Choice? What Choice?
It is facile in the extreme for Michel Barnier to say that Brussels is waiting for the UK to tell it what kind of Brexit it wants, given that no matter what proposals Theresa May and her government come up with, they are going to be denied or at least tied up in masses of conditions and red tape.
It is time that things were made clear. The referendum decision was for the UK to leave the EU, no hard Brexit or soft Brexit! Just out! No customs union, no single market, no ECJ meddling in UK laws and no special rights for EU citizens arriving after 29th March next year. Ireland? They should only be interested in the North unless Ireland wants to leave the EU and throw its lot in the rest of the UK.
This may sound hawkish, but it is the sentiment expressed by the referendum decision.
It is also facile to hope for a Churchillian or Thatcheresque figure to step up and lead the British out of the fog of hope that has fallen over negotiations but sleepwalking into the half-baked Brexit being championed by MP’s who are determined to 'stay friends' with Brussels is a disaster waiting to happen and belittles Britain to those nations with whom they will be negotiating trade deals going forward.
Bank of England Risking All
In the UK banking was always an honourable profession. It set a certain level of standards. Up until the eighties, the banks had a certain solemnity where the customer was always considered first, and the utmost care was taken to provide services they needed.
Credibility was all that mattered. A banker’s word was his bond and that degree of trust and behaviour led the City of London to its pre-eminence in global financial affairs.
Now those days are gone. Two major UK banks are in foreign hands, customers seem an inconvenience and service levels have fallen like a stone. The historic step taken by Gordon Brown as Chancellor has been hailed as an unmitigated success but there is one issue that is starting to raise its head: credibility.
It strained the MPC’s credibility to raise rates in November and tempered that by the 'dovish hike' rhetoric. Now, the economy is close to being in tatters, activity indexes are falling, productivity gaps are appearing, and investment is at close to all-time lows. Now we hear of analysts considering the need for a hike in rates in May. That would be close to the final straw.
The predilection of analysts with returning to 'normal' monetary policy is misplaced. The goalposts of normality have been moved and the Bank of England and Treasury are going to have to be more innovative to deal with what is coming.
Grand Coalition Brings EU Comeback
I was writing earlier about the grand coalition that had been agreed in Germany and my spell checker changed 'coalition' to 'copulation'! The thought of a grand copulation between Angela Merkel and Martin Schulz is a little tough to imagine.
However, we do have a grand coalition and the SPD have managed to wring some particularly left-wing concessions out of Mrs Merkel particularly in the areas of social care and pensions. Members of Mrs Merkel’s CDU/CSU group have commented that too much has been given away simply to keep Mrs Merkel as Chancellor.
The agreement seems to have more to do with Germany’s desire to retain it place at the head of the EU table than any domestic German considerations. It certainly brings adoption of Emmanuel Macron’s proposals for greater integration and a 'United States of Europe' closer.
With Germany at the forefront of EU advancement and a German certain to take over at the ECB following Mario Draghi’s departure next year, the Brexit process is sure to take on a slightly more Teutonic flavour which will depend upon just how Theresa May deals with Angela Merkel (or vice versa).