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The Benefits of a Hard Brexit

by John Brian Shannon

“Name five benefits of a Hard Brexit” someone asked recently, which conveniently forms the basis of a useful discussion. So then, let’s have it:

  1. The UK instantly saves £39 billion pounds.
  2. The UK will no longer need to pay a (net) £9 billion per year to the EU.
  3. The Northern Ireland border will resolve itself. Which means, ‘It’s on them.’
  4. The UK will leave fiascos like the Salzburg meeting and Brussels debacles behind.
  5. The UK can sign as many free trade deals as it wants following the official Brexit date.

There are plenty more benefits but in case some feel that’s an overstatement, let’s post five more:

  1. Billions of dollars, pounds, yen and rupees would flow to the UK due to newly signed trade deals.
  2. Rifts in the UK Conservative Party would heal and the party could again function as one political entity.
  3. A major Conservative promise (Brexit) kept — leading to a majority government at the next General Election.
  4. Cheaper foods and goods for UK consumers (due to the huge economies of scale of North American agriculture and marketplace)
  5. The EU would rightly be put in its place for trying to steal Northern Ireland from the UK using bureaucratic stealth.

Want five more? Easy!

  1. UK universities full and expanding due to higher enrollment from new free trade partner countries.
  2. UK tourism operators experience record year-after-year numbers as new trading partners boost UK tourism.
  3. UK exporters export unprecedented amounts of goods around the world due to new trade opportunities post-Brexit.
  4. UK hospitals earn billions in foreign income as patients from new trade partner countries travel to the UK for treatment.
  5. UK increases engagement with Commonwealth of Nations countries and dedicates its entire foreign aid budget to Commonwealth countries only, which ‘keeps the money in the family’ so to speak.

The UK is Missing Out Because Theresa May Wants a Polite Brexit

But it appears that for all her efforts she is getting nowhere with the EU.

It’s a waste of time to try reasoning with people who don’t want a solution — and the EU doesn’t want a solution because it doesn’t want lose the UK (the EU’s cash-cow) which is the 2nd-largest contributor to the EU budget.

That’s it in a nutshell, folks! Nothing more, nothing less.

Therefore, the EU tries to bully the British people into giving up the idea of Brexit and it resorts to various plots to try to suspend Brexit like trying to rally weak-willed Britons to support a 2nd referendum (and the EU used that ploy successfully to browbeat the Irish into joining the union in a 2nd referendum attempt) and employs other games and media influencers to further their BRINO Brexit dreams.

And why wouldn’t they try that option? When you’re the spendthrift EU and you’re facing a (net) loss of £9 billion funding per year anything is worth a try.

Still, future relations must count for something. Let’s hope EU leaders eventually see the value of preserving a long-term relationship with the saviour of Europe (twice since 1914) and a major purchaser of EU goods in the present-day.

But if not, let us be on our way…

Let’s Talk Customs Union!

by John Brian Shannon

In the European Union, it’s all about the money.

For if it isn’t the EU holding-up the UK for £40 billion to leave the EU, it’s the European Union wanting billions for a Customs Union deal that will benefit continental Europe moreso than it will benefit the United Kingdom.

  • To be fair, there’s no word yet if there’s an up-front-payment component associated with the rumoured Customs Union deal.
  • Let’s not forget that the £40 billion number was arranged to pay an estimated £9.15 billion in British expat pension and other legitimate liabilities that the UK will rightly owe to the EU over the next 50-years.
  • Nobody in the UK disputes the £9.15 billion number (although everyone agrees it’s an approximate number as expat lifespans rise and other legitimate costs could increase in the future) but some wonder how £9.15 billion became £40 billion.

As much as UK citizens are tired of paying a (net) £8.6 billion annually to feed the EU’s budget, it looks like there will be a cost for a Customs Union deal with the EU. Still, few Britons would begrudge paying reasonable amounts (like Norway does) to be in a Customs Union (but not in a Political Union) with the EU.

Just make sure it costs less than £8.6 billion annually, Ms. Prime Minister…


For the record, let’s see how much the UK was projected to contribute to the EU budget

UK contribution to EU budget

This statistic presents the net contributions that the UK is predicted to make to the EU budget from 2016 to 2022. The peak of contributions is expected to be in 2019/20 at net 12.2 billion British pounds. Find more statistics at Statista.com

If you’re handy with a calculator, you’ll see that’s a net contribution of £71.6 billion over a span of 7-years and you’ll also note that the average net contribution will rise to £11.1 billion annually when averaged over the next 5-years. The £8.6 billion figure that we often hear came about from the average net contribution over the past 5-years.

Wow, that’s a lot of net contributing. Remember, the term “net” means you’re paying more in than you get back.


Time for the EU to Lower Their Spending or (better) Turn EU27 Nations into Net Contributors

Some blocs have ‘champagne taste and wildly varying contributions from member nations’ and the EU is surely that.

Once the UK leaves the union it will be primarily Germany propping-up the bloc as most of the EU27 are net ‘takers’ from the EU budget — and the few net ‘contributors’ are small countries that couldn’t float the EU budget no matter how hard they would try.

Sweden has a great economy for example, but with a population of 9-million people how could they afford to pay for the programme spending of 450 million EU citizens? To cover the EU budget you need two economic near-superpowers. Italy is still putting itself back together after the last recession and France’s economy is a break-even proposition — although the French live very good lives, and good for them. No wonder Germany enjoyed splitting the EU’s bills with the UK since 1993, but especially since 1998. Ultimately however, Germany got plenty of say in EU affairs while the UK was (basically) allowed to comment on EU affairs. But the UK knew that going in, so no complaining!

