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Let’s Talk Customs Union!
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
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?
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)
UK to EU: The Ball is in Your Court
Theresa May naively assumed that if she could just come up with the ‘right’ Brexit deal the EU would sign it and life would be good for citizens on both sides of the English Channel forever, and ever, and ever… (queue the dreamy music now)
Which sounds wonderful, doesn’t it? Theresa May crisscrosses Europe for two years doing political hand stands for the EU elite, comes up with a Brexit plan that works well for both sides, the good people of the UK and the EU return to their normal happy lives and the only difference is a border between the UK and the EU.
Fluffy white kittens and playful sparrows as far as the eye can see! Can you hear Vivaldi’s The Four Seasons wafting across the lavender fields towards you?
(Not me. After the EU’s failure at Salzburg, I hear music to accompany Milton’s Paradise Lost. Even the most tone-deaf can tell the difference between those tunes)
But, such was not to be. ‘Theresa May the Naive’ didn’t realize the EU never intended to get a deal. Their ‘deal’ was to break the will of Theresa May and break the indomitable spirit of the British people who dared vote against their elitist, corporatist club.
And God love Theresa May for thinking it was all about ‘getting the right deal’ instead of realizing that it was all about having to forfeit Northern Ireland, £40 billion in taxpayer cash, and every subsequent British Prime Minister kneeling before the EU politburo as part of their penance until more suitable punishment can be arranged. How medieval…
Time to Give Up on Negotiations, Theresa?
Don’t tempt her…
After using up considerable political capital (in order to cater to EU leaders) on the path towards getting a Brexit deal that works for both sides, and getting practically nowhere, Theresa May must now find herself at the crossroads — wondering what to do next.
And the simple answer is; Nothing.
Do nothing, Theresa, because no matter what you offer it won’t be good enough!
Not only are the EU in denial that the UK is leaving, they want to punish the UK and its people for leaving the union and nothing you can do will save them from their grief.
At this point, the only play left in the big diplomatic book is to stop. doing. anything. and. wait.
Not through any fault of yours — you’ve served them your best plan and it wasn’t good enough. But no matter what you served it wouldn’t have satisfied them.
The way you must play it now is to withdraw yourself from the constant ‘coming up with plans’ modality to arrange a suitable Brexit for both sides — because they have no interest in that. Why waste your time and remaining political capital?
No more traipsing around Europe trying to work with EU leaders, no more coming up with policy alternatives, no more allowing yourself to be set-up for failure!
It may take years for their hurt feelings dissipate, but as the British Prime Minister you must do what’s necessary for the UK, and in the absence of a deal with the EU, you must begin planning for a Hard Brexit on January 1, 2019.
Why January 1, 2019? Because there’s almost zero chance at a reasonable Brexit deal with the EU between now and March 29, 2019.
And every month that passes, the UK will be losing billions of pounds sterling (not only paying £8.6 billion more per year into the EU than the UK gets back, but in lost trade that could be earning the UK billions) in the meantime.
It’s not inconceivable the UK would be losing anywhere from £1 billion to £10 billion per month in lost trade each month it waits for the EU to agree a deal before March 29, 2019.
And that isn’t what responsible UK Prime Ministers do. Is it?
Responsible Prime Ministers try their best to arrange a reasonable deal and when that doesn’t work — it’s time to get back to running the country and getting out of a bad deal that’s costing the UK billions of pounds per month. ASAP.
“You’re welcome to visit me in London to discuss Brexit, but otherwise I’m busy.”
EU, the ball is in your court.
Letter to Britain 