Brexit’s Irish Checkmate

We had stuck our necks out yesterday and said it was likely that that Theresa May would be unable to deliver a deal on the Irish border in Brussels yesterday. We also said she’d given a few days more to try to stitch up a deal but that effort would fail.

Our forecast is holding up well, since as readers who have been following Brexit no doubt know, the negotiations were halted in the afternoon thanks to the DUP publicly repudiating the tentative Ireland deal based on a leak of some key language, and May has run back to the UK to try to stitch things back up. , May has until Friday at the latest to get a deal back on track.

However, we were gobsmacked to see how humiliating the day’s developments were for May and even to some degree even for EU figures like Jean-Claude Juncker and Donald Tusk, who were clearly blindsided by the Tories’ coalition partner, the DUP, going into scorched earth mode against the UK’s Irish border solution. The blow up made it acutely visible that key parties to Brexit want things that are utterly incompatible.

The immediate sticking point is that the position of the Republic of Ireland and Northern Ireland on the border issue cannot be reconciled. As we stressed yesterday, the UK leaving the EU means there has to be a hard border somewhere.

The Republic opposes a hard border between the Republic and Northern Ireland (NI). Normally that might not be fatal since per Article 50, a Brexit deal requires the approval of a “qualified majority,” so Ireland could not veto a pact all by itself. But the EU has committed itself to defending the Republic’s interests, and it can’t back away from that pledge (or at least not quickly enough to resolve the current impasse).

NI, or more precisely, the DUP, the Tories’ coalition partner, had ruled out finesses to prevent the establishment of a hard border on land, such as having NI remaining in the single market, since they would increase the political integration of Ireland and also entail the creation of a hard border at sea.

It was hard to imagine any way to come up with a solution. Politico and the Daily Mail reported that the fudge that the EU negotiators and May had agreed upon and the Republic had accepted was, :

In return for giving the go-ahead for sufficient progress, May would agree to ensure Northern Ireland remained “aligned” with the Republic of Ireland over regulations affecting north-south border issues like farming, agriculture, energy and transport. Dublin, in turn, would drop its demand for Northern Ireland to effectively remain in the single market and customs union, something unacceptable to Brexiteers.

:

Mrs May is thought to be proposing an arrangement which would require the whole UK to retain ‘regulatory alignment’ with the EU on a narrow range of issues that affect the Irish border. These include energy, agriculture and transport.

Quite honestly, I don’t see how a “no hard border somewhere” arrangement can possibly work. Even applying an 80/20 or 95/5 prioritization of “aligning” rules for the thing that go across the Republic/NI border now does not solve the problem of Northern Ireland becoming a route for smuggling goods in that don’t comply with EU regulations. Let’s start with small size, high value good like pharmaceuticals. We already have a big problem in the US with what amount to bootleg pharmaceuticals getting into our distribution channels, such as medications past their sell-by date relabeled or repackaged to appear current, and dosages upmarked to sell at higher prices (eg, a 50 mg dose repackaged and sold as if it were 150 mg).

Richard North :

The UK imports goods from all over the world and, apart from EU goods, applies border controls of varying sophistication, as well as the “official controls” on animals and foods, and other products. But once we leave the EU, to us, EU countries have to be treated the same as all other countries with which we trade, under exactly the same terms.

This is a matter of WTO rules – the one’s that so many “ultras” are so keen to pursue. The WTO non-discrimination requirements mean that, if we apply no checks to EU goods at the Northern Irish border, then we cannot apply them anywhere else. It really is as simple as that.

Needless to say, it was obvious to anyone paying even a little bit of attention to who wanted what on Ireland that the DUP would balk at this scheme. As our PlutoniumKun wrote:

I’m a bit astonished that anyone would have thought the DUP would buy the deal, they’ve been absolutely consistent (one thing you can say about Ulster loyalists, is that they don’t change their minds easily). And . I don’t have a particularly high opinion of May’s acumen, but even she and her advisers couldn’t possibly think the DUP would give in without a fight.

:

….there are some crucial, unresolved inconsistencies in this narrative to the extent that it hardly seems to hang together. First, and most important, it relies on the idea that Mrs May went to Brussels with a proposal that she must have known that the DUP would not accept – and then had to be dragged out of her meeting with Juncker to be told this.

Now, over months that Mrs May has been prime minister, we have largely come to terms with her incompetence. But it is nonetheless difficult to believe that, with the well-known and frequently rehearsed position of the DUP, she could go to Brussels with a proposal she must have known would by rejected by this Northern Ireland party. This is carrying incompetence to a new level.

Secondly, while much has been said of the Whitehall/Dublin deal, as far as I am aware, the full official text has not been made public. All we have to go on is an “early negotiating text” leaked to RTÉ News and “sight of a key phrase in the joint text”….

Further, we do not know whether this deal, apparently agreed between the UK and the Irish Republic, was necessarily agreeable to Brussels… As it stands, there is no possible way that Brussels could accept a situation where there was a soft border between the Republic and Northern Ireland, with no controls over goods from the mainland UK. This would open a back door into the Single Market which would be completely unacceptable to the remaining EU Member States…

This, then, leaves us with two implausible options. On the one hand, Mrs May went to Brussels with a proposal she knew the DUP could not accept, or she went with a proposal that the EU could not accept…

There is little doubt, however, that Mrs May did go to Brussels expecting a deal. She had booked time in Parliament today, asking the Speaker to clear “several hours” for a “major statement” on the outcome of her talks. This has now been cancelled.

And the negotiations didn’t just fail, they blew up  spectacularly.

10.27am: Jean-Claude Juncker meets with his chief negotiator Michel Barnier and EU Parliament representative Guy Verhofstadt. He says they are working for a ‘fair deal’.

