Brexit discussion thread IX (Please read OP before posting)

Leroy42

Bit cynical wrote: »

The UK owes nothing if there's no deal.

Wrong. The UK have simply agreed on the figure and the payment plan under the WA. No deal still leaves the money payable.

Do you understand what the payment is for? It is not a cost to leaving. This is money that the UK would be paying whether they stay or go. The EU wants it in the WA so that it cannot be used as a pawn in any FTA. And it appears they were 100% right to take this approach as clearly the UK have every intention of using it as such.

It is the same as settling a bar tab at the end of the night.

Sure, you can leg it, but try getting back in the next night.

Bit cynical

Professor Moriarty wrote: »

There will be trade. But Britain will be competing for EU trade under less favourable terms than 60 other countries. Here's an important fact to illustrate how mad No Deal is. If Britain were to start trading under WTO rules only on Nov 1st, which is what they would have to do if they crashed out, they would be the only country in the world to be doing so.

Yes but I am not advocating no deal. Both Ireland and the UK are better off economically if there's a deal.

But from the UK's perspective, a large part of the attractiveness of the WA is continuity. While negotiations for the future relationship is ongoing, the UK gets to trade on much the same basis as it was doing as an EU member.

However in the event of no deal, this continuity is lost. It is gone and cannot be brought back. Now they are outsiders. They expect economic hardship - there's been no shortage of doom and gloom forecasts in the press - and they will get it and there will indeed be some political pressure to come crawling back to the EU in humiliation, but there will also be a desire to get on with the task of rebuilding the economy and negotiate trade deals with the rest of the world.

So I don't think it is as simple as saying that because the UK will suffer economically they will immediately come back with their tails between their legs looking to reopen the WA.

Panrich

Leroy42 wrote: »

Wrong. The UK have simply agreed on the figure and the payment plan under the WA. No deal still leaves the money payable.

Do you understand what the payment is for? It is not a cost to leaving. This is money that the UK would be paying whether they stay or go. The EU wants it in the WA so that it cannot be used as a pawn in any FTA. And it appears they were 100% right to take this approach as clearly the UK have every intention of using it as such.

It is the same as settling a bar tab at the end of the night.

Sure, you can leg it, but try getting back in the next night.

Exactly. As an example there are very many retired British citizens who served in official capacity for the EU over the years. The EU will continue to pay their pensions.

Professor Moriarty

Bit cynical wrote: »

Yes but I am not advocating no deal. Both Ireland and the UK are better off economically if there's a deal.

But from the UK's perspective, a large part of the attractiveness of the WA is continuity. While negotiations for the future relationship is ongoing, the UK gets to trade on much the same basis as it was doing as an EU member.

However in the event of no deal, this continuity is lost. It is gone and cannot be brought back. Now they are outsiders. They expect economic hardship - there's been no shortage of doom and gloom forecasts in the press - and they will get it and there will indeed be some political pressure to come crawling back to the EU in humiliation, but there will also be a desire to get on with the task of rebuilding the economy and negotiate trade deals with the rest of the world.

So I don't think it is as simple as saying that because the UK will suffer economically they will immediately come back with their tails between their legs looking to reopen the WA.

So if they don't come back to the EU looking for a deal, what will their economy look like under WTO rules only?

Zubeneschamali

Professor Moriarty wrote: »

Quite simply, there won't be other jobs for these people to take.

Of course there will be other jobs: Ireland has added 350,000 jobs since 2014, 70000 jobs a year.

Bit cynical

Professor Moriarty wrote: »

So if they don't come back to the EU looking for a deal, what will their economy look like under WTO rules only?

Well there have been economic forecasts for different kinds of Brexit and like I said, the economic hit is significant for both the UK and Ireland but somewhat less than Ireland suffered under the financial crisis.

Leroy42

Bit cynical wrote: »

Yes but I am not advocating no deal. Both Ireland and the UK are better off economically if there's a deal.

But from the UK's perspective, a large part of the attractiveness of the WA is continuity. While negotiations for the future relationship is ongoing, the UK gets to trade on much the same basis as it was doing as an EU member.

However in the event of no deal, this continuity is lost. It is gone and cannot be brought back. Now they are outsiders. They expect economic hardship - there's been no shortage of doom and gloom forecasts in the press - and they will get it and there will indeed be some political pressure to come crawling back to the EU in humiliation, but there will also be a desire to get on with the task of rebuilding the economy and negotiate trade deals with the rest of the world.

