More on Brexit

Theresa May’s speech last week, while providing very little new information, provoked a lot of debate about the future relationship between the United (or perhaps more aptly the Disunited) Kingdom and the EU, and the potential consequences for Ireland. In particular there is much debate about the nature of the trade deal that might be achieved, and what Ireland should do. No doubt this debate will continue until the UK has left the EU and probably beyond.

However, what people are forgetting is that for there to be a trade agreement there first needs to be a successful outcome to the Article 50 negotiations. Some commentators do not distinguish the Article 50 negotiations, which are solely about the exit of the UK from the EU, from the trade negotiations, which in any case can’t be completed (at least in terms of signatures and giving legal effect to them) until the UK has actually left the EU.

The lack of attention on the Article 50 negotiations also seems to apply to the UK government, which other than indicating the likely time period in which Article 50 is going to be triggered, has not commented in detail about these. Theresa May’s speech last week is no exception in this. It would appear that the outcome of these negotiations is taken for granted, which might be due to a lack of understanding of what they entail.

A key aspect of the negotiations relates to the assets and liabilities shared between the Member States. The EU owns significant financial assets and of course also owns significant property assets. The 2015 consolidated EU accounts show that these assets were worth €154 billion. Of course the EU also has substantial liabilities, such as contractually committed expenditures but also pension liabilities. These amounted to €226billion in 2015. If one simply apportioned the net liabilities according to economic size the UK would owe the EU €12.6 billion.

Apportioning the UK share of the net liabilities amounting to €72 billion is going to be a tricky task, especially as the simple aggregate approach used here for illustrative purposes will have to be replaced by a much more detailed approach. Thus, instead of arguing about the shares for the two figures on assets and liabilities the negotiations will be about lots of figures.

Some commentators have also suggested alternative numbers, which are presumably based on different underlying data. For example the Financial Times has suggested that net payments from the UK to the EU could range between €20 billion and €60 billion. Apart from the potential for disagreements in attributing assets and liabilities to the UK, it should not be taken for granted that a Eurosceptic Westminster would approve payment of billions of pounds to ‘Brussels bureaucrats’. Failing to successfully complete the Article 50 negotiations would make trade negotiations difficult if not impossible.

What should Ireland do to mitigate the consequences of Brexit? Some people (e.g. Nigel Farage) are arguing that Ireland should also leave the EU. This is utter nonsense! Does anyone believe that Ireland could cut a good trade deal with a country that is over ten times larger in economic terms (GDP) and 14 times large in terms of population (the UK) rather than being part of a block that is almost 5 times larger than the UK? Brexiteers are trying to stir disagreement among EU members as a broken EU will be a lot easier to leave and doing deals with (small) individual countries will also be more advantageous for the UK.

The fact that Ireland trades extensively with non-EU countries, and particularly the US is not evidence that Ireland does not need the EU, but the opposite. Multinational companies that are responsible for the bulk of Irish trade are in Ireland because of EU membership. The EU has concluded trade deals with a range of countries and blocks and a small country like Ireland is not going to negotiate a better deal than the EU.

The latter point also applies to the UK. While Theresa May is now using the slogan of “making Britain truly global”, she and fellow Brexiteers have failed to show how the EU stopped the UK from being global. Indeed the evidence shows that Germany went global, i.e. increased its export share with non-EU countries accounting for EU expansion effects, from the 1980’s onwards. Using this definition the UK only started globalising in the early part of the last decade (see Morgenroth, 2017). Far from stopping countries going global the EU has actually facilitated globalisation for countries that wanted to pursue this goal (something that has been criticised by certain groups). Failure to do so is thus likely to be due to domestic policy failings.

So what should Ireland do? Firstly, it is important to note that when it comes to trade, the objectives of the EU are the same as those of Ireland – to keep trade as free as possible. Similarly, every EU Member State will want to protect its firms from unfair competition. This implies that the EU negotiating stance is likely to be reactive, responding to deviations by the UK from the status quo on trade barriers as well as other factors such as the adherence to State Aid Rules.