11.10am: David Davis says today’s talks are the culmination of seven months work by both sides and that Britain hopes to get agreement on ‘sufficient progress’ on divorce issues at the meeting.

11.16am: Irish broadcaster RTE reports on a leak of the draft agreement suggesting the UK will agree there will be no ‘regulatory divergence’ between the Republic and Northern Ireland.

12.09pm: European Commission confirms the plan for the May-Juncker lunch is to get ‘as close as possible’ to a deal.

12.40pm: May arrives at the talks and poses for pictures with Juncker ahead of lunch.

12.44pm: EU Council President Donald Tusk tweets ‘Tell me why I like Mondays’ and says he was encouraged about the prospects for a deal following talks with Irish premier Leo Varadkar.

12.45pm: DUP MP Sammy Wilson accuses the Irish government of leaking claims about regulatory divergence and claims the UK government will not sign up to them.

1.30pm: Nicola Sturgeon seizes on the leaks to demand Scotland gets access to the same terms as Northern Ireland.

2pm: Arlene Foster appears in front of cameras at Stormont to denounce any deal that ‘separates Northern Ireland economically or politically’ from the UK.

2.30pm: Varadkar postpones a statement in Dublin on Ireland’s position in the talks.

3.12pm: Reports emerge Foster and May have spoken by telephone during a break in the May-Juncker lunch.

3.57pm: Juncker appears alongside May to confirm there would be no deal today but that he remains confident.

3.59pm: May insists she is ‘confident we will conclude this positively’ but announces talks will reconvene later in the week.

4.15pm: DUP MP Sammy Wilson appears on TV again to brand the deal a ‘unionist nightmare’.

5.10pm: Tusk tweets a picture of himself and May, warning time is ‘tight’ but agreement is ‘still possible’.

5.20pm: Varadkar finally makes his appearance in Dublin, confirming Britain was ready to sign up to an agreement. He said Ireland was ready to sign and was ‘surprised and disappointed’ Britain could no longer sign up.

The other wee problem with whatever it was exactly that May was proposing regarding “alignment” would have been anathema to the hard Brexiteers and the press barons. To them, one of the most important reasons for the UK to extract itself from the EU is to free itself from evil Eurocrats. Having NI or even worse, the UK have to continue to harmonize regulations with the EU is unacceptable to them.

In other words, the sketchy Ireland arrangement bears a worrisome resemblance to all of those Eurozone “kick the can” deals in the 2010-2012 period, when there seemed to be a new mini-crisis every few months or so, and Eurozone leaders would do the bare minimum at the 11th hours to keep things from falling apart. If Richard North’s surmise is wrong, that the EU negotiators actually would accept verbiage that was viable from the Irish end, that would be because the negotiators were so keen to get to the next phases of trade talks that they’d give a flawed deal a waiver in the hopes something could be cobbled together in the context of the trade talks.

But as we stressed yesterday, Barnier was slapped down before in trying to move to the trade negotiation phase because France and Germany (and others) deemed that the preliminary issues had not been resolved. So the state of play in Brussels could also reflect the negotiating team trying to get its principals, the EU member states, to be more accommodating to the UK, at least on negotiating process.

It is over my pay grade to envision how things can move forward from here. It is hard to come back from such a public blow-up. May, who was already a dead woman walking, has been further damaged by this miscalculation. Yet the last thing the Tories want is new elections, since Labour could win a majority. May is meeting today with DUP leader Arlene Foster, but by all accounts, the DUP was apoplectic over what was leaked about the deal, and it seems doubtful that they’ll be talked out of the tree, particularly since May had reportedly spent a half-hour on the phone with her from Brussels trying to address her objections before the UK-EU talks had to be suspended.

The wags in the Financial Times’ comment section may have the best take:

Achilles 47
The Titanic of Brexit founders on the iceberg of Ireland!

Iron Knee
@Achilles 47: Built in Belfast by Protestant craftsmen.

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62 comments

  1. PlutoniumKun

    If you don’t mind I’ll just hoist from yesterdays thread my morning comment:
    As of this morning, the consensus in the media seems pretty clear – May and her team thought they had linguistically ‘finessed’ the border issue with Ireland, but underestimated the stubbornness of the DUP, and were outmanoeuvred in London as the DUP got the hard Brexiters on their side. She seemed to have genuinely thought that the DUP would never pull the plug as this would let Corbyn into power. The Irish Times gives what seems a well sourced timeline and overview. The Irish and EU were convinced they had an agreement, until May pulled the plug over lunch.

    Diplomacy is largely about subtlety. The way that officials had found to break the deadlock was to remove a pledge for “no regulatory divergence” in the text and replace it with a promise that “regulatory alignment” would be maintained.

    The Taoiseach said later in his press conference that the two things meant the same thing, although some of those involved in the process said that was not quite the case. “Alignment” sounds a bit weaker than “no divergence”, and that was certainly the British view. But crucially, for the Irish side, the British had made what they viewed as a “cast-iron” promise that there would be no hard Border; that meant a special deal for Northern Ireland.

    The details could be worked out in phase two. But a subtle distinction to one is a dangerous ambiguity to another. And the plain-spoken men and women of the DUP are suspicious of ambiguity, especially when they smell betrayal in the air. And subtlety, in any case, is not the DUP’s strongest game.

    For all the DUP scaremongering about Dublin’s designs on the North through the Trojan horse of Brexit (which presumably they know is poppycock), it’s hard to avoid the conclusion that what the DUP fears is what unionists have always most feared – not Dublin’s designs, but betrayal by London.

    and

    May went into her lunch with Juncker in Brussels ready to sign off on the morning’s deal – not just on Ireland, but also citizens’ rights and the financial settlement – to clear the way for the phase two talks to be rubber-stamped by EU leaders next week. Midway through lunch, May stepped out to take a call from the DUP leader Arlene Foster. By the time she returned, the deal was off.

    and

    When it eventually convened, at 5.15pm, the mood had swung wildly. Varadkar didn’t mince his words. The British had agreed, and then withdrawn. It was now up to them to come up new language, but the Irish would not be budging from the substance of their position.