So I don't think it is as simple as saying that because the UK will suffer economically they will immediately come back with their tails between their legs looking to reopen the WA.

But there is no analysis, forecast or anything on how they are going to replace the lost trade. Never mind the massive hit in the short term that will happen regardless.

It is not simply political pressure, people will lose their jobs. People will lose their homes. Companies will close down. And at least the 2008 crash could be blamed on the US, or the banks. This is going to land directly at the feet of Johnson and Farage. What is Johnson going to do to help these people?

And how will they handle the inflation? If NI is effected even close to the forecasts will England be happy to increase the subvention to cover it. And what about the costs of setting up all the trade bodies, regulation offices, additional customs checks, vet services?

And will other countries be willing to lend them money given they have just whelced on money owed to the EU simply because they didn't feel like paying?

Hurrache

In another one of those you couldn't make it up moments, Alan Mendoza, executive director of the Henry Jackson Society, a conservative think tank that tries to position itself across the divide and claims to "work across borders and party lines to combat extremism, advance democracy and real human rights" had this to say about how to deal with Ireland.

Someone needs to have a whisper in his ear and tell him where the opposition to the backstop is coming from.

https://twitter.com/DarranMarshall/status/1149671033646927872

edit:

This one was the reaction from the Daily Mirror editor in it.

https://twitter.com/lumi_1984/status/1149678401042731008

Bit cynical

Leroy42 wrote: »

Wrong. The UK have simply agreed on the figure and the payment plan under the WA. No deal still leaves the money payable.

Do you understand what the payment is for? It is not a cost to leaving. This is money that the UK would be paying whether they stay or go. The EU wants it in the WA so that it cannot be used as a pawn in any FTA. And it appears they were 100% right to take this approach as clearly the UK have every intention of using it as such.

It is the same as settling a bar tab at the end of the night.

Sure, you can leg it, but try getting back in the next night.

I think you are incorrect. As pointed out there's no legal obligation to pay that money in the event of no deal. It is not like a bar tab where there's a legal obligation.

Zubeneschamali

Bit cynical wrote: »

Well there have been economic forecasts for different kinds of Brexit

The last No Deal estimates I saw were 7.7 to 10.7% lower GDP after 15 years compared to Remaining.



https://www.theguardian.com/politics/2018/nov/28/uk-significantly-worse-off-under-all-brexit-scenarios-official-forecast-gdp

Professor Moriarty

Zubeneschamali wrote: »

Of course there will be other jobs: Ireland has added 350,000 jobs since 2014, 70000 jobs a year.

No there won't. It's -80000. Not -80000+80000=0. If you lose 80000 jobs then you lose 80000 jobs. The economy will be hammered for years so new jobs won't be coming anytime soon.

Leroy42

Bit cynical wrote: »

I think you are incorrect. As pointed out there's no legal obligation to pay that money in the event of no deal. It is not like a bar tab where there's a legal obligation.

That is exactly what it is. TM has stated that in the HoC. The likes of JRM etc have dressed it up as a divorce bill, a price for leaving, but it is simply false.

They owe money as part of the agreed projects within the current budget. Bridges, for example, are currently being built that UK will be part funding. Should they simply be allowed to stop paying now?

As mentioned, peoples pensions (Farage for example) have to be paid for a number of years. That is part of it.

I think you misunderstand what the 39bn relates to.

Professor Moriarty

Hurrache wrote: »

In another one of those you couldn't make it up moments, Alan Mendoza, executive director of the Henry Jackson Society, a conservative think tank that tries to position itself across the divide and claims to "work across borders and party lines to combat extremism, advance democracy and real human rights" had this to say about how to deal with Ireland

https://twitter.com/DarranMarshall/status/1149671033646927872

I'm certainly open to bribery. Might cost him a little more than he thinks, but I'm game.

Zubeneschamali

Professor Moriarty wrote: »

No there won't. It's -80000. Not -80000+80000=0. If you lose 80000 jobs then you lose 80000 jobs. The economy will be hammered for years so new jobs won't be coming anytime soon.

No, look it up. here is a quote:

In a disorderly scenario, economic output here would be 5 per cent lower after 10 years than if the UK remained in the European Union, while employment would be 3.4 per cent lower, which equates to 77,500 fewer jobs.