Secondly, while Ireland is particularly exposed to the negative impacts of Brexit, there are other EU Members, which will have shared concerns. For example as is now well known, the Irish agri-food sector is particularly exposed. Analysis shows that the Danish pork exports are as exposed Brexit as Irish beef exports to the UK (see Lawless and Morgenroth, 2016). Thus, there are natural allies which will have similar interests when it comes to the negotiations. The detailed analysis of which sectors, firms and regions are most exposed will help identify potential mitigating actions, for example by helping develop alternative markets.
Thirdly, EU Members will have the same objectives when it comes to attracting investment (both of foreign and UK firms) away from the UK, even if they will be competing against each other for this investment. Ireland is already more successful in attracting FDI than its size would suggest and it is likely that this will also apply to any investment diverted from the UK, at least in sectors where Ireland is already strong.

Finally, it is important to remember that it is not the EU that is turning its back on Ireland but that it is the UK that is doing so by leaving the EU – no amount of rhetoric changes this fact.

27 thoughts on “More on Brexit”

  1. A stimulating post. While I’m fully committed to the EU and think Brexit is economic foolishness (but makes complete sense from an English nationalist point of view) it behoves Irish economists and policy makers to consider seriously and carefully the case for Irexit – if only to then refute it.

    One of the biggest problems I see is that we are locked in to UK supply chains e.g. Tesco and other UK retailers have a huge share of the Irish retail market and make great profits here. Part of the reason for that is that we like our brands and will pay extra for them by shopping in Tesco. Also, we don’t like to be seen as cheapskates by shopping for value and using generics. In my (lower middle class) social circle one does not easily confess to shopping in Aldi or Lidl. It will not be easy to encourage other European retailers to set up shop in Ireland. John Fitzerald wrote a newspaper article about this very recently. At the moment, we are almost completely at the mercy of the prices charged by UK retailers and, if we don’t diversify, we face a huge increase in consumer prices post Brexit which will lower living standards. Even some non-British retail chains, e.g. TK Maxx, enter the Irish market from their UK office, price goods in Sterling and then convert them to Euro at a very favourable (to them) exchange rate. It is possible that even Spanish retailers like Zara do the same. Has there been any economic research on this?

  2. On the previous and, imho ongoing, crisis Ireland adopted a supine approach to both Financial System and EU diktats and the lumpen Hibernian proles were largely sacrificed on the altar of Finance first and democratic lifeworld second … not to mention the nonsensical acontextual and atemporal SGP forced on member states and such nonsense now entered into Irish law.

    On trade following Brexit, if it ever reaches its endpoint, the indigenous SME and Agri sector appear most vulnerable …. yet vast majority on Island of Ireland and Scotland are pro-EU …. democratic mandates.

    throughout the ongoing financial crisis [debt/GNP ratios – unconscionable socialization of financial and corporate losses] the Global FDI continued to prosper …. and methinks most will ignore the new lad across the big pond and continue to accept our most generous hospitality …. [and they can certainly afford to substantially increase their employee pRSI contributions which are bottom of the EU league]

    Over in ‘EUrope’ I doubt that the distinction between Donegal and Derry is understood …. let alone the distinction between Derry and Londonderry. 12.5% certainly is! And blackmail has been tried before by EU leaders!

    I humbly suggest a Hard euro-critical All Island stance with the EU and a demand for a seat at negotiations (Veto in back pocket or handbag); a Hard These Islands stance with a ‘lost’ London Admin on breaches to Good Friday Agreement and the Scottish Question; and an unknown response to the new lad across the big pond in less than 140 characters.

    Time to invade Europe in the best possible sense ….

