German Chancellor Angela Merkel now sounds like socialist nannycrat Francois Hollande when it comes to punishing the UK.
The Financial Times reports Angela Merkel Takes Tough Stance on Brexit Negotiations.
In a speech to the Bundestag on Tuesday morning, Ms Merkel spelt out to London that the EU’s internal freedoms were indivisible — if Britain, like Norway, wanted access to the internal market then, like Norway, it would have to accept freedom of movement.
“We will ensure that the negotiations will not be run on the principle of cherry-picking,” the chancellor said, drawing applause. “We must and will make a palpable difference over whether a country wants to be a member of the family of the European Union or not. Whoever wants to get out of this family cannot expect that all the obligations fall away but the privileges continue to remain in place.”
Her words were a rebuff to Boris Johnson, the chief Brexit campaigner and possible successor to Mr Cameron, who declared on Monday that Britain would retain “access to the single market”.
Ms Merkel also insisted that there would be no informal talks with London before the UK submitted an application to start exit procedures — rejecting suggestions for such discussions from Leave campaigners, who are seeking to preserve as much flexibility as possible in the divorce proceedings.
At the European Parliament in Brussels, MEPs gathered for their own emergency summit to discuss Brexit. In a raucous session, they booed Nigel Farage, leader of the UK Independence party, which spearheaded the UK’s withdrawal from the EU, showering him with shouts of “shame on you!” when he rose to speak.
“Out, out, out!” MEPs chanted, thumping tables.
But Mr Farage was unrepentant. “When I came here 17 years ago, and I said that I wanted to lead a campaign to get Britain to leave the European Union, you all laughed at me,” he said. “Well, I have to say, you’re not laughing now, are you?”
Bundestag Cheers Possible Trade Collapse
There is nothing to cheer about trade idiocy. Everyone benefits from trade. period.
Dear Ms. Merkel, need I remind you UK Trade Deficit with EU Hits New Record.
Figures from the ONS showed that Europe is gradually becoming a less important destination for UK companies. In 2000, 60% of exports went to other EU countries, but the percentage fell to 58% in 2005, 54% in 2010 and 47% in 2015.
Over the same period, imports from the EU remained constant, accounting for 54% in both 2000 and 2015.
Europe has tended to be a less crucial market for UK service sector companies, many of whom have close business links with the US. Since 2000, the percentage of services sector exports going to the EU has remained at around 40%. Taking goods and services together, the share of exports going to the EU has fallen from 54% in 2000 to 44% in 2015.
Germany’s Trade Balance with UK
Dear Ms. Merkel let’s dive into Germany’s Trade Position With the UK.
Bluff or Stupidity?
Germany exports €50,963,643 to the UK than it takes back in imports.
Clearly, Germany would suffer far more damages than the UK were both sides to remain stubborn.
It would behoove the those cheering Merkel to take this into consideration.
The EU really ought to start over. It was supposed to be an organization that broke down trade barriers, not build walls.
But EU rules were so stupid, the UK wanted out. Instead of making more ridiculous demands on the UK and building more walls to stop trade, the EU ought to think about what is happening and why.
Queen of the Nannycrats
Sadly, EU nannycrats are incapable of intelligent thought on trade (and everything else as well, especially immigration).
Thanks to the stubborn stupidity of nannycrats, now led by Queen Merkel to the rousing applause of fools who don’t understand trade, there is a very real risk of a global depression.
Mike “Mish” Shedlock
The EU is acting like a really bad abusive husband. They are doubledowning on punishment, language and frankly-acting like stereotypical Germans from the 30s. And Merkel’s response is that the EU was created to prevent another big continental war…are you guys going to grow up already?
Look how the EU Parliament behaved like barn yard pigs today.
EPIC – Nigel Farage Speaks To European Parliament Today: “You’re not laughing now are you”?…
https://youtu.be/Y1ewRNSfyiI
https://theconservativetreehouse.com/2016/06/28/epic-nigel-farage-speaks-to-european-parliament-today-youre-not-laughing-now-are-you/
FYI
“LONDONERS’ REACTIONS IN THE IMMEDIATE AFTERMATH OF BREXIT: “YOU’RE AN OLD RACIST FOR VOTING OUT!!!”