So it is 80,000 jobs less than if the UK remain, not all growth stops and then a drop of 80,000 net jobs.

And it is 80,000 jobs over 10 years. We added 4 times that number of jobs in just the last 5 years.

This really isn't the end of the world.

https://www.irishtimes.com/business/economy/disorderly-brexit-could-cause-loss-of-80-000-irish-jobs-report-warns-1.3838322

Professor Moriarty

Zubeneschamali wrote: »

No, look it up. here is a quote:

In a disorderly scenario, economic output here would be 5 per cent lower after 10 years than if the UK remained in the European Union, while employment would be 3.4 per cent lower, which equates to 77,500 fewer jobs.

So it is 80,000 jobs less than if the UK remain, not all growth stops and then a drop of 80,000 net jobs.

And it is 80,000 jobs over 10 years. We added 4 times that number of jobs in just the last 5 years.

This really isn't the end of the world.

https://www.irishtimes.com/business/economy/disorderly-brexit-could-cause-loss-of-80-000-irish-jobs-report-warns-1.3838322

No. The ESRI are quite specific. After 10 years there will be 80000 fewer jobs in the Irish economy than there is today. So, for example, if there are 1000000 jobs in Ireland today, there will be 920000 in 2029.

Bit cynical

Zubeneschamali wrote: »

The last No Deal estimates I saw were 7.7 to 10.7% lower GDP after 15 years compared to Remaining.
https://www.theguardian.com/politics/2018/nov/28/uk-significantly-worse-off-under-all-brexit-scenarios-official-forecast-gdp

However what is striking about most of the forecasts is the similarity in magnitude for both the UK in Ireland in the various brexit scenarios. In relation to Ireland you say below:

Zubeneschamali wrote: »

This really isn't the end of the world.

If it isn't the end of the world for Ireland, it won't be the end of the world for the UK either.

kunst nugget

Bit cynical wrote: »

I think you are incorrect. As pointed out there's no legal obligation to pay that money in the event of no deal. It is not like a bar tab where there's a legal obligation.

Except there would be

A House of Lords report from 2017 says that we won’t be bound by EU law after Brexit, and so we could get out of paying the bill. But that report is contentious. Irrespective of our membership of the EU, we are still bound to our financial commitments under international law.

And it’s worth remembering that even beyond the legal issues, reneging on our financial obligations is likely to make any free trade deal with Europe, or other potential partners, politically impossible.

Is there a legal obligation to pay the 39 billion

listermint

Bit cynical wrote: »

However what is striking about most of the forecasts is the similarity in magnitude for both the UK in Ireland in the various brexit scenarios. In relation to Ireland you say below:

If it isn't the end of the world for Ireland, it won't be the end of the world for the UK either.

Show us the forecasts that are the same please.


I'll wait

Bit cynical

Leroy42 wrote: »

That is exactly what it is. TM has stated that in the HoC. The likes of JRM etc have dressed it up as a divorce bill, a price for leaving, but it is simply false.

They owe money as part of the agreed projects within the current budget. Bridges, for example, are currently being built that UK will be part funding. Should they simply be allowed to stop paying now?

As mentioned, peoples pensions (Farage for example) have to be paid for a number of years. That is part of it.

I think you misunderstand what the 39bn relates to.

None of that has a bearing on the issue. The EU may be down financially on things like pensions to Farage or whatever and may have liked to have the UK contribute to it, but that is not the same as saying that the UK legally owes the EU for Farage's pension (or any other pension for that matter). Wanting something to be the case is not an argument I'm afraid.

Lackadaisical

From an Irish point of view, it's extremely difficult to model what's going to happen as there are also likely to be upswings in terms of relocating companies as this starts to get a lot more real and nobody's quite sure how those flows will happen or how big they will be as there's absolutely no precedent for any of this and the politics is still all up in the air.

All models should be read with a *huge* degree of caution.

In anything I do, I'm just trying to limit exposure to the UK. I don't particularly want to do that, but I don't have much option as the whole thing is just so up in the air.

The one thing I would caution is that there's still confusion outside of Ireland as to where exactly we stand. I have heard a few comments assuming we will leave the EU too. The Irish Government needs to really hammer that point was it will cost us FDI. You'd be surprised how much stuff flies around in rumour in business communities and a lot of people don't spend all that much time thinking about or parsing Irish politics or may assume it's similar to UK politics due to geographical proximity.

