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November 27, 2017

Will Northern Ireland scupper a Brexit deal?

The rule of thumb in any difficult EU negotiations is that a major breakthrough is preceded by a phase in which it seems impossible to reach any, a phase of intense wobble. Will we be looking back at the debate over Northern Ireland as the last-minute wobble in an ultimate successful Article 50 agreement? Or was Northern Ireland an accident waiting to happen?

The EU and Ireland are playing hardball. We fear they are miscalculating, and may provoke a situation in which an Article 50 deal becomes impossible. The position taken by Ireland, that it would not accept a hard border between the North and the Republic, would mean one of two things: either the UK drops its entire Brexit strategy of leaving the customs and single market; or it grants special status to Northern Ireland, as a result of which the EU's external borders would run across the Irish Sea. It's not hard to figure out the position of a UK minority government supported by a Northern Irish unionist party. The only way out of this mess is the one outlined by Niall Fitzgerald - a special customs partnership between the UK and Ireland, with lots of mutual recognition agreements, and some joint presentation on regulatory bodies. But this is not something that can easily be done in the next ten days. Nor can it be done until the contours of the future association and trade agreements become clearer. If Ireland demands clarity on this issue in the next ten days, it simply won't happen. 

Britain's international trade secretary Liam Fox told Sky TV that the UK will not be offering a solution to the Northern Ireland issue in the next ten days, as requested by the EU, and will only do so once the negotiations with the EU have moved on to discussing the future relationship. 

The Irish columnist Fintan O'Toole has written an article for Guardian in which he notes that the possibility of an Irish general election will have no impact on this matter. No possible outcome would weaken the Irish government's insistence on the imperative of avoiding a hard border.

"As things stand, the December summit seems likely to say that enough progress has been made on two of the key preliminary questions, the divorce bill and the mutual recognition of the rights of expat citizens. But Ireland will be the spoke in the wheel."

O'Toole is most concerned about the verbal outbursts that would follow such a result, but the more serious problem is that such a decision would trigger Brexit preparation by British industry on a large scale. Companies have been holding off until there is clarity of the future relationship. But, if this summit were to fail, people would start making preparation for a hard Brexit - preparations that could turn into a self-fulfilling prophecy. We noted a comment by Philip Hammond that the value of a transition deal would rapidly decline as companies shift operations out of the UK. And, if the value of a transitional agreement declines rapidly, while the EU does not entertain the idea of any Canada-Plus option, the no-deal Brexit option will become a rational choice for the simple reason that the alternative is becoming highly unattractive. If Ireland vetoes the second stage of the Article 50 agreement, then Ireland will veto a no trade agreement. If that is the expectation, there is no advantage in pursuing an agreement. In that case, the UK may well end the Brexit negotiations early.

It is not that easy to see a diplomatic way out of this problem. We would also favour a change in the UK Brexit strategy of leaving the customs union and the single market. But we note that this strategy was supported by UK legislation, and accepted by the EU. Forcing the UK to drop this strategy seems futile. This is also where the strategy of the UK's Remainers has been mistaken. Rather than betting all on a Brexit reversal, they should have joined forces to press for the EEA option - the only one that provides membership of the single market. We still think that a strategic shift is possible. But if this issue is forced onto the UK from the outside, the response may well be the opposite of what is intended.

If the purpose of the Irish government is to avoid a hard border, this strategy may make it inevitable.

The issue has only recently surfaced in the discussion in the UK. We liked the tweet by Peter Geoghegan (@PeterKGeoghegan), who commented on a political discussion at the BBC, where everybody seemed to agree that the Irish are bluffing:

"Show was textbook British media on politics. 45 mins of analysing the political theatre of May, Corbyn, etc. 60 secs of saying 'the Irish are bluffing', no analysis, no Irish experts, just statements of fact"

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November 27, 2017

Last-ditch effort to prevent Irish elections

Irish elections are still in the cards, after a weekend of talks between Fine Gael and Fianna Fáil was not enough to iron out the differences over what to do with deputy PM Frances Fitzgerald who is at the centre of a controversy over her role in a whistle-blower case. Fianna Fáil tabled a no-confidence vote in the parliament last week, due to be discussed tomorrow. If this were to be voted through, elections loom. 

We are not there yet, though. Talks between party leaders Leo Varadkar and Micheál Martin will continue today. The Irish Times writes that there seems to be an understanding over the parameters of an agreement. There had been talks about allowing Fitzgerald to continue in government, but to be examined by a tribunal about the case early next year. But new revelations last night about further links between the police force and a senior official in Fitzgerald’s ministry at the time seem to have upset that fine balance. Central to the success of the negotiations is a document which sums up the trail of relevant evidence found in the Justice ministry. If no agreement can be made today, there will be huge pressure on Fitzgerald to resign in order to prevent snap elections, according to some senior figures in Fianna Fáil. 

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November 27, 2017

Pressure on Wauquiez

Last weekend, pro-Macron conservatives split away in two different directions: about 19 founded a new party called Agir  (to act) while three heavyweights joined Emmanuel Macron’s LREM party. They all oppose the ultra-conservative and eurosceptic direction pursued by Laurent Wauquiez, the front runner likely to take over at the party's helm in two weeks' time. 

The new Agir party is in many ways pro-Macron, in particular on business policies, but it wants to remain free from LREM. In their founding letter, published by Le Figaro, they defined their objective as "to defend liberal, social, European, humanist, and reformist, ideas of the right and the centre.”

Another three heavyweights - Gérald Darmanin, Sébastien Lecornu, and Thierry Solère - adhered to the rules for joining LREM, discretely and without ego. Given that LREM lacks heavyweights, everything seems possible for these three talented politicians, writes Cécile Cornudet. 

The three had been excluded from Les Républicains recently. The members of Agir don’t know yet whether they will be excluded from Les Républicains too, or whether they can keep their double party membership. If they were to be excluded, expect high drama in the run up to that, which could well knock Les Républicains off course. The exclusion of those active in Macron’s government was traumatic already. Add another 19 to that list, and members might ask themselves what party they still belong to. It could well weaken Wauquiez at the moment when he is suppose to shine. Just a week ago Wauquiez dismissed them as a cell of sobering Republicans, not strong enough to have in influence in the upcoming elections. His words seemed to have worked as a catalyst for the moderates in the party.

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  • What the (failed) agreement on the Northern Irish border tells us
  • December 04, 2017
  • Can Brexit still be stopped?
  • Could Poland open up the Posted Workers Directive again?
  • Has the Bank of England solved the productivity puzzle?
  • November 30, 2017
  • Please tell us there is another way than fudging the border
  • Could Gentiloni remain prime minister beyond the elections?
  • Stage set for Babis minority government
  • November 28, 2017
  • On the Northern Ireland question
  • Kammenos off the hook, for now