Brexit discussion thread II

IDS, a former Tory leader, saying we are playing politics because of the upcoming president election.

https://twitter.com/foxymm12/status/935596154011750406?s=17

Christ the Tansplaining has been bad over the last few weeks but this takes the biscuit.

kowtow wrote: »

The City of London was the worlds primary Eurodollar market and the worlds largest foreign exchange centre by the end of the seventies, regaining a position it had held until the 1920s. It was always the worlds premier insurance and reinsurance market thanks to Lloyds, always the centre for the Gold Fix and always pretty much dominant in shipping.

Today London is by far the largest forex market in the world and there is no European city which even makes the list.

It's advantage was - and is - a location in between the USA and the East (and Europe of course) and by far the most trusted commercial common law legal jurisdiction in the world ..absolutely rooted in centuries of commerce. Just consider how many bonds are issued around the world, including in Europe, under English Law and the specific reasons why that might be the case?

The Privy Council in London is the ultimate court of appeal for 31 countries, a figure probably only rivaled by the ECJ.

We all appreciate the success of the EU - which has been considerable - and the concomitant benefits to many countries including our own but the slavish, anti - UK Euro cheer-leading on this thread really makes one wonder.

You seem to be under the illusion that nothing ever changes. When London was getting into 1st place was before the EU became what it is today. Since the UK was in the EU there really was no need to relocate.

Britain was at the forefront on international trade when very few other countries were involved and UK had the navy. Since then the US has bypassed it, China has roared ahead and EU has gone from 14 to 27 countries.

So which is it to be?

Leroy42 wrote: »

When London was getting into 1st place was before the EU became what it is today.

listermint wrote: »

That entire post is the most wishful of wishful ...Europe made the city, Europe will take it away.

Leroy42 wrote: »

Britain was at the forefront on international trade when very few other countries were involved and UK had the navy. Since then the US has bypassed it, China has roared ahead and EU has gone from 14 to 27 countries.

From the FT:

Move over, Singapore. There’s a new favoured clearing centre for the renminbi on the global scene.

The UK unseated the southeast Asian financial hub as the largest clearing centre for the renminbi outside of greater China in March, according to Swift’s RMB tracker. The financial transaction system’s data showed the value of UK Rmb payments rose 21 per cent year-on-year last month.

That reflects the growing dominance of China’s currency in payments between the UK and China/Hong Kong, which now accounts for 40 per cent of all payments in the corridor, followed by the Hong Kong dollar (24 per cent).

London is the world’s largest single FX-trading centre, with $2.15tn traded daily, according to the latest data from the Bank of England. The renminbi has climbed to be the eighth most-traded currency in the city, involved in 1.8 per cent of transactions – equivalent to about $39bn of deals, compared with $1.9tn for the dollar and $837bn for the euro.

Really Interested wrote: »

Are you sure it is 31 countries?

https://www.jcpc.uk/about/role-of-the-jcpc.html

The Judicial Committee of the Privy Council is tiny name one large country that it is the final court of appeal?

No - it's all the offshore tax havens! - with the exception of Ireland.

kowtow wrote: »

So which is it to be?

Its not an either or.

London got itself into a significant place because of history and was able to stay there and expand due to being part of the largest trading block in the world. In effect, EU left London at it, mainly because they had nothing significantly different to offer to entice banks etc away.

You seem to be ignoring that EU played any part at all in the expansion of the City.

But UK has decided to change all of that. Why would you keep your main office, which serves EU, within a smaller market with access issues to that market?

London is not going to disappear in terms of banks etc, the UK market is big in of itself, but the reasons to stay rather than relocate to Paris, Frankfurt etc have diminshed. Whether it has a significant negative effect is unknown, by me but more importantly by the UK.

It may well stay intact, but it seems a hell of a risk to take without having a pretty good guarantee.

Leroy42 wrote: »

Its not an either or.

London got itself into a significant place because of history and was able to stay there and expand due to being part of the largest trading block in the world. In effect, EU left London at it, mainly because they had nothing significantly different to offer to entice banks etc away.

You seem to be ignoring that EU played any part at all in the expansion of the City.

But UK has decided to change all of that. Why would you keep your main office, which serves EU, within a smaller market with access issues to that market?

London is not going to disappear in terms of banks etc, the UK market is big in of itself, but the reasons to stay rather than relocate to Paris, Frankfurt etc have diminshed. Whether it has a significant negative effect is unknown, by me but more importantly by the UK.

I'm not suggesting that Europe hasn't contributed to the City's growth - of course it has. And of course some business will move there..