We were left somewhat shocked recently when a very senior US executive asked someone to explain "What's all this Brexit stuff I keep hearing people talking about."

fash

Dytalus wrote: »

The divorce bill is £39 billion.

And they would absolutely be expected to pay it even with a no-deal scenario. The bill covers outstanding commitments and liabilities to the EU, it is money the UK already owes. The EU could take the UK to the international court of justice for refusing to pay and they'd look very, very unreliable in the eyes of other nations for not paying.

Frankly better not to even do that. Better to seize assets outside the UK and then let the UK do whatever it wanted.

FrancieBrady

Lackadaisical wrote: »

All models should be read with a *huge* degree of caution.

In anything I do, I'm just trying to limit exposure to the UK. I don't particularly want to do that, but I don't have much option as the whole thing is just so up in the air.

Exactly. And what cannot be modelled is how well prepared business is. Some will be and some won't.
Same as you, I am now buying supplies from Germany and The Netherlands rather than the UK. Actually making a saving on some of it. Very small business though.

Professor Moriarty

Lackadaisical wrote: »

From an Irish point of view, it's extremely difficult to model what's going to happen as there are also likely to be upswings in terms of relocating companies as this starts to get a lot more real and nobody's quite sure how those flows will happen or how big they will be as there's absolutely no precedent for any of this and the politics is still all up in the air.

All models should be read with a *huge* degree of caution.

Well, you have to have something on which you base your plans and the ESRI's comprehensive assessment is the best you can get. They also factored in any probable increased FDI. But you're right. Nobody knows what our learned friends across the Irish Sea will do next.

Lackadaisical

Professor Moriarty wrote: »

Well, you have to have something on which you base your plans and the ESRI's comprehensive assessment is the best you can get. They also factored in any probable increased FDI. But you're right. Nobody knows what our learned friends across the Irish Sea will do next.

Well they'll make their best guess, but I'm just saying I wouldn't be jumping to the conclusion that any of these models are particularly reliable. I wouldn't read them like I would a normal economic forecast based around solid data. The whole thing is uncharted water and the main actors are not particularly rational either.

Professor Moriarty

Lackadaisical wrote: »

Well they'll make their best guess, but I'm just saying I wouldn't be jumping to the conclusion that any of these models are particularly reliable. I wouldn't read them like I would a normal economic forecast based around solid data. The whole thing is uncharted water and the main actors are not particularly rational either.

No. One thing is certain. It won't be pretty.

Lackadaisical

Professor Moriarty wrote: »

No. One thing is certain. It won't be pretty.

My concern is that, a bit like the 2008 credit crunch, the weak points in the UK economy will suddenly come into focus e.g. large consumer debt load or some other issues that are in plain sight but not being noticed, it will crystallise out and all hey presto! economic meltdown.

Economies tend to function a lot on everyone trusting the system and the foundations of that system are being rocked to the core by Brexit.

fash

Bit cynical wrote: »

But no court would be involved unless an agreement had been reached that was then subsequently broken by one or other of the parties.

You don't seem to understand that the £39B (or whatever) is due for services rendered. The UK owes that. They merely agreed that the amount that was owed was precisely £39B (in fact likely more- there is a complex formula to calculate what will fall due) and the timetable for payment. Hence the EU do not need to sue for the precise WA amount, which was reduced - they sue for the full amount (or just seize assets etc.)

Zubeneschamali

Professor Moriarty wrote: »

No. The ESRI are quite specific. After 10 years there will be 80000 fewer jobs in the Irish economy than there is today. So, for example, if there are 1000000 jobs in Ireland today, there will be 920000 in 2029.

I provided an actual quote above and linked to the report in the Irish times reporting what the ESRI said.


You are wrong.

trellheim

Doesnt the UK have form in this area and ignoring everyone and finding it having to reconcile in complete ignominy .... Suez crisis springs to mind .... PM Eden thought it could be a runner

Zubeneschamali

Bit cynical wrote: »

However what is striking about most of the forecasts is the similarity in magnitude for both the UK in Ireland in the various brexit scenarios.

5% for Ireland, 10.7% for the UK.


Yep, looks the same.