    So it seems it was more cock-up than conspiracy. May simply didn’t have the political skill and strength to bring her people with her on an agreement.

    For the EU and Ireland though, the good news. For Junker, etc., I think this is very much job done.

    There are plenty of ‘there is still time to do a deal’ type quotes floating around, but it seems checkmate to me. The EU is not going to shift to satisfy the DUP (the Irish PM has already said as much). May is fatally weakened, and unless she can somehow do a deal with the hardliners (threaten a new ‘soft Brexit’ coalition with other parties in Parliament?) I find it hard to see how May can stay PM by Christmas now, she has been utterly humiliated by this. I almost feel sorry for her.

  2. PlutoniumKun

    Just to lighten it up, the

    The prime minister’s confusion had started early in the day when Davis had told reporters he felt sure a deal could be done today. As the Brexit secretary is almost always wrong about everything – he had even imagined the impact assessments existed in excruciating detail when they hadn’t actually been written – Theresa had been alerted to the fact that things weren’t going to be easy. But even she hadn’t banked on it being this hard.

    “Are you sure we can’t fudge the Northern Ireland border issue just a little bit?” she had asked Juncker on arrival in Brussels. Juncker had sniggered. Absolutely not. What bit of “regulatory alignment” did she not get? Theresa had another go. How about we say that pigs, cheese and a few cows are allowed to wander across the border without a passport?

    So you’re basically giving in and accepting that Northern Ireland must stay inside the single market and the customs union, Juncker had observed. Mmm, yes and no, Theresa whispered, checking over her shoulder to make sure no one was listening.

    And finally:

    All for none and none for all. Juncker sighed. He needed a drink badly. Another one. It was a three-bottle day. Every time he thought the UK couldn’t get any more incompetent, it somehow managed to surprise him.

    The first BTL comment on the article sums it all up nicely.

    Even by this government’s standards, today was a whole new level of clusterfuckery. That takes some doing.

  3. The Rev Kev

    Historically speaking, perhaps the division of Ireland back in 1921 wasn’t such a bright idea after all. What might have happened if the UK had told Northern Ireland to either go it alone or to combine with the rest of Ireland at the same time as they left. It might have made a lot of the present problems go away. Just saying.

    1. Joel

      umm…it would have made a lot of problems over the last 100 years go away (for Britain, at least, and thrown some of them in the Republic’s lap)…while they were at it, had they created a strong Palestinian state alongside Israel with borders that satisfied all concerned, that would have been nice, too.

      1. Clive

        British rule’s ending by coming up with something a bit better for India / Pakistan wouldn’t have hurt, either. Using a thinner pen to draw the India / China border maps would have also been helpful. Not, too, was hanging on to Rhodesia (Zimbabwe) the brightest idea we’ve ever had. And naming the country that originally too, I wonder if it might have sent the wrong messages?

        Not, all things considered, perhaps our finest century.

        1. RBHoughton

          Now we are in an age of mercantile authority, perhaps sovereignty will become just another asset to trade.

  4. LeuvenRich

    The circle cannot be squared. It’s a binary choice; UK to remain in the customs union or a hard border. Both are unacceptable to one side, the other or both. The rabid Brexit ‘No deal’ brigade will be screaming for a walkout, if I were May I would resign and let them deal with it.

    1. Yves Smith Post author

      Agreed. This is why we anticipated there would be no Irish border deal.

      Normally you solve this sort of problem by bribing one side, which would presumably be the DUP. But they are already on the take from Brexit ultras. And the way bribes like this get done is usually with legislative holdouts, by putting some pork into the bill. May isn’t in a position to give NI some big goodies for which the DUP could take credit even if she wanted to.

      1. Darn

        The DUP also suffer from the fact they actually campaigned for Brexit, so to try and stop it in the House of Commons would be a U-turn

      2. PlutoniunKun

        There is actually a way of neutralising the DUP if May had the real desire to do it. Their role in NI can easily be removed by completely dissolving the NI Assembly and refusing to pay DUP elected members (despite it being suspended, they are still on generous full pay and entitlements). Under the peace agreement London can either enact direct rule from London or (much worse from the DUP perspective) re-establish the and share rule with Dublin.

        In the House of Parliament, she is 8 short of a majority. The DUP have 10 MP’s, the Lib Dems (pro Europe) have 12, the SNP (pro Europe) have 35. She could do a deal with the LibDems, SNP or even Labour premised not on their active support, but on their withdrawal of MP’s to ‘match’ any vote by the DUP, on the basis that this would facilitate a softer Brexit deal. She could, for example, offer the SNP the same opt out for Scotland she negotiates for Northern Ireland, or just offer pork to the Lib Dems core constituencies (and some nice House of Lords seats for a couple of retiring MP’s). If Corbyn was politically wily I think he would straight out offer to do this ‘in the national interest’ just to see the Tories squirm.

        This won’t happen of course, partly because she has no inclination for any such deal, but also because it seems probable that anywhere from 50 to 100 Tories would rebel, because ultimately they don’t want a deal, and its convenient now to blame the DUP. So her core problem is the dysfunction of the Tory party, not the DUP.

        1. Mark P.

          One more little detail: the DUP MPs apparently have constituencies that also voted to Remain by a margin of something like — heh — 52 percent in favor of staying in the EU, according to polls after the Referendum. There are lots of farmers and small businessmen near the borders whose livelihoods are dependent on the single market and the current status quo

          I don’t know how that plays out, but there it is. Arlene Foster and the DUP are actually defying the will of the majority of their voters.
          .

