The OECD Is making the same mistake as our negotiating team

According to Angel Gurria (above) of the Organisation for Economic Co-operation and Development, we should hold  a fresh referendum to stay in the EU as this would be ‘positive’ for the UK economy.  The OECD published its report as speculation mounts that Theresa May will shortly pull the plug on the Brexit talks. She is most definitely being encouraged to do so by a number of her MPs.

In response, Philip Hammond, the Chancellor, quickly made it plain that a second referendum was not going to happen and a number of Brexit-supporting Tory MPs expressed their indignation at the OECD’s intervention, pointing out that it had consistently underestimated the UK’s economic performance since last June’s vote.  Leaving the EU without a deal, however, is a different kettle of fish. There are sharply differing opinions among Brexit supporters about the probable consequences, ranging from predictions of a decade-long recession to a conviction that leaving under so-called WTO rules would bring economic benefit.

We will find out who is right in less than 18 months, but even if the OECD’s gloom proves correct, in urging us to halt Brexit, it is guilty of making the same mistake as our negotiating team – viewing the EU as an economic project whereas it is predominantly a political project.

What swung it for the leave campaign was not money but sovereignty. The message on the red battlebus about funding the NHS was a red herring. We wanted to regain control of our country from a foreign power and to escape from a political project for which few of those who understood its true nature had any enthusiasm. This is why we voted to leave and the EU’s subsequent push towards closer union, as evidenced by Jean-Claude Juncker’s recent “State of the Union” speech, has been a vindication of that decision.

Elsewhere on this blog, I have compared Brexit to a cancer operation. It will be painful at the time and a period of convalescence  may be required afterwards, but leaving the condition untreated would be far worse – it will inevitably lead to death.

Therefore, even if we are less well off in the immediate post-Brexit period, than we might have otherwise been, it is a price worth paying. It seems that the majority of Brexit voters agree. We could draw parallels with 1939. We would have been much better off to declare our neutrality alongside Sweden and Switzerland if our relationship with Hitler’s régime had been judged in purely economic terms at that time.  That was not the course we chose to take and after all these years, most people still feel that we made the right decision to address the evil of German expansionism.

In the long term, I have little doubt that if Brexit is managed successfully, there will be economic benefit. It will be far easier from outside the EU to reorientate the focus of our trade from the sclerotic economies of Europe to more rapidly growing countries in Asia. Our fishing industry will revive and we can do more to nudge global trade away from protectionism when we regain our seat on bodies like the WTO rather than have someone from the EU speak on our behalf.

The short term is another matter, however. A short blip for which we can prepare (and from which we should recover within a year or so) – which is the most likely outcome of a smooth Brexit allowing us a reasonable degree of access to the EU’s single market – shouldn’t cause a recession nor generate any serious political ripples. A badly botched Brexit would be another matter. Substantial job losses, food shortages and a sharp spike in inflation cannot be ruled out.

To return to the cancer operation analogy, yes, we have to go through with it. The sheer complexity of the issues already discussed in the Brexit talks highlights the amount of sovereignty which has already been eaten away by the EU.  Given that this is such pioneering surgery, however, it would be good to be assured that the best possible team of surgeons are in charge. As the halfway point between the vote to leave and Brexit day looms on 9th November, some of us have yet to be convinced that this is the case.

 

 

Photo by Chatham House, London

Reasonable or unreasonable?

It will have come as no surprise to many keen observers of the Brexit process that the fourth round of talks ended this week ended with Jean-Claude Juncker, the Commision President, saying that it would take a “miracle” for Brexit talks to progress quickly enough to persuade the EU to start discussing a trade deal any time soon. This follows on from Michel Barnier saying the same thing a day earlier.

It is the usual story. An optimistic David Davis speaking of encouraging progress followed by a more negative slant from the EU side.

The divergence in assessing the state of play goes right back to Davis and his team agreeing to the EU’s negotiating schedule, which demanded that progress had to be made on the rights of EU citizens living in the UK, the Irish border question and the financial settlement, or so-called divorce bill, before the issues of trade would be discussed.

