Brexit discussion thread II

solodeogloria · 26-09-2017 09:14AM

Good morning!

steddyeddy wrote: »

Straight from the airline's mouths. There are no common aviation laws for airlines to fall back on unlike trade which can revert to WTO rules. Planes could be grounded until Britain starts acting sensibly in this negotiation.

https://www.theguardian.com/politics/2017/sep/20/us-airlines-aviation-regulations-post-brexit-open-skies-agreement-eu

From what I can see the UK is acting sensibly.

The EU on the other hand is being highly unreasonable.

I'd be hoping (and I'm sure this is happening already) that the UK will start discussing aviation arrangements with other countries outside of the EU to avoid this cliff edge.

I agree with the principle that the UK needs to plan for no deal. There's no guarantee that the EU will start being reasonable any time soon.

The UK has a very clear position. When Barnier asks for "clarity" what he means is "submit to our position or else".

If that continues I think the UK should say sod off. The EU are insisting on a vassal state status for the UK and it shouldn't agree to it.

I think let October pass and if the EU continues to be unreasonable plan extensively for no deal with the hope of the EU coming to a reasonable position.

steddyeddy wrote: »

The EU rules out immediate transition deal talks.

http://www.independent.co.uk/news/uk/politics/brexit-transition-period-single-market-eu-chief-negotiator-michel-barnier-talks-brussels-davis-davis-a7966616.html

See above. I think the UK needs to work on the no deal scenario and start trying to smooth out the runway for landing to use the aviation analogy.

This still doesn't dissuade me from Brexit.

Much thanks,
solodeogloria

Peregrinus · 26-09-2017 09:18AM

solodeogloria wrote: »

Good morning!

I'd encourage BA and easyJet to set up European subsidiaries for flights within the EU.

That won't help. Status within the European Aviation Area depends on who the ultimate owners of an airline are, not on where it is incorporated or headquartered.

A subsidiary of Easyjet would be a UK airline because Easyjet itself is a UK airline (quoted on the London Stock Exchange).

What Easyjet will have to do is most likely sell off its EU-27 network to an EU-27 purchaser. But it'll be something of a fire sale, since if the network isn't sold to a qualified purchaser by Brexit day it effectively becomes worthless. Plus, the EU-27 network, without the interoperation with the UK network of the same airline, is significantly less valuable - and the same goes for the UK network. This is pretty much a textbook case of regulation destroying value.

British Airways is a more complex case, because it is itself a subsidiary of IAG, incorporated in Madrid but quoted in London, with a large chunk owned by Qatar airways. (Air Lingus is also a subsidiary of AIG, as is Iberia.) Again, AIG will probably have to demerge, with consequent loss of value on both sides, but particularly for BA. (BA will be much more affected by the loss of access to the EU internal market than Iberia or Aer Lingus will by the loss of access to the Uk internal market.)

(Easyjet share price fell by 30% in the wake of the Brexit vote. This is not a coincidence. IAG fell by the same amount. IAG has since recovered, but Easyjet hasn't.)

solodeogloria wrote: »

Flights from the UK into the EU would still be able to land under a third country arrangement.

Yes, and vice versa. But note that as of now there is no third country arrangement between the EU and the UK; one will have to be negotiated. And, the point is, ruling out ECJ (and EASA) jurisdiction significantly limits what can be negotiated.

solodeogloria wrote: »

Leaving the EU means that the UK cannot receive the same conditions within the EU as if it had elected to stay in. I understand this.

Yes, but you appear to be indifferent as to what the consequences of this may be for the UK. You've adopted a very inflexible line on ECJ jurisdiction without any attempt to work out what this will cost the UK, or how it will affect the UK. Which, we have increasing reason to hope, is not the approach the UK government is likely to take.

LeinsterDub · 26-09-2017 09:19AM

Fratton Fred wrote: »

ok, sure.

read the article you linked to properly.

is that better?

You mean the article is about the Irish issues with energy post brexit ? I'm aware of that. I was using the article to highlight what the SEM is

https://www.chathamhouse.org/publication/staying-connected-key-elements-uk-eu27-energy-cooperation-after-brexit

Remaining fully integrated with the IEM would require the UK’s compliance with current and future EU energy market rules, as well with some EU environmental legislation. The UK government, British companies and other relevant stakeholders will need to maintain an active presence in Brussels and European energy forums, so that constructive and informed engagement can be sustained..