I voted out, I’m 27 and I live in London. I don’t own anything with a Union Jack on it, even though I grew up in a council house and have working class parents. I studied politics and economics for 5 years at Queen Mary and the LSE, so I’m not ‘uneducated’. I don’t hold the same views as these institutions, I don’t belong to any ‘isms’, nor do I identify with left or right: I don’t watch mainstream news, so I don’t feel the need to put myself in any of these boxes. I am not a nihilist either; I’m a freethinking individual who wants peace and harmony for all human beings on this planet…..”
GOOD READ
http://brexitnotracist.com/
I think that the Evil Union is more like my wife, she doesn’t recognise where her wealth comes from.
The Evil Union believes that there is a wealth generator in the Evil Union parliament! They believe that every trade barrier and every new Evil regulation generates wealth.
They forget that wealth is generated by the transformation of goods and services to higher value, by the input of effort and by risking capital.
Governments by their very nature just consume wealth. The smaller we make them the less they’ll consume.
Let’s have micro-government, protecting our life liberty and private property, not forever expanding the bloated bureaucracies.
This is a call to all of the oppressed, resist and vote with your feet! Unfortunately the oppressed are too busy scratching around in the dirt, and paying ever more taxes to keep the likes of Merkel fat! Merkel and Yellen make a great pair, fat dumpy bookends to the oppressors!
First, I want to apologize to all the 3yr olds whom I insulted over the weekend. The EU bureaucrats are not as mature as you.
Second, please will someone change Juncker’s diapers?
Third, we all know that the status quo is not sustainable. The genie is out of the bottle and not going back in. However you want to phrase it.
Having the EU throw a temper tantrum for a few days was completely expected. No one likes to be thrown out of power.
But they are quickly moving from sore losers to suicide watch. When imperial Japan had technically lost WW2 (and it was obvious even to the Japanese), they could have surrendered, they could have retreated to their own island and avoided lots of bloodshed, they could have offered to retreat in exchange for peace… but instead they promised to fight to the death of the last man. Their best and brightest became kamikazes and died fighting battles that would never matter. Harry Truman reluctantly approved the atomic bomb rather than fight kamikazes on Japan’s main island (yes, it was Japan’s fault even if Obama didn’t read that chapter of US history).
Brexit was a symptom, not the disease. The EU had already lost before last week. Juncker flinging his food off the high chair won’t going to make anyone believe the EU will be viable a year or two from now.
But Merkel thinks she will destroy German exports to spite the British? That will shom ’em, right? Good grief. Continental Europe is in far bigger trouble than we knew.
England just pulled a Sam Zell and sold at the very top of the market — nice trade!
Beginning and ending sound reasonable enough. But I absolutely disagree with the middle part: A strange bit of revisionist history (of 70 years ago) with a neo-Con War Party spin in the middle that sounds like pure Hilary Clinton (to Syria, Libya, Iran, Iraq).
Real history, not neo-Con fantasy revisions (everyone surrender immediately and unconditionally to the World’s Greatest Military Power), bears the correctness of the Japanese actions in their correct historical context. That context: Surrender to the West based on promises, like Germany did in WWI, and you will get a Treaty of Versailles (bad terms). Instead Japan fought to the last man, and instead of Wiemar Republic hyperinflation and collapse into fascism, got good terms from the USA that allowed rebuilding into what was for a while the Second Greatest Economy in the world. Absolutely a correct strategy. Only place I might disagree with Japan is in not surrendering after the first atomic bomb; but given how innovative the weapon was in the history of warfare, I would not have faulted Truman for allowing Japan an extra 2 weeks to let it sink in before bombing a second time.
Nowadays Japan is so afraid of their own nuclear reactors that they shut them down and import oil instead to their economic detriment. Japan today acts like a whipped dog with its tail between its legs. USA.gov says bark, and Japan does it. Goes against its own people on monetary policy and allowing a second new USA.gov Okinawa military base for War Party to challenge China. Japan did better for itself when they were willing to die for their freedom. Pre-USA in 1776, a similar set of choices, like retreating to Canada in loyalty to the Crown against George Washington and his band of traitors opposing the legitimate rulers in London; choice always seems easier in hindsight of decades or centuries, versus real time when it really counts. But no disagreements with you on EU.
