September 18, 2016
Is there a point at which enough bad news will have piled up for Brexit that the British government is forced to reassess the entire situation?
We have all read that the decision of June’s vote is not legally binding. However, at some point, will the context of that vote become so detached from the current political reality that the entire premise needs to be reviewed?
In the early days after the vote there were the shocks that we all recall, though perhaps not clearly enough. Things like Mr Farage suggesting that the promise to spend 350 million pounds per week was “a mistake”. And who can forget the shock of Boris Johnson being appointed Foreign Secretary? Or all those silly promises of economic ruination being demonstrated as the pound fell like a stone, immediately? Or the suggestion that Scotland and Northern Ireland would be prepared to break up the Union to preserve their EU memberships?
A Heavy Weight
If we were to imagine Brexit as being a fulcrum, or a set of scales, with positive and negative news on opposing sides, only the most ostrich-like Leave supporters could think that the balance sits in their favour.
Despite this, it seems that a group of senior Tories want to leave no matter the consequences.
It would appear that for some people, a decision MUST be taken. At this point, it is still perfectly possible for the UK to not proceed and simply admit that Brexit does not look like a good idea. But, in the face of only bad options, some people seem to be intent on selecting the worse option just to prove that they can. To your rather confused author, that seems to be borderline insanity.
Tipping The Balance?
Following on from the appointment of Guy Verhofstadt as chief negotiator for the opposition, it seems like the already insurmountable issues are being added to at quite a speed.
The Bratislava summit and a conversation between Mr Tusk and Mrs May lead him to gently suggest that the UK should get on with Article 50 “as soon as possible“. That looked as though it was really just for the cameras, so no surprises there.
News this weekend puts a much firmer view on the week’s events however. Firstly, Slovakia’s Prime Minister has spoken on behalf of the V4 (the Czech Republic, Hungary, Poland and Slovakia) to explain that any deal that fails to safeguard the rights of their citizens to live and work in the UK will be vetoed.
Much of the Leave campaign’s stance seemed to revolve around the idea that “we are British” so of course everyone else will do what we demand of them. Apparently that will not be the case at all. Who knew…?
Unsurprisingly, since the limiting of migration is such a key component of both sides of the negotiation, a leak suggests that the UK’s Chancellor, Philip Hammond, thinks that the UK might need to abandon any hope of Single Market access.
He also seems to think that The City of London can be protected because it is so special. To prove how financial markets feel about the idea, sterling slipped another 1.6% on the news.
You can imagine financiers in Frankfurt rubbing their hands together with glee at the suggestion that London will be protected. Every day of uncertainty is a day closer to the big banks moving their European operations to Germany.
And lastly, it is being suggested that should the UK begin any trade negotiations before submitting Article 50, legal action may be taken by the EU to prevent it. I can understand the logic of it. After all, if the EU is in the middle of a negotiation and the UK suddenly barges in and changes the playing field, we would all be unhappy too.
The Current Situation?
My initial thoughts were that Brexit was immediately impossible, but I am much less positive now. The main worry is that even though there may be no good potential outcomes, the UK might still go ahead anyway!
In which case, watch this.financialguy