Let’s see how committed Germany remains to the EU project 5 or 10-years on when it is paying into the EU budget without Britain’s help. German taxpayers and German business might force the country’s politicians to pull out of the EU and amp-up the stature of the EuroZone into a full political and economic bloc. That might be a smart move for EuroZone countries, but it could result in disaster for some non-EuroZone nations.

In the meantime, let’s hope the EU manages to tame its spendthrift ways or that it finds ways to turn ‘taker’ member nations into ‘contributor’ member nations before the EU loses one of its best annual contributors.

That would also have the benefit of helping the keep the continent’s number one economy (Germany) flying high — which is uber-important because one of the things Germany’s robust economy is financing via their contributions to the EU budget is continued peace and prosperity in Europe. And judged by that standard over the past 70-years both Britain and Germany deserve a truckload of Nobel Peace Prizes. Jolly good, gute Freunde!

Until the Brexit implementation period ends in a little over 2-years, the UK must continue paying a net £11.5 billion annually (2019-2021) and it will still need to pay the expected £9.15 billion in expected future liabilities (which for some as yet unexplained reason was trotted-out as £40 billion) and is payable up-front, and it looks like it must also pay to gain or be in a Customs Union agreement with the EU.

As Theresa May has said many times, ‘Nothing is agreed until everything is agreed’ which may yet prove to be among the wisest words a British Prime Minister ever spoke.

Interesting times, indeed.

Brexit & Customs Union – The New Brexit Deal?

by John Brian Shannon

UK Prime Minister Theresa May continues to reach out to the EU in order to obtain a workable Brexit deal for both sides. As of today, she’s planning to offer a Brexit deal whereby the UK would stay in a Customs Union with the EU for a specified time in order to give negotiators the time they need to iron out their differences on the Northern Ireland question and other Brexit matters.

Some genuinely admire Ms. May’s efforts in this regard but wonder if she has spent too much time and effort ‘pitching’ to the EU without getting anything in return. It seems for all her good intentions all the EU side says is, ‘No’, ‘No’, and more ‘No’.

Indeed, that’s all they’ve been doing — the more Theresa May offers, the more the EU wants!

And unless the EU side suddenly gets more reasonable it’s going to end badly for both sides.


Is Brexit + a Time-Limited Customs Union Agreement Brexit In Name Only?

For hardline Brexiteers, such a capitulation (for that is how they will surely see it) would be considered a so-called BRINO (a Brexit In Name Only) and is worth much less to them than a so-called Hard Brexit where the UK would leave without the benefit of an agreement with the EU and the UK would be free to embark on any path it chooses.

The EU’s intransigence feeds this feeling among Brexiteers and it seems to be catching-on with moderates in recent weeks.

But there are positives to such a Customs Union plan.

It’s worth noting at this point that negotiators on both sides have been working to create a workable Brexit deal for 2-years and 4-months and have precious little to show for it. The combined total successes are zero and the European default to ‘Low Ambition’ is on full display. Yes, very European.

Yet, responsible leaders continue to throw themselves into finding a Brexit plan that works for both sides. For which they get nothing but abuse and insults on both sides of the English Channel. Shameful.

In the end, obtaining a Brexit deal that results in the least amount of disruption to both economies is the best outcome. And if that means the UK continues on in a Customs Union with the EU for 2-years to give negotiators the time to arrange a suitable Brexit deal — one that includes a proper Northern Ireland agreement — it’s worth the effort.

In the case of failure to reach an agreement for Northern Ireland and other Brexit issues, then a Hard Brexit would remain the only option.

But at least the UK will have put its best effort into obtaining a workable Brexit and any blame for that failure will fall squarely on the European Union as the facts will show Theresa May has been working diligently on the Brexit file through her entire Premiership and has been bending over backwards to find a suitable deal over the past 2-years, while the EU side has been cross with Ms. May for having the temerity to listen to UK voters.


If May Presents a Time-Limited Customs Union Plan, MP’s Should Support It

As they say here in North America, if you give the Europeans a week they’ll take a year and still be a few days late, just on principle.

The same holds true with negotiations: Look at the CETA deal that Canada and the EU negotiated. SEVEN YEARS! (And it’s still not fully implemented)

If the Canadian government had allowed it to go on and on it might have been 2025 by the time it was ready to sign. It seems someone on the Canadian side got a little bossy with the Europeans. Thank you Chrystia Freeland! (Canada’s excellent Foreign Minister) Eight years on, CETA is only partially implemented and none of the EU27 have ratified it. Historic Low Ambition!

Under no circumstances should a UK government ever enter into non-time-limited negotiations with any party, especially with the European Union.

You see what Theresa May is up against?

If there isn’t a strict time limit, the wheeling and dealing will go on forever. And with Theresa May’s well-intentioned but naive personality if it isn’t strictly time limited, by 2025 she will have negotiated away every bit of UK territory, wealth, and rights to the EU — which still won’t be enough for the EU side.

And if that is true, what is the benefit of dragging out negotiations over many years when putting them on a strict timetable will either timeforce an agreement on both parties or allow the UK to get on with creating a better future for Britons free of EU constraints.


Related Article:

  • May agrees to curbs on trade to break Brexit deadlock (The Times)