In spite of post-modern revisionism, one cannot ignore the historical facts. The very words of the Japanese leaders refute your ideas. It was not Bush who swore to defend Japan to the last child, it was the PM of Japan.
The Japanese rulers were very well aware that they did not have to fight to the last man, yet decided to do so. It took two bombs and over 100 fire bomb raids (not to mention the loss of almost the entire fleet and all of the empire) to convince the emperor to over ride the military junta and surrender. Note that they did so as soon as told to.
None of this had anything to do with the unconditional surrender demand. Their beliefs about what made a people inferior dictated that losing a war meant that they had to be racially inferior…..and since they were (in their minds) decidedly superior to all others, they could not, therefore, be defeated.
See how that works? Now, change Japan with EU, Tojo with Juncker and you get the idea.
You need to go back and re-read your history. Truman actually warned Japan before the first bomb *AND* the second bomb. Japan said they would fight to the last man, and that is when Truman gave the go ahead.
Revisionist history is denying that Japan started the war with its neighbors, Japan attacked Pearl Harbor, Japan still denies that if forced thousands to be “comfort women”, Japan still denies the forced labor camps.
To suggest an invasion of mainland Japan would have been fewer casualties (for Japan or allies) — you have to be as dumb as Obama. Japan could have surrendered two or three island chains earlier — and it would have saved tens of thousands of lives on each side.
Neo-cons came decades later…. again, you have to be a dumb as Obama.
President and former General Dwight Eisenhower was the guy who warned about the military industrial complex more than a decade after your revisionist version of nonsense.
All very good points, Dr. Strangepork. Was it any different with JFK and the Joints Chiefs of Staff over Cuba? The Prez, JFK, overruled the generals and the CIA. World War I was same way, give and take and back and forth arguments, but war hawks won. Japan, same thing, military won the internal struggle and got its way. Idiocy and opposing sides, nothing new. Japan is not blameless, and many in Korea and China and elsewhere would still like their pound of flesh.
I cannot fault Japan for wanting to defend itself at the very end, as by 1945 who started the war mattered little. The Japanese had good reason to feel they would be butchered by an invading force; their victims from the war years would no doubt have taken vengeance, not least the USA for Pearl Harbor and all the bloody Pacific battles. USA arguably got some measure of revenge with the atomic bombs, unlike Korea and China which still are airing their grievances from those years. It was because the Japanese did bad things that they had good reason to fear the consequences of an invasion.
I am not sure which history is the right history, Greg. If you read Hoover’s private memoirs of those years, well-documented and based on inside documents, you get a picture of FDR deliberately maneuvering Japan into war (perhaps for good reasons, perhaps not) and rebuffing peace talks with Japan pre-Pearl Harbor, which enabled the military to prevail over Japanese policy. Pearl Harbor, of course, was an act of war, more so than the Gulf of Tonkin or Iraqi Weapons of Mass Destruction or Benghazi and Libya flimsy Sec. of State Hilary excuses. I think major difference is coming out of the Great War, as World War I was known prior to World War II, the USA mood in the 1930s was different and politicians had to have a real attack to get their wish and go to war. Now you don’t need a Pearl Harbor to go to war, be it Serbia, Libya, Iraq, Syria, Russia, Iran.
I have listened to Obama, and he is not dumb. Wrong, yes. Dumb, no. As to Truman warning Japan, the Japanese would have had to be really dumb to have believed that the atomic bomb was anything more than a “poker bluff.” Japan may have been bad, but not dumb. If USA Prez was warned to either kill himself and surrender the country or be instantly vaporized along with the entire USA by an unknown space weapon, I doubt the response would be any different than that of the Japanese. The atomic bomb was an unknown weapon never before seen in the history of the world, so to surrender a country based on that threat would have been truly idiotic…
Japan surrendering two or three island chains earlier, that would have been truly a dumb decision at that point in time. Japanese were only concerned about saving Japanese homeland lives, just as USA was only concerned about saving American lives (e.g. part of rationale for atomic bombing). Japanese had good reason to stave off an invasion of the home island. Is that much different than modern USA strategy of 110 foreign military bases, drone attacks, financing mercenary armies in the Middle East, not to mention foreign invasions and bombing countries around the world? Maybe USA today likes war just as much as Japanese military did before WW II?
