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The Brexit effect

by Frank Schnittger Wed Oct 25th, 2017 at 09:43:20 PM EST

Worst case Brexit scenario could see Irish GDP fall by 9%, says EU report

A new study into the effects of Brexit on UK and EU trade, particularly agricultural trade, warns that Ireland's GDP could be harder hit than the UK.

Its main scenario analysis, based on a hard Brexit, foresees a fall in Irish GDP of 3.4 per cent, compared to a fall of 2.4 per cent in the UK. This is broadly in line with the predictions of other recent studies.

The report predicts that Irish agricultural exports to the rest of the world could fall by more than two thirds (71 per cent, or $6.5 billion).

The Brexit effect on the GDP of the whole of the EU27 would be of the order of only minus 0.3 per cent. The report, "EU-UK agricultural trade: State of play and possible impacts of Brexit", was written by economists for the European Parliament's agriculture committee.

The report even suggests the fall in Irish GDP could be as high as 9.4 per cent in the most malign scenario studied, if "non-tariff mechanisms" combine with new World Trade Organisation (WTO) tariffs to hamper Irish agricultural exports gain access to the rest of the EU and world.


I am unclear why the report expects Irish exports to the rest of the EU and the world to be so dramatically impacted by Brexit. The report attributes this to the dependency of Irish food exports on UK "intermediaries" such as animal feedstuffs or fertilisers. However most of these can probably sourced elsewhere and some Irish exports to the EU 27 may be able to replace UK exports to the EU27 if these are hit by very high WTO tariffs.

Ireland's dependency on the UK market has been declining steadily in any case, from c. 70% of total exports at the time of EU accession in 1973 to c. 14% now. However the Irish agri-food sector is still very dependent on the UK market (40% of Irish food exports go to the UK) and is already being hard hit by sterling devaluation. Overall the report predicts EU UK Agri-food  trade to decline by 62%.

Meanwhile, in other news, Michael Bloomberg has called Brexit the `single stupidest thing any country has ever done' until the USA Trumped them. Mr. Bloomberg appears to be feeling rather foolish for opening a large and expensive new European headquarters for Bloomberg in the City at a time when some of his staff are asking to be moved because they no longer feel welcome in the UK.

The Frankfurter Allgemeine Sonntagszeitung also has the now usual leak after a May Juncker dinner meeting:

The FAZ report claimed an exhausted-looking Ms May feared being toppled by enemies at home, that she had no room for manoeuvre and told Mr Juncker she was desperate for help from the European side of the Brexit negotiations.

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In the account of the most recent dinner, Ms May was said to have "begged for help", and seemed "anxious" and "tormented" as well as "despondent and discouraged".

The dinner last Monday was arranged at the last minute, according to the account, in spite of Downing Street's insistence it had been in the diary for weeks as part of preparations for last week's Brussels summit.

"Juncker found her anxious, despondent and disheartened. A woman who barely trusts anyone but also is unable to make a clean break," reads the account, which is largely written from Mr Juncker's perspective.

"May's facial expression and her demeanour spoke volumes. That's the way Juncker later described her to his colleagues. Everyone can see: the prime minister is marked by the struggle with her own party. She has deep rings under her eyes. She looks like someone who doesn't sleep at night."

The leak has provoked the now usual claims and counter claims about who leaked what to whom with former co-chief of staff for Theresa May, Nick Timothy, accusing the European Commission president's powerful chief of staff, Martin Selmayr, of responsibility for the leak and attempting to undermine Mrs May.

I can now reveal exclusively here that I was responsible for the leak. I wasn't invited to the dinner but it doesn't take much imagination to make up the details based on the body language Theresa May displays in public. The fact that the veracity of the leaks has been denied so furiously more or less proves that I was right in the first place.

I actually have a good deal of sympathy for May's predicament. She is so clearly in above her head and floundering desperately to keep afloat as the Brexiteer sharks circle her scenting blood. The fact that she actively sought the job limits my sympathy somewhat but she is not the first or last politician whose ambition exceeded their abilities.

She is now part of a process without an escape hatch but which at least has a defined end date: April Fools Day 2019. I suspect she is counting down the days. There is probably nothing much she can do to turn the ship of state around, even if she wanted to, and so there is nothing for it but to maintain a stiff upper lip, keep calm, and carry on.

