An Irish Sea border is a silly idea but so is the cake-and-eat-it bluster

The EU wants to annex Northern Ireland. Such was the predictable hysterical reaction by pro-Brexit MPs and commentators to the European Commission’s attempt to turn December’s Phase 1 agreement into a detailed withdrawal agreement.

What has really upset people is the Protocol on Ireland/Northern Ireland, which starts on Page 98. It contains the suggestion that, in the absence of any other way of avoiding a hard border in Ireland, it would be necessary for Northern Ireland to remain in a customs union with the EU. The corollary of this would be a customs border on the Irish Sea, effectively dividing the UK into two customs zones.

Of course, Theresa May is right when she says that “no United Kingdom prime minister could ever agree to it”. Chuka Umunna is also right when he says that parliament would never vote for it. A customs border on the Irish Sea is a silly idea which would create more problems than it solved. Leaving aside the possibility of Loyalist violence, the flip-side of the Republicans potentially attacking the border posts, there is the simple economic impact. While Northern Ireland’s principal foreign trading partner is the Republic of Ireland, the majority of its external trade goes to the rest of the UK. A customs border with Great Britain is therefore likely to be more damaging than one with the Republic. It also wouldn’t remove the Republic’s other Brexit headache, the loss of its export bridge to the rest of the EU.

The European Commission knows all this and knows that such a thing would never come to pass. It also must have known that its suggestion would provoke outrage. So why do it? Was it an insensitive provocation or was it, as the FT’s man in Brussels Alex Barker reports, because the EU wants to force a reckoning? One EU diplomat even used the term ‘shock therapy‘.

Paragraph 49 of the December agreement read:

The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU-UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all- island economy and the protection of the 1998 Agreement.

That effectively means that unless the UK can suggest either a form of trade deal or a technological solution that removes the need for border checks, the UK must retain full alignment with the single market and customs union at least for Northern Ireland.

Within days of the report being published, David Davis told Andrew Marr that it wasn’t really an agreement, just a statement of intent. This annoyed the other major players in the EU who thought they’d secured an agreement which would allow them to move on to the next phase of the negotiations. The UK also failed to come up with any detailed solutions, despite insisting that it could all be sorted out somehow. In the absence of anything more concrete, the EU came up with what it described as its fallback plan; an EU and Northern Ireland customs union.

Government ministers have probably known for some time that there isn’t an easy solution to the Northern Ireland border question. If Boris Johnson really believed that it was no more complicated than administering the congestion charge between the London Boroughs of Camden and Westminster, he wouldn’t have been the slightest bit worried by the European Commission’s fallback protocol. His response would have been, “What a silly suggestion. Everybody knows it won’t come to that because we have the technology to avoid customs checks at the Irish border.” Instead, he got angry and blustered. Indeed, it is the same people who have been assuring us all along that technology would solve the border question (many of them quoting an EU report that said nothing of the sort) who have gone apoplectic at the EU’s protocol. Which was, I suspect, the whole point of it.

So far, the government has avoided coming clean about the trade-offs that Brexit makes inevitable. It has stuck to the cake-and-eat-it line whereby the UK can end free movement and negotiate its own trade deals while avoiding a hard border in Ireland and any economic damage from trade friction.

But there is no magic solution to the Northern Ireland border. As soon as the UK starts importing goods from outside the EU under its own trade agreements, there has to be a customs border with the Republic of Ireland. There is a straightforward decision to be made. Do we want the UK to have its own trade deals with other countries or do we want to maintain the current border arrangements in Ireland? We can’t have both. If we choose the hard border option, the EU’s current line is that it will refuse to discuss trade deals. How firmly it will stick to this is anybody’s guess but it certainly increases the risk of the UK leaving the EU without any sort of trade deal.

So it’s not difficult this. It’s a straightforward trade-off. We can have some of what the Brexiters promised but not all of it.

The Brexit Dilemma

As a country, we need to decide what is important to us and what we are prepared to give up to secure it. But so far we haven’t had any proper political debate about any of this. The government has maintained that we can have it all and the Labour Party has, until recently, kept quiet. Now, the EU’s protocol on the future status of Northern Ireland, whether by cold hard calculation or ham-fisted provocation, is likely to force the issue.