Was it reasonable or unreasonable for the EU to take the initiative in proposing a schedule? Hard to say. After all, they never wanted us to vote to leave. On the other hand, we were not bound under Article 50 to agree to their schedule, but for better or worse, we did.

So what of the three demands? The size of our divorce settlement was always going to be a contentious issue. Some would argue that we shouldn’t pay a penny after Brexit day while others are willing at least to concede that we should honour our obligations up to the end of the EU’s seven-year budget cycle, which takes up up to 2020. There is a even a huge gap between the EU’s demands and the generous figure which Mrs May has indicated she is willing to pay – £50 billion – and this is higher than the carefully-researched study by the Institute of Chartered Accountants of England and Wales, which comes out with a figure of  £28 billion, including  spending which has been authorised but not incurred. The EU is unhappy with our foot-dragging, but given that Mrs May’s alleged offer was a generous gesture to try and unblock talks, if it doesn’t satisfy the EU, they are definitely the side who are being unreasonable.

The most unreasonable of all demands is that any agreement regarding the legal status of EU nationals living in the UK after Brexit includes a role for the European Court of Justice. This is quite frankly absurd.  If the UK insisted on UK law and the UK courts determining any aspect of the lives  of UK expats in, say Saudi Arabia, the Saudis would tell us, to quote Boris Johnson (or was it Philip Hollobone?), to “go whistle”. English Common Law means just that – it gives common treatment to all UK residents including non-nationals. We did make an exception in the Middle Ages, with the clergy subject to Canon Law instead and the general population didn’t like it one little bit, especially as monks and priests were able to get away with crimes for which the rest of the population wold be punished. There is no need to create another exception now. Our legal system is fair, with plenty of checks and balances. No EU citizen living over here should feel they are living in a tyrannical, unjust country

The question of the Irish border, however, is another matter.  The Irish republic joined the EEC, as it was, along with the UK in 1973. The two countries’ economies were – indeed, still are – closely linked and for the Irish to have kept out while we joined the European project would have caused immense problems. When the Irish joined the €uro, they did so in the expectation that we would follow suit. We did not, nor have we abandoned imperial measurements as they have. They have consistently elected governments which are led by EU enthusiasts. By contrast, most of our Prime Ministers since 1973 have been at best lukewarm towards the EU apart from Ted Heath and Tony Blair. In spite of these divergences, however, we share a common language, a common genetic ancestry and several hundred years of common history. More importantly as far as Brexit is concerned, we will soon be sharing the only land border between an independent UK and an EU member state.

It is true that the EU as a whole would suffer proportionately less than the UK from our crashing in March 2019 without a trade deal, but some individual states would take a big hit, with Ireland topping the list. No one wants a “hard border” and everyone wants trade to continue to flow freely between the Republic and Northern Ireland but, as Michel Barnier keeps pointing out, we become a “third country” in 18 months’ time. It is one thing to insist that we cannot go back to the days before the Good Friday Agreement but quite another to come up with a workable arrangement which is acceptable to Dublin and Brussels. So far, the EU negotiators have not head anything from their UK counterparts which provides the basis for a future agreement. Their impression is that, 15 months after Brexit, the UK has not got to grips with the issues involved in striking a deal on the Irish border question.  If this is true, there are good grounds for the EU to say we are being unreasonable.

There are other areas, however, where the EU – or at least, some of its senior figures – is being very unreasonable. The over-the-top reaction to Michael Gove’s denunciation of the 1964 London Fisheries Convention is one good example. Another  is the behaviour of José Margallo, the former Spanish Foreign Minister, who has been ramping up the Gibraltar issue, claiming that  Gibraltar will eventually have to welcome dual sovereignty for Spain and  spreading misleading statements about a proposed meeting with Fabian Picardo, Gibraltar’s Chief minister.

Of course, if, as claimed by one reliable source, staff are quitting the Department for Exiting the European Union “in their droves”, this isn’t getting us any closer to address the issues where some work is obviously needed by the UK side.  There is a good argument to be made that some EU demands are very unreasonable, but equally, a strong case can be made that thus far, our side’s approach to these difficult negotiations has left a lot to be desired.

