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December 20, 2018

Revenge of the stupid women

Yesterday was a good example of the adage that events intrude. When Theresa May provoked Jeremy Corbyn in the House of Commons, his lip movements left no doubt that he reacted by calling her a "stupid woman". There were no official recordings, which allowed him later to issue a somewhat implausible denial. This, not Brexit, was the big UK political news yesterday. We noted that both Theresa May and the leader of the House, Andrea Leadsom, have both been called a "stupid woman" - in the case of Leadsom, the offender was Mr Speaker himself. It was an irony to see Mr Speaker ruling yesterday in favour of Corbyn.

This stuff is not usually the kind of material we tend to focus on, but it is politically significant in the sense that it weakens Corbyn's position, and rallies at least some support behind May. As we noted yesterday, her strategy is to get the DUP on board, while stepping up no-deal preparations in a highly visible way to make the stakes clear. The BBC's political editor, Laura Kuenssberg, reported yesterday that the cabinet was briefed on the discussion between Olly Robbins and Michel Barnier on a form of words that could get the DUP on board. There is a lot of diplomatic activity going on in the background. Do not be fooled by reiterations that the EU is not opening up the deal. It is true that it is not formally opening up the withdrawal agreement, but it has several methods available to provide additional information. We also expect the DUP leadership to be briefed by May on the progress.

The brutal no-deal preparations are useful to raise the stakes in this debate. In addition to the emergency measures for a no-deal Brexit announced this week - stockpiling of medicines and troop deployment - the government will announce further measures before the vote in January. We noted a credible comment yesterday that the government was planning a mass consumer campaign by mid-January in preparation for them.

What is also useful to May is the publication of the European Commission's contingency measures. There are not as harsh as they could have been. For example, the EU will not immediately impose a  quota on UK road haulage after a no-deal Brexit, because the EU has no interest in creating logistical havoc. But the Commission notes that the contingency measures are temporary and will not replicate the benefits of membership. They will be adopted unilaterally, i.e. not negotiated with the UK. They will be revocable at any time, and also respect the competences of EU institutions and EU law. And we noted also the following pointy little bullet:

"They should not remedy delays that could have been avoided by preparedness, measures and timely action by the relevant stakeholders."

We agree with the assessment of Alex Barker in the FT that this package treads a fine line between avoiding the worst effects of a no-deal Brexit whilst stopping short of giving comfort to the Brexiteers. 

At this point it remains hard to predict whether May's dual strategy - of co-opting the DUP and scaring potential rebels - will work. As yesterday's lip-movement incident shows, accidents can and do happen. We cannot rule out that, in the event of parliament rejecting May's deal, a majority could assert itself to push through a Brexit reversal. Some government ministers like Amber Rudd keep open the possibility of a second referendum. But, in contrast to those commentators who attach large probabilities to this event, we keep pointing out this requires a colluding government. We have not yet seen a plausible political scenario to get us there, other than an election followed by a Labour victory and a simultaneous change of Labour leader. What we do know is that Brexit cannot be reversed as a result of a parliamentary motion alone. The reason why a no-deal Brexit remains more probable is that it is the default option. We note a subtle increase in the number of UK journalists writing about this most-misunderstood legal point about the Brexit process. See for example Stephen Bush in the New Statesman. There are still MPs and Lords out there who claim wrongly that Brexit cannot happen because of delays in the legislative timetable. As we approach the final decision, this illusion is likely to crumble.

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December 20, 2018

China's marching orders to the EU

The Chinese government has written a policy paper on its designs for the future relationship with the EU, updating two previous such attempts. What struck us in particular is the detailed knowledge of EU affairs - much more than what you would get from most EU member states themselves. Apart from an almost endless list of areas in which China seeks to develop closer ties - too numerous to mention here - there are a few bullets about what China wants the EU to do or in particular not to do. 

The EU should explicitly oppose Taiwan's independence, refrain from signing any agreements with it, or favour its membership of international organisation. Same for Tibet: don't give what China calls "leaders of the Dalai group" the right to visit the EU and cause mischief. And while China is always happy to engage in a constructive dialogue on human rights, the paper says: don't mess with China's internal affairs and judicial sovereignty in the name of human rights.

The paper also mentions the importance of the Silk and Road Initiative as a platform to co-opt the EU and its member states into a China-led Eurasian infrastructure initiative. The paper makes no explicit mention of initiatives like those of Germany making it harder for Chinese investors to buy strategic stakes in German companies, but we can presume that the China will act in full reciprocity.

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