Further Article 50 talks delay to accelerate flight from City of London

Prof Honeydew

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On Thursday, Sky carried an article about the Article 50 talks missing its October deadline for proceeding to the post-Brexit relationship between the EU and Britain. A new date date of December was suggested and repeated in a longer piece in the Guardian, the only other mainstream outlet to cover the story in depth.

https://www.theguardian.com/politics/2017/aug/17/brexit-trade-talks-may-be-reduced-to-as-little-as-10-months

The piece, yet to be disavowed with any conviction, presumably was leaked by British Brexit Minister David Davis and was an attempt to disguise the fact that EU negotiator Michel Barnier dismissing Britain's responses to the pre-negotiation issues of citizens rights, the divorce bill and the Irish border as deluded rubbish. In true British fashion, rather than trying to find a way of dealing the situation, Davis and his truth-benders tried to heap the blame on the EU and floated the ridiculous notion that the Master Negotiator was waiting until after September's German election when the new government would give in to British demands.

The story and the volumes of gobbledygook gushing out of Westminster during the week about Britain's "negotiating" positions were a response not just to political pressures but also to the relentless trickle of business from the City of London. At the moment, announcements of activity moving elsewhere, while significant in that they're happening at all and that almost every big player is involved, are still small scale and are more of a case of taking precautionary measures rather than making a big break.

If the British government's objective was to calm nerves, they've failed miserably. Reaction everywhere was scathing, ranging from disbelief that Britain could be governed by such incompetent fools to anger at having to waste time entertaining such arrogant fantasy to Irish outrage that the nation, North, South and the diaspora in England, was being used as a hostage for Britain's inability to live up to its responsibilities. Within Britain itself, every response other than the demagogues of the Tory press was laced with despair that the clock was ticking relentlessly towards disaster.

The immediate crisis now is how the City reacts. Of all business sectors, the finance industry abhors uncertainty the most as its ability to operate profitably depends entirely on the regulatory environment in which it is based. The response up to now has been to prudently plan for all eventualities but on a small enough scale to avoid the impression of panic and was based on the assumption that, despite occasional hiccups, common sense would prevail. A modus vivendi would be found that would allow the City to operate with only minor changes needed to comply with new post-Brexit regulations and wholesale disruption would be avoided.

That dream was shattered last week. Not only does a reduced timescale for negotiations make it less likely for them to be concluded successfully but there is now serious doubt as to whether they will kick off in December if at all. Not only did May's government waste nine months before invoking Article 50 but the five months since have produced absolutely no movement whatsoever. Painful as the consequences may be, it must now be dawning on many financial institutions that there's no future operating in a country that seems incapable of running a pìss-up in a brewery.

The City may deliver a declining proportion of British exports but the haul from Corporation Tax funds a big chunk of the British Exchequer and its loss would far outweigh any savings from net payments to the EU. And that 12% share of foreign earnings is still a significant proportion in a country running a current account deficit for decades, a factor that will grow in importance once sterling and Britain's ability to borrow are no longer propped up by EU membership.

Major financial decisions tend not to be taken until the head honchos return from their yachts and their grouse shoots in September. For many of those with operations in the City of London, crunch time lies just around the corner and it's up to May and her ramshackle government to come up with some other ideas to soothe the nerves of an industry notorious for its herd reaction and prevent the trickle from turning into a stampede.
 


gleeful

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"Britain's failure to join the euro may have cost up to 40,000 manufacturing jobs this year, according to powerful new evidence facing the Government."

This is probably true. UK has a massive trade deficit ever since they stayed out. Meanwhile the German manufacturing industry is astoundingly successful.
 

Wascurito

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It's like a car crash in slow motion.
 

PO'Neill

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If the British government's objective was to calm nerves, they've failed miserably. Reaction everywhere was scathing, ranging from disbelief that Britain could be governed by such incompetent fools to anger at having to waste time entertaining such arrogant fantasy to Irish outrage that the nation, North, South and the diaspora in England, was being used as a hostage for Britain's inability to live up to its responsibilities. Within Britain itself, every response other than the demagogues of the Tory press was laced with despair that the clock was ticking relentlessly towards disaster.
The puppet party's of FG/FF/LP are only using Brexit as (a) fake nationalism pretending to care about the six and the border counties, Haughey style 'standing up for the country' posing (b) Brexit will be used where possible to further the austerity agenda with Brexit to blame for everything. Our wee puppet govt will do everything possible to appease the EU and where possible the Brits. To the detriment of Ireland of course, but that's what they have been doing since the day the state was founded.
 