But the suggestion that the City will be broken by Brexit could only come from somebody that doesn't understand the City.

Firstly, an FTT is an increasing likelihood and that would be a death knell for most trading operations.

Second, Chinese & US currency trading, securities, and the derivatives business which surround them, will always seek the most flexible regulation and the most flexible taxation arrangements that can be found. The UK is already dominant in this part of the world and absolutely free to provide the best taxation structures for holding and trading these investments. Ask yourself why so many German property funds are domiciled in Guernsey, for example, rather than in Frankfurt.

The more Europe seeks to becomes a closed shop for financial services the more it limits itself to handling finance flows for it's own internal trade and investment rather than being open to global flows - and that hurts liquidity.

Of course passporting is important - especially for retail and near retail operations, but that's not the big part of the City that some would imagine. I'd be surprised if it was 25% or 30% of current business and free of the regulatory burden of Europe with tax laws optimized to channel investment into it you might be surprised how quickly the City will replace that.

Back in the Eurodollar days we grew in London as an "offshore America" - there's every chance that the City will actually grow faster again in years to come as "offshore Europe".

Job losses? Yes loads, but we do that in London every few years anyway. Moves to Europe? Some. But there are record deals still taking place in City office blocks - and that market has been overheated for years. There's a lot more talk than walk at the moment.

kowtow wrote: »

Still, nothing is agreed until everything is agreed.

So they obviously feel they'll be getting something worthwhile in return.

Officially, no. The money is a (soon-to-be) agreed compounding of the UK’s existing net liabilities and commitments to the EU. From early on the UK’s position has always been, yes, we owe this, and we’re going to pay it; the only issue is how to value our liabilities/commitments and calculate the amount to be paid. On this view, the UK doesn’t get anything in return for the money, any more than you get anything in return when unhappy differences arise between you and your current Reason for Living, and you have to divide up the house and the mortgage and the cat and the dog. You’re just drawing a line under existing business.

In reality, of course, yes; what the UK hopes to get in return for this is trust and goodwill which will pave the way to an EU/UK Brexit deal which meets the UK’s objectives/aspirations. And, as you say, nothing is agreed until everything is agreed.

kowtow wrote: »

Once the rest of the 27 have a sniff of the money the pressure will be on from a lot of directions.

Not so much. The money (and in particular the amount of the money) has always been a much bigger factor in the UK than in the EU. As far as the EU are concerned, they want an exit settlement because of the Principle of the Thing, and the amount must be correctly and reasonably calculated because Principle and because Fairness and yes, all other things being equal, a bigger payment is better than a smaller one.

But the actual amount is relatively much less significant to the EU than it has been in the the UK, if only because the EU is vastly bigger and wealthier than the UK. You’ll have noticed that much of the Brexity rhetoric on this question has focussed on the amount, because the amount really matters at the UK end. But not so much at the EU end, where the focus has always been on the method and basis of calculation. A couple of weeks ago Jacob Rees-Mogg, the famous genius, suggested that the loss of the UK’s net contribution to the EU of £9 billion sterling per annum would render the EU “effectively insolvent”, and that the UK could (and indeed should) force the EU to accept a Brexit deal on UK terms by threatening an immediate suspension of the UK’s payments. It was left to others with a greater mastery of arithmetic to point out that the UK’s net contribution works out at £20 per head, or £46 per household, on the EU side.

The fact is that the EU decided some time ago that if the UK left without making any exit payment at all they could absorb the financial impact of that without too much difficulty. If that’s their attitude towards getting no payment at all, you can imagine that increases or decreases in the projected amount of the payment are not going to change many minds on purely financial grounds. As far as the EU is concerned, if the UK’s projected payment goes up from, say, €40 billion over five years to €55 billion over five years that’s nice, but the main significance is not the extra €3 billion per year; it’s the change in the UK’s attitude that is signalled by this.

kowtow wrote: »

My guess is that they will end up with a fudge which guarantees no regulatory divergence in NI until such time as a mutually acceptable electronic whole Island border thingy is implemented. They'll aim to use the transition period to do much of the work for this. They'll offer a bit of cash to Ireland to help in the planning and we'll jump.

Possibly. What is needed here is an arrangement which can colourably be presented as not Single Market participation, not Customs Union participation and not a “sea border” but which still guarantees that goods and services crossing the Irish border are such as can be freely imported into and traded in the Single Market. I think that does require a bit more than regulatory compliance in NI during the transitional period; it requires (a high degree of) regulatory compliance on an ongoing basis, either within NI supported by (what is tantamount to) a sea border, or within the UK as a whole. The yet to be invented electronic gizmos aren’t a substitute for regulatory equivalence; they are a way of assuring and monitoring it.

kowtow wrote: »

The alternative is we hold up the talks (which even if right, doesn't help us much) and they drive home the message that they have never had any intention of putting a border up and Ireland and the EU obviously want to.

