Sterling continued to recover some of last week's lost ground and enjoyed a good day. According to Reuters this was due to investors taking "as a positive sign a growing opposition from political parties to Johnson’s promise to take Britain out of the EU with or without a deal". You know how bad Brexit is when the pound surges at the prospect of a Jeremy Corbyn government. Will the Tories ever get back their reputation for fiscal rectitude? I truly doubt it.
The 'bounce' didn't last very long though because The Telegraph then reported a 'leaked' document from the German finance ministry which rather conveniently appeared in Handelsblatt on the day Sajid Javid, Chancellor of the Exchequer, visited his counterpart in Berlin. The Mail reported it HERE.
The Telegraph seemed surprised and almost shocked by what the document revealed about Germany's approach to Johnson's hard line stance:
"Germany expects a No Deal Brexit and is not prepared to renegotiate the withdrawal agreement, according to leaked details of an internal briefing paper for Angela Merkel’s government. The leaked paper is the first evidence that Germany may be preparing to let Britain walk away with No Deal rather than back down to Boris Johnson’s demand to drop the Irish backstop".
The first evidence!! For heaven's sake, the EU Commission and the EU27 are blue in the face from telling us the Withdrawal Agreement will not be reopeneded - no matter what.
Despite knowing this the Daily Mail still manages to report:
Despite knowing this the Daily Mail still manages to report:
"However, many in the [UK] government are increasingly confident that Mr Johnson's 'do or die' pledge to deliver Brexit with or without a deal by October 31 has hit home hard in Brussels.
"They now believe the EU, faced with the prospect of a chaotic split on Halloween which would do significant damage to the Irish economy, will ultimately buckle".
Usually, this kind of thinking is reserved for the fag end of an outgoing and failed administration blinded to their reality. Johnson's must be the first government in history to have arrived in office with a bunker mentality.
Remember Germany was the EU country that was supposed to be the most likely to bend! Johnson is discovering that others can also play the same game as him. He pretends that he will take Britain out without a deal and the Germans pretend to believe him and call his bluff. They seem utterly unperturbed by the threat. All very predictable. Sterling showed what the money markets actually think about a no-deal Brexit and the pound will continue its wild ride for a few weeks yet.
The Guardian carried a report of the same Teutonic 'intransigence', aka rational behaviour, but added a bit of extra information. This was about the visit to Brussels last week by David Frost, Johnson's newly appointed negotiator, to set out the new government's thinking:
"Frost is understood to have insisted that a deal was only possible if the backstop, which would keep Northern Ireland in the single market and the whole of the UK in a customs union to avoid a hard border on the island of Ireland, were removed.
"However, he told EU officials that this alone could not guarantee the revised deal being ratified by parliament".
"However, he told EU officials that this alone could not guarantee the revised deal being ratified by parliament".
If there was anything that was needed to convince the EU to stick rigidly to their long-held position it was this. As a salesman it's a well known situation. The customer asks for something (usually a discount) but you do not offer one. Instead, you ask a question: IF I give the discount, will you give me the order? For the technical, this is known as the sharp angle close. If the answer is yes, and you know you have the authority to offer the discount, you close the deal.
But when the answer is no, you know this is not the time even to offer a discount. Because the customer will bank it and come back for more later. The EU are wise to this although clearly Mr Frost is way out of his depth - probably even for buying a used car unaccompanied.
Johnson's strategy is exactly the same as Theresa May's. Keep battering away at the brick wall with a feather duster and hope it somehow falls.
The building and construction industry sent an open letter to Johnson yesterday appealing for the UK to "leave the EU in a considered, managed way in order to avoid the likelihood of massive short-term disorder and potentially long-lasting damage".
The Association for Consultancy and Engineering (ACE), Build UK, the Civil Engineering Contractors Association (CECA) the Construction Products Association (CPA) and the Federation of Master Builders now join the CBI, the NFU, the BCC, the SMMT, the FSB and Make UK as well as trade unions and just about every other trade body in the country, calling for sanity. Will it work? Of course it will, eventually.
Boris Johnson is going to look an almighty idiot - even more than he normally does - when he is forced to backtrack and betray the ERG and the party members who supported him as well as thousands of ordinary people who actually believed him when he said we would leave on 31st October 'do or die'. He will do neither.
A university friend of Boris Johnson writes to defend him in The Spectator and says:
"By standing up to the EU, Boris may show it to be the paper tiger that sceptics have always suspected it to be. For the EU, Brexit presents an existential crisis – if Britain leaves and make a success of it, it is the beginning of the end for it. Others will surely follow, as squeaking rats scurry over the side of a sinking ship. For that reason, they were never going to make it easy for us to leave and May should have been prepared for a battle to the death – which means leaving without a deal"
I fear it is Britain who has become the paper tiger as we will soon find out.
A university friend of Boris Johnson writes to defend him in The Spectator and says:
"By standing up to the EU, Boris may show it to be the paper tiger that sceptics have always suspected it to be. For the EU, Brexit presents an existential crisis – if Britain leaves and make a success of it, it is the beginning of the end for it. Others will surely follow, as squeaking rats scurry over the side of a sinking ship. For that reason, they were never going to make it easy for us to leave and May should have been prepared for a battle to the death – which means leaving without a deal"
I fear it is Britain who has become the paper tiger as we will soon find out.
On an unrelated topic (perhaps) I note the BBC will soon show a three part series: The rise of the Nazis. It seems an oddly appropriate moment to commission and show such a series and I wonder if the BBC aren't doing it deliberately to warn us what happens when the political extremes are reached.
In the early 1930s Germany had become disillusioned with the political class (it was suffering from severe unemployment in their case) and and looked to the extremes for deliverance. On the left (the communists) and the right (the Nazis) were unscrupulous people ready with quick, simple solutions to a very difficult, complex, deep seated and long running problem (recognise anything?).
In 1930 the then Chancellor, Brüning, had cut government expenditure, wages and unemployment pay, adding to the national crisis but he couldn't get the Reichstag, the German parliament, to agree to his proposals (sound familiar?). President Hindenburg used Article 48 of the Weimar constitution, which gave him the power to pass laws by decree, to by-pass the Reichstag (we call it proroguing now) in order to force laws onto the statute book.
This undermined democracy and weakened the power of the parliament – and arguably led the way for the rise Adolph Hitler. I am not suggesting for a moment that we are about to experience anything quite as bad, but the right is certainly on the rise. Nationalism and populism are once again offering quick, easy solutions to complex issues and we have a population prepared to listen and credulous enough to believe such solutions exist.
