The Brexit Consequences Thread

Wordsmith

LE
Book Reviewer
I think Germany has already surrended and Merkel has signed up to the 750 Euro Bailout. Macron knows how the charm the batty old birds.
The 750 billion euro bailout runs to 2025, and on a year by year basis, spread across the entire EU, it doesn't amount to much. In addition, on past performance, the majority of the dosh won't end up where it's needed - the bulk of it will end up with the states in favour of further integration.

Wordsmith
 
Germany, interestingly, is slowly revising its opinion of the euro. It was all for it when the euro was working in Germany's benefit - German exports boomed on the back of the euro because it delivered what was - for Germany - an artificially low exchange rate. But that worm has now turned.

With Club Med going down the sh*tter as a result of Covid-19, Germany is taking a much tougher line. The German Constitutional Court, which bent over backwards to justify EU shenanigans in the past has suddenly dome a 180 degree turn over the latest bout of ECB QE, ruling it's contrary to EU rules - and indeed that the ECB itself is in breach of EU rules. Could that be because the QE is making extensive use of the German cheque book without German permission?

Expect to see German strongly resist further ECB QE. Two wins for Germany from doing that. The first is the German regain control of their cheque book. The second is Germany is cash rich by EU standards. As Club Med companies get into financial trouble, expect to see Germany companies buying them up at bargain basement prices.

European solidarity is a wonderful thing.

Wordsmith
The worm has turned in perspective that witH reunification France tabled it as the price. I’ve said this before. In context France got away with the blame for the failure of the EURO . But that is an Atlantic Ocean away now time wise, the changes such as the failure of the Lisbon treaty in many areas Is more directly responsible. France needed control of the Euro: now it’s got it. The EU has suffered lack of nerve from day one, it’s run by consensus
 

Wordsmith

LE
Book Reviewer
The worm has turned in perspective that witH reunification France tabled it as the price. I’ve said this before. In context France got away with the blame for the failure of the EURO . But that is an Atlantic Ocean away now time wise, the changes such as the failure of the Lisbon treaty in many areas Is more directly responsible. France needed control of the Euro: now it’s got it. The EU has suffered lack of nerve from day one, it’s run by consensus
Unfortunately for France, it might have got control of the euro, but Germany is threatening to take it's trainset home.

Club Med (and France) are going to require a massive bailout (which is why France is trying to dictate the euro's direction), but the German constitutional court has ruled that massive bale outs are in violation of EU rules. And if the constitutional court holds to that line, there will be no bailout.

Which ultimately means that Germany, being the EU's major paymaster, will have control of the EU. It looks like financial muscle might achieve what Adolf could not...

Wordsmith
 
The EU already allow visa free travel for holders of Turkish special i.e. official passports. I do not know the detail on what is being proposed with the UK, but I would imagine that it would be on the lines of something similar. Considering that the holders of these particular documents will be the sort of people that the UK will need to deal with in order to make any such trade deal a success, it is not exactly a big ask or even a big issue. We have given the Chinese rather more travel concessions and these will now have to be reviewed as a matter of priority.
 
Unfortunately for France, it might have got control of the euro, but Germany is threatening to take it's trainset home.

Club Med (and France) are going to require a massive bailout (which is why France is trying to dictate the euro's direction), but the German constitutional court has ruled that massive bale outs are in violation of EU rules. And if the constitutional court holds to that line, there will be no bailout.

Which ultimately means that Germany, being the EU's major paymaster, will have control of the EU. It looks like financial muscle might achieve what Adolf could not...

Wordsmith
Ironic innit?
 

Wordsmith

LE
Book Reviewer
I doubt the EU will be pleased by this:

Taxes and red tape will be slashed in towns and cities across the country next year, under government plans for a post-Brexit and post-coronavirus economic revolution.

Rishi Sunak, the Chancellor, is preparing to introduce sweeping tax cuts and an overhaul of planning laws in up to 10 new "freeports" within a year of the UK becoming fully independent from the European Union in December, The Telegraph can reveal.
Exactly what the EU doesn't want the UK doing - gaining competitive advantage by binning regulations and chopping taxes. It'll make agreement with the EU harder to reach - which is why I suspect these stories are starting to emerge now. My gut feeling is that BoJo wants to exit on WTO terms and he's putting a potential agreement further out of reach by raising two fingers to the EU and it's demands.

