The laugh of the day is a move by the EU to up Brexit divorce settlement to €100 billion from €60 billion.
France and Poland want to include agricultural subsidies and Germany proposes the UK should get nothing for assets such as buildings.
This is such a nonstarter that even the most diehard deal proponents ought to be shaking their heads.
Some of this is tit-for-tat gamesmanship involves Brexit leaks in which EC president Jean-Claude Juncker informed Angela Merkel that “Theresa May Lives in a Different Galaxy”.
That phone call came following a meeting last Wednesday when Theresa May told Juncker the UK has no legal obligation to pay the EU a Brexit divorce bill. Juncker also stated he is “ten times more skeptical than before.”
These statements were leaked to the press, most likely by Juncker or his staff.
Regardless, I fail to see how widening differences is remotely conducive to serious negotiations.
Optimism Reigns
Yesterday, Eurointelligellence commented:
Despite the extraordinary events following Jean-Claude Juncker’s dinner in Downing Street last week, we remain optimistic that a Brexit deal is still possible. The road to an agreement is unlikely to be straight, however, and it may be very noisy. Clearly there is the potential for a grand failure.
Today, following the €100 Billion bluff, Eurointillegence wrote:
We thought the leak of the Juncker-May dinner conversation was amateurish, very likely to strengthen Theresa May in the UK and reduce the role of the European Commission in the upcoming Brexit talks. We do not think that any of this will alter the Brexit negotiation outcome. A deal is possible if both sides want it – and impossible if one does not.
That’s a bit of a change but not much. The key line is “We do not think that any of this will alter the Brexit negotiation outcome.”
Thus, Eurointelligence is still optimistic, despite its carefully laid out math.
Deal Math
- If the UK does not want a deal it won’t happen.
- If the EU does not want a deal it won’t happen.
- A deal is “possible” if both sides want one.
It’s pretty clear that Juncker and Merkel do not want any deal that does not involve huge punishment to the UK.
The EU may claim it wants a deal, but hardening positions show it doesn’t. This could be silly “art of the deal” gamesmanship but it increases the likelihood the UK says to hell with it all and just walks away.
Even if both sides want a deal and attempt to stick it out, a deal is impossible if both sides stick to stated principles.
“Avoid Negotiating at All Costs”
Yanis Varoufakis, the former finance minister of Greece, gave this pertinent advice to the UK: Yanis Varoufakis: ‘My Brexit advice to Theresa May is to avoid negotiating at all costs’
Prof Varoufakis, a specialist on economic “Game Theory”, says Britain must not let itself be captured by the EU’s negotiating net.
“My advice to Theresa May is to avoid negotiation at all costs. If she doesn’t do that she will fall into the trap of Alexis Tsipras, and it will end in capitulation,” he told The Telegraph.
He was speaking on the publication of his memoir, Adults in the Room, a riveting account of his brush with a back-stabbing and treacherous EU system.
“The parallel with Brexit is the tactic of stalling negotiations. They will get you on the sequencing. First, there is the price of divorce to sort out before they will talk about free trade in the future,” he said.
“When you make a moderate proposal they will react with blank stares and look at you as if you were reciting the Swedish National Anthem. It is their way of stonewalling,” he said.
Prof Varoufakis, steeped in Hellenic mythology, says they will resort to the “Penelope Ruse”, the delaying tactic of weaving each day before unraveling it again secretly at night.
Just Leave
Varoufakis’ advice is similar to what I have been offering for months.
- March 5: Brexit Reality: “Paying Any Exit Fee is absurd”
- February 19: Brexit Fast-Track Dead: EU Insists Upon Divorce Settlement Before Trade Talks
- December 2: Brexit is a Religious Battle (And You Can’t Negotiate Religion)
- November 29: Brexit Stacked Deck? Which Way? Don’t Negotiate, Just Leave!
- October 17: EU Doesn’t Want Brexit “Negotiations”, the EU Wants “Blood Revenge”
On April 28, I wrote Brexit Negotiations: Why Bother?
Only by walking away – showing a willingness to let time expire – does the UK have a chance at reasonable negotiations. Even then, I am not sure what the chance is because the “EU’s desire to punish the UK and set rules in the name of solidarity” likely exceeds the desire to walk away with a win-win situation.
