German finance minister Wolfgang Schäuble warns the UK faces stiff rules on tax breaks and prolonged EU payments.
Such threats are nothing more than an extortion attempt by the EU on the UK.
Schäuble’s threats are laughable because they are unenforceable, yet extremely serious because of likely end results.
Please consider yet another foolish EU threat: Wolfgang Schäuble Sets Out Tough Line on Brexit.
Germany’s finance minister has set out a tough line on EU divorce talks with Britain on issues from tax breaks to exit costs, dashing Downing Street hopes Berlin would soften Europe’s stance on a UK departure from the bloc.
Theresa May’s government has been looking to Germany, a net exporter to the UK, to temper French demands that Britain “pay a price” for its decision to leave.
But Wolfgang Schäuble told the Financial Times that, even after Brexit, the UK would be bound by tax rules that would restrict it from granting incentives to keep investors in the country — and would also face EU budget bills for more than a decade.
“Until the UK’s exit is complete, Britain will certainly have to fulfil its commitments,” he said. “Possibly there will be some commitments that last beyond the exit … even, in part, to 2030 … Also we cannot grant any generous rebates.”
In addition to demands for long-term financial payments, Mr Schäuble insisted Britain must stick to international rules on investment incentives, a clear signal Berlin would closely watch commitment like those Mrs May made to carmaker Nissan, which recently won government assurances before it agreed to build new models in the UK
“These rules apply to all whether EU members or not,” he said.
Mr Schäuble noted that Group of 20 agreements commit members to limiting tax avoidance — an initiative, led by Germany and the UK, that would reduce Britain’s ability to grant breaks to companies, even after leaving the bloc.
Amazing Arrogance
The UK is out of the EU as soon as it says so, not as soon as the EU lets the UK go.
The clear answer to the UK’s non-dilemma over group of 20 agreements is to renounce them immediately.
“There is no à la carte menu. There is only the whole menu or none,” said Schäuble, arguing that British restrictions on EU immigration would end financial services companies’ free access to EU markets under so-called passporting rules.
“The UK is still a member of the EU and it is a country which has always upheld the valid regulations, valid laws and valid treaties,” added Schäuble.
Well la-de-friggin-da.
Schäuble acts like a spoiled brat who thinks he has all the marbles, when there is a far bigger pile elsewhere.
The UK does not need 27 nations to agree the UK can leave. Moreover, it is increasingly obvious to anyone watching that the EU is totally dysfunctional and will never agree on much of anything.
The UK can kiss off the EU anytime it wants. I suggest prime minister Theresa May fire off a warning salvo immediately, renouncing Group of 20 Agreements.
EU buffoonery is completely out of hand.
In related news, please consider EU the Toothless Tiger, Totally Dysfunctional Until it Disintegrates Into Oblivion.
Other Related Articles
- November 15, 2016: Expect Global Trade Collapse; Bills That Won’t Be Paid; Deflation Coming Up?
- November 13, 2016: Shades of Great Depression and Smoot-Hawley: Sarkozy Proposes Carbon Tax on US, Anti-Dumping Tax, Buy-EU Act
- September 27, 2016: WTO Slashes Global Trade Growth Forecast by 39% Since April: “Wake-Up Call” Says WTO Director
- September 26, 2016: Draghi Increases Risk of Global Trade Collapse With Brexit Tough Talk
These EU fools are playing with a Smoot-Hawley style global deflationary collapse.
Mike “Mish” Shedlock
Continuing on with the analogy of “divorce”, Wolfgang’s EU sounds more and more like a controlling abusive husband whose wife has had enough. His stalking behavior does not endear Wolfgang to all the other wives still in the EU’s harem.
http://youtu.be/9cgrEA6eQ_g
Enjoy.
Both Putin and Trump have German connections.
These people don’t care about “free trade”, which has never existed in the EU. They care about power, and ordering the peasants around…..
Weimar Britain
http://4.bp.blogspot.com/-v9fBYbOhVhk/VlAXB4qSXyI/AAAAAAAAFf0/CP3woHdP_sI/s1600/banks%2Bcopy.png
As long as cultural marxist globalists rule, all European nations are degenerate Weimar.
Schäuble sounds more like he’s talking to Greece.
Looking at the UK debt level it’s not unthinkable that he thinks he is.
