Brexit Fast-Track Dead: EU Insists Upon Divorce Settlement Before Trade Talks

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Published : February 20th, 2017
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Category : Opinions and Analysis

Before the EU is willing to enter trade talks with the UK, it wants an upfront divorce settlement of €60 billion in exit bill claims along with guaranteed rights for expatriate citizens.

Expatriate rights are easy. Both sides can pass legislation quickly, at no cost.

As for the exit bill, the UK should tell the EU to go to hell. The UK would have no bargaining power if it agreed to give the EU all or most of €60 billion in exit bill claims before trade settlement negotiation.

24hGold - Brexit Fast-Track De...

With those new pre-divorce demands, Brexit Tade Talks Delayed Until Next Year.

The EU’s Brexit negotiators expect to spend until Christmas solely discussing Britain’s divorce from the bloc, denying London any trade talks until progress is made on a €60bn exit bill and the rights of expatriate citizens.

A narrow divorce-first approach favored by Michel Barnier, the EU’s chief negotiator, would represent a big setback for Britain’s aim for a fast-track EU trade deal, completed by the end of 2018.

A move to delay trade talks sets the stage for a high-stakes stand-off once formal Brexit negotiations begin. David Davis, the UK’s Brexit secretary, wants all elements of Brexit to be handled “in parallel”, saying he has told Mr. Barnier that his “sequential” plan for talks “does not seem practical”.

At one extreme some of the EU-27 — including some French officials — want Britain to honor its financial commitments as a first step. Others are concerned a hardline money-first approach will fail unless the “sweetener” of trade discussions is offered to keep the UK engaged. Spain, for instance, opposes “strict procedural requirements” and has backed early discussions about the future relationship.

Lust Leave

For the third time, I suggest the UK “Just Leave”. There is nothing to negotiate with a collective set of fools whose clear intent is to punish the UK.

The EU believes it has the upper hand. They don’t. I discussed this on November 29, 2016 in Brexit Stacked Deck? Which Way? Don’t Negotiate, Just Leave!

Bluff from Schauble

Germany’s finance minister Wolfgang Schäuble boasts Britain can’t lower corporation tax because the UK still has EU commitments.

Obviously, that claim flies out the window the moment the UK says “goodbye”. It is to the EU’s advantage, not the UK’s for the UK to enter negotiations.

The EU will try to drag the negotiations on forever. Heck, they won’t even have to try. Permanent negotiation is a natural process getting 28 nations to agree to anything, and under silly EU rules all 28 nations have to agree.

All the UK has to do is proclaim the treaty null and void. By doing so, all these accumulated fees the EU is threatening the UK with immediately go up in smoke. So do current UK contributions.

That is the ultimate trump card, and I mentioned that prospect on day one.

Brexit is a Religious Battle

On December 2, I wrote Brexit is a Religious Battle (And You Can’t Negotiate Religion)

You Can’t Negotiate Religion

Both sides appear firmly entrenched. And the entrenchment grows by the day. Jeroen ijsselbloem, who chairs the eurogroup of 19 eurozone finance ministers, insists UK Must Abide by EU Rules Post Brexit to Secure ‘Passporting’ Rights.

Given that hardening stance, the UK may as well sit down with the Pope in an effort to negotiate the “Holy Ghost” out of the “Trinity”.

Risk to UK

The risk to the UK is negotiations drag on and on with costs piling up. As long as the UK remains in the EU, the UK arguably has bills to pay.

Just Leave

There is one and only one solution to this madness: Just leave.

Only One Way to End Discussion Madness

27 nations will never agree to anything except complete capitulation by the UK.

There is only one way to prevent endless #Brexit discussion madness: Don't discuss things with mad men, just leave! https://t.co/mHb2qSxuVE

— Mike Mish Shedlock (@MishGEA) February 19, 2017

Mike “Mish” Shedlock

Source : mishtalk.com
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Mish 13 abonnés
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
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