European Single Market: Will Britain stay in?
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Paul Mason points out that Hammond this morning on R4 said financial srvices need membership of single market, so EEA option only way…
Operation reverse ferret begins:http://www.itv.com/news/update/2016-07-15/theresa-may-article-50-will-not-be-brought-forward/"Look at all those problems with Brexit" they say, as the grass grows longer…
According to today's South Wales Argus, Leanne Woods, the Leader of the Welsh Nationalist Party, has said that
Quote:Plaid would continue to campaign for the UK to remain part of the European Economic Area.I don't know but I imagine that's the position of the SNP and the LibDems too.
According to the BBC, the City of London has given up hope of deal allowing the UK to have continued full access to the single market (like Norway) because they see this as politically impossible and is going for the second best option in the circumstances : bespoke deals on particular financial services (like Switzerland):
Quote:There are, of course, plenty of business leaders in financial services who think the UK can now prosper even better outside the EU. But as an industry, the City lost the argument at the ballot box and it is now debating what deal the UK government can negotiate to ensure its future.The options come down to something the well-dressed City slicker knows all about. Does it go for an off-the-peg arrangement, or have something made bespoke?Off-the-peg would be best for many in financial services: they would prefer that if the UK is to leave the EU, it should at least stay in the single market, which would include that all-important passporting.However, it is looking increasingly likely that the off-the-peg solution is just not an option. That is because membership of the single market has always come at a high price, allowing the free movement of people from across the EU and paying money into the coffers of the EU.The City, which has been testing the waters, seems to have decided that is just not going to happen.As prime minister Theresa May said, "Brexit means Brexit". And with many voters deciding to vote Leave to keep "our money" and to reduce immigration, the price of membership of the single market would be unacceptably high.That leaves a "bespoke" solution, one based on the Swiss Model (pun intended), one where the UK negotiates a series of deals with the EU covering different industries.This is what Switzerland has done and it is a very prosperous country, but it does raise several areas of concern for the financial services industry in the UK.For a start, the City will want a better deal than the Swiss enjoy. The perfect illustration of that is the fact that one of the reasons the City is so successful is that it has attracted all those banks to London to do business in the EU, including all the major Swiss ones.That's because Switzerland's deal with EU does not provide its banks with that "passport" the UK enjoys, so they have to base a lot of their staff here. A great gain for our economy and a bit of blow for the Swiss economy.http://www.bbc.co.uk/news/business-37129715More on Switzerland's relationship to the EU here.
The less reported side-effect
Quote:German carmaker Opel has warned it will have to cut hours for its factory workers. The European subsidiary of General Motors said the move came in response to slowing sales after the UK's Brexit vote. Opel executives said Friday they would have to cut workers' shifts at its German factories in Rüsselsheim and Eisenach. About 5,000 employees producing the Insignia and Corsa models would be affected, the company added. "We cannot confirm the exact number of days that will be cut," the firm said in a statement. "That will depend heavily on the sales volume of both models in the UK.GM-owned Opel sells more cars in Britain under its Vauxhall brand than in any other European country. But slowing sales and a weaker pound are likely to hit the carmaker's financial results this year, potentially stalling its emerging recovery after years of hard times…GM estimated it could be $400 million (353 million euros) worse off because of the UK's vote to leave the European Union. "http://www.dw.com/en/shorter-shifts-for-opel-workers-on-brexit-vote/a-19488238
Quote:political leaders are wondering whether the Rock can do what they call a ‘reverse Greenland’. Though Greenland is ruled by Denmark, which is a member of the EU, the island’s political leaders achieved a deal in 1985 under which it left the EU without severing its political links to Denmark. In Gibraltar, the question is being raised as to whether the territory could remain in the EU when the UK leaves, while continuing to be a British Overseas Territory, its chief minister, Fabian Picardo told the BBC’s Today progamme.http://www.bbc.co.uk/news/uk-politics-37219143Well the "Unique deal" sounds liek the Canada option, which will involve leaving the single market and striking a deal: that will mean the City of London will lose passporting rights. That is, unless this is all a long bluff to try and get some control of migration within the EU (but one that will be called, if it is).
http://www.belfasttelegraph.co.uk/news/northern-ireland/david-davis-we-dont-want-hard-border-post-brexit-northern-ireland-still-open-for-business-35011702.htmlInteresting from the Brexit Minister:
Quote:This won't be about Government ministers telling you what is going to happen – it will be a two-way conversation – and we need to hear what people want our relationship with Europe to look like….We have promised the devolved administrations will have an important role in the forthcoming negotiations. We will be true to our word. Everyone has a voice as we strike out and take our new place in the world.So, they don'#t lknow what they want, or they're not saying.
