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http://www.bbc.com/news/uk-politics-uk-leaves-the-eu-37278222

Brexit: The phoney war

The flags of the European Union and the United Kingdom

 

Returning to the UK from North America is to encounter an air of unreality. Britain has embarked on the biggest constitutional change in nearly 50 years - but you wouldn't guess it.
 

Informed but incredulous Americans ask "you really had no plan?"

The much-quoted "Brexit means Brexit" is met with bafflement. A Washington Post columnist said it had as much meaning as a parent declaring "bedtime means bedtime"   :dead:  The French talk of "le grand flou de Theresa May", the great vagueness of the British PM.

In this period of seeming inactivity, the financial markets and the British consumer buy time and cover. The IMF declares the financial turmoil has subsided. UK manufacturing records the biggest month-on-month increase in half a century. The sense of crisis ebbs, or it does until the next month's figures appear. The prime minister warns of "difficult times" ahead.

The politicians' phrases are more about buying time than delivering a plan. "Brexit means Brexit" is aimed primarily at preserving unity in the Conservative Party. The Brexiteers remain eagle-eyed for any backsliding and the mantra that "Britain is open for business" is an empty sound bite. It is unclear anyone believed the opposite.

And during this slow post-Brexit summer Europe has largely been a passive bystander, obdurate in its refusal to even talk about options before the UK invokes Article 50 of the Lisbon Treaty and the formal withdrawal process begins.

 

British Prime Minister Theresa May holds a cabinet meeting

 

 

The President of the European Council, Donald Tusk, insists "our position is crystal clear: there will be no negotiations without notification. This principle is enshrined in our treaties…".

And yet informal talks would speed up and possibly smooth out the formal negotiations, although there is insecurity in many of Europe's capitals. The German vice-chancellor Sigmar Gabriel warned that the EU could go "down the drain" if other countries saw Britain keeping "the nice things". So, in the divorce proceedings that lie ahead, there must be some pain.

Occasionally there is a shaft of light, of reality. Frans Timmermans, the vice-president of the European Commission, declares: "The UK will remain a European country if it is not a member of the EU and that should be the basis, I believe, for the negotiations." But, at times, it can appear that Europe's leaders have a vested interest in Britain's failure rather than in achieving mutual success.

It is clearly in the interests of both parties in this split to talk informally. The politics may be difficult but the economic signals from the eurozone are still troubling. The European Commission says it is expecting growth of 1.8% but the figures mask continuing weakness. In the second quarter of the year, Italy and France posted no growth at all.

A fragile recovery might be expected to prompt a flexible approach towards Europe's second-largest economy but when the EU meets in Bratislava in the coming days to discuss its future, Brexit will not be the major subject.

 

Greek Drachma coins sit on 20-Euro money notes

 

In the UK the cabinet, two-thirds of which voted to remain in the EU, will have to make some hard choices.

Prime Minister Theresa May has strongly hinted that Britain will be looking for a "bespoke" rather than an "off-the-peg" deal with the EU.

That seems to rule out the Norway model that offers access to the single market without tariffs but includes paying into the EU budget and accepting freedom of movement. And the UK would have no voice in decision-making.

It probably excludes the Canadian model too. That offers tariff-free access for most manufacturing goods but not services - and services account for four-fifths of British GDP.

At the heart of the British dilemma lie two irreconcilable aims; retaining full access to the EU single market and ending - or greatly reducing - freedom of movement. Europe's leaders have said repeatedly - you can't have one without the other.

A great political battle is looming which carries risks for the Tory party and explains Theresa May's caution.

 

City of London skyline

 

 

There are those who argue passionately that access to the single market must be retained. Britain's economic future depends on it. "It is a delusion to argue that Britain can prosper outside of this area," says Anna Soubry, the former business minister.

The financial services industry depends on being able to operate across Europe and it contributes £65bn to the Exchequer. These voices are prepared to seek a deal on freedom of movement that would reduce immigration. Their strategy is dismissed by the other side as "Brexit lite".