 

The parallel universe next door

For anyone wanting to take the EU’s temperature, the annual “State of the Union” address by the President of the European Commission is always a helpful speech to study. Anyone wanting to read the full 6,130 words of Jean-Claude Juncker’s lengthy talk can do so here.

However, most of us will only want a brief summary. As far as Brexit is concerned, Juncker had very little to say. He called it “a very sad and tragic moment,” adding “We will always regret it.” The text of the speech does not include the phrase “and you will regret it soon”, although this extract from the speech shows that he clearly said these words (in French) and also added that Brexit isn’t the future of Europe.

Will we regret it? On the basis of the rest of the speech, I think not. Open Europe, hardly a bastion of withdrawalism in pre-referendum days says that the speech is “likely to test the limits of what EU citizens or even EU leaders might support. Juncker admitted that 2016 was “a year  that shook our very foundations” – in other words, a crisis. What is the classic EU solution for any crisis? More Europe, and yes, this is exactly what he is proposing:- an increase in qualified majority voting – or to put it another way, the removal of national vetoes – in foreign policy decisions and in maters of taxation, a European Finance minister  and elections for the European Parliament featuring trans-national rather than national lists. Treaty change is “inevitable” at some point, he added, but in the meanwhile, use should be made of the so-called “passerelle” clauses in the existing treaties which allow qualified majority voting to be extended without treaty amendment. Juncker does not want a two-speed Europe, but by stating that the Parliament of the €urozone is the European Parliament, he is forcing non-€urozone countries either to join the Single Currency or accept second class status.

It is hardly surprising that Pieter Cleppe of Open Europe says that “This was not a great speech for those hoping the European Commission would see Brexit as the moment to take stock and reconnect with those across Europe who feel that the EU has over-reached.” Reaction from the UK has been more scathing. Diane James, formerly a UKIP MEP but now sitting as an independent, wrote a scathing article for City AM which pours scorn on the upbeat assessment of the EU’s current state by Mr Juncker. ” I can sum up the “state of the Union” in one word: dismal.” She points out that 66 per cent of Europeans stated in a recent survey that they were dissatisfied by the direction being taken by Brussels. The EU may be putting pressure on us to try to stop Brexit, or at lest to water it down, but many citizens in EU-27 are hardly happy bunnies and Juncker’s speech will have done nothing to make them feel better.  The powers-that-be in Brussels seem to be living in a parallel universe from most ordinary people.

Nigel Farage was even more scathing in his response to Juncker’s speech when addressing the European Parliament. “All I can say is Thank God we’re leaving,” he said. Lord Stoddart, a former President of CIB, was equally dismissive, calling Juncker’s vision of the EU as a “nightmare”.

Indeed. Juncker’s speech will have reminded many of us of exactly why we campaigned for years – indeed, in some cases, decades – to extricate our country from the EU. Given that there are still many tensions between the member states simmering beneath the surface, Juncker’s speech has, if anything, made it more likely that another country may well follow us out of the door.

 

Peer says: Let’s back Boris’s “positive vision” not Juncker’s “nightmare”

THE PRESS OFFICE OF

The Lord Stoddart of Swindon

(independent Labour)

News Release

 

18th September 2017

 

Let’s back Boris’s “positive vision” of UK’s future not Juncker’s “nightmare,” says independent Labour Peer

The independent Labour Peer, Lord Stoddart of Swindon has welcomed Foreign Secretary, Boris Johnson’s controversial intervention in the ongoing debate about the Brexit negotiations.  Lord Stoddart said: “I congratulate the Foreign Secretary for having the courage to write about a positive vision of the future of our great country, in the face of so much pessimism from gutless politicians who seem to have no faith in our country or its prospects.

“Mr Johnson has laid out the golden future that awaits us outside of the European Union and the public sector ought to welcome the £9 billion net saving we will make on leaving, as this sum gives the Government the funding not only for decent public-sector wage increases but also for investing in the NHS. His vision is particularly timely given that the European Union, in defiance of public opinion, has unashamedly set itself on the road to a federal super-state, as has been made all too clear by European Commission President Jean-Claude Juncker, in his recent state of the Union address.

