Shorties-8

The Rock and a Hard Pace

The comment in the Divorce Guidelines has produced the expected response from the British government and others:

After the United Kingdom leaves the Union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom.” Gibraltar

This appears to imply that Spain would have a veto over the economic future of Gibraltar. It may be an oblique reference to the low corporate tax rate there, something that gets up the EU’s nose and would be banned under any complete economic and monetary union.

Prime Minister Theresa May is reported as saying:

We will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes”.

Michael Fallon, Defence Minister: “Gibraltar is going to be protected all the way”.

Boris Johnson couldn’t resist his joke on Facebook: “The UK remains implacable and rock-like in our support for Gibraltar.”

Fabian Picardo, the Chief Minister of the governmFabian Picardoent of Gibraltar, interviewed by the Financial Times, recommended that the UK should stand up to EU bullies and blackmail.

The British tabloid press got in its usual helpful contribution by quoting an ex-military commander saying that the UK could crush the Spanish navy.

While these reactions could be dismissed as part of the prancing and posturing that precedes a bull-fight, it does indicate the attitudes, on both sides, that are guiding the forthcoming negotiations (see our Deal, or No Deal and Divorce Guidelines).

Afterthought

To demonstrate our eagerness to reach a deal we could comply with the EU’s Guidelines by including the 1713 Treaty of Utrecht amongst the European treaties we are renouncing. This would return Gibralter to Spain and also the Spanish Netherlands, which of course included the city of Brussels. What could be simpler? Spanish Netherlands

Taking Back Control

We have described already how the UK plus Ireland and Cyprus are the only EU-member countries with adaptive, bottom-up legal systems. The others all have codes imposed from above and, worse, the EU’s own laws are supervised by a court (the ECJ) that is mandated to interpret them to further the spirit, rather than the letter, of its treaties – how is that “legal”?tug-of-war 2

“Take Back Control” was a slogan of the Leave campaign during the Referendum and was effective because it means a lot to Brits, perhaps more than to many of the other nations – they have nearly all been under anti-democratic rule within living memory so perhaps find the EU less oppressive than we do. Roger Bootle pointed out in a Daily Telegraph article (3rd April) that only five out of the 27 countries have not been under dictatorship or invasion within living memory. Sweden, Switzerland and Ireland were WW2 neutrals, Malta and Cyprus were ex-UK colonies so not exactly democracies.Australian Supreme Court judges take part in traditional Red Mass at St. Mary's Cathedral in Sydney

The over-regulation matters to our businesses but can also annoy ordinary people. Our pounds and pints, our vacuums and kettles, our bent bananas and traditional jam, all impinge on our everyday lives. It’s one of the reasons we voted Out. 

bananas 3

 

Parliament Ponders

The UK Parliament, notably the House of Commons, was quiet for about six months after the Referendum last June. It is now, perhaps belatedly, trying to catch up and undertake its role to keep the Government in check. House 0f Commons

In a report published on 3 April, the Commons Committee for Brexit asks on what basis the Prime Minister made her claim that “no deal is better than a bad deal” (see Deal, or No Deal).

We note the Foreign Affairs Committee’s recent conclusion that a ‘no deal’ scenario “represents a very destructive outcome leading to mutually assured damage for the EU and the UK”. We share that view. It is, therefore, very important that both the UK and the EU avoid reaching the end of the two-year negotiating period without an agreement. The Government has talked about walking away from a bad deal, but has not yet explained what terms would be demonstrably worse for the UK than ‘no deal’. The Government should therefore conduct a thorough assessment of the economic, legal and other implications of leaving the EU at the end of the Article 50 period with ‘no deal’ in place.”

Brexit Minister, David Davis, has acknowledged that the Government has not made a detailed assessment of the consequences of failing to reach an agreement with the EU on the terms of becoming an ex-member; he has said that this may take a further year to complete.No Deal-2

Without an economic assessment of ‘no deal’ having been done and without evidence that steps are being taken to mitigate what would be the damaging effect of such an outcome, the Government’s assertion that “no deal is better than a bad deal”, is unsubstantiated.”

We can find no evidence that the EU has undertaken the research that would be needed to understand the implications of a breakdown of negotiations before an agreement has been reached. With the ill-tempered pronouncements from both sides growing in volume and intensity, and neither side understanding the consequences of failure, such failure seems increasingly likely to be the outcome.

 

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