Norman Bates

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This is the 'best' summing up of the present British position on Brexit I've come across ...

https://www.theguardian.com/commentisfree/2017/aug/19/brexit-eu-big-ben-theresa-may


The final paragraph of the article reads ...

Tick, tock. Tick, tock. Someone in government needs to get the message – but how? In olden times, around the turn of the millennium, people used to project things on to Big Ben. FHM magazine’s naked rear view of Gail Porter was the famous one, but perhaps some text might work better now. I’m fairly easy on the form of words – we’re not trying to avoid offending white supremacists, after all – but would suggest something along the lines of: “IN THE NAME OF ALL OUR FUTURES, CAN YOU PLEASE GET IT TOGETHER – NO ONE CARES ABOUT THE EFFING CLOCK.”


Here's a piece from The Irish Times today on the Irish leaving Brexit Britain:

https://www.irishtimes.com/life-and-style/abroad/i-m-packing-my-bags-today-the-irish-leaving-brexit-britain-1.3189563
 
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Prof Honeydew

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It's not just the jobs that are trickling away. The euro is now trading above £0.92 for the first time as sterling slides against all major currencies. Again, it's still a small but relentless slide as the funds, the institutions and the traders turn their back on London. The big worry is of a sudden gain in momentum when volume picks up in a few weeks time. September and October have always been the danger months in the financial markets - the two biggest crashes in history happened in the autumns of 1929 and 2008.

The Brits seriously need to get the finger out if they're to regain credibility. The shìte they're producing in their "position" papers is only making matters worse.
 

Volatire

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Weak sterling is a massive boon for UK economy.
 

mr_anderson

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"Britain's failure to join the euro may have cost up to 40,000 manufacturing jobs this year, according to powerful new evidence facing the Government."

This is probably true. UK has a massive trade deficit ever since they stayed out. Meanwhile the German manufacturing industry is astoundingly successful.

Yes, but do you realise how the German's have managed to pull this off ?
 

Dame_Enda

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There is a reasonable argument that it makes sense given the German election is in September and there will be much grandstanding before then, particularly by pro-EU parties wanting to deter Brexit-minded votes for the AFD with stern rhetoric.
 

Tribal

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Weak sterling is a massive boon for UK economy.
Pretty useless if your EU supply chain won't agree contracts past march 2019.
 

Prof Honeydew

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Element of panic now setting in as the lunacy of the British government's Brexit strategy dawns on some more reflective heads in the City.

https://www.theguardian.com/business/2017/sep/26/city-free-trade-agreement-financial-services-brexit-london-uk-eu

However, they don't seem to have quite shaken off official British thinking. The "bespoke" deal proposed wouldn't be subject to ECJ jurisdiction, would extend British access to the financial Single Market beyond any existing agreements with third countries and would, of course, be concluded in the interests of protecting Frankfurt's access to London's unique expertise.

London and Frankfurt will lose out to New York and Singapore unless a free trade deal on financial services after Brexit is agreed, according to leading City businesses. The report from key banks, law firms and fund managers in the UK proposes a “bespoke” free trade agreement once Britain leaves the EU. Such a deal would allow British and EU-based financial companies to sell their products and services without tariffs, taxes or quotas in each other’s markets after Brexit. A new joint “dispute resolution body” made up of judges and independent experts would rule on breaches of the agreement.
 

Prof Honeydew

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Stark Bank of England warning of time running out on a Brexit deal.
https://www.theguardian.com/politics/2017/oct/04/eu-transition-deal-is-needed-quickly-to-stop-city-firms-leaving-uk-says-bank-official
A top official at the Bank of England has warned the government it has less than 12 weeks to agree a transition deal with the EU to prevent City firms starting to move jobs and business out of the UK.
Sam Woods, a deputy governor at the Bank, said City firms would activate their Brexit contingency plans if there was no deal on a transition period by Christmas which would mitigate the impact of a hard Brexit in March 2019. Woods also repeated his warning of the strain being put on the Bank’s ability to police the financial sector as a result of the changes firms needed to make.
Preparing for doomsday sounds like they're about to give up on any sense coming from either of Britain's two main parties regarding Brexit.
 


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