As a former colleague of mine used to say, “Sometimes, the only way to get people to understand the shit they are in is to rub their noses in it.”

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43 Responses to An Irish Sea border is a silly idea but so is the cake-and-eat-it bluster

  1. Jim says:

    The UK doesn’t have to put any border control up on the NI/Eire border. It can declare unilateral tariff free trade, allow anything in from the Republic (and the rest of the EU and world of course) and it will be up to the Republic if it wants to put a hard border up on its side, as ordered by its EU Gauleiters.

    • Woodsman says:

      Sounds fun. Have you thought this through?

    • Mick McNeill says:

      I laughed my sides with merriment. No border to be erected by Mayhem and Co in NI, the EU will erect a border to stop you Quitter types getting out, but at least you’ll be able to let in all the immigrants you need FREELY at this non-border you don’t erect, so funny, I split my trousers laughing!

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    • Wasn’t the purpose of Brexit to take back control of our borders, at least in respect of passport control?

      If we declare unilateral free trade in respect of the Republic of Ireland, we’d be obliged by WTO rules (most favoured nation) to apply this universally, which means no border control for goods at Dover either. While this would lead to cheaper goods for consumers in many cases, it would also wipe out much of what remains of British manufacturing and agriculture, with no compensatory tariff-free access to export markets.

      The Republic would be obliged to implement border control for goods in order to enforce the common external tariff (unless the UK, or at least NI, stays in a customs union with the EU). This, together with passport controls for entry to the UK, would mean a hard border regardless of any unilateral declaration of free trade.

      • Blissex says:

        «The Republic would be obliged to implement border control for goods in order to enforce the common external tariff»

        As any “Leaver” can tell you, nobody forces Eire or the EU to do that — it is their choice if they do it. Welcome to understanding it is all about UK domestic politics blame game, with an eye towards the 2022 general elections run on a jingoist line.

        • The republic is “obliged” by the nature of the EU customs union. Enforcing an external tariff is a non-negotiable feature of any customs union, not just the EU version.

          As membership of the EU customs union is mandatory for EU members, a refusal on the part of the Republic to enforce the external tariff (and thus a hard border) would be a material breach of its obligations as a member of the EU.

          A refusal on the part of the EU to enforce the external tariff on the Republic/NI border would mean either a retrenchment of the customs union to exclude the Republic (which would be in breach of the EU’s own constitutional rules) or an exemption that would make the customs union essentially redundant (i.e. lots of business across the EU would import tariff-free via Ireland) and call into question the viability of the EU.

          In other words, the leaver claim that a hard border can be avoided by magical thinking (“they don’t have to do that”) is as deluded as the idea that it can be obviated by technology.

          • Blissex says:

            «The republic is “obliged” by the nature of the EU customs union. Enforcing an external tariff is a non-negotiable feature of any customs union, not just the EU version.[ … ] A refusal on the part of the EU to enforce the external tariff on the Republic/NI border would mean either a retrenchment of the customs union to exclude the Republic (which would be in breach of the EU’s own constitutional rules) »

            The “Leavers” understand better than this the nature of “sovereignty and independence”: it includes also the ability of changing constitutional rules to do very stupid things. The EU27 are sovereign and independent and have the power to change the nature of the EU CU, the EU constitutional treaties, and if needed their own constitutions and their own laws, to do whatever the Conservative governments asks of them even if it were very stupid for them to do so. Rather they reject the demands of the Conservative government because, as D Tusk and the others have very explicitly said, that is just not in their interests. It is WILFUL DISOBEDIENCE. 🙂

            Claiming that the EU is an undemocratic out-of-control dictatorship that forbids the member states from changing their treaties, constitutions, policies, is exactly what many “Leavers” claim.

          • Blissex says:

            Put another, a very simple way to resolve the irish border issue would be for Eire to exit from the EU too, and agree a suitable treaty with the UK, and this has been suggested by several “Leavers”. Nobody forbids the irish people from doing so, because they are sovereign and independent. if they don’t do that it is simply because they think it is not in their interests.

            To sort our the irish border situation some party have got to do something against what they think are their interests: at least one of Eire, the UK, or the EU. In way of principle, there is no reason why it should be the UK; Eire could exit the EU, or the EU members governments could change its treaties and rules and laws, these are all feasible solutions.