Then there are the Brexiteers who question Britain's need to remain in the single market.

The former chancellor Nigel Lawson is among those who question whether the single market has brought the discernible benefits claimed for it. Like others, he argues that after the referendum no future government can accept the right of EU workers to live and work in the UK. And, if that is the case, Britain will put itself outside the single market.

He sees the City of London's position as unassailable. There are some inside cabinet who believe the City should be left to fight for itself, who would accept tariffs and higher prices for the consumer in order to make a full and complete break with the EU.

The prime minister has chosen her words carefully but has made it clear the referendum vote requires "controls on the numbers of people coming".

It is also clear that, if possible, the government would like to retain tariff-free access to European markets - but that will be at the heart of the negotiations.

 

Francois Hollande with Angela Merkel

 

What makes the UK's position more difficult is that it is almost impossible to take unofficial soundings, to test what flexibility may exist.

As things stand the government will have to declare its hand, set the clock running, before getting a sense of Europe's response. And leaders like Angela Merkel and Francois Hollande have limited room for manoeuvre. They both face elections next year and concessions to the Brits may not be good politics.

 

And even if the formidable question of the trading relationship between the UK and the EU is ironed out, the list of further hurdles poses a massive administrative challenge.

Will parliament get to vote on whatever deal emerges? How will any deal work for Scotland, Wales and Northern Ireland? What about the acquired rights of EU citizens living in the UK?

 

What about 43 years of EU laws and policies? What should be retained or discarded? And the questions continue.

So, for a period, the phoney war will continue but the pressure will grow to allow informal contacts that will make the real negotiations more productive. Watch for those back door deniable channels opening up.

And on all sides there are risks. Theresa May has to keep her party and cabinet united. Businesses in continental Europe as much as in the UK want to continue trading and to end uncertainty. And then there are tensions between the Commission and the European Parliament on the one hand and the member states on the other.

And so, as summer eases into autumn, the British people are no clearer as to what Brexit will mean.
 

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The new home secretary unintentionally quoting Hitler's Mein Kampf when talking about making British companies list foreign workers is truly frightening. The Brexit insanity continues.

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Those news about companies listing their foreing workers are disturbing. I hope that is just some thinking from a politician and not a real law. 

And having such minimal unemployment... how do they think those jobs are going to be done by British people? They truly are not thinking. 

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Huge fight broke out at a UKIP meeting last night, one of the guys that was up for leadership is left fighting for his life. And people say these people are not thugs. I cannot.

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19 minutes ago, Rachelle of London said:

Huge fight broke out at a UKIP meeting last night, one of the guys that was up for leadership is left fighting for his life. And people say these people are not thugs. I cannot.

Rumour has it that he was planning to move across to the Conservative party and that's what the disagreement was about.  It's time to disband UKIP.

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3 hours ago, Rachelle of London said:

Huge fight broke out at a UKIP meeting last night, one of the guys that was up for leadership is left fighting for his life. And people say these people are not thugs. I cannot.

Wait what? They beat him up?

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1 hour ago, Raider of the lost Ark said:

Wait what? They beat him up?

YESSSS! There's a pic of him laid out could on the floor! Mass brawl. I suppose do we expect more from former National Front and BNP members. Just seen that he's in a stable condition now.

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1 hour ago, Rachelle of London said:

YESSSS! There's a pic of him laid out could on the floor! Mass brawl. I suppose do we expect more from former National Front and BNP members. Just seen that he's in a stable condition now.

No that's not what happened. :dead: There was an argument in the morning and then he collapsed in the afternoon.  It was morbid watching them pull the white barricades around him.

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2 hours ago, GetUnconscious said:

No that's not what happened. :dead: There was an argument in the morning and then he collapsed in the afternoon.  It was morbid watching them pull the white barricades around him.

Nigel Farage said there was a fight and even he said it was embarrassing. When Farage doesn't condone your behaviour you know it's bad.