Mike “Mish” Shedlock
Varoufakis’ advice is worth the toilet paper its written on. Rewriting history mate….you walked when the going got tough and couldn’t deliver so the title of his book makes his advice even more ironic.
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If you would recall the details, Varoufakis was overruled by Tsipras, who chose to ignore the result of the referendum. Even before that, his role as negotiator had been taken over by someone else — against his wishes. Sure, he could have tried to take over the party, but would it have worked?
Varoufakis was the co-pilot, not the pilot. His recommendations were consistently overruled. On what basis should he have stayed?
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So if everyone leaves the EU and gets billed at this multiple to contribution. Is it possible only Latvia remains, running the EU out of Brussels and demanding all other members give it $600 Billion Euros?
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They’ll all stiff the E.U.
and tell them to stuff it!
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“My advice to Theresa May is to avoid negotiation at all costs. If she doesn’t do that she will fall into the trap of Alexis Tsipras, and it will end in capitulation,” he told The Telegraph.
…
Why I’m not laughing.
Tsipras folded holding a royal flush … why? … the only thing that makes sense is he made a personal back room deal (how much did the EU wire to his swiss bank account?).
What would it take to bribe a few UK ministers (and/or May)?
The loss to the EU (especially if other countries left) could be catastrophic … no way UK walks away without everything in tool kit tried.
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Brussels has all the leverage in the Brexit negotiations. It’s called Scotland, Ulster, and Wales.
A rump England would be a petty dwarf state. The House of Hanover ain’t going to let that happen.
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Wales voted to LEAVE.
Ulster interference = trouble. There are some murderous mental cases, ever met a rabid Unionist? Watch out Brussels and Dublin. Unleash the dogs of war at your peril.
Scotland, better off out of the UK and using the Euro in the EU. Greece of the North.
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Good point
Can England bend them their way? … or, at the end of the day, would they stay in the EU and let England sail off on their own? Aren’t they at least cousins with plenty of (good and bad) history?
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The die was cast on Brexit.
Scots will go their own way.
They should remain in the EU and convert to Euro immediately.
They think they are >50% of the UK so that more than halves any bill.
Win-win.
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Alternative universe!
That would be the universe that has not petted up Hitler, Mussolini and Franco at home, and exported to the rest of the world a bunch of tyrants of a depravity previously unknown to humankind! That would be the universe where it is ok to criticize banks (or whatever it was Mish was done up for), and where those who criticize public officials are not criminalized. That would be the universe where politician don’t necessarily think it tickety boo to say ‘When it becomes serious, you have to lie’. That would be the universe where a Maoist past (or present) is not a badge of honour.
He means that alternative universe! Yes.
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Latest on Greece … courtesy of Tsipras fold:
ATHENS — Greece and its international creditors said on Tuesday that they had reached a preliminary deal allowing the country to receive crucial bailout payments in exchange for promises to raise taxes and to further cut pensions and social spending.
The agreement — the culmination of months of talks — paves the way for the transfer of more than 7 billion euros, or about $7.6 billion, of emergency funds to Athens. It also comes before a series of elections in France, Britain and Germany in the coming days and months, with European officials eager to avoid giving fuel to far-right parties.
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Emergency funds? Let’s call it Greece’s co-operation tax it imposes on the EU.
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Perhaps you’ve heard that saying?
When you’re be bank’s biggest borrower, you in effect run the bank.
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In previous bailouts > 90% of the funds went to service existing debt held by core EU banks.
Doubt it will be much different here. The funds go offshore, while the guy in the street gets stuck with another round of austerity.
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At least Greece lives within the reality. For the rest of overindebted countries, the looming reality check will come as a rude awakening.
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The NY Times article has a very deceptive title — more fake news!
ATHENS “agreed” to tighten their belts, not Greece. Athens word means nothing. ATHENS gave a pinky swear and said read my lips and if you like your doctor too bad for you. Brussels is stupid enough to believe anything Athens says.
The people of Greece never agreed to submit to Brussels rule in the first place. They barely trust Athens
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The EU wants to “put the EU first”. May wants to “put the UK first”. Trump wants to “put America first”.
As Mish said “a deal is possible if both sides want one”. No one will ever agree to a one sided deal.
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Enlightened self interest exists in May and I believe in Trump.
“First” probably shouldn’t have been used as it was.
People of goodwill can solve every problem so long as they don’t see the other side they are dealing with wishes them I’ll or to screw them.