Fratton Fred · 26-09-2017 09:26AM

LeinsterDub wrote: »

You mean the article is about the Irish issues with energy post brexit ? I'm aware of that. I was using the article to highlight what the SEM is

https://www.chathamhouse.org/publication/staying-connected-key-elements-uk-eu27-energy-cooperation-after-brexit

And nowhere does it mention the uk having to buy more power plants.

The SEM is to do with energy trading and allows all members to act as one combined market. UK producers can sell in to Ireland and French ones in to the uk.

Power generation is something different

steddyeddy · 26-09-2017 09:38AM

solodeogloria wrote: »

Good morning!

From what I can see the UK is acting sensibly.

The EU on the other hand is being highly unreasonable.

I'd be hoping (and I'm sure this is happening already) that the UK will start discussing aviation arrangements with other countries outside of the EU to avoid this cliff edge.

I agree with the principle that the UK needs to plan for no deal. There's no guarantee that the EU will start being reasonable any time soon.

The UK has a very clear position. When Barnier asks for "clarity" what he means is "submit to our position or else".

If that continues I think the UK should say sod off. The EU are insisting on a vassal state status for the UK and it shouldn't agree to it.

I think let October pass and if the EU continues to be unreasonable plan extensively for no deal with the hope of the EU coming to a reasonable position.

See above. I think the UK needs to work on the no deal scenario and start trying to smooth out the runway for landing to use the aviation analogy.

This still doesn't dissuade me from Brexit.

Much thanks,
solodeogloria

Hey S. I wasn't actually directing that post at you. Partly for the reasons above in bold. You'd say that no matter what. Also your position has changed several times. I don't think you believe what you're saying.

My best way to debate you is to post facts and articles. I can't debate ideology which changes from post to post.

murphaph · 26-09-2017 09:39AM

solodeogloria wrote: »

Good morning!

I'd encourage BA and easyJet to set up European subsidiaries for flights within the EU.

Flights from the UK into the EU would still be able to land under a third country arrangement.

Leaving the EU means that the UK cannot receive the same conditions within the EU as if it had elected to stay in. I understand this.

Much thanks,
solodeogloria

A simple subsidiary does not work. The airline must be at least 50% EU owned. That's why Ryanair is buying back shares as we speak from British shareholders.

Fratton Fred · 26-09-2017 09:57AM

murphaph wrote: »

A simple subsidiary does not work. The airline must be at least 50% EU owned. That's why Ryanair is buying back shares as we speak from British shareholders.

That's very misleading. Ryanair is buying back shares because it has the cash to do so. Low fuel prices and record passenger numbers has made it relatively cash rich and Brexit has put pressure on its share price (the news of the past few weeks has also helped them buy their shares more cheaply, which is purely a coincidence, surely) so it can this quicker than anticipated. Share holders approved this prior to the Brexit vote, so it is not Brexit related.

As part of this, It is also buying shares owned by US bond holders to comply with eu rules.

LeinsterDub · 26-09-2017 09:57AM

Fratton Fred wrote: »

And nowhere does it mention the uk having to buy more power plants.

The SEM is to do with energy trading and allows all members to act as one combined market. UK producers can sell in to Ireland and French ones in to the uk.

Power generation is something different

If the UK can't sell to and more importantly buy from Irish and mainland Europe for what ever reason (cost, politics ,regulations) that short fall will need to be made up by UK based generation. Also the inability to sell will mean more ramping up and down on plants which will drive up costs. Given that we've no certainty around anything at the moment this isn't beyond the realms of possibility

Fratton Fred · 26-09-2017 10:02AM

LeinsterDub wrote: »

If the UK can't sell to and more importantly buy from Irish and mainland Europe for what ever reason (cost, politics ,regulations) that short fall will need to be made up by UK based generation. Also the inability to sell will mean more ramping up and down on plants which will drive up costs. Given that we've no certainty around anything at the moment this isn't beyond the realms of possibility

The interconnector with France can carry up to 5% of the total UK requirements and the Irish ones only go one way. If anyone needs to worry about this (as the article says) it is Ireland as we could end up being 100% dependent on ESB prices again and go back to having just one provider of electricity.

solodeogloria · 26-09-2017 10:03AM

steddyeddy wrote: »

Hey S. I wasn't actually directing that post at you. Partly for the reasons above in bold. You'd say that no matter what. Also your position has changed several times. I don't think you believe what you're saying.