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I'm about to buy Euros for my holiday and I'm seriously fucked off how badly the pound is doing. It's basically 1-1 now. 

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Well the UK is lucky.  Any other European country would be in chaos now with so many stupid decisions. So be glad it is only affecting your holidays. 

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I wish it was only my holiday that is affected by Brexit. As a EU citizen living in UK I really don't know what the future holds. I applied for the British permanent residency certificate even before the referendum. Got it yesterday. Next step - British citizenship. It's better to be safe than sorry. Especially now that Tories seem to go for hard Brexit and use Nazi rhetoric when addressing the problem with immigration.

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What baffles me is that immigrants only represent 20% of the population,  unemployment is residual and millions of British people live abroad enjoying their EU rights. Nazi rhetoric indeed.  Scapegoat to disguise the poverty that brings neoliberalism. Policy that precisely defend conservative parties.  

They are playing with fire too,  because depending on how they treat those workers,  their countries will veto any good agreement in favour of UK during the process.  If they had minimum intelligence they would be more quiet about their racist and xenophobic remarks.  Poland,  Romania and Bulgaria are already fed up. 

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Treat al immigrants the same. So much sympathy for migrants coming from Europe. Yet people from outside have been treated like shit for centuries yet there's no sympathy there. Some of those eastern countries need to accept new people coming to their countries. I bet those refugees are fed up too. 

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On 7/10/2016 at 10:32 AM, pieciolot said:

I wish it was only my holiday that is affected by Brexit. As a EU citizen living in UK I really don't know what the future holds. I applied for the British permanent residency certificate even before the referendum. Got it yesterday. Next step - British citizenship. It's better to be safe than sorry. Especially now that Tories seem to go for hard Brexit and use Nazi rhetoric when addressing the problem with immigration.

apparently there are starting a movement to make the british population living in spain to have also the spanish citizenship...if they do this, I hope the spanish people living in the UK also will have the british citizenship!

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2 hours ago, Rachelle of London said:

Treat al immigrants the same. So much sympathy for migrants coming from Europe. Yet people from outside have been treated like shit for centuries yet there's no sympathy there. Some of those eastern countries need to accept new people coming to their countries. I bet those refugees are fed up too. 

Amen!

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4 hours ago, promise to try said:

apparently there are starting a movement to make the british population living in spain to have also the spanish citizenship...if they do this, I hope the spanish people living in the UK also will have the british citizenship!

You need to speak Spanish and pass a very difficult test to get Spanish citizenship.  I doubt most of British people living in Spain can get it. They barely speak Spanish. 

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6 hours ago, Rachelle of London said:

Treat al immigrants the same. So much sympathy for migrants coming from Europe. Yet people from outside have been treated like shit for centuries yet there's no sympathy there. Some of those eastern countries need to accept new people coming to their countries. I bet those refugees are fed up too. 

That makes no sense.  The EU was founded on creating a common place for economy and society.  So EU citizenship matters. By law. 

Refugees are a different matter altogether.  They have to be accepted after there's a decision from the European Commission and that decision still hasn't been done.  The decision comes with a plan. Blame Brussels. 

Once the UK stops being a EU member they can do all they want,  but British people living abroad will get the same treatment.  That's why I'm appalled at the Tories.  You can expect those populist remarks from UKIP but Tories should know better. 

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1 hour ago, karbatal said:

That makes no sense.  The EU was founded on creating a common place for economy and society.  So EU citizenship matters. By law. 

Refugees are a different matter altogether.  They have to be accepted after there's a decision from the European Commission and that decision still hasn't been done.  The decision comes with a plan. Blame Brussels. 

Once the UK stops being a EU member they can do all they want,  but British people living abroad will get the same treatment.  That's why I'm appalled at the Tories.  You can expect those populist remarks from UKIP but Tories should know better. 