      • Perry says:

        We do not belong to the WTO. Our agreement with the EU is. “Nothing is agreed until everything is agreed.” Try to understand. Nothing has been agreed. We do not need to join the WTO, it is after all mainly for the benefit of the USA.
        We are not subject to its rules..

        • The WTO is the successor to GATT, which we joined at its inception in 1948, long befeore accession to the EEC (whose successor is the EU). The UK is a member of the WTO both individually and as a constituent member of the EU. Brexit does not mean that we stop being a WTO member.

          • perry525 says:

            We are only a member by virtue of the EU. Once we leave the EU. We are not a member. Yes we were a member of the WTO a long time age, but we gave it up as part of joining the EU.

    • gunnerbear says:

      Tarriff free trade eh? You’ve just smashed UK industry to pieces as cheap goods flood in from all over the world.

      Why do you hate UK manufacturing?

  2. Dipper says:

    There is this document.

    http://www.europarl.europa.eu/RegData/etudes/STUD/2017/596828/IPOL_STU(2017)596828_EN.pdf

    which is a document produced for the EU. Without reading every page it seems to propose a light border. Lots of pre-registration, special lanes for lorries. I think the UK would wind back even on this with solutions that don’t require a shed on the Newry – Dundalk road. If the EU wanted to make this work, they would make it work, but they don’t.

    “The government has maintained that we can have it all”. They are negotiating. Not the UK’s job to do the EU’s negotiating for it.

    Meanwhile, Varadkar needs to wind his neck in. First he gives his support to a document that seeks to grab control of NI against the wishes of the people of NI in breach of the GFA and then appears to be mandating UK MPs to vote in the interests of ROI. This has been noticed.

    • Woodsman says:

      Let’s face it, staying in the EU would be both easier and beneficial to all. Good night.

      • Perry says:

        Please look at the overall position. Everything we import from outside of the EU is subject to import duty, which money goes to the EU. Before we joined the EU, we decided on our level of import duties on every product from every country in the World, and believe me it was a very large book, that got altered every month. The rates of duty varied depending on businesses lobbying the Government of the day and how competitive our businesses were. At the time we had the cheapest food in the world.
        Once we have left the EU we can again decide what rates of duty if any we will apply for every product that is imported from every country in the world.
        This will mean that many things will be imported FREE OF DUTY!
        And therefore cheaper to buy.
        SOMEHOW PEOPLE HAVE LOST ALL IDEA OF HOW THINGS WERE PRIOR TO OUR JOINING THE EU. AND HOW THEY CAN BE AGAIN..
        WE DO NOT NEED FREE TRADE AGREEMENTS – THAT ARE SOLELY FOR THE BENEFIT OF BIG BUSINESS.

    • Mick McNeill says:

      Hey Dipper is that you stillshouting in your echo chamber, LOL!

      I laughed my sides with merriment. No border to be erected by Mayhem and Co in NI, the EU will erect a border to stop you Quitter types getting out, but at least you’ll be able to let in all the immigrants you need FREELY at this non-border you don’t erect, so funny, I split my trousers laughing!

  3. Patricia Leighton says:

    How much is this futile ‘negotiation’ costing us all. No trade deals, no agreements, nothing positive and all the while, our businesses are going down the pan and even the Mini will soon be completely German. What a total, pathetic waste.

    • Blissex says:

      «nothing positive and all the while, our businesses are going down the pan»

      Enough with “Project Fear”: exit will have the same impact as a recession, that is quite painful but as D Davis said not a “Mad Max” scenario. Lower wages and bigger unemployment will save english businesses.

      And there will be a positive side or two: less sovereignty because of more dependence on the USA and China, and the southern english middle classes and the southern english elites will again be the constituency that entirely dominates the politics of the UK, instead of being just one of the big constituencies within the EU. For hundreds of year the southern english constituencies and elites have had the absolute majority of votes and of top leaders in the Empire and in the UK, and got fed up with being just another lobby at the EU level.

      • Brendan says:

        I don’t ever know of any circumstances in which a government has wilfully and knowingly inflicted a recession upon its people. “Quite painful” hides a multitude of sins. It means lives ruined and lost, in the aggregate material effects of a recession.

