April 29, 2016
Before we go into our main story, just a reminder that there will be no news briefing on Monday, May 2, a UK bank holiday.
Our main story is about the first case we are aware of in which the Project Fear campaign is now being conducted from Brussels itself, which has so far been quiet in the Brexit discussions. Reuters has a story based on two anonymous sources that the EU would insist on completing a swift divorce with Britain after a Brexit vote. There is an aspect of this story which makes us doubtful as it says the two source were "with the bloc's latest thinking". Apart from the fact that we hate it if anyone calls the EU a "bloc" (an ignorant Americanism), we also doubt very much that any two people, however important they may be, know what the EU is thinking - as though this was an issue on which EU leaders are united. We assume, however, that the two sources are familiar with their own thinking. If Brexit prevails, the European Commission would hold a meeting on Sunday, June 26, one of the sources said (which tells us that this must a Commission source). The reason for the quick divorce is a "lack of appetite" for lengthy negotiations. The second source says that the goal is to conclude the deal within two years foreseen by the Treaty (though this can be prolonged if everyone agrees). That would make the UK a non-EU country on July 1, 2018. Any bilateral trade negotiations would start only then.
The unofficial Leave campaign immediately zoomed in on this story with accusations of scaremongering (on this point we agree with them. Threats such as these are extraordinary silly and counterproductive). The spokesman said it was reminiscent of the treats against the UK when they did not join the eurozone.
If you want to spend the weekend reading up on Brexit, we recommend this compilation of essays. We were interested in Andrew Duff's comment who noted that there were also imponderables attached to a victory of the Remain campaign, an issue we will also be focusing on in the next few weeks. He says even a Remain victory would constitute a soft version of Brexit. We would like to quote his argument in full because we think it is important:
"What is much less obvious is what will happen if Britain votes Yes. The EU institutions will have to try to apply immediately the terms of the Decision of 19 February...The implementation of the Decision will be very complex, controversial and protracted, requiring the complicity of the European Commission, the consent of the European Parliament and the permission of the Court of Justice in order to succeed. It also presupposes no backsliding from any of the other 27 governments in the Council.
The exercise in giving life to Britain's new 'special status' in the EU will compound the sense of deviation from mainstream, mainland integration. The UK already has opt-outs, for as long as it wants, from joining the euro, from integration within the Schengen border-free area, and from the developing corpus of EU law in justice and home affairs. It has a generous rebate from the EU budget. It claims special treatment under the Charter of Fundamental Rights. It has excluded itself from the banking union. It will not be a participant in the common effort to accept refugees from Syria, Iraq and Afghanistan. Depending on the outcome of the referendum, the Decision of 19 February will entrench in constitutional terms the UK's status as a deviant member state. Technically speaking, indeed, its formal exemption from political union will put the UK in breach of the Copenhagen criteria on which a candidate country's eligibility for EU membership are judged.
In fact, it is difficult to avoid the impression that a Yes vote, especially if close, will amount to little more than a soft form of Brexit."
We also have stories on a realignment of Italian politics; on Moody's scepticism of Atlante; on France and Germany now in disagreement over Greece; on violent clashes in France over labour reform; on Angolan shenanigans; on the Commission flexing its antitrust muscles on the CDS market; on EU regulation on financial benchmarks; on European money market funds doing rather well; on consumer protection vs credit enforcement; on Portugal's budget plans; on the German wage round; and on the case for a sovereign debt restructuring mechanism.