    Nr. 175 · January 2017 · Hans-Böckler-Stiftung

    CRISIS RECOVERY IN A COUNTRY WITH A HIGH PRESENCE OF FOREIGN OWNED COMPANIES – The case of Ireland

    Heike Joebges
    ABSTRACT
    Compared to other euro area countries, Ireland has been one of the countries most heavily hit by the worldwide financial crisis, yet, also one with the strongest and quickest recovery. Foreign controlled affiliates of multinational companies dominate economic activity, attracted by low corporate taxation rates. Low Irish tax rates contribute to downward competition of taxation in the EU and constitute a beggar-thy-neighbour-policy. Effects on Ireland are neither clearly positive: Profits of foreign affiliates do not necessarily stay in the country. A consequence is the huge difference between GNI and GDP: GNI per capita is by about 15 percentage points lower than GDP per capita. Hence, GDP can be misleading, when judging the recovery since the financial crisis. The paper instead concentrates on the development of national income, employment, and wages. Judged by these indicators, the Irish recovery ceases to be successful compared to other crisis countries. The benefits to Irish citizens are nevertheless questionable: GNI decreased stronger than GDP. Even worse are labour market developments since the recent crisis: employment and wages are still to recover, and the wage share decreased by more than 10% points.

    https://www.socialeurope.eu/wp-content/uploads/2017/01/p_imk_wp_175_2017.pdf

  3. “Firstly, it is important to note that when it comes to trade, the objectives of the EU are the same as those of Ireland – to keep trade as free as possible.”

    Really? So-called ‘Free Trade’ – if it ever actually existed would promptly impoverish some states vis-a-vis some other (and it seems to have done so). So what we probably have had is a lot of ‘slightly’ Free Trade.

    “Similarly, every EU Member State will want to protect its firms from unfair competition.”

    Unfair competition? Now that is “In the eye of the beholder” stuff – your ‘fair’ competition is my ‘unfair’. The weak (or the poitically coerced) will suffer what they must. Until, that is ….. Are we there yet? No. But I’d guess we are making definite progress.

    “The detailed analysis of which sectors, firms and regions are most exposed will help identify potential mitigating actions, for example by helping develop alternative markets.”

    Like where? The really large potential markets are slowly degenerating into fiscal basket cases. That competition thingy looks like a nasty Zero Sum gameplan. The received economic theoretical rationale is that you reduce, reduce and reduce (your production costs). But Economics 101 also has this thing about diminishing margins. Hmmmm. So, everyone cannot do it simultaneously. Lets see how this one plays out.

    Maybe we should introduce a Robot Tax. 😉

  4. Many thanks, Edgar, for this excellent thought-provoking post. You are delving in to key economic aspects of Brexit, but I fear this might be a tad previous as there is a lot of political economy that still must be played out. In many of the advanced economies there is a considerable groundswell of popular disgust and anger at the self-serving, rent-extracting antics of the upper echelons of the private sector (both multinational and national), of high net worth individuals, of their counterparts in the public and parastatal sectors, of the governing politicians, policy-makers and regulators they have suborned or intimidate and of the armies of professionals and service providers that operate as their well-rewarded functionaries and flunkies.

    This fully justified disgust and anger on their own did not result in the yes to Brexit last June in the UK or Donald Trump’s victory in the US; this disgust and anger are combined with a host of tribal and cultural factors. This combination, in its various manifestations, has yet to be played out in the Dutch general election in March, in the French presidential election in May and in the German federal elections in September. It’s difficult to assess how the political situation in Italy will develop. The governance of Spain is far from settled. And Poland is following Hungary as an authoritarian, illiberal polity.

    We had more than a hint of this disgust and anger during the water charge protests in October and November 2014. These protests went far wider and deeper than the usual left-wing head-banging and frightened the wits out of the then government and FF. Since then the expression of this disgust and anger has been returned to its usual and time-hallowed expression in the polling booths when, in the general election last year, both FG and FF were deprived of the opportunity of forming a government without the consent of the other party. But this disgust and anger have not disappeared. It’s just that those exercising power and influence in the public, private and semi-state sectors have been treading very carefully to avoid generating anything like the blatant provocation of the water charging debacle.

    But it wouldn’t take much to provoke it. The affection for the EU may run deep among the upper echelons referred to above, and there may be some lingering affection in other strata, but the sense that Ireland was screwed by Germany and France to protect their banks has settled deep in the public perception. When economic conditions in Ireland will be damaged and when the cost of living increases as a result of the inevitable conflict between the UK and the rest of the EU, public opinion in Ireland could shift radically. And the outcome won’t be comfortable for those in the pampered upper echelons.