          1. PlutoniumKun

            Yes, its pretty clear from voting patterns that a significant proportion of DUP voters didn’t want Brexit. Its quite likely that the DUP itself would not be Brexiters Their determination to hang with the Tory hard liners on this may well come back to bite them at the next election, especially in their rural and border constituencies, which are likely to be hardest hit economically.

        2. Andrew Dodds

          The parliamentary maths really only works for a Labour/Tory ‘grand coalition’ – in which theoretical case, significant numbers of headbangers on either side could be ignored in the national interest.

          Because if we are going to have Brexit, then a government of national unity to achieve it would seem sensible. However, the Tories clearly see anything that lets Corbyn et al near power as completely unthinkable. And, of course, after the example the Tories made of the Lib Dems, Labour would have to think twice about any agreement.. So. Not going to happen.

      3. AbateMagicThinking But Not Money

        The absurdity of the situation is a symptom of a political party that should have split into two at least two decades ago. Nearly all of my adult life the Tories have been split over Europe (I am no spring chicken).

        Pip pip

  5. Clive

    The UK government is as dumb as a bag of spanners. But the Republic’s government could have ended up being so sharp, it cut itself.

    It might have seemed like a natty strategic move to put the border issue resolution as a red line in the preliminary round of the negotiations.

    But I am afraid to say, the border issue resolution does depend, at least in part, on the final trade / border / customs resolution — if any. The Republic created a catch-22 for itself, the UK and the EU.

    Now, all is chaos.

    Theresa May might have simply misunderstood what the DUP would tolerate. It might all be just a bit of theatre to demonstrate to Barnier that, yes, these really are the UK’s political realities. Or May could just be totally, totally thick.

    But regardless, unless the DUP will be amenable to caving, the UK government can do not more. There are no rabbits to be pulled out the hat.

    There has to, however, be a border somewhere. The Republic could end up being told by the Council (they don’t have a veto there) that it’ll just have to accept a north-south border. If it doesn’t, the rest of the EU-26 can impose one on it.

    1. Darn

      Agree the border can’t be properly dealt with until the final trade situation is known. As the post says a fudge might be agreed to proceed to the next stage of talks. But — huh? Was it the Republic that put the border in the first phase, or was it the Commission?

      I do wonder about the southern brinkmanship, since as the post explains, if there is no deal then Article 50 will proceed and there will automatically be a hard border.

      Ostensibly the south (and the DUP) considers this unacceptable, and yet a sea border with GB is several times more damaging to the Republic’s trade. If this is supposed to build a coalition of nervous British voters who want to overturn Brexit and force the Commons into doing so, it’s a funny issue to do it over since it is out of sight and out of mind. There is liberal hysteria over the border in the press, but it’s from Remainers. What Remainers need is to recruit Leavers, by persuading them Brexit is an imminent threat to the economy of Britain, not the economy and politics of Ireland.

      1. Yves Smith Post author

        I need to turn in, otherwise I would check, but yes, you are correct, the Irish border was not originally a first phase matter, and I think it was Ireland that got in in the first phase. I don’t see a reason for the EU to have done that without Irish prodding.

        1. PlutoniumKun

          It was definitely made a first phase issue on the basis of Irish government intense lobbying. It was highlighted as a diplomatic victory for the former PM to have achieved this. It wasn’t just at EU level, the leaked diplomatic papers showed clearly that all Irish embassies were instructed to keep individual EU members ‘on board’ as a priority.

          The British could have diffused it as an issue at a very early stage if they’d handled it right, but instead they managed to antagonise pretty much everyone across the EU through their clumsiness.

          1. nick weech

            just a small point: “defused” for diffused though the meaning in context probably not altered much as it’s clear what’s meant. It’s an unholy mess granted and this weekend’s a crunch time for UK, NI, EU and Eire

        2. carolyn

          If it helps any, 29/04/2017 –

          Section III. Agreement on arrangements for an orderly withdrawal
          Para 11.

          The Union has consistently supported the goal of peace and reconciliation enshrined in the Good Friday Agreement in all its parts, and continuing to support and protect the achievements, benefits and commitments of the Peace Process will remain of paramount importance. In view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order. In this context, the Union should also recognise existing bilateral agreements and arrangements between the United Kingdom and Ireland which are compatible with EU law.

      2. Inert_Bert

        Hello Darn,

        I don’t think the Irish strategy in the talks can be rightly described as brinkmanship. As you say, without an article 50 deal there will be hard border in Ireland. But because the UK has opted for 3rd country status that would be the default outcome anyway if the border-issue cannot be quarantined.

        The point you make about building a coalition of nervous british voters is very relevant for the political fight within the UK. But I don’t think Ireland can reliably influence that side of the debate to such a degree that it would be worth throwing away the influence over the shape of the table they currently hold. This week’s agreement would’ve decided what options any UK government would have going foreward, not just a hypothetical new pro-singlemarket government.

        On the technical/legal side, the Irish have nothing to lose by playing hardball on sectioning off the border with the north from the rest of the trade talks:

        1. The UK-Ireland hard border is coming either way, deal or no deal (even ignoring the multi-year gap between art 50 agreement and a CETA-style FTA). I would argue that we actually do know enough about what that is going to look like to know it will not nearly satisfy the GFA or the economic realities of the Irish economy (agrifood especially). There is, AFAIK, very little overlap between the needs of the Irish border and the legal possibilities of the future UK-EU border so they can and should be treated as two different problems with different desired outcomes.

        2. The draft that RTÉ described yesterday would have apparently built in a backstop that could be used to yank the north back into the single market in case of a no-deal scenario (which, given the likelihood of a no-deal scenario would have been a HUGE win for Ireland).