        • Dipper says:

          Greece

        • Dipper says:

          and to state the obvious, in promising that the government would implement the result of the referendum even if that result was to Leave which would cause a recession, the UK government was promising to do just that.

        • Blissex says:

          «I don’t ever know of any circumstances in which a government has wilfully and knowingly inflicted a recession upon its people.»

          Oh there have been many cases around the world, e.g. UK in the 1980s, but in voter democracies such aims haven’t exactly been described as such in party manifestos.

          «Greece»

          That’s a really inappropriate example at least for the case of Greece 2001-2016: the story told by the usual propagandists as to the greek economy starts always, with great intellectual dishonesty, in 2008, and with equally great intellectual dishonesty always omits mentions of the trade deficit and accounting fraud.

          What happened in 2001-2008 is that the conservative greek governments increased borrowing, the government deficit and the trade deficit all to around 15-25% (depending on how it is measured) of GDP annually, where fraudulent borrowing went straight into big handouts to benefit conservative constituencies, and those went straight into imported consumer goods. When the accounting fraud ended the borrowing ended, the government deficit ended, the imports ended, and GDP returned to what it was before.
          Arguably there was no austerity and no recession, just a temporary surge in imports funded by fraud, followed by a return to normal levels of GDP per head Unemployment rose but only because of a change in the type of employment.
          Quite probably the return to normality in 2012 was not an intentional goal of the conservative governments that created the fraudulent boom of 2008, just an inevitable consequence of the end of the fraud.

  4. J.H. says:

    “A customs border on the Irish Sea is a silly idea which would create more problems than it solved. Leaving aside the possibility of Loyalist violence, the flip-side of the Republicans potentially attacking the border posts, there is the simple economic impact. While Northern Ireland’s principal foreign trading partner is the Republic of Ireland, the majority of its external trade goes to the rest of the UK. A customs border with Great Britain is therefore likely to be more damaging than one with the Republic. It also wouldn’t remove the Republic’s other Brexit headache, the loss of its export bridge to the rest of the EU.”

    This is true.

    But what is also true (and seemingly not taken into account in this otherwise excellent post) is that the problems outlined in the bit quoted above (other than the loss of the export bridge) is NOT the EU’s problem, but the UK’s problem. Since the UK will not be an EU member anymore the EU isn’t obliged to consider its problems as part of the EU’s problems. A customs border between NI and Great Britain will be damaging to Northern Ireland, but that’s not the EU’s problem and the EU won’t have to fix it. The EU’s primary concern is the Republic of Ireland, and unlike the UK, the EU (and within it, the Republic of Ireland) at least seem to have recognized that they cannot have it all:

    a) continued frictionless trade between NI and Ireland
    b) continued frictionless trade between Ireland and Great Britain
    c) continued frictionless trade between the rest of the EU (other than Ireland) and the UK as a whole (and Great Britain specifically)
    d) the maintenance of the export bridge between Ireland and the rest of the EU via the UK (which is predicated upon (c) above)
    e) freedom of movement for capital and persons being maintained between Great Britain and the EU26 (the rest of the EU other than Ireland)
    f) continued UK contributions to the budget

    So they’ve come up with a draft agreement which maintains things as they are until the end of the current budget period (thus minimizing disruptions to the current budget and allowing for the next budget to be negotiated without Brexit affecting it) and which would at least keep frictionless trade between NI and Ireland and thereby limit at least some of the damage that Ireland will experience (at this point based on the UK government’s red lines, the Irish are going to take a hit, this at least lessens the damage and costs, even if only by a small amount). The Brexit red lines outlined by the UK means that the export bridge is lost anyway, so the Commission and the EU generally seems to be going after what might still be feasible in the salvage operation that is the Brexit process.

  5. Blissex says:

    The diagram above is not quite right:: being part of the EU Customs Union is in effect incompatible with restricting the free movement of people or not paying into development funds.

    The reason is very simple: being inside the EU Customs Unions means no tariffs and no restrictions to trade between countries, because it means indeed customs-free trade among the EU CU members. That is full freedom to trade, and the EEA four freedoms cannot be separated: there cannot be freedom of trade without freedom of movement, plus there must be compensatory transfers.
    The less developed and poorer members of the EU CU will never agree to be flooded by products from the richer more developed ones without getting freedom of movement for their emigrants and development funding for those who stay.