My best way to debate you is to post facts and articles. I can't debate ideology which changes from post to post.

Good morning!

Go on humour me - how has my position changed?

Moreover - if I have changed my mind - why is that an inherently bad thing?

As for "facts". These articles don't contain "facts". They contain X may happen if Y happens. I still don't see the apocalypse. I see at worst a relatively painful adjustment to a new reality. I still maintain that this is probably a price worth paying for taking back control in a meaningful way.

I hope for a beneficial EU trade agreement but in the event that they aren't going to be reasonable I still think the UK needs to make this adjustment and I think that it will be worth it.

Much thanks,
solodeogloria

Gerry T · 26-09-2017 10:05AM

solodeogloria wrote:

From what I can see the UK is acting sensibly.

solodeogloria wrote:

The EU on the other hand is being highly unreasonable.

How is the UK being sensible and the EU unreasonable?
The UK is walking away from the EU, that process will be completed Mar '19, unless an extension is agreed. So it's reasonable to conclude items such as aviation, trade, people's rights etc will change to that of a 3rd country. Now if these are things the UK wants it doesn't seem sensible to leave the EU, if that's what you want.
Did you get your statement backwards? Now that the UK has turned it's back on the EU, if it wants to have a relationship with the EU it should outline it's proposal, if it doesn't then that's the end of it.
The EU isn't going to make proposals to the UK, hard to make a proposal with someone breaking existing relations.

Peregrinus · 26-09-2017 10:11AM

It's not as though there's a good way to go about implementing Brexit. The idea is a fundamentallly bad one, shockingly ill-thought out, and it can be implemented in ways which have bad outcomes, or in ways which have worse outcomes. That's basically the range of possibilities. Watching the UK develop its Brexit strategy is more or less like watching Baldrick develop a cunning plan. It's amusing, but it won't end well.

26-09-2017 10:19AM

solodeogloria wrote: »

Good morning!

I'd encourage BA and easyJet to set up European subsidiaries for flights within the EU.

Flights from the UK into the EU would still be able to land under a third country arrangement.

Leaving the EU means that the UK cannot receive the same conditions within the EU as if it had elected to stay in. I understand this.

Much thanks,
solodeogloria

Airline ownership and control is still restricted - BA couldn't just set up a wholly owned EU subsidiary.
The US places a limit of 25% on foreign ownership of its airlines; for Japanese airlines the limit is 33%; and the European Union limits non EU ownership of the airlines of its member states to 49%.
BA however is the British subsidiary of International Airlines Group - a Spanish registered company. It would remain to be seen if the British government would allow foreign ownership of airlines.

For Easyjet to become European Stelios Haji-Ioannou just has to declare his shares as Cypriot rather than British and move HQ. The problem then becomes internal flights within the UK.

Ryanair has a bit of a problem as most of its shares would be owned by non Europe people or institutions.

Northern Ireland could find itself cut off in different ways with limited flights - the easiest way would be for the UK to not restrict foreign ownership and to be served internally by the newly European airlines (BA, Easyjet and Ryanair)

Fratton Fred · 26-09-2017 10:23AM

Peregrinus wrote: »

It's not as though there's a good way to go about implementing Brexit. The idea is a fundamentallly bad one, shockingly ill-thought out, and it can be implement in ways which have bad outcomes, or in ways which have worse outcomes. That's basically the range of possibilities. Watching the UK develop its Brexit strategy is more or less like watching Baldrick develop a cunning plan. It's amusing, but it won't end well.

I had an interesting conversation with an American over the weekend. He spoke of differing principles between the British and EU negotiators which is causing an impasse.