Talking of Greece…
http://www.keeptalkinggreece.com/2016/11/20/the-german-austrian-plot-australia-solution-all-refugees-on-a-greek-island-if-eu-turkey-deal-fails/
GD MP beaten up in public, camps torched… escalating http://www.keeptalkinggreece.com/2016/11/19/athens-golden-dawn-mp-beaten-by-group-of-20-30-people-wearing-hoods/
Schäuble is not uttering hollow threats. German policy makers are ready and willing to take a hit to their economy as a means of punishing the UK and ensuring that no other nation will ever risk the dire consequences of leaving the EU.
Yes, a denuded UK economy will hurt Germany, but not by a huge amount. A 40% decline in trade with the UK is quite tolerable and well worth the cost of ensuring the future of EU integrity (i.e. by making a graphic example of the consequences of leaving).
Schäuble and the policy makers may be willing to take a hit to the German economy to “punish” the U.K. for having the temerity to make a stand against an undemocratic and authoritarian E.U. but as Germany had a 46 billion dollar surplus on trade with the U.K. to say that it would be willing to lose 40%, i.e. over 18 billion dollars a year to “punish” the UK is absurd to say the least, will the employees at Mercedes Benz, Audi, BMW, etc,etc, be voting for Schäuble and his policy makers when they are on short time working, there is not a lot of market for RHD cars in the E.U. without the U.K. and even if a production changeover to LHD is financially viable who is going to buy all the extra capacity ? Greece maybe ?
It will not be “dire” for the U.K. because there is a whole world out there to trade with and as the U.K. imports far more from the E.U. than it sells to it any “punishment” will be totally counter productive.
The far bigger problem for Schäuble, his policy makers and the E.U. is the question of who will be required to make up the contribution payments the U.K. currently makes into the E.U. trough, on a nett basis the U.K. is the second largest contributor after Germany, Schäuble says that the U.K will be paying into the trough for another 20 years but what if the Brits say,
No Chance !,
what is Schäuble going to do that doesn’t increase German and E.U. economic problems ?
I can’t see the Germans or anyone else in the E.U. for that matter being very happy about being required to make up the U.K. payment shortfall knowing that well over 40% of the total E.U. budget goes in C.A.P. payments and most of that to one country, France.
Economic considerations are not the only ones behind Brexit.
One of the supposed “benefits” (only to the EU, of course) of the UK being in the organisation is that we are supposed to provide a “third leg” for the whole edifice to stand on – the other two being Germany and France. We are supposed to be a third “force” that stops these two being at each others throats. How are they going to get on without us? (Other, smaller, members, have also looked to us to moderate the bahaviour of these two nations with dictatorial tendences.)
Given that the French screw the system as hard as they can, a) through the Common Agriculture Policy, and b) by plainly ignoring and not acting upon / implementing many of the rules and laws of the EU, and given that the Germans gain an enormous advantage from the Eurine to the detriment of the unemployed youth of the southern countries, including to a lesser extent France, it is going to be interesting to see how the two sort things out between them.
Of course, they will both screw the other member nations as hard as they can, but there are still some major differences of opinion between them, as to how to do EU things. They both preach cooperation in public, while doing precisely what’s best for each, in the background. We ain’t going to be there to balance the arguments, and that is one of the reasons, I think, why they are so furious we have opted to get out. We’ve spoilt their nice cosy party, and we won’t be there any longer be there to stop the fight when it breaks out!
Excellent summary. Germany will be out voted more often vs France/Spain/Italy/Greece.
The Germans know how we have supported them vs spendthrift others.
Germans will pick up the bills but with reduced influence UNLESS Germany forces some change.
The one unifying cause will be 27 deciding how to harm the UK. Once that’s done watch them start to tear into each other again with no UK to help balance the ship.
UK will suffer, Hammonds Autumn statement next week is the start.
Debt needs to be addressed.
Personal credit growth is picking up too quickly after having fallen well for a few years, UK deficit too high, whilst UK needs to borrow more to help compensate for exit from the EU.
Hard to balance that lot whilst UK is split.
EXPECT RECESSIONS ACROSS THE BOARD.
There is substantial excess auto manufacture in Europe too. VW will lay off 30,000 by 2020.
23,000 in Germany.
They say it’s down to diesel gate but the fact is manufacture efficiencies are increasing, there’s too much capacity and German manufacturesr are eying Slovakia, Romania etc as much, much cheaper.
Deflation will continue in the EU as this is just an example.
Now, imagine the EU citizens that moved to the UK. When the UK stalls, it will, remittances (substantial) to Eastern Europe will fall. Benefits will have to be cut. Some are already returning home. Some to no job.
There are 3M of them. Reckon 1.5M could shift. There are also £40m p.a. Worth of EU prisoners in UK prisons to be returned home and band from UK. The 40m£ won’t move the needle but it’s a lot of criminals to go back to no job.
