Wednesday, August 28, 2019

Is the EU likely to buy his bluff?

"In a dramatic move on Wednesday morning, Britain's new Prime Minister Boris Johnson set in motion the suspension of the UK Parliament -- which means MPs have much less time to debate Brexit, the process of the UK leaving the European Union." Normally the British Parliament would have taken an autumn recess for 3 weeks around 10 September, which means that they would have reconvened at the beginning of October. Johnson has postponed the reopening to 14 October, leaving less time to debate Brexit. Opposition leaders are furious. Labour leader Jeremy Corbyn described it as "a smash and grab on our democracy". Johnson thinks that by threatening the European Union (EU) with a 'No Deal' Brexit he can blackmail them to get rid of the Irish backstop. The only land border between the EU and the UK is the one between Northern Ireland, a part of Britain, and the Republic of Ireland a member of the Eurozone. As a member of the EU the UK had no customs or immigration check for goods and people traveling to and from the continent. The 'backstop' is a customs union for an indefinite period, till a formal trade deal is negotiated between the UK and the EU. In recent talks with Angela Merkel of Germany and Emmanuel Macron of France Johnson believes that they are ready to concede on the backstop. They did say that they will look at any new proposal the UK brings to the table, wrote K Adler, but Johnson has no new idea, only bluff and bluster. The opposition maybe enraged but they are also responsible for Johnson's gambit. The House of Commons voted overwhelmingly against a Brexit deal negotiated over 2 years by the former Prime Minister Theresa May. They then voted against 8 proposals presented by MPs to resolve differences. US President Donald Trump is a vocal supporter of Johnson and his hard line stance on Brexit. Trump has promised a great trade deal for the UK once it is out of the EU, but Johnson insists that the US has to compromise if it wants a deal with the UK. The UK has a population of 67.5 million and a nominal GDP of $2.9 trillion, while the US has a population of 327 million and a nominal GDP of $20.5 trillion. The EU has a population of 513 million and a nominal GDP of $18.8 trillion, and yet Johnson wants the EU to capitulate to his ultimatum, or else. The UK economy could shrink by 2%, according to the Office for Budget Responsibility (OBR), or by 8%, according to the Bank of England, in the event of a no deal Brexit, yet Johnson thinks that the EU is trembling in fear. We know that Boris Johnson does not use LSD or crystal meth so he is most likely suffering from delusions of grandeur. Which is worse.  

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