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July 29, 2019

No-deal Brexit is no longer just a scenario

We would be deep into the European summer lull were it not for Brexit. The big issue in the UK media is the Johnson administration’s full-throttle preparations for a no-deal Brexit. We never tire of writing that no-deal cannot be stopped on its own. It is the legal default. The Johnson administration has now made it the political default as well. 

The other big news development over the weekend was a Times story on the government’s legal advice, according to which elections won’t stop a no-deal Brexit. We are not surprised by this, as the contrary argument rested on the false assumption that a no-deal Brexit constitutes a decision when it is an already legislated default. The attorney general has thus neutered the one trump card MPs thought they had in stopping a no-deal Brexit. They assumed, wrongly, that the government would have to request a Brexit extension in case of an election. The EU would, of course, grant an extension if a request were made. But there is nothing in UK or EU law that would force Boris Johnson to make such a request. We should always remember that it was Theresa May who sought the Brexit extensions in March and April. She could have frustrated parliament if she had wanted to.

In the meantime, the UK treasury will spend an extra £1bn on no-deal preparations. As we hear this morning, the government is also planning a big no-deal advertising campaign - all this while parliament is in recess. The government has some five weeks of uninterrupted propaganda from the bully pulpit with no parliament in attendance. 

Johnson will set up three government committees. A war committee, as the media calls it, to prepare the exit strategy. It will include Johnson, Michael Gove, and Sajid Javid, the new chancellor. It meets twice a week. Then there will be a daily operations committee under Gove, and an economy and trade committee.

What should the EU make of this? Is this an empty scare tactic, bound to collapse when the reality of a no-deal Brexit approaches? There is a lot of commentary out there that misread the politics. We don’t think that Johnson is bluffing. Johnson and his team have concluded - as have we - that he must deliver Brexit before an election. It is as simple as that. 

We still do not rule out a deal with the EU. The prospect of a no-deal Brexit - likely coinciding with a recession - might concentrate minds on both sides. But the political obstacles are even harder now. It is technically possible to envisage a fudge on the Irish backstop, but Johnson is now insisting that the backstop is formally dropped. The EU cannot accept that. We noted an article by Katy Balls in the Spectator reporting on comments by Dominic Cummings, who told Downing Street staff that no matter what happens the government will force through Brexit on October 31.  

Wolfgang Munchau writes in his FT column that the EU too, should prepare for a no-deal Brexit. The EU is technically prepared - at the level of the European Commission - but not politically or economically. Munchau said he is not sure that EU solidarity with Ireland will hold up when it is apparent that a no-deal Brexit will bring job losses.

We think there is now only one undisputed way to stop a no-deal Brexit. Parliament holds a vote of no confidence in the government in September. If there is a majority against the government, parliament could unite around an alternative prime minister within 14 days as foreseen in the fixed-term parliaments act. That would mean that Labour, rebel Tories, LibDems and assorted nationalists and independents would agree to elect one person - a technical prime minister as the Italians would call it - with the sole mandate to ask for a short Brexit extension and pave the way for elections. We do not think there is such a majority in parliament - not by a long shot. And, as Jeremy Corbyn has made it clear over the weekend, he is getting his party ready to fight an election on the theme of poverty. 

Meanwhile, we noted more Guardian and Observer journalists descending into outright panic over the prospect that Johnson could succeed in uniting the Brexit vote, while the more diffuse Remain vote is split across three parties in England - Labour, LibDems, and Greens - plus nationalist parties in Scotland and Wales. The polls are beginning to register this trend too, with the Tories regaining the voters they lose to Nigel Farage.

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July 29, 2019

No German warships to the Strait of Hormuz

Frankfurter Allgemeine reports in its Sunday edition that the grand coalition is against Germany contribution to a naval protection force in the Strait of Hormuz. This was also our immediate gut reaction when we heard Heiko Maas talking about the need for a diplomatic solution to the Iranian seizure of a British oil tanker. This is shorthand for "no, thank you". The report quotes the foreign affairs spokesman of the SPD's group in the Bundestag as saying that German participation was not up for discussion. The CDU’s supremo in the Bundestag foreign affairs committee also confirmed that Germany would not send ships or planes to the region. France, Italy, Spain and Denmark have signalled support for an operation to protect commercial shipping in the Persian Gulf. Politically, we see a trend against German participation in international missions of any kind - which effectively forecloses any notion of deepening the EU-level of foreign and security policy.

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