Greg. Japan was almost out of rice and other food commodities. Even if it did not surrender its people would have starved to death. On the other hand, the soviets were ready to occupy Japan, and that is the more likely reason the US nuked it so it got there first. It was a simple as that.
The urge for more power seldom becomes more subtle over time. There is a reason we fear tyranny. We understand that it CAN be benevolent, but seldom ever stays that way, and even if, it NEVER becomes more efficient in anything other than destruction.
German car manufacturers won’t be happy. 🙂
The workers might not be happy because more manufacturing might be done in Britain now. On the other hand we are talking Bentley’s and Rolls Royce’s etc…so if selling your 300,000$ “das auto” just dropped by 25%…all other things being equal…the Das Auto dude is saying “das es good.”
Still no competition with Tesla which is quite remarkable. They have a been a big winner in the collapse of the Continental Financing System. There stock price has moved higher on this news interestingly.
I’m not sure what is meant by “cherry picking.” Is that a euphemism?
Apparently English is to be banned…maybe that will make the fraud that is the Euro more palatable.
English to be ‘banned’… was just having a conversation today with a non-English speaker from S.America, English remains the No1 priority for almost all people after the language of the country they reside in. What is EU going to do, dictate global Esperanto ?
EU shoots itself in foot again.
Ask why English has such recognition, it isn’t just imperialism or wealth.
A quote from German media dw: http://www.dw.com/en/eu-aims-to-sidestep-parliaments-on-ceta/a-19363101
European Commission President Jean-Claude Juncker told EU leaders on Tuesday that CETA would fall within the exclusive competence of the EU executive and therefore didn’t need to be ratified by national parliaments in the 28-nation bloc, sources in Brussels told the German news agency DPA.
So the German unions are just going to roll over, accept the decrees of Juncker — they won’t blast Merkel out of the water? The Bundestag is going to sign over all authority too? Because Juncker says so?
And Canada (which is part of the UK Commonwealth) is going to look at the temper tantrum Juncker is pulling over Brexit, and conclude that he will be reasonable with Canada?
I have to wonder if Juncker’s baby-ish behavior didn’t just sink the EU trade agreement with Canada too.
Don’t underestimate the stupidity of EU leaders in making ridiculous demands on member states. Just look at how they’ve treated Greece if you have any doubts.
It is very likely that the EU will refuse to make any trade deal with the UK unless it agrees to all the EU rules/regulations/immigration requirements. In short, either suck it up and do everything the EU wants like Norway & Switzerland or stay out.
Keep in mind that the EU leaders are more concerned about setting precedents that encourage other member states to stray from the party line than they are in being reasonable in negotiations.
Iceland and Norway did not agree to EU demands…. not sure where you got that from.
Iceland formally withdrew their application. The EU claims they haven’t formally accepted Iceland’s withdrawal — whatever that means. Iceland isn’t going to obey EU nonsense regardless.
Norway has the same show stopper problem as Iceland — the EU thinks it should micromanage Norwegian fishing. Fishing is too important to Norway (and Iceland), so given an ultimatum Norway will follow Iceland out the door
Switzerland just announced they also withdrew their application, and they already implemented a strict quota on immigration in defiance of EU treaties. And Switzerland already wrestled trade agreements with the EU — England has a LOT more leverage than Switzerland (see Mish’s data)
Norway and Switzerland had to agree to allow free migration with the EU and adopt all EU regulations in order to have free trade with the EU. Switzerland and Norway may not be members of the EU but they had to suck it in and adopt all the EU rules anyway just to have free trade. Heck, Norway and Switzerland still have to pay the same annual dues to the EU as actual EU member states.
Kind of like tribute…
Austria has had no problem closing Brenner Pass…and they are part of the EU I believe…so so much for the rules.