Cards on table + pragmatism + give – take = deal.
Alternatives are reduced wealth and/or war.
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Britain knows a lot more about devolving sovereignty than Europe – that is – how to do so whilst maintaining vital economic interests. It takes pragmatism, not idealism.
Tomorrow Junker will no doubt say he was wrong, it’s really a trillion due. So what.
Boo-hoo-hoo. What’s that you hear, Jean Claude? The sound of the world’s smallest violin?
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Someone will have to make the first move, probably the EU. The UK will do nothing and continue trading under existing agreements until the EU stops it. In other matters they will simply ignore the EU and act as if they are already gone. Thus they continue with most favored trade status to their advantage.
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Yes.
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All the EU remaining member countries might pay lip service to Brussels, but they are and will continue to give England favored trading status.
The first EU member that doesn’t will be made an example of by England — in all cases, England can get the same trade goods from other suppliers, many of whom have been pushing to get more access to British markets before the brexit nonsense.
I repeat my suggestion to Theresa May: send Paddington Bear (a stuffed animal) to Brussels to negotiate. Put a t-shirt on the bear that says “No, England does not agree to that”. The bear will “win” the negotiations, get exactly the same terms (no agreement) that a human would get, and Juncker is so drunk he probably won’t even know he is talking to a stuffed animal.
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There is a new movement headed by Blair with him outside Parliament. He’d not be elected an MP again after what he did.
This is to help opposition, Blair etc. Give them ammunition.
It’s obvious the EU knows having no deal won’t kill the UK so the only punishment must be a punitive bill for which there is no basis in treaty from what I understand.
If they go to court will words used by various heads of state prejudice any case?
The UK side has been measured and careful so far.
EU have talked punishment = punitive.
What honest judge accepts punitive demands by a plaintiff?
They are acting very childishly and it might end in real conflict. First words.
Look at what happened post WWI when the French punished Germany.
It also exhibits why no other country should want to join the EU henceforth.
It’s mafia.
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maybe it’s more like the hotel california where you can check out any time you like but you can never leave…
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Original Hotel California, pre-famous song, was in Mexican province of Baja California. Reuters headline: “The Eagles sue Hotel California.”
http://www.reuters.com/article/us-music-eagles-hotelcalifornia-idUSKBN17Y1TU
Unfortunately the web site is a real piece of crap, loads so many videos that I cannot copy any snippets or even reread the article, which is a shame because quite an interesting legal case
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“They are acting very childishly and it might end in real conflict.”
In 1 to 2 years time there will be some friction over fishing rights once the British fishing fleet takes to the seas again. But that is about it. NATO will make both sides put their big boy pants on and sort the rest out.
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i) I wonder whether Soros is funding Blair’s efforts. It would be interesting to know.
ii) Is there a list as to why Britain owes Eur 100bn ? That should be distributed to all EU citizens to see how bloody expensive membership really is…….
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It is rare a UK Prime Minister accuses anyone of threatening the UK. To do so is large order diplomatic escalation.
Theresa May has said elements are now threatening.
The EU has given the UK permission to defend itself. Nothing more needs be said.
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The EU is actually playing Brexit brilliantly. The thing to keep in mind is that their primary objective is to instill fear in any other member nations that may get silly ideas about leaving. Junker is being very forthright when he says that Brexit CANNOT be a success. A successful EU would be a disaster to the EU project. As such, the Eurocrats will ensure that it is impossible to reach any kind of reasonable Brexit agreement on anything with the UK.
Making outlandish demands is a great way to achieve the aim of torpedoeing Brexit negotiations. Better still, the Brexit talks are actually proving to be a sort of rallying cry for EU members states. The 27 EU members can all agree that they are mad at the British and want to stick it to them. It is actually quite remarkable how unified the EU nations are with the demands being made by Bernier and Tusk.
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“The EU is actually playing Brexit brilliantly.”
Your view differs from mine. I think that he is doing precisely the wrong thing.
Firstly, PM May is wisely trying to be discreet, Juncker is publicly broadcasting his position. Beginning negotiation is like poker, one should never show one’s hand. Rule 1. For this he has placed PM May at an advantage.
Secondly, he may be intimidating member state politicians but his approach is offending the population. It is a little like a civilian bombing campaign during war; it never works and only serves to harden the resistance.
