Finance: Research, Policy and Anecdotes

I have discussed in several occasions that the Brexit soap opera will never end, no matter that Johnson won the 2019 General Elections with the slogan Get Brexit Done! Brexit is an on-going process and given last week’s suggestion by Johnson’s government to renegotiate the Northern Ireland Protocol (NIP), one even wonders whether this is: Get Brexit Undone!

If one feels that we have been here before, this is certainly the case – it is almost like Groundhog Day.  I went back and checked what I wrote on my blog 25 October 2019, eight days after the agreement on the Withdrawal Agreement, including the Northern Ireland Protocol – most of what I wrote then applies to the current discussion – here are four points I made back then:

“First, the Brexit Trilemma is alive and kicking, with the UK wide backstop negotiated by Theresa May replaced with a Northern Ireland front-stop, taking NI effectively out of the UK customs union and internal single market.”  As many more informed observers have pointed out, the Irish Sea Border is not an invention of the EU, it was critical part of the October 2019 agreement, addressing the Northern Ireland Trilemma. But here we are,  with the UK government again threatening to break international law by walking away from the NIP, critical part of the Withdrawal Agreement that Johnson was so proud of in late 2019. And we are back at the same old discussion on border controls - as pointed out over and over and over again, only two of the following can hold: the UK leaving Single Market and Customs Union, no border control between Northern and the Republic of Ireland, no border controls between Great Britain and Northern Ireland. In true form, the Brexiters are revisiting all of their unicorns (including in the paper underpinning the request for renegotiation), ignoring the fact that the border has to be somewhere between the Single Market (i.e., the EU) and the United Kingdom. And while it is certainly true that there is lots of space to improve the functioning of the sea border between Great Britain and Northern Ireland, the UK government does not seem to want or able to engage in such a dialogue.   Rather it has chosen yet again confrontation, asking for a complete revamp of an International Agreement it happily agree to less than two years ago. Now, one could draw a parallel to the replacement of NAFTA with USMCA, which was rather aggressively pushed by Trump, however, there are two important differences; one, USMCA replaced NAFTA after 26 years; two, the US is certainly a more powerful player vis-à-vis its two neighbours than the UK vis-à-vis the EU. 

“Second, the utter incompetence of Tory ministers has been proven again, such as when not being able to respond whether or not there would be customs control between Great Britain and Northern Ireland” – ok, I might have been wrong here – it is either incompetence or simply lying by Tories. The arguments that the government is using to demand a renegotiation of the NIP (that it is creating unexpected problems) are obviously lies, given the explainer on the NIP published by the UK government in October 2019 (for further evidence, see here by Anton Spisak).   Given the obvious trend towards rewriting history, it seems that the British government does not only want to renege on international treaties but also openly lies about its bad faith with which it signed these agreements.  At the same time, it is asking for trust from the 27 countries that make up the European Union – as has been pointed out excessively, putting trust and Johnson in the same sentence is an oxymoron,  As Dominic Cummings has made clear (and it seems rather plausible) is that Johnson simply did not care about the ‘fine print’ of his Brexit deal – yes, there were lots of warnings back then, but he signed up for the Withdrawal Agreement with the NIP simply in bad faith!  So, why would the 27 countries of the European Union trust him now given that he has shown that his word is not to be trusted.

“Third, the idea that Brexit will help take back control” continues to be wrong – no, the EU will not throw more fuel on the Northern Irish bonfires if the Johnson government reneges on the Withdrawal Agreement, but it will put pressure on Great Britain with targeted trade sanctions; not immediately, but eventually.  We can expect more EU bashing in the coming months – populists need a common enemy and for the Brexit press and the Tories it has been the EU for the past five years.  And given that the UK is about to fall behind the EU in terms of vaccinations (not vaccinating below-18 for example), it cannot boast anymore about being so much better than the EU. So something else has to come up – the conflict on the Northern Ireland Protocol is thus timely for the British government. But obviously this does not mean that the UK has taken back control; it shows the lack of such control!

“Fourth, the idea that once Brexit has been ‘achieved’, it will all be done, the nation can find again together and the government can turn its attention to more pressing issues.”  Well, I started this blog entry noting that this idea was wrong in 2019, it is wrong in 2021 and it will be wrong for many years to come.

In sum, not much substantial news: Brexit continues to be true to its nature as soap opera – new actions, new actors, but same plot. However, one interesting development in the past days was Dominic Cummings engaging on twitter, among others with David Gauke (one of the Tory MPs trying to prevent a no-deal Brexit and subsequently purged from the Tory party by Johnson) and Anne Applebaum  – he seems to be taking as much joy as always from ‘owning the remainers’.  His tweets have made clear that for him the referendum and the 2019 General Elections were all just a game – how to win, without thinking about the political consequences, referring to both the 2016 referendum and 2019 general election as ‘heist’.  Now, in every political party, there are campaigners and policy wonks – it is just that the case of Brexit, the campaigners were really good (if not brilliant I would admit), while the policy wonks were nuts (and they still are).  This, however, is a characteristics of populist movements – whatever slogan-based policy is being invented, there are always some people in the background who come up with the weirdest ideas to underpin these ideas (see unicorn ideas on avoiding the Northern Ireland Trilemma mentioned above).

So, here we are in Groundhog Day, reliving the same circle of grandstanding, confrontation and lies that has come to dominate British politics.

27. Jul, 2021