“We must strongly support the Foreign Secretary’s vision of the future, not the nightmare envisaged by Mr Juncker.”

Ends

NB: Boris Johnson’s full article can be read at: https://en-gb.facebook.com/borisjohnson/posts/10155036320191317

 

What if we had lost?

It’s now over 10 months since the referendum. After the initial euphoria at the result, we enjoyed a brief and well-deserved break before plunging in to the next campaign – ensuring that we end up with the best Brexit deal possible. With Article 50 now triggered, however, the negotiations about to begin in earnest and memories of the referendum itself beginning to fade, it’s easy to forget how hard we had to work to achieve last June’s result.

Suppose, however, that it we had lost.

David Cameron had spelt out in no uncertain terms that this referendum, like Scotland’s vote in 2014, was a “once in a generation” decision. Admittedly, Nicola Sturgeon is straining every nerve to try to engineer a second vote on Scottish independence, but given that it was 41 years since our previous referendum on EU membership, we all knew that if our countrymen had voted to remain in the EU last June, we would have faced many more years of campaigning before a third vote would ever become even a remote possibility.

But just suppose a further vote had eventually been held in, say, 2025, what sort of state would our country – or indeed, the EU – be in by then?

We know that there was a great deal of unease on the Continent following the Conservatives’ 2015 General Election victory, which meant Cameron was going to have to make good his promise to hold the referendum. Laurent Fabius, France’s Foreign Minister, called his pledge “dangerous”. Until last June, Cameron had been described as a “lucky” Prime Minister, winning the 2015 General Election when many pollsters were predicting a hung parliament and securing the results he wanted in both the AV and Scottish independence referendums. Perhaps his track record helped calm nerves in Brussels and Berlin. After all, if remain had won, the implications for the EU would have been enormous.

A vote by the most consistently eurosceptic member state to remain in the EU would have been a green light for a further push towards federalism. Such a move may have initially been focussed on the Eurozone, especially given the victory of the enthusiastic federalist Emmanuel Macron in last Sunday’s French Presidential Election, but we would have inevitably found ourselves swept along in the federalist slipstream. Furthermore, even if voters in other EU member states voted the “wrong” way in any subsequent plebiscites, the EU could have pressed on confident that opposition could be muzzled. If even the truculent UK ultimately had decided to submit to the yoke of Brussels, the EU would have felt emboldened in the pursuit of its objective of creating a superstate. To put it another way, all 28 member states would have themselves been locked into an EU where the Jean-Claude Juncker mindset would have reigned unchallenged. “’If it’s a Yes we will say “on we go”, and if it’s a No we will say “we continue””, he famously said.

Now, however, there will be much nail-biting whenever a new treaty is put to a popular vote. The Brexit vote has shown that electorates are happy to defy a powerful combination of their own political leaders, businessmen and senior figures from both Europe and the wider world. The results of the Dutch general and French presidential elections may have been greeted with huge sighs of relief in Brussels, but it is worth remembering that in the first round of the French elections, 46% of voters opted for an EU-critical candidate. Macron’s victory does not imply a renewed love for the EU in France.

A remain vote would have bolstered the EU’s credibility in the wider world. It is doubtful whether it would have altered the course of events in Turkey, where accession to the EU now looks highly improbable following President Erdogan’s revisions to his country’s Constitution. It would, however, have strengthened the pro-European forces in Norway and Iceland. Maybe even the Swiss would have felt that sooner or later, they would have to join up. Instead, our vote to leave essentially buries the prospect of membership for Western Europe’s non-EU members and also makes the EU a harder sell in the Balkans and the former Soviet republics.

After all, although many of us are aware that one country, Greenland, had earlier left the EEC (as it then was), how many of us can actually remember it happening? It was a pretty minor piece of news at the time whereas the Brexit vote was splashed over front pages across the world, complete with pictures of either Donald Tusk or Angela Merkel looking distinctly gloomy.