Thirdly, his arrogant statements and posture reinforce an image that represents everything that people despise – an unelected, arrogant, power mad, blow hard, bully bureaucrat that cannot be sacked. Who appointed this fellow dictator for life? Were it not for NATO, I have no doubt that he would resort to war to get his way – it may still come.
He would be best advised to just shut his mouth. In fact the Council of the European Union, during their next meeting, should just force him into a closet, lock the door and throw away the key. They would be the better for it.
I don’t know whether or not any other countries that have adopted the Euro will exit the EU. Their ageing populations are probably too worried about their pensions to voluntarily do so. Clearly this is a major issue in France and is why Macron will have the older vote, while polls show that Le Pen has the youth vote.
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You miss the point. The EU goal is to make Brexit a disaster for the UK so they can hold the UK up as an example of the consequences for any other nation silly enough to leave.
With that goal in mind, the Eurocrats are handling this brilliantly.
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Yeah- Watch what happens when the result is a trade war and strong recession hits Europe.
Brilliant?
Yeah for someone like Beppe Grillo in Italy and capitalize
Michael, you are the one not thinking here
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On any downturn near term it’s LePens heartlands that will be hit hard.
Macron will win election but better get German help to force changes, fast.
If he doesn’t reform enough, fast enough, LePen is a shoe-in at the next election.
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Hey, look at how successful the EU has been in dealing with Greece? Greece has become the poster boy for anyone wanting to defy the Euro powers that be. The goal has never been to “fix” Greece, but rather to preserve the Euro (and EU) with the least cost/pain to other nations.
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“The EU goal is to make Brexit a disaster for the UK …”
I understand this is your position, Michael, but the Brexit is a disaster for Europe – no other way to describe it. Britain is already benefiting from the Brexit, contrary to the doom and gloom forecast by the Remain campaign. No matter how hard Europe huffs and puffs, there is nothing they can do to stop this.
If Juncker threatens to seal the borders to trade, Mercedes, Renault, Citroen etc will have no choice but to build factories in Britain – they are not going to give up 60 billion per year in sales. This will be a huge benefit for Britain and a great loss for Europe.
Europe has become a disaster. For its citizens, I cannot think of one good thing that has come to them. Brussels politicians, having realized that they are hated by their own people, are actively trying to replace the European population by massive immigration, on a scale previously unseen in history – just to keep their political ambitions, salaries and perks going a while longer.
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You clearly undervalue the benefits of having a limited curvature on bananas.
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For legal purposes, both sides can say they are “negotiating”. Since there is no possibility of agreement, both sides will do what they want. Which means UK will “win” because UK will do what UK wants to do. EU will never be able to agree on what to do, since EU is deeply divided and hatred of the EU within the EU is growing stronger. Will be Waterloo for the EU.
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JOKE? “The EU is actually playing Brexit brilliantly.”
Mike “San Fran” Surkan steps in to provide us all with some comic relief
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Three issues:
1. Who has sovereignty over Britain.
2. Who has decision power.
3. Who has the bigger stick, and most to lose.
1. Britain is sovereign with unilateral decision power.
2. Without an agreement the disparate EU members could NEVER agree to sanction Britain.
3. Britain has a $150 billion trade deficit with EU. Half of Britain’s exports go to EU. Fifteen percent of EU exports go to Britain.
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People are our most valuable asset. Here take 10 million refugees in lieu.
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I guess this Kabuki act goes on until another referendum is held that gives the EU the results it wants. Seek a goal long enough and it will be achieved. Either the EU hangs together, or England hangs separately.
Meanwhile, Greece West has taken the BK pill. Puerto Rico now owns the bank.
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Interesting.
A) May, country has been threatened.
B) Some opposition siding with EU against UK,
C) If A) is correct, people in B) are edging towards treason.
Treason usually gets people locked up, not sure if there is still the death penalty?
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I feel May is more than capable of handling Juncker and his tribe. I hope the election strengthens her hands Blair notwithstanding. Just a month away. We will knoe the stuff she is made of. She does not appear to be a person who is going to run away from a battle.
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So EUR 60 billion became EUR 100 billion, because the Junck the Drunk was having trouble pronouncing sixty without slurring his words? This is like listening to Dr Evil request one gajailion dollars ransom from the UN. Its pretty funny.