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David Davis 'to prepare for NO-DEAL' Brexit as EU refuses to budge on trade and transition,
The decision to prepare for a "no-deal" Brexit comes as Theresa May was left empty-handed this week after speaking to German Chancellor Angela Merkel and French President Emmanuel Macron who have taken a hard line on talks.

The upcoming speech comes as Mrs May appealed to EU leaders to come to an agreement that everyone could "stand behind and defend to our people".

The Conservative leader has taken a stand against further concessions on payments to the EU until progress on trade and transition arrangements are made.

She said: "The clear and urgent imperative must be that the dynamic you create enables us to move forward together."

The refusal to negotiate or offer concessions has pushed the Prime Minister to prepare for every eventuality.

Mrs May has reportedly "stuck it" to EU leaders and had "something close to a row" with Jean-Claude Juncker as the EU continues in its stubborn Brexit behaviour, despite the generous €20billion (£18billion) offered to pay for future liabilities.

Angela Merkel and Emmanuel Macron are reportedly demanding the sum be increased as the leaders persist in halting the progress of talks.

The persistent efforts by the Prime Minister appear to be wearing the EU down as talks will be held today that will discuss a potential move towards trade and transition talks.

Theresa May arrived at the EU headquarters yesterday with a tough challenge of convincing leaders talks are ready to move on to the trade and future relationship phase.

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She is under pressure to walk out of talks with Brussels bosses if they refuse to talk trade.

The UK's idea of a negotiation appears to be to seek to wear down the opposition by shouting "I want, I want, I want". The Express appears perplexed that the EU isn't rushing to agree to every new demand the UK comes up with.


Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 25th, 2017 at 11:55:33 PM EST
The Conservative leader has taken a stand against further concessions on payments to the EU until progress on trade and transition arrangements are made.

Hello Teresa, when you run up a bill and try and wiggle out of paying it, making offers of partial payment is not a 'concession', it's defaulting, re-negotiating after the fact, aka welching.
Appeals to the EU negotiators' better natures after flouncing your skirts and snubbing your nose at them beforehand (while leaving your foreign secretary uncriticised while he sticks in his saboteur oar at every opportunity mouthing off provocative inanities, all the while shoving a shiv between your exposed shoulder blades) isn't the leverage you hoped for, is it now?
It was your call to treat the EU with archly aggressive disdain and toss your head at them so rudely, without comity or couth, as if your pouting snarl would immediately make them scurry back to their desks and humbly accept your conditions unconditionally.
Your haste to skip the formalities and cut right to the commercials is reminiscent of a child wanting dessert before soup, alternating naked greed with tantrums as strategy to win the EU over to your superior views on how things must be done, come what May wants, period.
And when they don't swoon in obeisance at this clarion call to reason, you turn coy and beg them to be understanding about how you look to your own electorate!
You'll get the hard Brexit your intransigence demands, not only because Cameron was bluffing with the referendum and it went pear-shaped and because the EU will feel compelled to make an example out of Britain to discourage others' exiteering in your polluted slipstream, but because your negotiation skills are so sub par.
You don't want a soft Brexit because you'll be seen as weak by your party stalwarts and be a big Fail on that level. More and more it seems like you want to wobble out on power-drunk legs and do as much damage as you can on the way, smashing mirrors, bringing down the hatstands and sidling off with the umbrellas.
Yelling into the dark while the country's split in two, the Irish question sticking out like a sore thumb, as unaddressed as the trivial matter of the bill being unpaid as agreed and public support for your strength and stability at an all time low isn't jaunty courage, it's a vacillating effort to cover up the fact that there is no viable plan for Brexit in your head. You're just winging it.
Did you really think you could finesse 27 countries with echoes of empire?
Nation of shopkeepers indeed, but where's the genteel icing of decorum for the cake?
'We don't want your friendship, we just want to trade with you' is not the brilliantly diplomatic move you delude yourself it is, as we are finding out. Funny how that's shaping up for a great transition period, while you cast about for a clue how to make this a win for anybody.

 

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Oct 26th, 2017 at 01:33:48 AM EST
[ Parent ]
by Oui on Thu Oct 26th, 2017 at 07:53:30 AM EST
If her situation is as bad as reported and if the personal toll on her is as severe she should just resign - claiming health issues. A braver act would be to pull together the remaining remainers and act with the cooperation of other parties to just put an end to this whole fiasco while she can and then resign. At least she would salvage some of her reputation that way - at the cost of the hatred of the Brexit foamers, who she found more politically expedient than truly congenial. But I fear there is not much chance of that happening.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 30th, 2017 at 02:25:02 AM EST
The political dynamic in Brexitland is inexorably towards a harder and harder Brexit. I doubt she could turn it around now, even if she wanted to. The Tories have a way of spitting out their leaders and forgetting all about them within days... Remember Cameron? He is a non-person now. George Osborne? Who?

