Monday 8 May 2017

COMING SOON - A MEXICAN STAND OFF

I think it's perfectly clear Brexit was built on lies. Even leavers acknowledge it. The £350 million a week for the NHS was perhaps the worst example but there were many others like Turkey joining the EU and so on. The pro-Brexit press was at the forefront of it all. They lied shamelessly about the facts, played down all the difficulties and wildly exaggerated every perceived and usually completely spurious benefit. This did not end with the campaign.


As we enter the negotiations many of the problems are becoming clear. The reaction of the press is a predictable one. They do what liars usually do and keep on lying. Having urged Brexit on an all too credulous electorate, something many believe to be the worst foreign policy mistake ever, they are unlikely to admit error anytime soon. 

There is still the belief we have a strong negotiating position. We can walk away and no deal is better than a bad deal, so they say. The so-called divorce bill is going to be a Mexican stand-off. It looks like we have liabilities between 86.9 billion and 113 billion Euro (HERE) less some assets, which will reduce the final bill but the UK will refuse to pay it anyway. What happens then? Each side will have to consider its position. The problem with this sort of thing, when both sides think they have a winning hand, is that the ante gets upped before one side realises they might not after all have an unbeatable position.

Who will blink first? It will be the side who thinks they have the most to lose. And that must be the UK, unless Mrs May is as deluded as the EU think she is. The clock is ticking down and the more time is taken up arguing about the divorce bill the less time is available to discuss a trade deal. The EU say no trade deal until the bill is agreed. Both sides will lose if there is no trade deal, that is certain. Trade will not stop if we operate on WTO terms but it will cost more and take longer because of tariffs and customs delays.

Unless an agreement is reached quickly, the press will whip up a storm against the "intransigent EU" and blame them for everything, the atmosphere will become poisonous and industry, especially the car industry, will begin to look at options across The Channel. We will see if Mrs May is really prepared to walk away.