        3. For Ireland, a bad deal (that allows a border on the island) is only marginally better than no deal, whereas even a good deal is going to cause a big hit caused by the rest of the UK leaving the single market and customs union, as you said. Piling on the pressure now is not just necessary to prevent a bad deal (for Ireland) but it also increases the chances of yet another election by forcing Theresa May to face her now rather than later. An Election is the only thing that could steer the UK as a whole away from its pursuit of 3rd country status. As you alluded to, this latter scenario is the ideal outcome for Ireland but it is also a precondition for your coalition of nervous British voters to be of any use in the first place.

        So I guess I don’t disagree that the stakes are high but I think the Irish are playing the hand they’ve been dealt about as wel as they can by both putting pressure on May and boxing in any UK government, rather than hoping to cultivate one that is less hopeless in time for it to matter.

        Finally, the Irish border is a matter of peace and international order. As such, it should not be mixed up with horse-trading between two economic blocs about TRQ’s or whatever. Can you imagine: “If you don’t allow us to export six more tonnes of wool tariff free we’ll pull the plug on the peace-process”.

        1. Darn

          Thank you for writing a thorough response.

          On building a coalition of the nervous, I should have made plain I was referring to the use of the border issue both by the RoI govt and by Remainers in the UK.

          1. I don’t understand what you’re saying here. The Irish border *will be* a future UK-EU border. The GFA does not need to be satisfied, because UK EU membership is not required by its terms. Brexit will have (and is having) an adverse impact on the politics of NI, but that’s not the GFA itself.

          2. If that’s true it’s little wonder the DUP couldn’t accept it. Again, NI’s sales to GB are several times bigger than to the Republic, so it would be a big net loss for Northern Ireland’s economy, on top of the Brexit-induced recession or whatever for the UK. Not peace-process friendly at all, and only a huge win for the Republic of Ireland!

          3. Varadkar himself doesn’t seem to think this about 3rd country status, as he’s repeatedly talked about his desire for an EU-UK customs deal, limited though that may be. Combine it with a long transition period to get ready. The coalition of the nervous don’t need to vote in an election to get Brexit stopped — the Commons can vote on it at any time, although the EU would have to accept that withdrawal of Article 50 notification can be legally valid. The coalition of the nervous is to be a latent threat: the MPs need to know the voters expect Brexit will really hurt the economy and that the voters are prepared to make MPs lose their seats over it. At the moment, MPs fear losing seats by going against the referendum result. We want to make it the other way round.

          Not sure what you mean in final paragraph, if one calls the border a matter of peace as well as an economic issue than how can one discuss them separately? And neither side can pull the plug on the peace process over this anyway, they have treaty obligations from both the British-Irish Agreement and from TEU (Article 50).

    2. Liam

      The problem is that, despite the vastly improved relations, London is untrustworthy. Amongst all else two things stood out to this observer:

      1. the rather patronising manner of senior British figures during visits and interviews with Irish media. You know the whole, don’t worry your little head routine. We’ll look after you.

      2. the need of Varadkar, Coveney, etc. to repeatedly point out that they believed May was acting in good faith.

      What is being missed is that, (and I believe Coveney has stressed this point), the issue was to ensure that should the second round fail, (which is distinctly possible, as it is a vastly more complex set of negotiations), the baseline default would be the status quo. If the second round proved a doddle and the Uk got all it asked for then there would be no issues anyway. But then no-one really believes that will be the case, do they?

      1. PlutoniumKun

        Exactly so. The Irish government had no choice but to do what they did. If the Irish border was not made a red line from the very beginning, then it would have gotten lost in phase II agreements and the government would have been in a very weak position if it tried to get specific border measures into any agreement. IMO the Irish governments priorities were to use its bargaining hand to:

        1. Force the British into backing away from a stupid hard/chaotic Brexit.
        2. If above did not succeed, protect immediate cross-border trade through ensuring a special arrangement for NI.
        3. If above did not succeed, do whatever is necessary to minimise cross-border disruption.

        I think it was entirely reasonable to take the action they took to protect the Irish national interest n the above. The problem now is that unless a rabbit is pulled out of an unlikely hat, then (3) is the fall back.

        1. Liam

          Ah they would have been railroaded, just as May attempted with the DUP. Anyone suggesting otherwise should look at, not only UK – Irish history, of which there are an obscene array of examples to draw upon, but the all round experience of what happens to smaller countries when big countries start moving. I’ve never been a fan of the blueshirts, but on this occassion they’ve got my support.

        2. Darn

          Is 2 in the southern Irish interest? Trade with GB is several times larger. For the same reason it is not in the Northern Irish interest to have a sea instead of a land border, which is why the DUP are trying to reject it.

          RoI has reason to get as much as it can over 2, but brinkmanship with a year left to go, could help ensure 1, which is in nobody’s interest.

          1. PlutoniumKun

            Yes its in the Irish interest. Its more than just direct trade flows. Its about the all Ireland electricity market. Its about cross border public transport agreements. Its about being able to get a prescription drug on one side of the border signed by a doctor on the other. Its about cross border animal health co-operation. Its about phytosanitary regulatory co-operation. Its about water catchment management arrangements on shared waterbodies. Its about cross-border natural gas networks. Its about cross-border waste management arrangements. Its about people living on one side of the border being able to work on the other. Its about farmers who sell milk to a co-op just across the border. Its about trade originating from abroad coming in to Ireland from Larne, or into NI via Dublin Port.

            Managing customs arrangements on half a dozen ports (which would already have some infrastructure in place) would be a vastly easier and less disruptive impact than trying to manage a whole new 400km long land border.