@surkan — Norway and Switzerland were told to adapt all the EU rules “like tribute”, but they both said no. They adopted some rules, and ignored others, cherry picking by Merkel standards.
And earlier this year (in March I believe), Switzerland formally announced they weren’t going to comply with EU immigration rules. Of course the EU objected, and Switzerland told them to shove it. Earlier this month, Switzerland formally announced they were no longer considering joining the EU. This year’s annual dues are the last.
Norway still obeys ***SOME*** EU laws, but not others. They have told Brussels that EU fishing laws will not happen no matter how many delusional fantasies Michael Surkan writes about. Not going to happen.
Stop living in the past Surkan, your two “example” countries left the EU months before England did.
The Negotiations Have Begun!
“In a speech to the Bundestag on Tuesday morning, Ms Merkel spelt out to London that the EU’s internal freedoms were indivisible”
If her objective was to spelt london, should not she have spelted the house of commons?
Merkel lost. She is trying to save face (not doing a particularly good job of it)
Why is everything the EU does is for importing the maximum amount of muslim refugees?
It is their number #1 priority and trumps all rules, laws and common sense…
Merkel’s face is sure gonna miss that nose she’s cutting off.
The only way the EU can survive is being protectionist, because no one except the politicians in Brussels want political union shoved down their throats.
Why does everyone blamed Brussels? I thought the Eurolanders met in Strasbourg?
God knows, France had to have its version and they shuttle about to keep taxi drivers happy and draw expenses. The last I remember the Strasbourg roof was falling in or something.
“Clearly, Germany would suffer far more damages than the UK were both sides to remain stubborn.”
YTD the euro has gained 12.36% paired with pound.
If this holds, should help British exports to EU nicely.
European Union, definition: Something designed by someone who doesn’t understand complex systems.–nassim taleb
Off topic: Mish please take a look over on zero hedge as they have posted it again today “Onward toward bullion bank collapse” and if u r interested read what I said to u about this article along with Trader Dan’s “Gold weekly COT report” for future reference unless u think it’s all just a bunch of BS. The post is a moving target, a new feature I guess,
The Footsie us up today, and the British Pound is up today too!
The Big Picture:
Brexit: the fall of the Babel Tower
King of Babel: Minister, faithful minister, speak to me! I hear that there is unrest at the great tower that my workers are building. I hear that some workers want to leave, and I see that the tower is not growing anymore so fast as it was growing not long ago. Minister, tell me what’s happening with my tower; the great tower of Babel of which, I, the King of Babel, am so proud!
Minister: King, what you say is true. There is unrest at the great tower of Babel, the workers are clamoring for better pay and a group of them have voted among themselves to stop working at the tower and go back to their land beyond the sea, where they will build their own tower. And because of this, the Great Tower of Babel is not growing anymore.
King: But, minister, why is that happening? Haven’t these workers worked for so many years at my tower? Wasn’t my tower nicely growing up until not long ago? What’s happened that made the workers rebel against me, their master?
Minister: King, you see, we have a problem of energy return on investment…..
King: What?
Minister: King, let me explain to you. In order to build the tower, we need stones from quarries. And it has happened that the nearby quarries have produced so many stones for the tower that there is no stone anymore there.
King: Minister, I was told about this problem. But I was also told that there are many quarries a little farther away that still hold plenty of stone. So what is the problem with getting good stones from these quarries?
Minister: King, you see, there lies the problem. In order to carry these stones from the quarry to the tower, we need a caravan of many mules pulling carts.
King: And what is the problem with that, minister?
Minister: Well, the problem is that we keep extracting stones and the quarries we get it from are farther and farther away.
King: But that just means that the caravans will have to travel farther away, right?
Minister: King, this is the energy problem I was telling you about. You see, mules need energy, in the form of food. And the people driving the mules need energy, too, in the form of food. So, some carts in the caravan must carry food for the mules and for the mule drivers, and therefore these carts cannot carry stones. And the farther the quarry is, the more food loaded carts there have to be in it.
King: So be it. What is the problem?