The EU was never going to be the same after our referendum, however we voted. Its credibility would either have been boosted or dented.

As for how our country would have been affected by a remain vote, as Rupert Matthews pointed out, defeated leavers would have accepted the result with far more grace than the appalling behaviour we have witnessed from remainiacs like Gina Miller, Richard Branson and Tony Blair. We would have vowed to continue the fight but would not have accused voters in the opposite camp of being stupid. Nor would we have been cry-babies saying that the people didn’t know what they were voting for.

However, within a matter of only a few years, we would have seen much of our remaining distinctiveness gradually eroded. How long would we have been able to remain outside the single currency? How long before our armed services would have been absorbed into an EU army? What of the safeguards of our common law-based criminal justice system, so superior to the Napoleonic inquisitorial system of continental Europe, which the EU eventually would have replaced with a single criminal justice code? Would metrication have been pushed with renewed vigour?

Thankfully, instead of this nightmare scenario, we voted to leave and in so doing, besides the eventual benefits to our own country, we may well have put a big spanner in the works to the whole federalist project, for the good of the whole continent. As William Pitt the younger famously said 200 years ago, “England has saved herself by her exertions and will, as I trust, save Europe by her example.”

Brussels’ provocations

By Horst Teubert

German business associations are calling on the EU Commission to end its Brexit provocations. A disorderly Brexit would entail enormous costs for the German economy, the President of the German Chambers of Industry and Commerce (DIHK) warned; therefore an amicable Brexit agreement with London must be reached. The Federation of German Industries (BDI) expressed a similar view. The head of the EU’s Commission’s recent audacious financial demands and deliberate indiscretions have stirred massive resentment in the United Kingdom and were rightfully considered an attempt to influence Britain’s upcoming parliamentary elections. Observers attribute these indiscretions to EU Commissioner Jean-Claude Juncker’s German Chief of Staff, Martin Selmayr (CDU), who is currently playing a key role in the Commission’s Brexit negotiations’ preparations. The German Chancellery is now calling for restraint in view of the severe damage a hard Brexit could entail for the German economy.

The Commission’s Indiscretions

German businesses are complaining about the EU Commission’s recent provocations: On the one hand, the deliberate indiscretions concerning confidential talks on April 26 in London between the British Prime Minister, Theresa May, the President of the EU Commission, Jean-Claude Juncker, and their respective closest collaborators in preparation of Brexit negotiations. The alleged contents of the talks were leaked to a German newspaper, which published a detailed report, spiked with assessments, presenting the British government as blind to reality, uncompromising and disunited.[1] Juncker’s statements, reproduced in the report, are rightfully regarded in Britain as an attempt to tarnish Theresa May’s Conservative government and thereby reinforce EU-oriented forces, particularly among the Liberal Democrats and segments of the Labour Party during the election campaign – apparently to no avail. The obvious attempt to interfere in the country’s internal affairs has stirred massive resentment in the United Kingdom. In last week’s local elections in various parts of the country, all pro-EU parties, except the Welsh Plaid Cymru, lost mandates, whereas the conservative party made substantial gains. In spite of the significance of particularities in local elections, this is regarded as an expression of the wide approval for May’s political course.

Berlin’s Special Role

London has taken note of the special role Germany is playing in this affair. The indiscretions were published in a German newspaper and were probably leaked by the German EU official Martin Selmayr, a member of the CDU. Selmayr is Commission President Juncker’s Chief of Staff, and, according to reports, he is closely allied with Chancellery Minister Peter Altmeier. He is considered to be Juncker’s most important prompter, having a “tight grip” on the Commission, according to observers. (german-foreign-policy.com reported.[2]) He also holds a prominent position in the Brexit negotiations: Last October, Juncker mandated him to conduct regular preliminary talks on the Brexit negotiations with London. In the meantime, Selmayr has repeatedly announced that “Brexit will never become a success,”[3] thereby following Berlin’s suggestion that the Brexit could possibly have a deterrent effect on EU critics in other member countries. Selmayr is suspected of having leaked the recent indiscretions, because they contained also those parts of the confidential talks in London, in which only he and Juncker had participated on behalf of the EU. Michel Barnier, the chief Brexit negotiator, and his deputy, Sabine Weyand, joined the talks only later on April 26th. Alongside Selmayr, trade expert Weyand is the second German in a decisive procedural position in the Brexit negotiations.