    • George Carty says:

      What about Turkey? They’re part of a customs union with the EU without having freedom of movement…

      • Blissex says:

        That customs union covers only manufactured goods made in Turkey, with rules of origin etc. In practice it is just a concession to a “developing” country, like the EU concession of tariff free (large) quotas on imports from third-world countries.
        Also it was given in exchange for help with refugees, and is now complemented, as a further concession, by visa-free travel, which is a nice way to say “illegal immigration is tolerated”. In the area where I live after that happened a number of turkish-owned shops opened up, or were bought and staffed by turks. My guess is that they are financed by the turkish mafias, because barber shops and other shops are perfect for hiring illegal immigrants, paying them cash-in-hand, and getting “legal” cash from customers.
        Similar geopolitical motivations are behind the special trade treaty with the Ukraine.

        Concessions to large rich developed countries are not as easily available “for free”, in particular for rivals in sectors like advanced financial services. Those have to be bought, with large contributions and pooled sovereignty on regulation and dispute resolution, as in the cases of Norway and Iceland, and even in those case they are pretty small countries that mostly export commodities.

        As to freedom of movement for the UK, I usually produce this chart of UK population over the decades, inviting to spot the surge of uncontrolled immigration from the EU when it started in 1973:

        • Dipper says:

          there’s a surge there in 2004 to the current time.

          • Blissex says:

            «there’s a surge there in 2004 to the current time.»

            And so there was a much bigger one after 1955 with the baby boomers. Should the “surplus” ones be thrown out of England because they were “generational immigrants”? 🙂

            Apart from the joke, the two better points are:

            * The UK joined the EEC/EC/EU in 1973, and there was actually a “surge” of emigration to places like Germany by northerners for example when they were made unemployed by M Thatcher. Obviously “uncontrolled immigration” as such is not the problem, if it took 30 years for a “surge” to happen the other way.

            * The so-called “surge” did not have a big effect on the long term slope of population growth, which has fluctuated around 0.5% per year, and the rate of population increase is obviously falling, and polish wages have doubled in real terms since 2004, and french and german companies are opening factories in eastern Europe as fast as they can.

            In the great scheme of things even the impact of a good chunk of people coming in post-2004 was but a blip; and that blip happened because the tories and tory-lites wanted to destroy the businesses of France, Germany, Italy with cheap english exports thanks to supplying lower wage workers to english businesses, in order to get the voters of the other countries to demand exit from the EU. It backfired…

          • Dipper says:

            an increase of 25% in a generation and 25% of births going from immigrants is not a blip.

      • Blissex says:

        «Turkey? They’re part of a customs union with the EU without having freedom of movement…»

        Put another way the debate was whether to be part of “the” EU Customs Union, the full one that covers all services, and that is politically a very difficult situation. Trade is always political: ask people in the north for an opinion about imports of polish coal. Trade in financial services is particularly fraught with political issues, because like weapons manufacturing, oil, nuclear, aviation, finance is a sector of “special state interest”, where in effect businesses in it are directly or indirectly managed or guided by state policy.
        RBS, Thales, BP, BA, are not fully independent/private companies.
        The establishment of the ECB (however weird an organization it is technically, similar to the BIS) and of a common market in financial services in the EU, dominated by the City, was a truly major event, and surely the result of very difficult negotiations.

        https://www.theguardian.com/politics/2017/dec/18/uk-cannot-have-a-special-deal-for-the-city-says-eu-brexit-negotiator-barnier
        «Michel Barnier said it was unavoidable that British banks and financial firms would lose the passports that allow them to trade freely in the EU, as a result of any decision to quit the single market. “There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn’t exist.” He said the outcome was a consequence of “the red lines that the British have chosen themselves. In leaving the single market, they lose the financial services passport.”»

        There are trade deals that have a section on financial services, like the EU-Canada, EU-south-Korea ones, but the coverage tends to be quite limited. Instead the existing situation with “passporting” is that UK based businesses can trade directly (without having to open local branches) in services anywhere in the EU27 under the supervision of the BoE and the Treasury without any country-specific licenses. As M Barnier said there is nothing like that outside the EU, and that requires a significant degree of political and regulatory integration.
        For example the single market in financial services has meant that in eastern Europe pretty much all local banks and finance business have disappeared or been bought by western european ones, which was as their governments expected. No sovereign country would have agreed to have their financial sector become a foreign colony without compensation such as development funds and free emigration.