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Oct 30th, 2017 at 04:21:58 PM EST
[ Parent ]
One of the most persistent Brexiteer criticisms of the EU is that the EU Commission has an enormous, faceless, unelected, bureaucracy based in Brussels stifling enterprise and growth. Little matter that the Brussels headcount of c. 33,000 is less than the number of of people employed by the County Council of Derbyshire. However now Brexit secretary David Davis has revealed that the Whitehall Civil service will balloon by at least 8,000 workers by the end of the year to deal with the fall-out from Brexit. Given that the UK represents about 16% of the EU economy, this is already proportionately more than the entire Commission bureaucracy.

Not comparing precisely like with like, perhaps, but an indication that Brexit is not going to save on the cost of governance for the UK.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Oct 31st, 2017 at 10:14:26 PM EST
I have long argued with my brexiteer sister that much of the bureaucracy (she's a small business owner) complains aobut originates in whitehall, not Brussels.

However, as I've realised, I can prove my case again and again, but each time she walks out of the door, she resets to default.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Nov 1st, 2017 at 06:14:36 PM EST
[ Parent ]
Like many others she needs to experience the consequences ("hard" withdrawal) for herself in order to learn the lesson. It is as necessary as hand on the flame sometimes.

Diversity is the key to economic and political evolution.
by Cat on Wed Nov 1st, 2017 at 06:35:48 PM EST
[ Parent ]
trouble is, we're all gonna get burned

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Wed Nov 1st, 2017 at 07:36:42 PM EST
[ Parent ]
yes, that lesson (nadie es libre a/k/a no man is an island a/k/a ... ) and concomitant fallacies (rational self-interested ... a/k/a free market a/k/a no such thing as society... "empathy" &tc) are related to the forgoing.

Diversity is the key to economic and political evolution.
by Cat on Wed Nov 1st, 2017 at 07:47:58 PM EST
[ Parent ]
And it's v. hard to unburn a hand.  And I'm not sure any lessons will be learned. Ten years from now, with the UK economy perhaps 10% smaller than it otherwise would have been, most people will shrug their shoulders when asked about Brexit and say gaining their "freedom" was worth it, and that any loss of output and wealth was all because the EU chose to "punish" the UK.

I used to have an equilibrium theory of politics (a very long time ago). According to this theory if a political system moved very hard right a reaction would occur and it would then swing hard left around some notional centre.

Then I saw too many cases where this simply didn't happen.  People would double down on their mistakes and become ever more embittered and entrenched in their views. Far from swing back left the whole spectrum or Overton window or notional centre would just keep careering right.

And then, even if they did fall right over a cliff and the whole system crashed they would still be heard mumbling into their beers about how they had been betrayed.  Hitler felt that way about his armies even when they had been faced with overwhelming odds. American generals felt that way about the Vietnam war being lost because of the libruls back home.

One of the reasons I find the whole substance and style of the Trump Presidency so alarming is that he is redefining what is normal to such a huge degree. And he hasn't lost much support and Republican governors are still amongst the most popular in the land. He is changing what it means to be an American.

There is simply no bottom to how low this can get, and no automatic corrective to pull it back to some notional mean. The UK in 10 years time could be significantly poorer (relative to the EU), ultra-nationalist, quasi fascist, and xenophobic as hell, and it will all have come to be seen as normal by the majority. A backwater doesn't seem like a backwater to those who know no different.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 1st, 2017 at 09:18:20 PM EST
[ Parent ]
frankly I think the UK would have dodged a bullet if our economy only diminishes by 10%.

given the lack of manufacturing and the politics of Westminster vis a vis the City, I believe the Tories have ambitions for us to be reduced to a despeately poor 3rd world offshore tax haven with an oligarchic elite lording it over the rest of us.

It's not that they want the majority of the population to be reduced to destitution, it's just that we will be unhappy collateral damage to them feathering their own nests.

That said, there will be no doubling down on right wing stupidity here, the next PM will be Corbyn. That will change the trajectory of the nation quite considerably.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Thu Nov 2nd, 2017 at 08:32:07 AM EST
[ Parent ]
That said, there will be no doubling down on right wing stupidity here, the next PM will be Corbyn. That will change the trajectory of the nation quite considerably.

