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Theresa the Brilliant, or Theresa the Appeaser?
It’s starting to heat up in Brexit-land after 17 months of jockeying for position, and this month more than any month since June 2016 might indicate whether UK Prime Minister Theresa May’s critics are right or wrong.
Will Theresa May travel confidently to the European Union this week to explain what she expects to receive in exchange for offering a £40 billion divorce payment? Or will she arrive and meekly accept whatever crumbs fall from the EU master’s table?
The result will determine what Prime Minister Theresa May will be called for the rest of her political life — she’ll either be known as ‘Theresa the Brilliant’ or ‘Theresa the Appeaser’ — or worse variations of those two titles.
Why Would the UK Choose to Offer £40 billion to the EU?
Certainly, the UK has pension and other legitimate obligations to the European Union that must be covered in the post-Brexit timeframe, no one is disputing that.
Also important to this discussion is that the UK has been and remains the second-largest contributor to the EU budget and is thereby part owner with the European Union of many shared buildings and properties — like the EU Parliament building in Brussels, for instance. (Total UK equity in the EC/EEC/EU institutions and real estate could be as high as £9.65 billion, although it’s difficult to find agreement on the amount)
So the question becomes; What’s the UK paying for, when it offers apropos of nothing, £40 billion?
Clearly, it isn’t to cover the legitimate obligations of the UK post-Brexit which amount to £6.15 billion, nor does it factor-in the UK’s share of the EU’s institutional equity — some £9.65 billion worth of land, buildings, and other holdings.
Indeed, Germany (#1) and the UK (#2) have paid the largest share of the EC/EEC/EU’s operating budget since 1972, and in recent years the UK’s annual net payment to the EU has hovered around £8 billion.
British Taxpayers: “If £40 Billion Isn’t Enough, Then It’s a WTO Brexit, Prime Minister”
Therefore it would seem that the £40 billion offer to the EU isn’t to pay future obligations, but that PM Theresa May has decided to pay in advance for (a) a bespoke free trade agreement with the European Union, (b) a bespoke Northern Ireland border agreement, and (c) to clear every single miscellaneous issue so that Brexit can proceed quickly.
And if that’s the Prime Minister’s thinking, it seems sound logic although it could be seen by some pundits as an expensive way to go.
Q: “Could I Have a Nice and Clean Brexit?”
A: “That Will be £40 Billion, Please.”
If Prime Minister May gets a nice clean Brexit, the UK can then sign free trade agreements with most of the countries and trading blocs in the world, in addition to maintaining a healthy trading relationship with the European Union which accounts for 15% of all global trade.
In addition to that, such a bespoke Brexit payment should guarantee perfect cooperation on a soft border between the Republic of Ireland and Northern Ireland.
It should guarantee that the European Court of Justice won’t comment or interfere on UK matters, and it will simply become one of many global courts that UK judges consult when making precedent-setting rulings.
And because in the whole history of the world there has never been such an unprecedented £40 billion divorce payment, Prime Minister Theresa May and every subsequent UK Prime Minister should be entitled to the utmost respect in EU capitals until the year 2100.
It Sounds Expensive, But It Isn’t
Once the UK signs free trade agreements with China, with all of the UK’s Commonwealth partner nations, with the United States, and perhaps ASEAN nations, MERCOSUR, Russia and its CIS partners, African Union member nations, and with other free trade associations like the Pacific Alliance, the UK will dramatically ramp-up exports to more than five billion people around the world.
If the Prime Minister and her negotiators can sign reasonable free trade agreements with much of the world immediately post-Brexit, it means that instead of paying the EU a net annual payment of £8 billion — increased exports and other positive economic activity (such as increased tourism) will boost the UK economy by £10 to £20 billion annually.
Making Theresa May’s present plan look brilliant, in retrospect.
A Slight Lag, Followed by Economic Boom
Although the first year won’t show instant results, and it depends on the quantity and quality of those free trade agreements and upon how quickly UK exporters can respond to the changed market, as time rolls forward, paying £40 billion to the EU in order to gain a bespoke Brexit and Free Trade Agreement might seem like an exceptionally wise decision by Theresa May.
At the very least and to get the ball rolling in the first few days after Brexit, the United Kingdom could coordinate military procurement with other Commonwealth of Nations countries so that navy destroyers, frigates, coastal patrol craft and army tanks required by Commonwealth countries could be sourced from the United Kingdom. The bonus of such a plan is that through bulk purchasing power and common design parameters, such military equipment costs could be reduced for all member nations.
That plan has ‘instant success’ written all over it because there is a real need among those countries for new and used UK military equipment.
Either Theresa May is one of the brightest politicians of our century (paying £40 billion to get free of the EU more quickly and completely, and by obtaining a bespoke UK/EU free trade agreement) or she’s heading off to Brussels this week to accept whatever crumbs the EU mandarins toss her way.
As the entire country waits this week for the news reports, let’s hope she’s the former.
UK Taxpayers: If £40 Billion Isn’t Enough, Then It’s a WTO Brexit, Prime Minister
“It’s starting to get a little rich.” That seems to be the general opinion of UK taxpayers judging by the thousands of terse comments posted in the comments section of UK newspapers, on UK talk shows, and in places like YouTube where hundreds of Brexit videos (both pro and con) await your viewing pleasure.