  5. Article 50 spells out only one legal procedure; that for the divorce settlement. But it does not rule out other actions, apart from the generally accepted point that the UK cannot agree any formal third country agreements with the EU until it becomes one. Scheuble, the German finance minister, has suggested that the UK follow the example of Switzerland i.e. a series of interlocked bilateral agreements (to be negotiated over time but the broad outlines of which would be agreed as part of the exit “package”). Given that May has ruled out full membership of the single market through the UK joining the EEA, customs union (and associated common commercial policy), he is simply drawing the necessary conclusion; other than the UK crashing out into the arms of the WTO.

    This offers a possible basis of agreement. An EEA solution, for example, would have excluded both agriculture and fisheries.

  6. @Elia – I raised the issue of imports and supply chains in our report on Brexit back in November 2015 but as you rightly point out the implications in this area have not been analysed in detail as far as I know. The potential negative impact could be larger at least in the short to medium term than the impact through exports.

    @Brian Woods snr – you remind me about why I stopped posting here!

    @Paul Hunt – you are right in pointing to the distributional issues and dissatisfaction with the political ‘class’ as important factors. Not sure that voting for Brexit or Trump is going do anything other than register this dissatisfaction. But this does need to be taken seriously.

    @DOCM – Article 50 is about leaving. There are other articles that deal with relations to non members. What you suggest might be what will happen, but we know it is not going to look like anything that is in place already (Norway or Switzerland). I don’t think the style of arrangements you suggest has all that many fans in Brussels and in Germany for that matter.

    1. Thank you, Edgar, for your response. I agree that much of the voting for Brexit and for Trump was simply the registering of a dissatisfaction that has been building up for a long time; but the outcomes – Brexit and Trump – are very real. Geert Wilders’s Party of Freedom emerging as the largest party in the Dutch general election is not beyond the bounds of probability; nor is victory for Marine le Pen in May. The principal left of centre parties appear to be cheerfully choosing extinction – witness the re-election by party members of Corbyn in Britain, the likely selection of Benoit Hamon as the presidential candidate in France, the terminal decline of the SPD in Germany and the implosion of the PSOE in Spain. Centre-right parties are being pulled further to the right. The Dutch PM is basically telling Muslim immigrants to leave if they don’t want to accept the prevailing Dutch norms and values. Francois Fillon wants to tear up the Schengen agreement. Angela Merkel is being forced to accept, eventually, something along these lines. A very different EU is emerging as key founding principles are under pressure.

      And this is happening not because governing politicians, senior officials and those exercising economic power and influence (ably assisted by armies of professional flunkies and functionaries) persistently lied to voters – even though many did from time to time; it is happening because all these players spouted endless streams of self-serving bullshit.

      They have spouted so much bullshit that they no longer have any idea what is true or real. It is both ironic and tragic that their bullshit is being exposed and cast to one side not by those expressing the truth, but by those spouting lies and even more disreputable bullshit.

    2. Article 50 is also about the framework for the future relationship with the EU of the departing state.
      Switzerland it will be. It provides an a la carte and not a set menu.
      All involved, and especially May, will wish to keep the decisions at the level of the institutions i.e. no formal ratification at the level of national parliaments; only the EP in respect of the formal divorce settlement (with participation of UK meps!).
      NB The Swiss can also trade in ag. products with EU. Their interest in fish is less.

  7. Well done to authors (M. Lawless and E. Morgenroth) on Working Paper 550 Nov 2016.
    The paper is the first detailed information on WTO tariff rates, that I have seen, as it affects this country. The information on Table 3 is disconcerting, to say the least.
    If WTO it is, which now seems a real probability, then the Irish beef/ food industry will be FUBAR.

    That said, the statement that- “Some people (e.g. Nigel Farage) are arguing that Ireland should also leave the EU. This is utter nonsense! “, is absolutely correct.
    To follow Farage, would be to make a bad situation altogether worse. But Ireland must start to fight its own position.
    When one looks at Figure 3, WTO rates to EU by product, one can see clearly that the EU is an almost free trade area for all products except agricultural, where extremely high tariffs apply.
    It is that ‘agricultural based products’ protection, that is now coming back to haunt Ireland.
    Without a realignment of EU tariffs on food based products, it is hard to see how Ireland can mitigate the effects of the oncoming disaster.