Not sure how much it'll improve it though: Corbyn seems overly enamoured of solving problems from 1977 rather than 2017.

by Colman (colman at eurotrib.com) on Thu Nov 2nd, 2017 at 11:36:13 AM EST
[ Parent ]
Meh, 2017 was what Varoufakis tried.
But realistically there can be no clean break brexit. So  I totally expect the EU to go back to their favourite hobby of pulling the wings off socialists when it is time to negotiate an extenseion to the extension of the temporary emergency aggreement.
by generic on Thu Nov 2nd, 2017 at 11:57:47 AM EST
[ Parent ]
nobody solved the problems of 77, they just pretended that thatcher made them all go away. How do you solve the problems of the UK? Start at the beginning; 77 is as good a place to start as any, better than many in fact.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Nov 2nd, 2017 at 03:28:40 PM EST
[ Parent ]
And by the time you spend fifty years fixing the problems of the seventies you'll be just in time to start figuring out the  problems of 2017. I'm not sure the swarms of autonomous AIs in fusion powered  flying cars are going to be impressed.
by Colman (colman at eurotrib.com) on Sun Nov 5th, 2017 at 03:44:14 PM EST
[ Parent ]
I did advise you back when the selfservin sumbitch was elected in '08 that the US is essential a conservative nation. You didn't believe me then, which is fine, I guess, since so many Americans deny it, too, while voting in conservative fiscal and special, social "hot button" issues all up and down biennial tickets.
MAP
US "liberalism" has been fading for more than thirty years.


Diversity is the key to economic and political evolution.
by Cat on Sat Nov 4th, 2017 at 11:08:44 PM EST
[ Parent ]
I don't think I was ever under any illusions about the strength of US conservatism and I was about to deny even being around this joint that far back when I thought I'd better check. Oh schucks - my first post here was on 28th. Nov. 2001 - my 10th. anniversary is coming up!

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Nov 5th, 2017 at 07:56:46 PM EST
[ Parent ]
I hesitate to respond, Frank. Your perspective of the future appears to have taken quite a turn in one week, since you published this diary. It's taken a turn about everything, everywhere that's lunatic and familiar, not strange or actually alarming bollox, but the negotiations at Stormont. That's a bit of a stress, isn't it. Persevere, nonetheless. Burns scar. Scars are mementos.

I myself have on my forearm a fifty-year-old scar from a tipped pot of scalding water. How it happened to be is beside my point. I don't remember anyway. My point is, I do remember it once ran nearly the full length. Now it's but a quarter of its own accord or rather the regenerative properties of life and imperceptible castings of its shell as I go about my business. That is what I carry with me.

Last week I took my daily constitutional to the corner grocer. The breeze was right. My new neighbors congregated on the stoops of those ol' rowhouses gossiping and nodding to rhythm and blues outa someone's car stereo. One  gentleman of a certain age snagged me 'bout my waist for a dance. And I blushed and tried my best. That is what I carry with me.

Time will tell. Some people will rise to the day. Not all will, this you may allow. Some people you've yet to meet may be just enough. Just as was to bring Ireland to this new day out of the last day, angst with the past, the "backwater", no? Some people will, because they must. And also there's no skin left to burn. Look there. You will not be abandoned.


Diversity is the key to economic and political evolution.

by Cat on Thu Nov 2nd, 2017 at 04:38:16 AM EST
Fear not Cat! I haven't changed my outlook in the past week even if developments in Catalonia, UK and N. Ireland are not good. I lost my youthful Hegelian idealism a long time ago.

All to often now I am content to analyse the dynamics of a situation playing out before our eyes while knowing I have zero influence on the outcome. The best we can often do is brace ourselves and prepare for more bad news.

I feel for Helen caught in in the warped reality of Brexit, powerless to do anything, but liable for it's costs in any case. Just as I felt for Irish workers made unemployed by the banking crash for which they had no responsibility, and which they were even made liable to pay for.

The good news this week is that Irish unemployment has declined to 6% from a high of over 15% in 2012 with part-time working also declining rapidly and wage rates starting to increase. So yes, there is always some good news to celebrate and there is a lot in my life right now.

PS Great song and performance by Andra Day

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Nov 2nd, 2017 at 04:22:56 PM EST
[ Parent ]


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