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  7. Blissex says:

    Stop the presses: the new speech by T May has a vitally important detail:

    «We are not looking for passporting because we understand this is intrinsic to the single market of which we would no longer be a member.»

    it is every important because “passporting” was the only thing that really mattered to many sponsors of the Conservatives and the one thing that the Conservative negotiators cared about as to “cake and eat it”.
    That the Conservatives have given up on “passporting” means that they are definitely going for a “hard exit”, because they have given up on the one thing that might have resulted in give-and-take during the negotiations. That means that they probably no longer give a fake penny about the irish situation either.

    • Blissex says:

      Stop the presses again: today P Hammond has directly contradicted T May’s official government position that he had endorsed just last Friday during the “away day”:

      https://www.theguardian.com/politics/2018/mar/07/philip-hammond-reignites-the-no-deal-brexit-argument
      <blockquote«Philip Hammond has put Britain on a fresh collision course with Brussels after he warned the government could reject any Brexit trade deal not including financial services. Speaking in Canary Wharf at the headquarters of HSBC on Wednesday afternoon, the chancellor said a trade deal would only happen if it balanced the interests of both the UK and the EU. “It’s hard to see any deal that did not include financial services can look like a fair and balanced deal,” he said.»

      Pretty amazing, not even a week before the “away day” blows up.

      • I think the explanation for this apparent contradiction comes down once more to language. The term “passporting” has become associated in the press with a privilege granted by the EU, which makes it anathema to the ultras, not least because that means it is ultimately under the jurisdiction of the ECJ. What May wants is de facto passporting (i.e. the status quo) but under the aegis of a bilateral trade deal that avoids any ECJ superiority.

        At times I wonder if we could have avoided Brexit if we had simply got the EU to agree to add a common rider to all treaties and regulations: “This applies to all EU members, including the UK, except that the UK is also to be considered as wholly independent of the EU and not subject to this (except that it is)”. Lawyers might have had conniptions, but I think this could have worked politically.

        • Blissex says:

          «comes down once more to language [ … ] What May wants is de facto passporting (i.e. the status quo) »

          I totally disagree with that because she added very explicitly “we understand this is intrinsic to the single market of which we would no longer be a member” and this reflects exactly what the EU27 have been saying clearly, for example:

          https://www.theguardian.com/politics/2017/dec/18/uk-cannot-have-a-special-deal-for-the-city-says-eu-brexit-negotiator-barnier

          «Michel Barnier said it was unavoidable that British banks and financial firms would lose the passports that allow them to trade freely in the EU, as a result of any decision to quit the single market. “There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn’t exist.” He said the outcome was a consequence of “the red lines that the British have chosen themselves. In leaving the single market, they lose the financial services passport.”»

          BTW I thought that perhaps T May may have agreed to “We are not looking for passporting” because she did not fully understand the implications, but certainly during “away day” P Hammond must have agreed explicitly to “We are not looking for passporting”, and must have reviewed and endorsed her Mansion House speech.

          There is another interpretation possible but it is scary: that when P Hammond today said “hard to see any deal that did not include financial services” he meant that having given up passporting, the UK government is aiming for a no-deal exit.

          • Dipper says:

            “.. that allow them to trade freely in the EU,”

            What does this mean? Banks aren’t setting up stalls and having people buy goods from them. They offer prices normally through electronic venues and match bids and offers with counterparties. Are the EU going to stop EU banks from trading with non-EU counterparties?And in a wholesale market that is cleared they are trading with the central counterparty. So I don’t really see what this means.

            Banks will need to clear their Euros and will need a suitable counterparty or base in the Euro zone, but that was the case prior to the referendum and is related to the Euro not the EU.