But the general consensus seems to be that these extremely large numbers will require huge tax increases and may reflect badly on the Conservative Party’s chances in the next election.
It’s Fun, Fun, Fun, ’till Daddy takes the T-Bird away as the Beach Boys tune goes.
It’s great to make nice with the EU people and pay them billions in exit fees, but after a certain large number is reached taxpayers are likely to revolt, signalling the end of the Conservative reign for the foreseeable future.
Why Should There be a Divorce Bill at All?
This still, even at this late date, hasn’t been explained. AT ALL.
Not even Theresa May’s government seems to have received guidance from the EU Parliament or their negotiators as to why the UK should pay the outrageous sums demanded by the EU.
What’s it for? Everyone wants to know. The silence on this is deafening.
Both sets of numbers, whether proposed by the EU or the UK seem completely arbitrary to put it mildly.
Let’s Leave on Good Terms
Having said that, when you exit a marriage or a long-term business agreement it’s expected you don’t leave the other party in the lurch. Of course some kind of payment for loss of opportunity by the jilted party is de rigueur if you want warm trade relations to continue.
It’s also good business to NOT ask for wholly outrageous amounts of money (too late for that, I guess) otherwise, they risk ‘poisoning the well’ and even if trade continues, over time evermore billions of UK trade will be done with the U.S. and billions less with the EU.
What is Fair?
No change in money flowing across the English Channel for four more years (but no lump sum payment to the EU either) and Brexit can occur as scheduled on March 29, 2019 — but until then, the UK should continue to receive the exact same benefits from the EU as it will remain a paid-up member until that date. (Hey, no shorting us!)
After that date, the UK can continue to pay the EU the same £8 billion (net) for three more years — a full three years beyond Brexit day.
Calendar
- Article 50 triggered March 29, 2017, therefore,
- March 29, 2017 to March 29, 2018 (£8 billion net)
- March 29, 2018 to March 29, 2019 (£8 billion net)
- Also, March 29th 2019 will be Brexit day, and after that date the UK will no longer be an EU member
- March 29, 2019 to March 29, 2020 (£8 billion net)
- March 29, 2020 to March 29, 2021 (£8 billion net)
- March 29, 2021 to March 29, 2022 (£8 billion net) and the final payment to the EU
Take it or leave it Mr. Barnier, or the EU won’t get to sell their goods to the UK after March 29, 2019 except under WTO rules.
Many UK citizens will miss buying BMW’s, Mercedes Benz, Volkswagens, etc. for a couple of weeks (hehehe) until the EU would come to its senses. I bet EU heads would roll if it ever came to that.
OK, Seems Reasonable Enough. But What Will the UK Get in Return?
Nobody seems to know…
Should the UK Have an Opinion on Catalonia?
As the UK remains a fully paid-up member of the 28-member European Union, it seems fair that the government should have a position on Catalonia’s recent move toward greater autonomy. Which in recent weeks, has grown beyond simple autonomy within the Spanish federal government architecture to seeking full independence, but the attempt has since been knocked down by the Spanish authorities.
Had the UK passed the Brexit threshold by now, it would be difficult indeed for the British government to have any public opinion at all as it then becomes a very different thing. It’s fair comment to opine on the internal politics of a fellow EU member state, but it is quite another for a non-member to criticize the goings-on in a foreign country.
For that reason, it’s well within Theresa May’s purview as the Prime Minister of a paid-up member of the European Union to comment on issues Catalonia.
Nigel Farage MEP certainly didn’t hold back from informing his viewers about his opinions on the Catalonian situation and it’s difficult to find flaws in his argument.
Certainly, it was a tragedy that 900 mainly peaceful protesters were injured and/or arrested by Spanish federal police, although many of those charges against protesters may be dropped in exchange for the much more serious charges against the police being dropped. Look for this to happen on a case-by-case basis. Many of the police are reputed to have used excessive force against the (probably annoying, but otherwise peaceful) protesters.
Until such times as Britain is no longer an EU member state, the UK and its citizens have every right to comment on the unfortunate Catalonian situation, but after Brexit I hope the government feels constrained about commenting on what will then be, a comment on the internal affairs of a sovereign bloc (the EU) a sovereign nation within the EU (Spain) and a state within that nation (Catalonia)
“What Goes Around, Comes Around”
This has been true since the universe began and were the British government to attempt to unduly affect the outcome (either way) in Catalonia, eventually it could work against the United Kingdom and conceivably against the Commonwealth, as there are rumours from time to time about disaffection among jurisdictions of either entity.
Therefore, it’s best for the UK government to comment in good form only and avoid trying to make political hay against the EU bloc simply because we may have other frustrations with them. (Hey, they’re frustrated too. It isn’t a one-way street. Let’s just get the Brexit done and not unduly antagonize the EU Parliament or its individual member states in the meantime, because that works better for the UK in the long run)
As a Member of the European Parliament and as a citizen of the United Kingdom, Nigel Farage has much more leeway to comment than the government, and his recent talk show brings up some fascinating points about Catalonia. Take a few minutes and watch Nigel take calls from all over the world about the attempted Catalonian secession.
Letter to Britain 