In the UK, this principle of "Fair Play" is strong. The people voted to leave the eu and that must be respected and therefore the government is acting on it. The British government expects the eu to understand this and behave in a similar way. The eu doesn't get this and just sees the UK as being unreasonable. They also can't understand (as do a lot of posters on here) why the government is doing something that is not in the best interests of its people.

The eu negotiators also believe that the eu is everything and simply can't understand why anyone in their right mind would want to leave. This is why they insist that their principles are right and is sticking to them, because they simply can't see any alternative due to their entrenched belief that the eu is perfect.

blanch152 · 26-09-2017 10:45AM

solodeogloria wrote: »

Good morning!

From what I can see the UK is acting sensibly.

The EU on the other hand is being highly unreasonable.

Much thanks,
solodeogloria

The UK wants a divorce, fair enough. However, it also want to retain friends with benefits status and a closer relationship than anyone else has.

You call that sensible? And that the EU is unreasonable in rejecting it?

Peregrinus · 26-09-2017 10:47AM

Fratton Fred wrote: »

I had an interesting conversation with an American over the weekend. He spoke of differing principles between the British and EU negotiators which is causing an impasse.

In the UK, this principle of "Fair Play" is strong. The people voted to leave the eu and that must be respected and therefore the government is acting on it. The British government expects the eu to understand this and behave in a similar way. The eu doesn't get this and just sees the UK as being unreasonable. They also can't understand (as do a lot of posters on here) why the government is doing something that is not in the best interests of its people.

That's not it at all. The question of how the UK makes a decision - whether it's made by the government, the Parliament, the people in a referendum, or in some other way, is absolutely no business of the EU's. It's an internal constitutional matter for the UK. The UK doesn't get some kind of pass on reasonableness or fairness on the basis that a particular decision was made by referendum rather than by Parliament or vice versa. The UK wants to leave the EU, which is its right, but they don't have any claim to special treatment because they made that decision by referendum rather than by parliamentary vote or executive decision. Nobody but themselves cares how they make this decision. As far as the rest of the world is concerned, it's a decision by the UK, with exactly the same status as any other decision by the UK.

Fratton Fred wrote: »

The eu negotiators also believe that the eu is everything and simply can't understand why anyone in their right mind would want to leave. This is why they insist that their principles are right and is sticking to them, because they simply can't see any alternative due to their entrenched belief that the eu is perfect.

This is nonsense on stilts. Nobody on the EU side has said anything remotely like this. You should stop listening to your US friend because his views are clearly not informed by reality.

The 27 members of the EU who have not decided to leave do not believe that it is perfect, but they do think it is a good thing and they wish to keep it and defend it. They will not wish to see its principles undermined or its structures weakened, and they do not think that "fairness" to the UK requires this.

There's nothing unreasonable or unfair about the EU's position that aspects of
EU membership cannot be cherry-picked. This has been extraordinarily difficult for the UK to grasp, and there are some in the UK (and, apparently, in the US) who haven't quite got there yet. The UK-EU Brexit discourse started after the referendum with loud voices on the UK side insisting that the UK could participate in the single market but not accept free movement of labour, apparently unable to see that this was a fairly basic contradiction in terms, and saying that those who pointed this out were being unfair and unreasonable. At the official level the UK has moved on from this and May now confirms that a rejection of free movement does indeed require withdrawal from the single market, and this is not some unreasonable and arbitrary decree of an EU that considers itself perfect. But the fact is that there are still Brexiters like solo who lay down a series of rigid sweeping red lines that have been adopted without any thought as to their effect or any attempt to calculate what they will cost the UK, and in the same breath denounce the EU as unreasonable and inflexible.

murphaph · 26-09-2017 10:50AM

Fratton Fred wrote: »

That's very misleading. Ryanair is buying back shares because it has the cash to do so. Low fuel prices and record passenger numbers has made it relatively cash rich and Brexit has put pressure on its share price (the news of the past few weeks has also helped them buy their shares more cheaply, which is purely a coincidence, surely) so it can this quicker than anticipated. Share holders approved this prior to the Brexit vote, so it is not Brexit related.

As part of this, It is also buying shares owned by US bond holders to comply with eu rules.

Even if the decision was made before Brexit, Brexit makes it compulsory.