  8. Edgar, noted: fortunately I’m ignorable.

    The overall economic situation (both global and national) is slowly deteriorating. The political brethern (some anyway) seem to have gotten part of this factual message, whilst the economic brethern (mostly) still appear to be clinging to the ‘alternative facts’.

    Like it or no, Ireland has only its Anglophone attribute (and a time-worn umbilicus to Britian) as our principal economic selling feature and we are in part, merely the much smaller of two smallish islands on the Atlantic edge of Europe. If France and Spain had successfully colonized the Americas North – rather than our cousins across the Irish Sea, we might still be a potato economy. Looking (or hoping) that the US or EU will save our ‘beef’ after the UK leaves the EU is a very dodgy proposition indeed. We were ruthlessly ‘shafted’ a few years back. Might happen again. I’d nearly put money on it.

    Some really imaginative economic thought and innovative action is now needed. No TINA stuff. I really cannot see anything other than appeals to stati quo arising from our current political crews. Maybe I’ll be proved incorrect. We’ll see. Cheers.

  9. The talk about Ireland following the UK out of the EU is skating around a big difference between the two countries. The British have a currency. For better or worse we abolished ours in 1999.

    Are the Irexiteers proposing that we re-establish a currency before quitting, or threatening to quit? How exactly (this is serious) do you do this? If you cannot do it, is it feasible to be a non-EU member with no currency? The models is Montenegro – anybody bother to check how things work with the Montenegrin financial system?

    1. On Colm McC’s point… One possibility for Ireland to exit the EU is to exit one union and to join one with which we share a land border today. Not advocating it by any means, but it’s one of the possibilities that’ll arise.

      We’d use a long standing currency, have a customs union, free travel area, shared citizenship, resolve one aspect of Ireland’s internal inter-community problem, etc., etc.,

      Now it’s a very different future than we might have considered before Brexit reared its ugly head, but Ireland is a small island in the middle of a big world. Brexit means we only have a few options. Either in the EU, outside the EU and alone, or outside the EU and part of something else.

      Personal preference makes me plump for option 1 – staying in the EU. But personal preference isn’t a good guide to national policy.

      1. We are stuck with the euro whether we like it or not. Schauble knows this better than most. He is pointing at the only feasible road ahead for ALL concerned, short of a rupture in UK – EU27 relations destructive to both.
        As usual, the debate in Ireland is about everything other than what will be seen in retrospect as the obvious.

  10. The Old Etonian spat within the Tories has just lost Scotland.

    …. and quite possibly the North East of This Island in time.

  11. I have no objection to England exiting the EU if that’s what they want. Good luck to them. As a nationalist, I don’t accept the right of England to govern Ireland’s (or Scotland’s) external relations. So, it would be hypocritical of me to object to England’s obvious desire to leave the EU. I’m sure England has enough talent and enterprise to make a go of it. But, even if not, its their decision.

    My objection is to England deciding for N. Ireland and Scotland and overruling both those countries’ equally obvious desire to remain in the EU. The House of Lords’ ruling today highlights the farce of the ‘United Kingdom’, wherein the Celtic countries are supposedly partners, but in reality count for absolutely nothing. At the time of the Act of Union in 1801, England had 50% of the U. Kingdom population and Ireland, Scotland and Wales combined had the other 50%. In 2017, England’s share of the U. Kingdom population is 85% and rising every year. Thanks to lopsided economic development and internal migration, the U. Kingdom is now simply England with a few politically impotent appendages added on. Make no mistake, if it wasn’t for Easter 1916, the R. Ireland would now be in the same sorry position as N. Ireland and Scotland and Teresa May, not the Irish electorate, would be the one making the decision on the whole island of Ireland’s membership of the EU.