          • Blissex says:

            «Banks aren’t setting up stalls and having people buy goods from them»

            They are increasingly harder to find, but there used to be “bank branches” and “mortgage shops” and “insurance brokers”… 🙂

            «in a wholesale market that is cleared they are trading with the central counterparty»

            Wholesale markets are quite a different thing, and even in those only licensed participants are admitted to trading. The “passporting” meant that in both wholesale and retail markets member country financial companies can be licensed on one member country and operate *directly* in another member country’s market, without having to open a local subsidiary capitalized and regulated locally. Of course every EU27 firm have already locally capitalized and regulated subsidiaries in the City and Wall Street.

            Adter exit UK financial companies (wholesale or retail, banks or insurance or consultants) will have to open and capitalize and register with the local regulator a subsidiary in each `of the 27 member countries that they want to have a wholesale or retail presence in. For businesses from EU member countries there is a single (to some extent) EU financial market; for businesses from outside there are 27 different markets. Consultants will have to get a country-specific work permit every time they get a contract.

        • Blissex says:

          BTW another bizarre detail is that after the Mansion House speech I haven’t seen any newspaper comments on the “We are not looking for passporting” in the speech, which was the only substantive statement she made, which astonished me, and today “The Guardian” wrote very carefully that P Hammond’s statement “has put Britain on a fresh collision course with Brussels”, rather than with official government policy agreed in the “away day”.

          I suspect the government, days of shouting from the City, is going to pretend that T may never said “We are not looking for passporting because we understand this is intrinsic to the single market of which we would no longer be a member”.

        • Blissex says:

          «if we could have avoided Brexit »

          My proposal was:

          * To rename the EU to “The Empire of England, the British Isles, and continental Dominions”.
          * Have HM Queen Elizabeth acclaimed figurehead of said empire.
          * Get HM Queen Elizabeth open the sessions of the The English Imperial European Parliament.
          * Rename the ECJ as the “Imperial Dominions Justice Lords”.
          * Rename the EU Council as the “Imperial Privy Council of the Dominions”.
          * Rename the EU Commission as “Commissioners of the Imperial Dominions Office”, with JC Juncker as “HM Chief Permanent Secretary of the Imperial Dominions Office”.
          * Change the EU passports to be all blue and bear a fancy logo with lion and unicorn and appropriate caption.

          Without actually changing anything else, the politics, the voting weights, the treaties.
          This remembering W Bagehot’s distinction between “dignified” and “efficient” parts of the UK constitutional arrangements. It would probably have satisfied the pride of enough older english voters. Other would have demanded to have 80% of the votes for England like in the English Empire and the UK, but I think just changing the dignified part would have been enough for most.

        • Blissex says:

          «What May wants is de facto passporting (i.e. the status quo) but under the aegis of a bilateral trade deal that avoids any ECJ superiority.»

          Someone commenting on “The Guardian” I suspect said the same with different words:

          «The comic answer is that she’s going to demand that the EU set up a special arrangement for U.K. banks that is basically identical but not explicitly the same to get around this. And then be shocked when they say no.»

          But it would be the extreme of insanity to say “We are not looking for passporting” with the sneaky intent to get not just passporting anyhow but also a “cake and eat it” version after adding “we understand this is intrinsic to the single market of which we would no longer be a member”.

          It would be the extreme of madness… oh oh. T May and P Hammond may have gone completely yet lucidly insane. Too many cabinet meetings with B Johnson, G Williamson, L Fox, J Hunt could do that. 🙂

  8. perry525 says:

    Boris made a comment the other day, which indicated that every entry to the Congestion Zone is covered by cameras, and there are a lot, and vehicle cannot enter without being caught. And indeed thousands of vehicle enter every day.
    Every day thousands of consignments arrive and depart UK airports, without customs delay.
    Keeping in mind that few manufactured goods move between Northern and Southern Ireland, traffic is mainly agricultural. It is hard to see that. the movement of goods across the Irish Border creates much of a problem. Especially that of Import Duty
    Is it not a fact, that the problem is being blown out of all proportion by remainers?

  9. Dipper says:

    Posted this in the wrong thread. Reposting it here because I know you all appreciate being kept informed.

    as of yesterday we have this.

    http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/exiting-the-european-union-committee/the-progress-of-the-uks-negotiations-on-eu-withdrawal/oral/80702.pdf

    So this is all feasible and within the timescale.

  10. Joey Vimsante says:

    Breaking away from the EU, is a terrible idea. We need closer contacts with European market, not less.

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