It appears to me that many of the UK Second Referendum folks do not grasp the concept that their side might lose again.
On a different note, the YouGov poll this week on the MEP elections found that the Farage Brexit Party is now in the lead by a moderate margin.
https://www.scotsman.com/news/politics/poll-nigel-farage-s-brexit-party-in-the-lead-for-europe-elections-1-4909570
“A YouGov poll, commissioned by the People’s Vote campaign, puts the Brexit Party on 27 per cent ahead of Labour on 22 per cent with the Conservatives trailing on 15 per cent.”