And it's a path the EU can't go down itself. Tax cuts mean less revenue for the EU as an institution - and hence less bribes structural funds to hand out to further moves towards further integration. While setting up freeports across the EU will unleash a no holds bared fight to get them in the first place, followed by the inevitable problems as countries bend the rules.

Ursula von der Leyen and Michael Barnier will be spitting tacks this morning.

Wordsmith
 
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A really though-provoking piece in the Staggers:


The introduction, in particular, is worth reading twice:

Intellectual attitudes towards the state of the nation mirror those towards the coronavirus. In each case, an influential body of opinion expects a reversion to what it regards as normalcy. The pandemic will soon be defeated, or else it will fade away. With the end of lockdown, the economy can continue where it left off.

Similarly, many seem to believe that the political changes of the past four years are anomalies. The Brexit referendum, Donald Trump’s presidency, Boris Johnson’s majority and the inability of the EU to achieve solidarity in face of the largest economic dislocation in its history are all aberrations from the normal course of events.


These expectations are not correlated with political allegiances in any simple way. Most of those who believe coronavirus is overhyped and lockdown overdone are Thatcherite Brexiteers. Those who believe the political shifts of recent years can be reversed are mostly progressive liberals and unreconciled Remainers. What these seemingly divergent groupings have in common is the faith that the order they imagine existed until a few years ago can somehow be reinstated. They recognise that things cannot be just as they used to be. The restoration they have in mind will be an enhanced, re-energised, super duper version of the old order. But however embellished, it will still be the ancién regime. It is a nostalgic vision, and plainly hallucinatory.
 
These two paragraphs also caught my eye:

Yet progressives remain fixated on how to revive the world that engendered the present disorder. They constructed and managed that world, and it flattered their self-image as the rational vanguard of the species. It is only to be expected that they should yearn for the return of their now bankrupt authority. Yet few aspects of the contemporary scene are more laughably grotesque than defunct politicians and advisers demanding a return to the politics of competence and expertise that produced the dysfunctional euro, the ruinous Iraq War, the financial crisis, anarchy in Libya and the regime of globalisation that is currently collapsing.

Paradoxically, the economic crisis may work in Johnson’s favour. Insofar as Starmer has a view of the economy, it appears to be that of the Economist, the Financial Times and the Wall Street Journal: there is nothing wrong with market capitalism that a few judicious reforms can’t remedy. Like these august journals of business opinion, Starmer’s new Labour has not noticed that the system it proposes to reform no longer exists.
 
Meanwhile, the EU hasn’t noticed the big 800lb gorilla now sitting in the room.

The West, ie, the 5 Eyes plus their close friends, are de facto now in a trade war with China.
 

Wordsmith

LE
Book Reviewer
Meanwhile, the EU hasn’t noticed the big 800lb gorilla now sitting in the room.

The West, ie, the 5 Eyes plus their close friends, are de facto now in a trade war with China.
Posted this before in another thread - the NCSC (National Cyber Security Centre) is the public face of GCHQ.

NCSC considers that the particular characteristics of some vendors can cause increased national risk. NCSC considers, therefore, that the market would be assisted by a clear statement of advice setting out how the presence of a particular vendor may increase security risks, what a high risk vendor is and how to manage the particular security risks presented by those vendors.
And the only HRV (High Risk Vendor) on the list...
Huawei has always been considered higher risk by the UK government and a risk mitigation strategy has been in place since they first began to supply into the UK. In terms of the HRV criteria set out above, the reasons NCSC continues to consider Huawei a HRV include at least that:
it is a Chinese company that could, under China’s National Intelligence Law of 2017, be ordered to act in a way that is harmful to the UK;
we assess that the Chinese State (and associated actors) have carried out and will continue to carry out cyber attacks against the UK and our interests
our experience has shown that Huawei’s cybersecurity and engineering quality is low and its processes opaque.
Note that this warning dates back to January - well before BoJo's decision to allow Huawei to supply 5G equipment to upgrade the UK's network. As such BoJo's decision always struck me as verging on the insane.

Also, from impeccable sources.
  1. The Chinese government is very active in hacking UK sites - along with the Russians and the Iranians.
  2. The software (after you get under the flashy interfaces) is buggy. Not least because the source code was stolen from a US competitor and refactored.
The underlying problem is that you can make serious money from dealing with Huawei - who are after picking brains as much as buying services. He who sups with the devil...