100 Billion Euros

Alongside this indiscretion, the most recent hike in the amount Brussels is demanding that London pay for its exit from the EU is being met with resentment in Great Britain. Even the 60 billion euros, mentioned a while back must be seen – to put it mildly – as an unrealistically exorbitant starting point for the negotiations. Last week, the commission increased the amount even further, to €100 billion, according to which, two years after its exit, the United Kingdom is to pay, for example, agricultural subsidies for other EU countries, as well as EU administrative costs, alongside co-financing both the European Central Bank (ECB) and the refugee agreement with Turkey. On the other hand, London would not be able to lay any claims to its share of the EU’s assets.[4] Observers suppose that these unorthodox demands have been ultimately raised to increase pressure on London’s government and lower its re-election possibilities in favour of EU-oriented forces – until now, to no avail.

More Strain on Germany

Instead, Brussels’ provocations are now leading to public complaints from the German economy. Britain is its third largest sales market for the highly export-dependent German industry and its second largest foreign investment site. At a time when business with important business partners is suffering – due to sanctions (Russia) or political tensions (Turkey), when trade with its most important ally, the United States, has become unreliable with the recent change of government and its number one sales market – the Euro zone – remains deeply embedded in a crisis, German business associations are adamantly refusing to take on any more risks.[5] “Now, it is important not to smash any more porcelain during the talks,” warns Dieter Kempf, President of the Federation of German Industries (BDI), in reference to Brexit negotiations. “Reason and pragmatism” must be the guidelines for “both” negotiating partners.[6] One should not forget “that the Brexit will come at high costs, also for the German economy,” warned Eric Schweitzer, President of the German Chambers of Industry and Commerce (DIHK). A disorderly Brexit, in which merely WTO standards apply between the EU-27 and Great Britain, trade between Great Britain and the EU would engender trade tariffs of around twelve billion euros. Because of the extensive exports to the United Kingdom, this “would engender an enormous additional strain, also on German enterprises.”[7]

Calls for Restraint

Over the weekend, the first calls for restraint had been heard in Berlin because of complaints from within business circles, and the fact that the EU’s provocations seem to be backfiring in the United Kingdom. Chancellor Angela Merkel made known that she is “upset” about Commission President Juncker, because “his failed Brexit dinner” has only made the climate worse between Brussels and London.[8] The German MEP Ingeborg Grässle (CDU), chair of the European Parliament’s budgetary control committee, criticized Juncker in the name of the European Parliament. “It is time that the EU Commission presents a bill comprehensible for everyone,” she demanded in view of the sum London has to pay for the Brexit. “We want to maintain good relations with the British.” The most recent demands – a good example of the EU Commission’s dealing – are “completely exaggerated.”[9]

The original was published by german-foreign-policy.com and is used with permission

[1] Thomas Gutschker: Das desaströse Brexit-Dinner. www.faz.net 01.05.2017.
[2] See Eine nie dagewesene Machtkonzentration.
[3] Florian Eder, David M. Herszenhorn: Brexit will never be a success: Juncker’s top aide. www.politico.eu 05.05.2017.
[4] Hendrick Kafsack: Ich will mein Geld zurück. Frankfurter Allgemeine Zeitung 04.05.2017.
[5] See A Dangerous Game and Auf brüchigem Boden.
[6] BDI fordert Pragmatismus im Brexit-Poker. www.handelsblatt.com 06.05.2017.
[7] DIHK warnt vor hohen Brexit-Kosten. www.dihk.de 04.05.2017.
[8] Merkel verärgert über Juncker nach Brexit-Dinner. www.spiegel.de 06.05.2017.
[9] Andre Tauber: Wie hoch ist der britische Anteil am EU-Vermögen? www.welt.de 07.05.2017