Then, fisheries. All UK waters will be off bounds to Danish, Spanish etc.
The EU will make transfer of goods very awkward. There was a dry run last year, it hurt the UK.
Now, air access. Massive complexity, won’t even go there as it’s so confusing.
Tourism, it will fall from UK to EU. Portugal, Spain will be hit big time. Prices will have to fall or volumes will.
No one will benefit from any of this.
“It will not be “dire” for the U.K. because there is a whole world out there to trade with and as the U.K. imports far more from the E.U. than it sells to it any “punishment” will be totally counter productive.”
Then why are companies in Britain panicking about losing access to the EU market?
I guess to heard about the Nissan storeis a couple of weeks ago?
For the UK, but established companies do not like change of this nature.
There’s a great deal of EU sympathy in foreign direct investment companies that came onshore to access the EU via the UK. Also an embedded pro-EU elite in organisations like the CBI (Confederation of British Industry) that have been extremely negative. JCB have left the CBI due to CBI negativity.
There are layers of people that don’t see sovereignty as important and willing to take the easy route of disappearing into the EU state.
The country needs pulling together to fight together.
Trump enters free trade agreement with the UK.
Trump normalizes trade with Russia.
Trump invites any country that leaves the EU to join.
Trump tells NATO they are going to FULLY pay for their own defense from now on.
How is that for “paying a price?”
“When the Federal Reserve Act was passed, the people of these United States did not perceive that a world banking system was being set up here. A super-state controlled by international bankers and industrialists…acting together to enslave the world…Every effort has been made by the Fed to conceal its powers but the truth is–the Fed has usurped the government.”
http://arcticcompass.blogspot.com/2013/05/who-killed-louis-thomas-mcfadden.html
AMEN
” ‘If you don’t like Trump, leave the country,’ US judge tells new citizens ”
https://www.rt.com/usa/367520-judge-leave-country-trump/
The Brits look dysfunctional as well: http://www.independent.co.uk/news/uk/politics/brexit-theresa-may-government-no-plan-30000-civil-servants-cope-cabinet-split-article-50-leaked-a7417966.html
Both sides will try to get the most of the upcoming negotiations. Germany wants to hold the rest of the EU together. So they will play hardball.
I also don´t see unenforcable threats in the article. Unless the UK´s exit isn´t completed, they are bound to the EU´s rules. Because they enjoy the advantages of the Union (market access…) for that long as well.
Beyond that Schäuble only says that there are international rules (on subsidies) that apply to any country.
So hurry up Britain! Get your act together and officially apply for the exit. The sooner both sides can move on, the better.
http://www.telegraph.co.uk/news/2016/11/19/heavyweight-brexiteers-go-public-as-60-tory-mps-demand-clean-bre/
As Mish pointed out in a previous post, the EU is not having much luck enforcing its will against Hungary (9% corporate tax plan) or Poland, or for that matter Ireland (15% corporate tax). Maybe Schäuble will get lucky with the UK. Can’t blame the guy for trying.
Perhaps the Brits will feel guilty for the Treaty of Versailles imposed upon Germany after WWI, and will therefore accept a Reverse Treaty of Versailles imposed upon the UK by a German-led EU. I guess Schäuble can dream out loud in public. In any case, giving tax breaks to Japanese carmakers sounds smart in case Germany decides to makes its cars hard to buy in the UK. The ultimate irony would be if the German carmakers relocate to the UK.
Obvious, Paris and Frankfurt have been in London to woo the banks.
Not so obvious meanwhile German industrial groups have been talking about on shoring some operations to the UK in high level discussions.
We’d rather have factories than banks. Please move some operations to the UK. Please.
One reason is the expectation of tariffs on goods and as UK is net importer it hurts German sourced products so why not build in the UK and look out globally from there with a weak sterling and new, lower, tariffs than the EU external tariff?
No one will benefit from any of this. There is a level of anxiety in parts of business that I have not witnessed before. Will it be a disaster but bring out the best in the British? I have no idea.
The EU v Britain thing illustrates the beautiful contradiction of the EU.
Britain, and the British, are still members of the EU, and yet the EU is plotting to make life as difficult as possible for the British people in the future. If the EU really cared about people and democracy it would make the transition as smooth and rewarding for both parties as it could. Instead, the EU is showing no grace at all.
(And these threats are, no less, directed towards to a country that rescued them from fascism only 70 years ago.)
Schauble et al et al exhibit a new form of fascism.