Every EU country is and will continue to give England favorable trade status (which is the only thing UK cares about), and the first EU member that doesn’t will be made an example of.
Plenty of other countries would love to gain UK market share at Europe’s expense — and everyone in Europe knows it.
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No – there will be conflict, take it to the bank.
Lots of mental cases in the UK.
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Will the globalists have yet another protest? Yes they will. Will they resort to violence to prove how “tolerant” they are? You bet.
But in the end, money talks. Europe needs trade, especially countries with export based economies (Germany, talking about you). But the same logic applies to all of them.
When the you-know-what hits the fan (and it probably will), I think individual EU member states will pay lip service to Brussels but trade with England anyway. Their economies depend on it.
If they don’t (I think this scenario less likely, but plausible) there are dozens of non EU countries that would trip over themselves to take UK market share away from EU countries. England knows it. The non EU countries are shouting it from the roof tops. So whatever any politician promises Brussels, the companies are going to twist their legislatures’ arms to make sure trade continues…. and non EU countries will be bending over backwards to steal market share away.
England wins. EU companies face added competition, but probably keeps market share in spite of Brussels. Juncker drinks another brandy and mumbles something about a galaxy far far away. lather, rinse, repeat
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The politicians gave in too easily to a marginal out vote in my opinion. All this crap about the voters have spoken, since when did the government take notice of 52%?
I still don’t think the UK will actually leave, there will be some spurious reason to have another referendum when enough pressure has been applied to get an in vote.
Why trust Theresa (I’m definitely not going to call an early election) May? Politicians lie, it’s second nature to them. Never let the voter know what the real agenda is, that’s why it’s called politics.
Personally, I would tell Brussels to stick it and walk away. Can’t be any worse than losing an empire and world reserve currency status and paying for 2 world wars.
I predict, 2 years on, there will be no deal and the voter will be asked to decide between a cosy continuation within the EU, or financial hard brexit armageddon if we walk away. Tough choice for the British voter uh? Almost as tough a choice as voting on a Saturday night.
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Get used to it – The UK is leaving
The election strengthened the odds as does UK blustering
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The 48% were mainly Scots and Northern Irish. Take them out and the tax paying English voted > 52% by a large margin AFTER project fear.
May has accused EU of interfering in UK election. This is serious.
You don’t interfere in other countries elections without consequences.
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May has said certain elements don’t want UK to prospe so EU now gets the blame if we don’t. They are the enemy wishing to harm the people of the UK.
A rallying call. A common enemy to everyone believing democracy has a place in modern society.
Junker dropped a large bollocking.
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Readers may find it interesting to compare the discussion and analysis here with the discussion and analysis of Yves Smith at nakedcapitalism.com a well known “fake news” (fake is true main stream not so much) site. they can’t both be right.
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Some of the conclusions on the complexity of trade/deals etc on nakedcapitilism are correct. It’s will be messy and stressful and less than ideal.
I think it falls down with the anti-British attitude and some of the denigrating comments are blatantly incorrect.
The EU will block ports etc. Trade will freeze. Very nasty.
Thinking the unthinkable – what if May doesn’t survive and someone less reasonable gets to power with an annoyed population supporting them to take any action thought necessary?
It happened in Germany, might be our turn now, nukes and all.
It might be a left winger even.
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Prediction – Junker will be out of post before end of Brexit, blaming I’ll health.
Real reason will be his misrepresentation of information and others losing confidence in him as EU President.
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Disagree… Juncker is way too pickled to get any disease 🙂 viruses and bacteria have trouble surviving in alcohol.
Less joking: the EU might keep him around to take the blame for England leaving (even though it was in England’s advantage to leave even without Juncker’s clown show)
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The beauty of this process is the EU will alienate the remainers to such an extent that by the end of it the entire country, not just about half, will be behind May and her leave campaign.
With similar boosts to anti EU groups across the continent.
Also, isn’t it classic the EU can, within a month or so, get the numbers wrong by about 66% (from 60 revised to 100bn).
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May should tell them to send the European army to come and collect it.
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I don’t recall seeing anything on the holdings of transborder debts.
Who owes what to whom, both corporate and government?
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EU is nothing more than a Hemlock Society … now that one of the members has decided to tip its cup into the sink rather thank drink, the others are trying to pour poison down its throat. We all hang together, for we will surely hang separately.
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