            1. Darn

              There is the economic harm from that cross-border disruption when set against the economic harm from inhibiting those trade flows…

              Since the ports handle a far larger volume of trade, and the UK isn’t going to have the new customs system begun pre-Brexit ready in the next few years, I rather doubt a hard sea border is easier than a hard land border.

              And it isn’t just RoI trade with GB that would be affected but with the rest of the EU as well. Up the volume of goods to check at ports and the business losses again. “Since Ireland would be de facto outside the customs union, all trade between Ireland and the EU26 would necessarily be subject to costly border and customs formalities, so as to rule out trade deflection. The basis for our prosperity, costless access to the Single Market, would be destroyed.”

              And again! “up to two-thirds of Irish exporters use Britain as a bridge to their continental European markets. For users of this route, Brexit will entail higher transport costs and significant time delays. Two new sets of customs frontiers will have to be crossed, as goods enter the U.K. and then re-enter the EU.”

    3. Christopher Dale Rogers

      Clive,

      “The UK Government is as dumb as a bag of spanners” 100% on board with this comment, but just one issue, a bag of spanners at least has some utilitarian use, whilst this Tory administration, propped up by NI Unionist nutters has no utility whatsoever. Can May et al square the circle? In a nutshell, no, which suggests, and if we are discussing the ‘national interest’ an Election needs to be called yet again, with the emphasis squarely placed on who administers the UK, Westminster or the Ulster Unionists – the Unionists have overplayed their hand & the Unionist Tories will pay a bitter electoral price for this issue.

  6. Alex Morfesis

    Tuesday night at the palace with the queen…churchill did what he thought needed to be done to insure that the dissolution of the empire would not happen on his watch…

    “whatever” needed to be done…

    Will the crown take extraordinary steps in a few hours to protect her legacy…

    It is difficult to absorb the notion the sovereign will allow this matter to continue down this road if it was not something she was consulted on or made aware of last tuesday night…

    Despite her limited powers beyond the Privy Council, she can’t possibly, at her advanced age, much worry or care about appearances and does have certain capacities in times of emergency…

    and after observing a few own goals by the tories…

    Grand coalition ?…

    A temporary (for this sovereign only) tweek to the parliamentary oath to allow a certain group which has refused to take its seat to perhaps also join in…??

    This is either a 17 level game of chess by that emmy winning act:

    Teri and the brexit doorknobs…

    or trojan level incompetence…

    Beware of dups bearing gifts…

    Very interesting times indeed…

    1. Darn

      Sinn Féin have said they will not take their seats “under any circumstances”. It isn’t about the oath. It’s because they don’t accept the UK has jurisdiction over NI at all. Politically it would also show people that problems can be solved within the UK instead of a united Ireland being the answer to everything.

  7. Patrick Donnelly

    What does The Remembrancer want? (Google it)

    Shifts in FX are easily predictable, if the script be known!

    There will be no Brexit. There will be fortunes made on FX and derivatives thereon. The Euro may become enlarged. Or the Crows will fly away from London.

    I knew I was correct to take this body at this time.

    All of this is nothing. Even the next war is nothing. Something is coming. It came once before….. no, not “Nibiru”, something much closer.

  8. Meher Baba Fan

    Thanks for fantastic contributions. As Clive says, theres nothing more the Torys can do. Nassim Nicholas Taleb , author of Black Swan, has a concept I really like called ‘skin in the game’ which means being personally affected by the consequences of ones actions. Taleb laments this condition is not a requirement for leadership or inflence.
    What strikes me as fascinating over the border issue is the Torys -some of them, at least – suddenly really responding, for once, because they now have skin in the game.

    1. PlutoniumKun

      I think a huge problem is that many Brexiters have ‘skin in the game’ to the extent that they might actually benefit financially from chaos.

  9. Terry Afer

    For what it’s worth, the WTO allows members to give unequal treatment to other WTO members, if the inequality results from a regional trade agreement. For example, the US gives favorable treatment to Canada and Mexico that does not extend to other WTO member countries. All countries have some form of RTA. So the WTO would probably allow the UK and EU to agree to a deal that, say, allowed trade within Ireland to proceed without barriers, and a hard border everywhere else.

    This probably cannot help with Brexit — the WTO is only a third-order stumbling block in this process.

    1. ahimsa

      So the WTO would probably allow the UK and EU to agree to a deal that, say, allowed trade within Ireland to proceed without barriers, and a hard border everywhere else.

      The problem is that the Republic of Ireland no longer exists an independent regional trading partner so long as she is part of the EU. Richard North gave the example of Argentinian growth hormone beef entering Northern Ireland. Once that beef crosses into the south it is then inside the borderless EU trading bloc – and therein lies the backdoor into the EU which the WTO and EU rules can’t permit.

      The Republic of Ireland’s dilemma is that she wants to retain all the benefits of EU Membership and all the benefits of regional co-operation with the UK & NI once they leave the EU. I really don’t think the two are compatible. A hard border will be needed somewhere and it will harm Irish trade either way.

  10. Jim A.

    I’m an outsider, but it seems to me that RI has a pretty terrible bargaining position. As I understand it, if there is no deal, there is a hard border between North and South. And NEEDING a deal, being unable to credibly walk away from negotiations is not a great place to be.

    1. vlade

      BOTH sides need a deal.

      If there’s a hard border, it will be seen as some people (who, likely are itching for any excuse in the first place) as repudiation of Good Friday agreement, and hence return back to the good old days of IRA and whatever the unionist militia was etc.

      The Troubles were always more of a drain on the UK I believe than Ireland. That said, the economic hit from a hard border would be harder on Ireland than the UK, but hardest on NI.

      1. liam

        Northern Ireland would wither.