It does make sense. Governments like the ones you posted above being fed up that their people will have to get a visa to stay in the UK (the same as every other country in the world) really have no right being offended by that when they're not even welcoming their doors to others. Why is there so much concern about how Europeans are going to survive when there are immigrants from all over the world that follow the same process.

British citizens living in Europe should have to apply for visas to remain in those countries. Once we're out of Europe. 

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When it comes to refugees UK has been the least welcoming of all the western European countries. Poland, Romania, Hungary and any other country have every right to be offended, just like UK has been.

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1 hour ago, Rachelle of London said:

It does make sense. Governments like the ones you posted above being fed up that their people will have to get a visa to stay in the UK (the same as every other country in the world) really have no right being offended by that when they're not even welcoming their doors to others. Why is there so much concern about how Europeans are going to survive when there are immigrants from all over the world that follow the same process.

British citizens living in Europe should have to apply for visas to remain in those countries. Once we're out of Europe. 

But Chelle,  are you aware that the Calais camp is right now the most horrible part of Europe precisely because the UK don't let the refugees get into the islands?  What's that propaganda about the East countries? 

East countries defended themselves when West countries said that those refugees should stay in the first European country they step in,  which is absurd and unfair.  

I'm seriously doubting that some European citizens are getting the correct information in their media 

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About the visas,  you are right.  Once UK is out all will have to renew their residence papers.  In both directions.  

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Cattura_zpswj5zss3e.png

 

 

The last week has underlined the basic reality of British politics - Brexit will define Theresa May's premiership. Almost certainly the prime minister knew that, but this week the currency markets confirmed it. Brexit talk can put the pound under pressure. The strong hints that curtailing immigration is a greater political priority than preserving access to the EU's single market sent sterling to a 31-year-low against the dollar.

Theresa May's new-found evangelical fervour for Brexit and Global Britain cannot disguise the fundamental dilemma that the UK faces when it triggers Article 50 next March and the negotiations to leave the EU begin. The government wants to control EU migration while retaining as much access as possible to the single market. On almost a daily basis European leaders say that the two aims are incompatible.

The drumbeat is incessant. Only this week, German Chancellor Angela Merkel said again that "full access to the single market is linked and inseparably bound up with the acceptance of the four fundamental freedoms - also including the freedom of movement for people". Mrs May's stance was equally firm: "We are not leaving the EU only to give up control of immigration all over again."

Many interpreted this as the UK being willing to sacrifice access to the single market in order to deliver on reducing immigration. The prime minister, however, was quick to insist she still wanted to give "British companies maximum freedom to trade with and operate within the single market". There will be many twists and turns but it is possible to sketch out the most likely scenarios.
 

 

_91558639_hi035653066.jpg

 

 

The UK should be able to draw up a divorce agreement in order to leave the EU by 2019 but it is more than likely that the terms of the future trading relationship will not have been settled. So the UK will argue for a transitional period - say up to five years - in order to negotiate a free trade agreement. During that period the UK would still trade and operate within the single market and accept EU rules.

It would give some certainty to business although a timetable of five years may be optimistic. The Canadians took seven years to negotiate their free trade deal and it still hasn't been ratified. The politics of a transitional agreement would be difficult to sell. The European Parliament - and some European states, like France - might see it as too much of a concession. At the very least they would demand continued contributions to the EU budget or a one-off payment. The problem for Theresa May is that when she comes to election time in 2020, Brexit may not feel like Brexit.

If a transitional deal was to prove impossible, there is another scenario that carries far greater risks for the British economy. The UK leaves the EU without a trade deal and has to fall back on the trading rules of the World Trade Organization (WTO) with the prospect of tariffs and tariff barriers. The tariffs on cars are 10%. Negotiating terms with the WTO would not be straightforward. The financial services sector would face strong headwinds as it is not covered by WTO rules.

The big political question for the UK government is how big a fight it is prepared to put up to stay in the single market and the customs union. There is an argument, stated by some senior British officials, that the current hard line coming from Europe's capitals is for political show. Sooner or later European self-interest will intrude.
 