That would be a hard message for the UK to sell. It’s plainly the case that the EU and Ireland do not want a hard border; right now there is an open border and that situation suits us just fine; we would love for it to continue. It’s the UK that is determined to move away from the status quo, remember. And if Ireland does veto a Brexit deal because it isn’t consistent with an open border, and pays a high economic price for doing so, that will underline still further that we really, really don’t want a hard border, and are prepared to pay a high price to avoid one. In that context, any narrative which starts “Ireland and the EU obviously wanted a hard border all along” will lack credibility.

The narrative that the UK never had any intention of putting a border up will also be a hard sell. The UK say they don’t want a hard border, but the question is whether they wanted an open border badly enough to be willing to compromise other aspirations and objectives in order to get it. I think the way most observers will read the situation is that both sides wanted an open border, but the UK wanted other things more than it wanted an open border and, when push came to shove, they chose the other things.

solodeogloria wrote: »

Good morning!

You can dress a pig in lipstick but unless Britain regains control over trade policy, laws and immigration then people will see through it.

You can't because lipstick is not an item of clothing. Anyone who understands trade policy will understand that policy is one thing, negotiations with other parties are a different thing and Britain will be the smaller party in a lot of those negotiations in the future, where it is the bigger party, the other party will not be contributing so much to its economy either way. Anyone who understands laws understands the UK had control over it and anyone at all who knows about immigration knows that the UK did not and continues not to bother implementing the control it has over immigration.

solodeogloria wrote: »

Particularly when it is coming at a €55bn price tag potentially. That's how this payment is seen in the UK. The access received better be fantastic for that amount of money.

You really need to understand that this sum is not paying for access. It is in settlement of what you already owe. It deals with the past, not the future. The problem for you is that you have no future if you don't deal with past debts. You are not paying for access here. Access payments will be whatover contributions you make to the EU budget going forward after the existing commitments have been paid. Check with Norway.

solodeogloria wrote: »

If the EU insist that the border must go up that won't be a hard sell at all. At least not within the UK. The Government have been clear so far that they want the border open. The only doubt is whether or not the EU will allow it to be.

Much thanks,
solodeogloria

If a border goes up it is because of a UK decision and prevailing international regulations on trading and customs. You know this because people are dead from telling you. It is not an EU decision, it is a UK decision to Brexit and all events arising from it are as a result of a UK decision. UK fault. UK responsibility. If there is a border in Northern Ireland it will be as a result of Brexit. BREXIT. BRITISH DECISION.

I believe you understand who voted for Brexit in the first place. It was the UK. Not the EU. The EU was quite happy for no change to happen. Anything else is the responsibilty of the UK. Stop pretending or deluding yourself that it is not.

solodeogloria wrote: »

Good morning!

I disagree that it is "impossible". There are two other cases with countries outside the customs union in Europe which have individual free trade deals with other countries where the border is open to general traffic. Norway has stopping points for trucks. Switzerland doesn't. There are other options to be looked at and they should be explored.

You and I both know that both of these options are incompatible with the UK's red lines.

solodeogloria wrote: »

Good morning!

I disagree that it is "impossible". There are two other cases with countries outside the customs union in Europe which have individual free trade deals with other countries where the border is open to general traffic. Norway has stopping points for trucks. Switzerland doesn't. There are other options to be looked at and they should be explored.

The UK will be expecting a movement in terms of access for goods and services and a movement in terms of controls in return for this €55bn. That's the reality. There will be increasing calls for no deal if this isn't delivered on.

The UK see this as money for access. The EU need to give assurances in this regard soon. Preferably the transition needs to be on the table in January.

Much thanks,
solodeogloria

So you want regulatory compliance then? Great, tell your government that you want the UK to stick to EU regulations for the sake of an open border with the Republic of Ireland. Where do you want the regulatory compliance to end? Is it throughout the UK? Or just the North? That gives some idea of where you want the border to be and how it must be enforced. You realise that it can't just be left entirely open due to a host of WTO regulations that the Prime Minister is worryingly unaware of? You might be grand with years of trade disputes, but there is no reason why the EU or Ireland should have to suffer the same just so Britain doesn't have to make any hard decisions at all.

God, Britain's position (at least that as represented by solo) is hopelessly naive.