Brexit discussion thread IX (Please read OP before posting)

Bit cynical wrote: »

Although obviously we in Ireland would like some sort of deal, there are some advantages of no deal from the UK point of view. For example, the divorce payment of 100 billion (or whatever the figure was) no longer exists. The UK and the EU, if they choose to talk, get to start again with a clean sheet without the complexity of pre-existing agreements.

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.

Bit cynical wrote: »

How would the EU take the UK to court? The UK only owe that figure if it is part of a negotiated agreement. In the case of no deal there is no agreement.

While it's true that the financial settlement is not legally binding until the WA is signed, the UK has made repeated commitments in the past to paying it. The Joint Report in 2017, for example.

Even bodies within the UK agree the EU would be within its rights to bring the UK before the ICJ - whether we would win the case and get paid or whether the UK gets to keep its money is a matter for the Court to decide.

Whether it is legally bound to paying the bill or not is irrelevant when one takes into account the reputational damage. While part of the EU, the UK agreed to certain financial commitments. It has received the benefits of those commitments (funding, participation in programs, etc) based on that financial commitment. If the UK then refuses to pay what both it and the EU agreed it still owes, then it's going to look unreliable in the eyes of future trading partners and allies.

Bit cynical wrote: »

How would the EU take the UK to court? The UK only owe that figure if it is part of a negotiated agreement. In the case of no deal there is no agreement.

I really don't think you get how any of this works at all.

Dytalus wrote: »

While it's true that the financial settlement is not legally binding until the WA is signed, the UK has made repeated commitments in the past to paying it. The Joint Report in 2017, for example.

Even bodies within the UK agree the EU would be within its rights to bring the UK before the ICJ - whether we would win the case or not is a matter for the Court to decide.

Whether it is legally bound to paying the bill or not is irrelevant when one takes into account the reputational damage. While part of the EU, the UK agreed to certain financial commitments. It has received the benefits of those commitments (funding, participation in programs, etc) based on that financial commitment. If the UK then refuses to pay what both it and the EU agreed it still owes, then it's going to look unreliable in the eyes of future trading partners and allies.

Payment of 39 billion would be item Number 1 on the agenda for any future FTA discussions before, during or after a crash out.

Professor Moriarty wrote: »

Crashing out will be an eye-opener for all concerned. However, the cost of making the UK "see sense" via a hard Brexit will be 80,000 Irish jobs and a 100 billion hit to the economy over 10 years.

For context, Ireland has added 200,000 jobs since mid 2016, so that would be maybe a years, year and a halfs employment growth, not the end of the world.

Bit cynical wrote: »

Although obviously we in Ireland would like some sort of deal, there are some advantages of no deal from the UK point of view. For example, the divorce payment of 100 billion (or whatever the figure was) no longer exists. The UK and the EU, if they choose to talk, get to start again with a clean sheet without the complexity of pre-existing agreements.

That's basically hoping that the EU will just forget everything that's happened up to now - why would they do that?

Zubeneschamali wrote: »

For context, Ireland has added 200,000 jobs since mid 2016, so that would be maybe a years, year and a halfs employment growth, not the end of the world.

Not the end of the world if you don't lose your job or your business.

Professor Moriarty wrote: »

Payment of 39 billion would be item Number 1 on the agenda for any future FTA discussions before, during or after a crash out.

Absolutely. Followed quickly by item number 2: the backstop.

Which is why not signing the WA is a fool's errand. Ireland will be hit very hard by a crash out, but we will have the backing and assistance of one of the most powerful economic forces in the world. And the EU wouldn't even have to go out of its way to help out. EU funding rates are assigned based on the economic performance of each member state. If our economy tanks, then we'd slide into a lower bracket and automatically get more funding. No rules bending, no special treatment. Just the EU doing one of the major things it does - help to prop up its weaker members.

The UK, though? They'd crash out with almost no trade deals. New ones can take up to a decade to complete, and even longer to have any appreciable effect. They would have nobody propping them up, and a very unhappy populace in two of its four members.

My money is on the UK bending before Ireland or the EU does. And then they'll have to sign to the very things they refuse to agree to now - and they'll have to do it after taking an economic hit. I cannot reasonably see a winning move for them that isn't singing the deal in front of them.

Zubeneschamali wrote: »

In an economy with essentially full employment, it is not the end of the world even if you do.

80000 jobs will be lost. The economy will take a hit of 100 billion over 10 years. There will be a 6 billion hole in public finances. Quite simply, there won't be other jobs for these people to take.

Dytalus wrote: »

Absolutely. Followed quickly by item number 2: the backstop.

Which is why not signing the WA is a fool's errand. Ireland will be hit very hard by a crash out, but we will have the backing and assistance of one of the most powerful economic forces in the world. And the EU wouldn't even have to go out of its way to help out. EU funding rates are assigned based on the economic performance of each member state. If our economy tanks, then we'd slide into a lower bracket and automatically get more funding. No rules bending, no special treatment. Just the EU doing one of the major things it does - help to prop up its weaker members.

The UK, though? They'd crash out with almost no trade deals. New ones can take up to a decade to complete, and even longer to have any appreciable effect. They would have nobody propping them up, and a very unhappy populace in two of its four members.

My money is on the UK bending before Ireland or the EU does. And then they'll have to sign to the very things they refuse to agree to now - and they'll have to do it after taking an economic hit. I cannot reasonably see a winning move for them that isn't singing the deal in front of them.

I agree. The only danger is the lunatics have taken over the asylum and there might not be enough sane people to stop them. The Tories are drunk on populism and could force this through just because they can.

Dytalus wrote: »

Absolutely. Followed quickly by item number 2: the backstop.

I think what will surprise a lot of us here is how quickly what was discussed in the WA negotiations will be forgotten in the event of no deal. The border, for example, however it is implemented, will just become the established norm.

Professor Moriarty wrote: »

On WTO terms? I wish the British economy the very best with that.

It is still trade. I think some of us here are imagining that after the UK leaves there will be literally no trade with Ireland or the EU.

Bit cynical wrote: »

I think what will surprise a lot of us here is how quickly what was discussed in the WA negotiations will be forgotten in the event of no deal. The border, for example, however it is implemented, will just become the established norm.

And what benefit is there to the UK to have a border in NI? The UK were the ones that came up with the backstop idea, precisely because they understood the impact of a border.

The EU agreed to put aside it rules on the basis of the GFA and peace and also because NI makes up such a small amount of trade in relative terms.

So the UK drop out without an agreement. They go back to the EU looking for a trade deal (which everyone agrees they will be doing) what do you think the EU will be looking for?

The UK will already have zero tariffs, or else WTO crippling tariffs. But the main difference is that the EU can source most UK things from within the EU at zero tariffs, whilst the UK will have to pay tariffs. So not only will the export economy be decimated, but the imports will either be massively more expensive or wipe out the indigenous industry.

All to save £39bn (which is actually smaller now as they have delayed and as such continued to pay into the EU during the time)

Bit cynical wrote: »

It is still trade. I think some of us here are imagining that after the UK leaves there will be literally no trade with Ireland or the EU.

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.