 

_91559467_hi035044292.jpg

 

Germany exports 800,000 cars each year to the UK and the country's car companies have huge investments in Britain. The head of the German automotive industries has said that "punishing Britain makes no sense". The EU sells far more to the UK than the other way round. Undoubtedly there will be pressure from European businesses to strike a sensible trade deal but that will not necessarily trump the politics. On Thursday, Angela Merkel insisted she would not be put under pressure from European industry associations.

British ministers also believe that their hand will be strengthened in negotiations by the resilience of the UK economy. The UK is witnessing growth in services and manufacturing, while the eurozone economy is slowing - another reason, it is said, for the EU political establishment to reach a compromise with Europe's second-largest economy.

One compromise being considered is striking deals to cover specific sectors if full access to the single market was not possible. Take the UK car industry, for example. It employs, when supply companies are included, nearly 800,000 people and it accounts for 4% of GDP. Could a special deal be done for cars? Without it, would some of the big manufacturers move to continental Europe?

Chancellor Philip Hammond has spoken of addressing the "specific needs" of the financial sector. Could a deal be done to extend what is called "passporting" - allowing financial companies and banks to sell their services across the EU? It would be a messy solution and what would the EU demand in exchange for such concessions? A large contribution to the EU budget at the very least. The UK would have to pay for access.

European politics is not set in stone but considerable sections of official Europe are not looking for an easy divorce. For political reasons, they need to demonstrate to their own Eurosceptic voters that the UK is hurting. The French President Francois Hollande is all for taking a tough line. "There must be a threat, there must be a risk, there must be a price," he said on Thursday. "Otherwise we will be in negotiations that will not end well." This is also a widely-held view in the European Parliament and that body will have to approve any deal done under Article 50 as well as any free trade deal.
 

 

_91558641_hi035342718.jpg

 

But in the midst of much hard-line comment there was also a hint of realism from Mrs Merkel. She defined the key question as: "How much access to the single market does Great Britain get and, in a reciprocal way, how much access to the British market do we get? And how ready are we to link this access politically so that the four freedoms are defended?"

Those questions offer the prospect of a meaningful negotiation. There was a further indication this week of just how sensitive the negotiations will be. The suggestion from the home secretary that companies may have to declare how many foreigners they employ was widely reported across the EU, with much of the commentary hostile. It led the chancellor to say that there would have to be "give and take", insisting that skilled people from the EU would still be able to work in the UK.

The government knows leaving the EU will not be smooth. It has already warned about "bumps" in the road. The biggest fear is of an early rebuff that when, next year, Britain sets out what it wants from the EU, the other 27 members dismiss it, so unnerving financial markets and opening up new uncertainties.

Within the government there is a fault-line between the pragmatists and the Brexit believers. The pragmatists are wary of what leaving the single market will do to investment, the wider economy and the City of London. The believers are focused on new trading opportunities away from the single market and the EU's customs union. Managing those tensions will take considerable political skill but turbulence is inescapable.
 

http://www.bbc.com/news/uk-politics-uk-leaves-the-eu-37586928

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I think some people in the Brexit camp need a reality check. It is absolutely unclear to me what they actually expect. Do they seriously believe nothing will change or they will get access to the single market without accepting the rules that apply to all members? I repeat what I have said many many times before, the best the UK can get is a deal similar to the Norway one. That basically means the UK pays as much money as before, all laws and regulations apply as before but the UK will no longer have a say in making those laws and regulations. Hopefully for the UK, the City of London has not left in big parts for mainland Europe or to Dubai or Singapore in the meantime. The idea that the UK government wants to have a 5 year transition phase is exactly what the British economy needs. Prolonged uncertainty. But I guess as long as the UK enjoys a growth thanks to higher exports and tourism simply because of a low pound, everything is fine and Brexiteers can still pretend how the Brexit has not caused any problems to the UK at all, still ignoring the hard fact that NOTHING has happened to far.

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