    There is no solution within current constitutional structures to the problems caused for N. Ireland and Scotland by Brexit. Following the UK decision to exit the single market, a hard Brexit is inevitable. There is no mechanism within current constitutional structures for allowing N. Ireland or Scotland to remain in the single market and politicians on all sides must face this fact.

    The only solution is for N. Ireland and Scotland to exit the U. Kingdom, with the EU facilitating the economic integration of both parts of the island of Ireland, to be followed within a decade by political integration and a United Ireland. There will probably be referenda in both N. Ireland and Scotland in the next few years. The primary objective of the Irish government should be to win both for nationalism. To this end it should use its influence in both the EU and the U. States to ensure that both contribute towards creating a political and economic environment that facilitates this transition. Donald Trumps’ mother is from Scotland and Mike Pence’s father (or grandfather?) is from Sligo. So, the prospects are good.

    1. The only signatories to the treaties establishing the EU from these islands are the UK, as presently constituted, and Ireland. It is an illusion to imagine that this situation can be either changed or ignored. The challenge for the Irish state in the context of Brexit is to behave as one. There can be no special pleading. The responsibility is to find other states who share our concerns in particular areas and to build alliances on that basis. There is no shortage. The even include the UK on certain matters.

    2. The DUP, however, appear to be somewhat economically challenged …

      ‘… business, commerce and agriculture in the north were pretty unanimously opposed to leaving the EU. Arlene Foster and the DUP knew this fact perfectly well but nevertheless persisted in supporting a Leave vote for what they believed to be political advantage … In that campaign and in the months that followed until the present Foster and her party have consistently failed to represent the opinions and interests of the people of the north ‘.

      http://www.irishnews.com/opinion/columnists/2017/01/25/news/brian-feeney-we-need-to-know-if-dup-was-paid-to-back-brexit-901980/

      @Ian Paisley Jnr.

      Blind Biddy say Hi! … and an invite to afternoon tea.

  12. As regards the concerns of each country with sectors that may be impacted e.g. Danish pork exports to UK, UK car imports, and so on, an FT piece on Monday quoting trade experts, pours cold water on the prospects of having sector by sector arrangements.

    The UK will of course want components for just-in-time supply chains fast tracked through custom controls, but that is likely pie-in-the sky also.

    FT:

    A limited arrangement will run into the thorny problem of where to draw the boundaries of a sector. British suppliers to the motor industry, for example, will agitate to be counted inside to prevent their components being subject to bureaucracy…it is the political objections on which the idea of a piecemeal customs union is most likely to founder. One senior EU diplomat at the heart of talks says the probable division between EU member states means a sector-by-sector arrangement “would never fly”.

    An attempt to pick apart the single market or customs union would stir obstructionist politics in countries with other important industries left out of arrangements. “If you include cars, what about countries with food processing or textiles?” the diplomat said.

    The most likely outcome is that Britain opts instead for a broad so-called free-trade agreement with the EU, in which it could cut tariffs to zero but would still have to make customs and rules-of-origin checks.

    Mrs May’s vagueness during her speech last week may well have been politically prudent. To have definitively stated her desire for a sector-by-sector customs union would have meant a public commitment to a deal that is likely to be technically highly challenging and politically beyond reach.

    1. The author of this item is missing the point. The UK is quitting the CU and the CCP. The various agreements that the Swiss have can be viewed as sectoral but based on broad categories covering integrated industrial and agricultural sectors. The problem for May is one of presentation. The UK following Switzerland!

  13. The bottom line is that Irish companies and the Irish government should invest time and energy in exploring the EU to replace the UK for supplies and markets. It’s long overdue. Some skills (notably languages) will need to be improved quickly.

    There are two years to prepare, time to start is now.

    Unfortunately the sounds coming from government seems to be wait and see while lobby groups appear to be appealing for some form of compensation – a classic passive handout approach.

  14. fergolah makes a point I wanted to make. If Irish agri-business faces WTO tariffs into the UK, the UK will face the same barriers selling to ourselves and the continent. There may be the possibility of (1) our exporters replacing UK exports to the Continent in some market segments (but we need to think seriously about more direct transport links for roll on roll off traffic); and (2) tariff-hopping inward investment to the EU by UK companies, some of which we might get. I’m not saying that Brexit will be good for us. The SME sector will be badly hit. I am saying that we need to minimise the hit by exploiting every available opportunity.

