Saturday 3 November 2018

IS A DEAL CLOSER THAN WE THINK?

Noises from around the negotiations seem to indicate we are closing in on a deal. Simon Coveney the Irish foreign minister and David Liddington, effectively Mrs May's deputy, both made encouraging comments yesterday (HERE) so I assume there is something in the offing. Based on what appears to be happening, I'll venture a small prediction. When the details are announced the Brexiteers in and out of parliament will go absolutely volcanic. May will need the kind of diplomatic skills that you might want to have when faced with an irrational gun-toting, drug crazed lunatic about to rob the family store.

The Irish Times (HERE) this morning have a suggestion for what the deal might look like - when it finally emerges from make-up - and essentially it involves the whole UK remaining in a sort of customs union after March 29th next year. A "bare-bones" customs arrangement will be written into the withdrawal agreement and the details fleshed out over the months and years of the transition period. This will avoid a border down the Irish sea.

But the ultimate backstop that the DUP were so opposed to will still be included apparently. The paper adds:

"Some EU member states have misgivings about the compromise proposal too, arguing that a legally-binding commitment to a customs union should not be cobbled together in a few weeks. They fear that unless Britain signs up to binding commitments on environmental and labour standards, taxation and state-aid rules, the customs deal could give British producers a competitive advantage".

It all looks very difficult for Brexiteers to swallow but some reports say a deal could be put before the UK cabinet as early as Tuesday.

There is however some intriguing news management going on at the moment. On the Irish backstop, The Mail and other newspapers are talking about movement from the EU to soften their hardline stance. A recent article (HERE) said, "EU leaders pile pressure on Michel Barnier over fears of a no deal Brexit". But when you read the article it's about the EU allowing the UK to remain in the customs union as a way of resolving the problem. The article quotes the Portuguese foreign minister saying the EU can't hold out for a perfect deal.

Another anonymous EU diplomat said Mr Barnier should drop his opposition to a UK-wide ‘backstop’ solution to the Northern Ireland problem, which could see the whole country stay in a customs union temporarily after Brexit. "There are legal issues, but we must be pragmatic, not dogmatic," the source said.

Daily Express sub editors are, as we know, a special breed and their more extreme take on it is: "EU CAVES IN: Brussels prepares Irish backstop CLIMBDOWN to hand Theresa May Brexit victory" (HERE). It remains to be seen who has caved in and who has been handed victory.

Other reports in the last few days which claimed that a deal had been agreed with the EU on financial services are not quite what they seem. Robert Peston at ITV explains (HERE) what has actually happened. First of all, there is definitely no deal. Secondly, the reports imply the EU have made concessions to the UK when they haven't.

On financial services, the Treasury has agreed some basic principles to govern the future relationship with the EU. These will be included in the political declaration which is non-binding. Peston says, "this is a million miles from a deal - which would not and could not be negotiated in its practical detail for months and even possibly years". It is more or less what the EU would offer to any other third countries like the USA. It means the UK banks must follow EU regulations which will delight the Brexiteers I'm sure.

The City were expecting this regime known as equivalence but it won't be anything like what they have now.

Barnier's tweet was this:
I'm not sure what's going on here. Neither of these two things are EU concessions in our favour but this is how they're presented. Hard Brexiteers will not see any of this as a reluctant or hard won compromise by the EU. They don't want us to be in any kind of financial services 'vassal state' or customs union on March 30th next year. It will look like total capitulation to them.

So what's going on?  Either the journalists don't actually understand what it all means (quite possible) or they are attempts to "manage the news" to make it more palatable to leave voters. I can't see it getting past the sceptics in the ERG though, can you?

There is no trust between factions in the Tory party at the moment.