The editorial in today's Times suggests that joining the European Economic Area (like Norway) could be an "interim" solution:
Quote:The decision on June 23 was to leave the European Union, and EEA membership is a perfectly sensible way out.Joining this as an interim measure would buy more time and, later at any time, the UK could withdraw from that too. But no doubt the Times and the majority section of the British ruling class hope that EEA membership would turn out to be permanent.
http://hansard.parliament.uk/commons/2016-09-05/debates/1609055000001/ExitingTheEuropeanUnionDavis seems to be envisaging the "Canada Option" a bilateral deal with the EU (rather than joining the EFTA arrangements):
Quote:The hon. Lady is right, and of course access to the single market is not really up for grabs; it is there for everybody and, frankly, there are many countries outside the EU that do a better job of exporting to the single market than we do, even without a trade arrangement. So of course we want to have access to the single market and we do not need to be a member of it to do that. Indeed being a member of it is what has caused some of the problems of sovereignty that drove this referendum.Quote:I am afraid that I start from a disagreement with my right hon. Friend; the simple truth is that, as I said earlier, the negotiation over free trade with the European Union will be to the benefit of both sides—it will be beneficial to us and to the European countries. The question of immigration and the control of immigration is a very high priority for this Government, as the Prime Minister has made plain on many occasions. I do not agree with the fundamental tenet of my right hon. Friend’s question; I do not think that that is a natural, necessary trade-off. The negotiation has to be very much about what is to the mutual benefit of this country and the European Union—full stop.Quote:It is early days to forecast the negotiation, but the right hon. Gentleman is right—there is a large trade surplus. The one that was cited time and again during the referendum campaign, which I do not want to revisit, was the surplus in cars from Germany alone, for example. With countries of the European Union facing economic difficulties, I do not think they will want to create problems for themselves by creating bilateral arrangements that hurt them, so the way I think it will play out is that over the period concerned—probably a couple of years or so—people will start to focus on what their own national interest is. My experience of the European Union is that the Commission makes a great deal of public statements, but at the end of the day the national interest of individual countries decides the outcome.Quote:I am saying that this Government are looking at every option, but the simple truth is that if a requirement of membership is giving up control of our borders, then I think that makes that very improbable. What we are looking for, in the words of the Prime Minister, is a “unique solution” that matches the fact that we are one of the largest trading countries in the world, and also a very large market for very large parts of very important industries in the European Union. I find it very difficult to believe that over the course of the next couple of years or so we will not be able to find an outcome that satisfies not just our own industries but those sponsored by Japan as well.But, the UK is not just negotiating with the EU:http://www.theguardian.com/politics/2016/sep/04/britain-japanese-brexit-letter-eu
Quote:The fear for Downing Street is that other non-EU countries – under internal pressure from their business communities – will now follow the Japanese example and publicly set out the parameters of an acceptable deal from the point of view of their UK-based companies. China, for instance, is not known for its diplomatic subtlety when commercial interests are at stake. Other countries in east Asia may also make their views known….The Japanese insist they are not telling a sovereign power how to negotiate, but just defending Japanese interests. Japanese firms, after all, employ about 140,000 workers in the UK, with Nomura bank, manufacturing corporation Hitachi and carmakers Honda, Nissan and Toyota all having large bases in the country.I notice that in rejecting the points system for immigrants, May spoke of "not free movement as it has been in the past". Which suggests that she is still in favour of "free movement" but wants it modified. I don't know what she has mind (she probably doesn't know herself at this stage) but it seems a good opening statement for negotiations on behalf of the British capitalist class with the rest of the EU, i.e we're in favour of the principle of "free movement" but would like to discuss its application. The europhobes are already up in arms about this but the majority section of the British capitalist class want to stay in the single market and will be prepared to accept some form of "free movement" if this is the price to pay.
I heard some suggestion that Davis was "freelancing" in the commons, ultimately, May retains control of the policy. The Canada deal with the EU does allow limited free movement of workers, especially professionals and posted-workers.
Quote:David Davis was expressing his opinion rather than government policy when he said it would be unlikely for Britain to stay in the single market after Brexit negotiations, the prime minister’s spokeswoman has said.Quote:But a senior Downing Street official sought to distance Theresa May from the statement. “He is setting out his view that [single market membership] is improbable,” the spokeswoman told journalists, adding that the work on the negotiations was ongoing. “The prime minister recognises that people have differing views and … all of this has to be negotiated with European partners. The prime minister’s view is that we should be ambitious and go after the best deal we can. The secretary of state said we want the best deal for trades and services: that is what the prime minister is doing.”They don't know what they're doing.
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