  15. @edgar

    “Finally, it is important to remember that it is not the EU that is turning its back on Ireland but that it is the UK that is doing so by leaving the EU”

    I’ve been following UK politics for a long time and have got used to electorates backing governments with very little understanding or interest in the impact of policies (newspaper headlines excepted). This is the first time though, that I can recall where they, broadly, had literally no idea whatsoever of the consequences of what they voted for.

    If Britain has turned its back on Ireland (or if it ends up doing so as a result of Ireland being steadfastly part of the EU 27 power bloc, and polarisation between UK and EU continuing) ‘it’ will have done so by accident, without realising what ‘it’ was doing.

    The politicians shouldn’t have any excuse, but in the rarefied atmosphere of the elites (which in approximate terms includes anyone who can be bothered to read this blog, for example) it is easy to forget that many of the people who voted for and fervently support Brexit don’t even have basic knowledge of the fact that Ireland is a completely separate, independent state, when that happened, or what the detailed arrangements are (eg ECHR) for the bit that they have heard of properly – ie Northern Ireland. They are largely clueless and fairly disinterested – and as always, everywhere, patriotism or nationalism is a simple and effective motivational tool, and is particularly good at obscuring complex arguments.

    BTW, the interesting question still unresolved (ECJ required) is whether A50 can be withdrawn. A definitive answer to this should be obtained since 2 or possibly 3 or 4 years is a long time in British politics, implosion of the ‘left’ and Liberal Democrats notwithstanding.

  16. I would agree wholeheartedly with the point made by fergolah in terms of the default stance of the Irish body politic. In this, it is reacting to the same degree of popular ignorance in Ireland of the EU, and of the broader issues involved, as identified by grumpy in relation to the UK. It is a fact of life.
    The biggest pressures will come from the agri-food sectors as they are the ones most likely to take the biggest hit and, indeed, are already doing so. The question, therefore, is whether the farming, foodstuffs, and fishing industries in the UK will wish to see themselves cut off from their nearest export markets in Europe or rather rely on the UK going it alone down the WTO route i.e. is there a basis for sectoral agreements in these areas?
    Self-interest on both sides of the negotiation would suggest that there is; across the entire swath of existing UK links with the EU. However, these are the three that really matter to Ireland, North and South in the context of Brexit (assuming that a satisfactory answer can be found to the issue of bilateral free movement).
    The red lines for the UK can be summarised under the heading “taking back control” i.e. (i) role of ECJ (in essence, rejection of the primacy of EU law in a domestic context) (ii) immigration and (iii) money. The fundamental problem for the EU27 is that the three are intimately linked and none can be conceded in terms of principle. However, as the experience of Switzerland has shown, they can be massaged if there is a sufficient degree of mutual economic interest.

  17. @grumpy

    [This] Friday, proceedings will begin in Dublin in a crowdfunded legal challenge.

    The case, the brainchild of British barrister Jolyon Maugham, is being brought in Ireland but the applicants’ explicit objective is to have the case diverted immediately to Luxembourg. The litigants want the Irish courts to ask the advice of the European court of justice which sits in Luxembourg for its (binding) opinion regarding certain Brexit-related matters.

    The European court’s advice is wanted on two main issues. First: can the UK change its mind once it gives article 50 notice and withdraw the notice? If so, that would give new hope to remainers who would like public opinion to shift on Brexit as the economic picture becomes clearer, of continuing their fight in the UK parliament, even after the government gives notice as planned.

    Second: is article 50 notice on its own enough to ensure the UK quits the single market, or will that require further notice to be given under the European Economic Area Treaty? If extra notice is needed, that might possibly give the UK parliament a chance to block this step.

    The litigants’ intentions are admirable

    https://www.theguardian.com/commentisfree/2017/jan/26/tackling-brexit-irish-court-long-shot-article-50

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