Quite apart from ownership rules and fifth freedoms and whatnot, there's also the immense problem that the UK doesnot have an equivalent to EASA. It would need to set one up to certify UK airline maintenance regimes etc. or British planes would not be allowed to fly to anywhere.

Peregrinus · 26-09-2017 10:53AM

murphaph wrote: »

Even if the decision was made before Brexit, Brexit makes it compulsory.

Quite apart from ownership rules and fifth freedoms and whatnot, there's also the immense problem that the UK doesnot have an equivalent to EASA. It would need to set one up to certify UK airline maintenance regimes etc. or British planes would not be allowed to fly to anywhere.

There are many regulatory agencies which the UK is going to have to set up and staff quick-smart. It's issues like that that have forced them into a recognising the need for a transitional period.

(In fairness, I think that the new for new regulatory agencies is something the British always realised, even if not everybody appreciated the magnitude of the task.)

LeinsterDub · 26-09-2017 11:20AM

Fratton Fred wrote: »

I had an interesting conversation with an American over the weekend. He spoke of differing principles between the British and EU negotiators which is causing an impasse.

Is there a reason this American's opinion carries more weight than the man on the street?

murphaph · 26-09-2017 11:28AM

Peregrinus wrote: »

There are many regulatory agencies which the UK is going to have to set up and staff quick-smart. It's issues like that that have forced them into a recognising the need for a transitional period.

(In fairness, I think that the new for new regulatory agencies is something the British always realised, even if not everybody appreciated the magnitude of the task.)

IMO these duplicate agencies will eat the lion's share of the current UK contribution to the EU budget. The task is so immense. The EU food standards agency alone has people all over the world in inspecting cattle and meat in abattoirs for example. Is the UK going to send Peter to stand beside Pierre to carry out these tasks on behalf of the UK? Or will they just hope the stuff rejected by Pierre doesn't get put in a box marked "Ship to Southampton".

Nody · 26-09-2017 11:50AM

murphaph wrote: »

IMO these duplicate agencies will eat the lion's share of the current UK contribution to the EU budget. The task is so immense. The EU food standards agency alone has people all over the world in inspecting cattle and meat in abattoirs for example. Is the UK going to send Peter to stand beside Pierre to carry out these tasks on behalf of the UK? Or will they just hope the stuff rejected by Pierre doesn't get put in a box marked "Ship to Southampton".

Honestly this is the type of things if UK had any brains they would "lease" from EU to do for them; it's clearly a case of scale benefits in action and it would most likely cost a lot less to pay EU for the data / checks compared to doing it all from scratch. But that would mean they would need to adhere to EU's higher standards and not be able to buy chlorinated chicken etc. so that's a no go.

cantwbr1 · 26-09-2017 12:00PM

But that would mean they would need to adhere to EU's higher standards and not be able to buy chlorinated chicken etc. so that's a no go.[/quote]

It would also mean acknowledging that the EU is also providing something of value to the UK

murphaph · 26-09-2017 12:02PM

Nody wrote: »

Honestly this is the type of things if UK had any brains they would "lease" from EU to do for them; it's clearly a case of scale benefits in action and it would most likely cost a lot less to pay EU for the data / checks compared to doing it all from scratch. But that would mean they would need to adhere to EU's higher standards and not be able to buy chlorinated chicken etc. so that's a no go.

I'm against this pick n mix stuff personally. The EU should make it clear that it's full membership or a Norway option or proper third country status with basic FTA (I'd expedite the FTA for the sake of old friends). No more Swiss type deals with messy bilateral agreements. I think the EU is against another Swiss job already.

blanch152 · 26-09-2017 12:11PM

murphaph wrote: »

IMO these duplicate agencies will eat the lion's share of the current UK contribution to the EU budget. The task is so immense. The EU food standards agency alone has people all over the world in inspecting cattle and meat in abattoirs for example. Is the UK going to send Peter to stand beside Pierre to carry out these tasks on behalf of the UK? Or will they just hope the stuff rejected by Pierre doesn't get put in a box marked "Ship to Southampton".