Minister: It is that the quarries we are exploiting at present are so far away that most of the carts must be loaded with food and only a few can carry stones. And so what you have are long, long caravans arriving from the quarry to the tower, but carrying very few stones.
King: So, make the caravans bigger, then there will be more carts loaded with stones for the tower.
Minister: King, we are doing that, but we are running out of mules. And we also need more caravans to bring wood for the scaffolding of the towers, and here, too, we must travel to far away forests to find good wood.
In addition, the bureaucrats managing the tower have been growing in numbers and are now more numerous than the workers. And we need more caravans and more mules to feed the bureaucrats. As a result, the workers are now living on reduced food rations and they are not happy about that. As I said, it is a question of diminishing energy returns. We call this the “Limits to Growth.”
http://cassandralegacy.blogspot.co.nz/2016/06/brexit-fall-of-babel-tower.html
The arrogance of the EU is going to be its downfall. First the UK departs, next up is possibly Austria or another nation flooded with unwanted immigrants.
The Brexit is far from over as senior politicians in Great Britain (GB) are right now trying to over turn it. I am not sure what they will do, but they are now quoting the 75% did not vote rule, even though this is Great Britain’s largest voter turn out in history. The bankers and politicians for the most part, including many unions, did not get their way. The people cannot decide their fate as they are nothing but stupid. Many quotes from EU officials back up the remarks.
This mess is far from over and many times people on sovereign country’s of the EU and EMU have voted only to have it overturned. I hope the GB government will actually do what the people want now, but there are two years of meetings and new agendas to usurp this process.
Free trade works best when there is a gold standard, and no tariffs. Goods are produced at their most efficient place, in the quantities that shoppers want, and trade balances over time.
Printing leads to the wrong mix of products for the market, zombie factories, quotas, and endless bank bailout demands. Then tariffs are offered as an attempt to protect zombie factories, and bank loans to those factories. Economies slowly spiral into banana republics.
Capitalism doesn’t work when printing misallocates capital.
“if Britain, like Norway, wanted access to the internal market then, like Norway, it would have to accept freedom of movement”
Freedom of movement of EU residents, sure, but of refugees according to EU quotas? From what I heard in a video about the topic, the EU’s own rules for refugees state that they must remain in the country where they landed and can’t go “welfare system best deal” shopping by moving to other countries. Is that correct?
Correct but ignored, and now overwritten by a quota system that few countries truly agree to in spite of their signature. There will have to be a proper UK return policy based according to UK wishes, not those of EU. If that fails UK will feel right to defend its borders as needs be.
Freedom of movement isn’t in question for Europeans, right to reside and claim in UK is open to changes.
Like Russian trade sanctions this is another case of cutting off your nose to spite your face. Throughout history such pettiness has caused a great many ills and wars.
If the EU puts up trade barriers to UK companies, then shell companies will be set up in other countries on behalf of the UK in order to do business with EU countries.
”
Germany exports €50,963,643 to the UK than it takes back in imports.
Clearly, Germany would suffer far more damages than the UK were both sides to remain stubborn.
”
There is nothing clear at all about that kind of mercantilistic calculations. It all depends on how central each country’s imports from the other, is to it’s continued functioning and well being.
If Britain imports key spare parts for their entire power grid from Germany, while all Germany imports from Britain is net negative in absolute terms bankster and lawyer “services”, plus some Boy Band ballads; Germany could fare much better after a breakup than Britain, regardless of how much a bunch of City banksters are to charge currently too flush to care Germans.
More generally, no mercantilistic concern or “insight” have any value whatsoever. They’re all just mumbo-jumbo. Nothing but a bunch of Mencken’s hobgoblins.
Merkel must make a better offer before UK activates Article 50. Meanwhile UK is under no obligation to honor EU dictate.
Excellent blog Mish.
“Germany exports €50,963,643 to the UK than it takes back in imports.”
I think it is rather €50,963,643,000
yawn
what’s a paltry €50,963,643? 50 million? really? that doesn’t buy you lunch.
oh wait, you are out by a facor of 1000. difficulty reading the table?
uh, and how much do all the other countries sum up to? why not sacrifice a little island as export destination, wasnt much anyway, to save the rest?