Wordsmith
 
Posted this before in another thread - the NCSC (National Cyber Security Centre) is the public face of GCHQ.



And the only HRV (High Risk Vendor) on the list...





Note that this warning dates back to January - well before BoJo's decision to allow Huawei to supply 5G equipment to upgrade the UK's network. As such BoJo's decision always struck me as verging on the insane.

Also, from impeccable sources.
  1. The Chinese government is very active in hacking UK sites - along with the Russians and the Iranians.
  2. The software (after you get under the flashy interfaces) is buggy. Not least because the source code was stolen from a US competitor and refactored.
The underlying problem is that you can make serious money from dealing with Huawei - who are after picking brains as much as buying services. He who sups with the devil...

Wordsmith
the brave new world will be 5 Eyes Approved 5G from 5 Eyes Approved vendors.
 
Germany, interestingly, is slowly revising its opinion of the euro. It was all for it when the euro was working in Germany's benefit - German exports boomed on the back of the euro because it delivered what was - for Germany - an artificially low exchange rate. But that worm has now turned.

With Club Med going down the sh*tter as a result of Covid-19, Germany is taking a much tougher line. The German Constitutional Court, which bent over backwards to justify EU shenanigans in the past has suddenly dome a 180 degree turn over the latest bout of ECB QE, ruling it's contrary to EU rules - and indeed that the ECB itself is in breach of EU rules. Could that be because the QE is making extensive use of the German cheque book without German permission?

Expect to see German strongly resist further ECB QE. Two wins for Germany from doing that. The first is the German regain control of their cheque book. The second is Germany is cash rich by EU standards. As Club Med companies get into financial trouble, expect to see Germany companies buying them up at bargain basement prices.

European solidarity is a wonderful thing.

Wordsmith
if only our banks stood by our country like the German courts do then we'd be in a much better place but our lot are full on EU supporters
 

Wordsmith

LE
Book Reviewer
A really though-provoking piece in the Staggers:


The introduction, in particular, is worth reading twice:

Similarly, many seem to believe that the political changes of the past four years are anomalies. The Brexit referendum, Donald Trump’s presidency, Boris Johnson’s majority and the inability of the EU to achieve solidarity in face of the largest economic dislocation in its history are all aberrations from the normal course of events.
This struck me as in interesting point from the article.
Instead of China converging on the free market, Western economies have morphed into versions of Chinese-style state capitalism. The difference is that Western states are not aiming to dominate the global market but to insulate themselves from it. Greater security against market shocks is integral to the process of deglobalisation that is under way.
Part of the EU reaction seems in part due to the fear that the UK will build bridges (aka trade agreements) with other bigger and better trade blocs. Two points of particular note:
  1. The UK represents about 15% of the EU's economic strength - i.e. 1/6 of that strength walks away on Dec 31st.
  2. The EU (after the UK has left will be 14% of world GDP). The US and Commonwealth are 41% combined. Providing the UK can sign decent FTA's with those areas, we will be leaving on trade bloc and joining a de facto bigger one.
The dilemma the EU now faces is that - if it puts up mutual trade barriers after the 31st - once the UK has signed FTA's with other countries, it faces being progressively pushed out of the currently lucrative UK market.

May's actions always seem motivated by fear - the fear that the UK economy would go down the sh*tter after Brexit. BoJo's actions seem motivated by hope - that there is a bigger and brighter world outside of the EU.

Wordsmith
 

Wordsmith

LE
Book Reviewer
if only our banks stood by our country like the German courts do then we'd be in a much better place but our lot are full on EU supporters
The German constitutional court did a good impression of the three wise monkeys all the time the euro was working to Germany's advantage. This is Germany's debt to GDP ratio. It's fallen steadily in recent years. One reason is that Germany's exports to other EU countries were rising, while it's imports from them were falling - in part attributable to Germany gaming the euro.

1594566191837.png

The German constitutional court - despite multiple cases being brought before it - always came down on the EU's side. Now, with the EU facing a Covid-19 related recession - and a huge bill for either the bailout of Club Med/France or a euro breakup, it's suddenly decided the EU is breaching the same rules it turned a blind eye to in the past.

Wordsmith
 
Meanwhile in another part of the forest my local cheesmakers are working all hours making kosher cheese. By the container load. Cheaper quicker and better than from anywhere else.....
Indeed, for "blessed are the cheesemakers"!!

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