        There is an assumption that all the actors are rational and merely have deeply entrenched and opposing aims and views. In the particular case of the DUP this line of thinking will get you nowhere.

        1. Their constituents, many of which are small farmers with real fears, voted by a narrow majority to remain, however, the DUP campaigned as the hardest of brexiteers.

        2. Northern Ireland as a whole is generally speaking a peripheral economy in the context of the UK. In the best of times they count on the UKs support, and even get considerable support from the Republic. Dr Pangloss has well and truly left the building and the Northern Irish economy is going to suffer more than anywhere else.

        3. The DUP never supported The Good Friday Agreement. In fact, despite the rhetoric of wanting no border, Ian Paisley Jnr for one, has stated on record that a hard border is the whole point of Brexit for the DUP. Being generous one could say that they’re divided on this and not just being duplicitous.

        Another assumption in all of this is that the various actors are approaching with the belief that a deal can be done. I’m not a negotiator, so maybe Yves, or another commentator with expertise can answer this, but: how does one negotiate when the expectation is failure?

        1. Mark P.

          Northern Ireland as a whole is generally speaking a peripheral economy in the context of the UK. In the best of times they count on the UKs support

          To say the least. Northern Ireland’s deficit is about 27 percent of its gross domestic product (GDP). That’s €9 to 10.8 billion annually, a loss that’s currently covered by the UK.

          In terms of how NI looks economically compared to the Republic of Ireland, NI’s per capita GDP is similar to the Border region of the ROI, which is about 38 per cent lower than the ROI’s national average.

          A back-of-the-envelope estimate of per capita GDP thus suggests that a united Ireland’s national average GDP would be about 11 percent lower than the ROI’s current GDP.

          That figure might be dealable with in theory. It turns out, this GDP gap for a United Ireland is similar to the gap that applied between East German per capita GDP and that of the reunified Germany. In practice, Ireland isn’t Germany, and doesn’t have the manufacturing prowess and trade sures that Deutschland does — and Brexit,remember, will bring at the very least whatever economic repercussions attend a hard border with the UK .

          The 10-12 percent drop in overall GDP that a united Ireland might entail could feel a lot like immiseration on the ground.

      2. PlutoniumKun

        I’ve not seen the figures, but I’d doubt its true that the Troubles were more of a drain on the UK. Proportionately, I suspect the direct costs of managing the border were far greater for the Republic. If I recall correctly, approximately 2,000 Irish police with a larger number of soldiers were permanently stationed in border areas (this sounds a lot, but the border is about 300 miles long, so they were spread pretty thin). This would have equated in real terms to at least 25% of manpower. Although it was also an important disciplinary method in the Irish police. I remember when ‘you’ll be stationed for the rest of your career in Monaghan, tramping bogs every day’ was used as a threat to any young policeman who wasn’t shaping up well.

        There were of course lots of indirect costs too – mostly impacts on economic development and tourism. Although of course the Troubles also meant that the British government had to turn a blind eye to a grossly oversized public sector in NI in order to keep job levels up.

        1. Colonel Smithers

          Thank you, PK.

          I remember dad talking about the cost on the Irish Republic in the 1980s. He served some tours with the Royal Air Force in the 1970s and 1980s and saw how a peaceful country like the Republic had its economy stunted by the Orange State.

          Lord Kilclooney, one of grandest titles in these islands and a peerage hitherto thought to be reserved for Boy George and Jamal of the Royal County of Berkshire, advocated Ireland’s exit from the EU on RT last night, a view shared by many North Irish and mainland backwoodsmen.

        2. vlade

          Yes, but the Troubles affected not only NI, but the rest of the UK as well.. (“Please do stay at the pub now, we have a report of an IRA bomb..”. Mind you, that might have improved the UK economy at the time ;) ).

          London Met police has just over 40k employees, of which >30k are sworn officers. Wikipedia tells me the total Irish police force (including non-sworn staff) has about 15k. These are of course current numbers, but I’d not expect the proportionality to be that much off then.

          Maintaining army in NI was not cheap either (>20k combat troops at the peak, which means likely another 10-20k non-combat support staff)

          Although thinking about it, while it might have cost the UK more in absolute numbers, you’re most likely correct it cost Ireland more in relative-to-GDP numbers (from which perspective, the UK should give away NI and toss some cash with it).

      3. Darn

        The active, dissident republican terrorists never supported the GFA and will not care if it’s repudiated. Brexit does not violate the GFA in any way. The dissidents are weak and no one likes them, it is difficult to see how exactly the border would change this. Would people resent border posts so much that they decide to join a terrorist group? Would they not have already joined due to resentment of police stations? The dissidents have killed a handful of policemen, soldiers and prison officers in 20 years. The loyalists have about the same number of kills (when civilian victims are included) as the dissident republicans over the same timespan, but are very disorganised and incapable and without any motivation to escalate things after Brexit.

        The economic hit to NI is mainly from the overall hit to the UK economy e.g. a big recession. In the long term, NI needs trade with GB much more than trade with the Republic, because trade with GB is already several times larger. Thus if we are concerned with the economic hit from a hard border (which we should be), we should be far more concerned with avoiding a sea border. In that respect, if the DUP says “no sea border or no deal” then they’re making sense. It was campaigning for Brexit that made no sense, and they should vote to withdraw Article 50 if they can get the other parties and the EU to accept this.

  11. EoH

    If the Brits would wise up before it’s too late, they would hold another referendum, but pay special attention to foreign bots. I suspect a majority would choose to stay in the EU rather than spend a trillion pounds and two decades sorting out how to become independent in a world in which the only way to survive is to be interdependent.

    1. Jack

      My understanding is that once Article 50 has been triggered, there is no way for the Brits to stay in the EU unless the EU27 has a unanimous vote allowing them to remain. I believe it has been mentioned before in NC by Yves and others that the EU might be amenable to cancelling Brexit, but would want some concessions. And that it is unlikely that Britain would agree to those conditions.

