Darren Winters explains, post Brexit negotiations are back on the radar, as the extension to the transitional period negotiations is due to be decided whether it will be extended beyond the 31 of December deadline.
Just to recap Britain has officially left the 27-nation bloc on January 31 but remains within the EU’s economic and regulatory framework until the end of the year. If June’s extension to the transitional period lapses with no extension to the talks agreed and post-Brexit talks fail to secure a deal in the remaining transitional period, then the UK would be treated as a “third country”.
Put simply, if post Brexit negotiations fail then it is a no-deal Brexit with the EU immediately apply “its rules and tariffs at its borders” with the UK
Post-Brexit do or die negotiations remain bogged down in no man’s land with neither side willing to give an inch.
Boris Johnson’s administration, with its most eurosceptic cabinet ever, wants a far more distant, independent relationship with the EU than the previous UK prime minister, Theresa May. So the current Boris Johnson conservative government views Brexit as an opportunity to break free from EU rules and standards, which they argue will give Britain a new footing as an independent sovereign nation. So UK.’s chief Brexit negotiator David Frost is seeking a Canadian-EU comprehensive type of trade agreement.
But as Darren Winters points out, the EU’s chief negotiator, Michael Barnier continues to stress that the UK’s geographical proximity to the EU, and degree of economic integration with Europe, mean the same rules cannot apply. Moreover, Michael Barnier has accused Britain of “wasting precious time” in the EU-UK negotiations.
Perhaps the greatest sign that post Brexit negotiations are dead in the water occurred when UK’s Chief negotiator Frost recently walked away from the prolongation of June’s trade negotiations extension, which has rattled the EU even further
“The UK cannot refuse to extend the position, and at the same time, slow down discussions on important areas,” said Michael Barnier in Brussels which was an explicit reminder that the hourglass sand timer was running out of time for talks.
Then more frustration came following a week of online negotiations due to the pandemic.
EU’s chief negotiator, Michael Barnier, said last week that little progress has been made on reaching a post-Brexit agreement, as ‘the UK continues to backtrack’ on commitments agreed to in a political declaration that sets out the framework for the future relationship between the bloc and Britain.
Then came the war of words as Brexit talks broke down. David Frost claimed that his European Union counterpart has a different understanding of non-binding documents that set out “parameters” of a potential future relationship agreement.
This cultural clash, which is probably why the UK is leaving the EU in the first place, could make post Brexit negotiations futile. No one negotiates with the EU because it is like an exclusive club, and club rules are non-negotiable. Post Brexit negotiations are like trying to negotiate with club rules, you either play by the rules and accept them or you willing leave, or you get booted out.
Britain’s chief negotiator David Frost probably releases that post Brexit negotiations are on a road to nowhere and for that reason, it might not be in the UK’s interests to extend this period of uncertainty by prolonging these futile negotiations.
With post Brexit negotiations now likely to lead to a no-deal Brexit does this lead to back pedalling Brexit?
As the saying goes, what doesn’t kill you makes you stronger, the EU has survived the financial crisis of 2008 which culminated in the peripheral sovereign debt crisis and it may have also survived the 2020 pandemic crisis. Big money is being thrown at this club.
The European Commission recently unveiled an unprecedented €750BN CoVid-19 recovery plan which consists of €500 billion in grants to member states, and €250 billion would be available in loans. Make no mistake about it, that kind of money buys membership loyalty.
Italy, the once wild card, is now in the EU’s pocket, Italy has been bought and paid for. Italy stands to receive 82 billion euros in emergency grants and up to 91 billion euros in low-interest loans. Spain also hit hard by the pandemic is in line for 77 billion euros of grants and up to 63 billion euros in loans. Greece could get 32 billion euros in grants and loans and France could get 39 billion euros in grants.
The EU is unlikely to offer the UK much wriggle room in the post Brexit negotiations with all its trouble maker members handsomely paid off to stay inline
But the sixty-four million dollar question is whether Britain will cave into the EU, a superstate, capitulate and surrender its parliamentary sovereignty to Brussels if post Brexit negotiations fail. Is this Europe’s battle of the century?
If stubbornness is the secret to Britishness, then prepare for a long-drawn-out EU-UK feud with a trade war in the mix.
But how stoic is the British public today?
Darren Winters explains, if post Brexit negotiations fail the British electorate could also throw Boris Johnson’s administration under the bus and vote a backpedal Brexit government in office.
Post Brexit negotiations are likely to lead to volatile markets, as both sides jostle for the higher ground
It is not an evenly matched fight, in the one corner is the EU with an $18 trillion GDP (2018), and whose single bloc currency, the euro represents 25.8% of the currency composition of the world’s holdings. By contrast the UK’s economy $2.83 trillion GDP, in the same year with sterling (GBP) representing 4.4% of the currency composition of the world holdings, according to the International Monetary Fund.
So standby for erratic capital flows in post Brexit negotiations as the market calculates post Brexit negotiations windup.