It has many faces.
Listen to the words out of the EU.
If it quacks like a duck it’s a duck.
That train has left the station. Who did Trump have the first conversation with, an EU commissar, a German apparatchik or … Theresa May? Britain now has a friend in the US, and that’s all that matters. The tables have turned, and it takes an EU apparatchik not to see it.
I am not an expert, but the whole European Union concept was one HORRIBLE idea in the first place. Just expressing my POV. (Hush it, Merkel- the Gravy Train is drying up!) LOL and have a great day! [ð] -Mary Free
________________________________
Mary – Free movement is actually a good idea. But not as administered.
Free trade is a good idea – but the EU is a basket of tariffs for the best interests of France and Germany
The overall idea is reasonable but very poorly implemented and is now a bureaucratic nightmare.
I cannot think of many (maybe any) examples where good ideas were made official without some ulterior motive or a means to harness them to official benefit existed or occurred.
All you have to do is leave people alone, break up any fights, and see that property/willing agreements are respected. That goes for freedom of movement also if you count a hypothetical nation as public property – you close the border to those that the public believe will damage it, but otherwise leave it open.
EU has only moved the borders from nation to region. For what? To save having to flash a passport? Reality is that is a psychological shift that empowers centralized management/mismanagement.
Crys I lived in Germany during the EU discussion and the naysayers that were demonized in the past were correct. Most of the discussions were about free movement of EU citizens across borders not refugees that some politician not elected would tell the member countries. There is a huge difference there. Refuges just like our own illegal problem was taken up and being forced down other countries throats as they do not want these refugees. Nothing wrong in my mind when a sovereign country tells these nut cases we will not take these people.
The biggest problem well during my 5 years spent in Europe was exchange rates when traveling from one country to another. Even I became a currency trader because of this during my stay there. Germany’s DM was the strongest currency and these currencies fluctuated daily and it was a mess to buy and sell in Europe. Who gets the most out of the Euro why, Germany of course and it was pointed out time and time again by other countries before Germany was admitted. What many forget is Germany was not apart of the monetary union until they saw how their currency continue to increase in value against the rest of the EMU.
Many people always talk about how great Germany is and forget they share the same currency as Greece and the rest of these broke countries. The real question people should be asking is why the hell does Germany get over on the rest of the EU. Germany would not be faring so well in the world if they were still on the DM. They were not faring well when I lived there and the DM went from 2.50DM per dollar to 1.50DM per dollar.
Many forget when the wall fell the EMU rebuilt a solidified Germany. Germany would not have been able to rebuild with the DM. Every country in the EMU has gone bankrupt or hyper-inflated in the past. Yes I think the US defaulted when we cancelled the Brettonwood treaty.
But honestly Germany would be worse then a lot of these EMU countries if they had to revert back to the DM and that is what is scaring them.
” Many forget when the wall fell the EMU rebuilt a solidified Germany. Germany would not have been able to rebuild with the DM. ”
______________
Thanks, Old Guy, your post was very interesting.
Reminds me of Bible history when Darius the Great used tribute from other provinces in his empire to rebuild Jerusalem’s temple. Ironic, because Hitler made an analogy between Berlin and the temple in Jerusalem.
.
“Schäuble’s threats are laughable because they are unenforceable, yet extremely serious because of likely end results.”
Isn’t that pretty much what they said about Ernst Kaltbrunner?
A screwed up UK exit will have deflationary knock-on effects globally. The 5th largest economy in recession with falling trade volumes with the largest single block is not a healthy development for anyone.
It might be dwarfed by China, US etc but if the wheels don’t fall off elsewhere it will still be enough to worry about.
Guess the theme a century on will be UK reparations, not German reparations.
“These EU fools are playing with a Smoot-Hawley style global deflationary collapse.”
Somebody has to do it. Cycles play out the same, over and over again. Glass Steagall was supposed to be forever, to prevent IT from ever happening again. At the Roaring 20’s phase of the cycle, they went ahead and dismantled it, just so that what happened in the 1930’s, could happen all over again.
Collapses are what happens in a depression. It is the reset of the cycle.
Death of Weimar and birth of…………….
Schauble is the German (domestic) finance minister rather than an EU politician. Despite which he drives his tanks into any EU parliament that has the temerity to disobey Merkel’s orders; Athens, Lisbon and now London. He is part of the reason Brits voted for Brexit, the EEC/EU was intended to keep Germany in it’s box, and yet here we are yet again with them presuming to rule over Europe.
Shall we all read his book on the New World Order to see where he’s coming from?