    2. Christopher Dale Rogers

      EoH,

      What foreign Bots are you referring too please, or, are you alluding to the famed ‘Red Bus,’ Russian FB posts, or as of late, the Legatum Institute, which have all allegedly contributed to Brexit in one way or another – of course, if people could get out of the London/Brussels bubble – and by this I’m referring to publications that draw their own conclusions drawn from the bubble inhabitants – we actually get a different picture, one many desire to ignore, but the fact remains many drivers were at work – far easier to blame Russians, Red Buses & far right neoliberal Think Tanks than the actualities on the ground in those regions devastated by globalisation, most of which voted for Brexit, with the exception of some large cities, Scotland, and funnily enough, Northern Ireland – I wonder why the Red Bus did not swing their votes if it were so effective!

  12. Carolyn

    DUP leader Arlene Foster has said it came as “a big shock” to the party when they saw the text of the deal the British government was set to agree with the European Union yesterday.

    In an interview with RTÉ News, Ms Foster said her party only saw the text of the deal late yesterday morning, despite asking to see if for five weeks.

    Ms Foster said that “once we saw the text, we knew it was not going to be acceptable” because the DUP could not sign up to anything that would allow a border to develop in the Irish Sea.

    She said that the DUP’s red line was a situation where Northern Ireland was different from the rest of the UK, and this had been made “quite clear” throughout negotiations with Mrs May.

    Ms Foster also said that she has told British Prime Minister Theresa May that they would not support Brexit legislation in the House of Commons unless the text presented yesterday was changed.

    [Source: ]

    Confirms what David Jones, MP said on BBC R4 Today programme this morning:
    “as I understand it…” […although there were discussions with the DUP…] “the precise wording [of the proposed agreement] was not made clear to them”. [Source: @ about 2:15:00 in]

  13. David

    Just a thought, in response to several comments above. If the security situation deteriorates, for any reason at all in NI the British are absolutely stuffed. In the 70s and 80s, there were 20,000 troops tied up on security duties there. Tank regiments were being taken from Germany, given a month’s training, sent as infantry to NI for three months and then sent back for a month’s refresher training before going back to their tanks. With leave, a unit would be unavailable for six months. That simply isn’t possible today with an Army half the size, and scattered in bits around the world. The expertise built up in those days has been lost as well. Even then, the Army was deployed “in support of” the police, and I don’t know how far the new PSNI, or the merged Royal Irish Regiment (partly ex-the UDR) would cope.

    1. PlutoniumKun

      Well, they could apply the successful peacekeeping formulae they used in Basra and Kandahar.

      Oh wait….

  14. Pinhead

    Why does anyone think that Mrs May’s government has a Brexit policy? Clearly her government has only one policy, which is to keep the Torries in power indefinitely. Just as clearly, Parliament will not accept any “deal” the EU will propose.

    So expect political fireworks in Britain during the months ahead. The Torries have lost the majority of voters but Labour has not necessarily picked them up. 2018 will be, politically, interesting and unpredictable.

  15. Tomonthebeach

    It might be that Ireland will save Britain from committing economic sebuku.

    To this Yank, the whole idea of Brexit is beyond self-destructive, especially considering that most people voted based on false or intentionally misleading information. You have Farage who has done as much damage you your government as Trump has to ours (Run tell Alex Jones that the Russians are behind the whole thing). We are working on reversing our problem – the UK should too.

  16. St Jacques

    There have been many years of peace that twenty years ago would have seemed miraculous. Loyalists should ask themselves if maintaining ancient religiously grounded hatreds towards a secular Ireland is now outmoded given that experience. A positive answer would present the solution to Ireland’s tragic division.

    Time to be brave and move on.

    1. Clive

      It is unfortunately a little more complicated than that. If instead of NI “reuniting” with the rest of the island of Ireland, you substituted that Britain should bury the hatchet and — respecting and acquiescing to centuries of shared history, culture, language and trade — “reunited” with our compatriots from whom we have for too long been unjustly estranged in the United States and take our rightful and logically place in that great union, well, a fair few people would take exception with you on that one.

      Simplistic solutions to complex and long-standing problems are rarely, if ever, actually solutions. They just exchange one set of issues for another, different, set of issues.

      And loyalists are not just loyalists on religious grounds (although that does have a lot to do with it); the “loyalty” is to the crown.

  17. Oregoncharles

    Yes, I’ve been saying that there would have to be border controls at the Republic ports, too.

    Just an off-the-wall idea: how about Sinn Fein breaks their policy of disengagement and agrees to a coalition, just for this purpose? It looks like a huge opportunity for them, from here, but I don’t know if they’d see it that way.

    Quite a climbdown, a coalition with the Tories (I wouldn’t want the Greens to do it), but politics and bedfellows.

  18. Meher Baba Fan

    CDR
    RE foreign bots

    also see Cambridge Analytica funded by Peter Thiel that took responsibility for influencing Brexit Referendum outcome

    1. makedoanmend

      Ah, Cambridge Analytica – sounds like a perfect combination reflecting the leafy-shaded canals and winding streets of a medieval university town which elevated thought to a prime directive then combined with the tech 21st century of ‘analytica’ techno-savvy morphic quality surpassing the bad old days of debate, integrative thought and compromise.

      Mary Shelly couldn’t, in her wildest imagine, have invented a more twisted and insincere creature than Cambridge Analytica. One felt sorry or had compassion for the monster of her imagintion, it being the creation of humanity’s desire to control its environment at all other costs. One cannot feel similar compassion for Cambridge Analytica. One can only hope this monster feasts upon its own warped carcass.

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