They will cost a lot more than the lion's share of the current UK contribution to the EU budget. All the scale savings will be lost.

ambro25 · 26-09-2017 12:13PM

murphaph wrote: »

I'm against this pick n mix stuff personally. The EU should make it clear that it's full membership or a Norway option or proper third country status with basic FTA (I'd expedite the FTA for the sake of old friends). No more Swiss type deals with messy bilateral agreements. I think the EU is against another Swiss job already.

I agree with your sentiment about nixing the pic-n-mix approach, but I don't think the EU needs to make that clear, and thereby help paint themselves as the intractable and undemocratic bad guy punishing the UK...

...the smarter political play is to let the UK continue to snooker itself de facto between those 3 choices given the oncoming Art.50 term, through its own time-wasting feet-dragging

Jaggo · 26-09-2017 12:15PM

murphaph wrote: »

Even if the decision was made before Brexit, Brexit makes it compulsory.

Quite apart from ownership rules and fifth freedoms and whatnot, there's also the immense problem that the UK doesnot have an equivalent to EASA. It would need to set one up to certify UK airline maintenance regimes etc. or British planes would not be allowed to fly to anywhere.

When Michael O'Leary was interviewed by Newsnight he said something about this, something along the lines that they were aware about the 50% ownership, but it would not be a problem by the time Brexit came around.
It does suggest a plan, possibly the repurchase of stock.

Another point he made was that a number of airlines were not pushing the issue as they would benefit from the disruption in airline services. If Ryanair or Easyjet cannot make certain flights, the prices would increase etc.

blanch152 · 26-09-2017 12:33PM

ambro25 wrote: »

I agree with your sentiment about nixing the pic-n-mix approach, but I don't think the EU needs to make that clear, and thereby help paint themselves as the intractable and undemocratic bad guy punishing the UK...

...the smarter political play is to let the UK continue to snooker itself de facto between those 3 choices given the oncoming Art.50 term, through its own time-wasting feet-dragging

You can see it now, the UK come along and say we want passporting for UK financial services, the EU says, that's ok so long as you accept ECJ jurisdiction over your financial laws and we also want some other concessions over here.

All is fair in love and negotiations.

Zubeneschamali · 26-09-2017 12:48PM

ambro25 wrote: »

...the smarter political play is to let the UK continue to snooker itself de facto between those 3 choices given the oncoming Art.50 term, through its own time-wasting feet-dragging

That only works if you think the UK side are smart enough not to crash out with no deal.

And if they were that smart, they wouldn't be leaving.

Nate--IRL-- · 26-09-2017 01:01PM

Jaggo wrote: »

When Michael O'Leary was interviewed by Newsnight he said something about this, something along the lines that they were aware about the 50% ownership, but it would not be a problem by the time Brexit came around.
It does suggest a plan, possibly the repurchase of stock.

Another point he made was that a number of airlines were not pushing the issue as they would benefit from the disruption in airline services. If Ryanair or Easyjet cannot make certain flights, the prices would increase etc.

Funny that their share price plummeted recently, due to a self inflicted debacle..... and that they also repurchased a lot of stock in the last while......

Nate

ambro25 · 26-09-2017 01:13PM

Zubeneschamali wrote: »

That only works if you think the UK side are smart enough not to crash out with no deal.

In fairness, that is the last and only (unsaid-) alternative beyond these 3 choices: the UK chose to put itself between the devil of the crash out scenario, and the deep (European-)blue sea of the EU27's red lines guidelines, the very second Ms May triggered Article 50 TEU.

You break it, you've bought it and all that.

Zubeneschamali wrote: »

And if they were that smart, they wouldn't be leaving.

Smarts doesn't come into it: it's always been, and still is, all about domestic politics (EDIT: and yes, I'll buy Armanijeanss' theory that, insofar as Labour/Corbyn are concerned, Brexit is an opportunity providing an out of their existential fight with the EU for continuing political relevance - see post #3560).

Beyond that, as already oft-repeated in here, (i) people get the governments they deserve, and (ii) where Brexit and the 52% and the <it's democracy so shurrup innit> brigade are concerned, they're never going to even begin to smarten up, until Brexit starts eating into their pension/benefits cheques and the scale and availability of NHS services.

So, well...let them learn how nutritious their democratic cake is, says I

Brexit discussion thread II

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