Brexit Uncertainty & Economic Shock

Both the parties in the ongoing Brexit saga, the United Kingdom and European Union have made a lot of progress on taking the process further ahead. In Sharm El-Sheikh, Prime Minister Theresa May announced that Britain and the European Union has made good progress in talks about Brexit and a deal is still within grasp so Britain can leave the bloc as planned on March 29. We still have it within our grasp to leave the European Union with a deal on the 29th of March, May said. We’ve had good progress, constructive discussions with the European Union. As the British Parliament opposed a no-deal Brexit so Prime Minister Theresa May now wants to go back to Brussels to renegotiate the original deal that she signed onto over the status of the border between Northern Ireland and the Republic of Ireland.

The truth is that EU diplomats and leaders are now thoroughly fed up with the staggering incompetence of the British government, the opposition and the Brexit and Remainer camps. They all know that Brexit has been a distraction at a time when Europe is trying to deal with its changing geopolitical position toward the United States and China. They want the whole Brexit saga to end. Britain has always had an ambiguous relationship with the EU since it joined in 1973. It is time to end this ambiguity. Continuing British membership in the EU prompted by another referendum or whatever messy compromise, would be poisonous.

The divides between Brexiteers and Remainers are so deep that any British EU delegation would be paralyzed. The United Kingdom’s hapless diplomats, whose foreign ministry back in London has been drained of talent because of inept leadership, would be constantly looking over their shoulders. They would fear making any statement about further reform of the European institutions. They would block any attempts to give Europe’s defense, security and foreign policy real teeth. Also, a continuing British presence in the EU could not claim an unqualified mandate from the British people. British policy toward the EU would be schizophrenic, even destructive. This is not what the EU needs, especially given the rise of populist movements one of many uncertainties currently facing Europe.

However, the Brexit economic shock dismissed by Leavers as ‘Project Fear’ is already underway. As per research and analysis, consumers are engaging in behaviour that was common during the brutal recession that followed the financial crisis of 2008. Nation’s grocery baskets has, for example, found that the long term and welcome trend of people choosing food for health reasons has plateaued, as it did then. Levels of snacking have increased. More people are taking lunch boxes into work, rather than buying from sandwich shops or the canteen, because it’s cheaper. The eating out boom of recent years has slowed dramatically.

According to the Department for Environment, Food & Rural Affairs, in 1988 domestic foods accounted for 66 per cent, or two-thirds, of all of what was consumed in Britain. Today, that figure has fallen to 50 per cent, or half. Much of the new consumption has arrived from the European Union, from where 62 per cent of all free foods are imported. In the absence of a deal, or a Brexit delay, in less than a month from now the smooth, uninterrupted flow of that food Britain enjoys through its membership of the single market will come to a juddering halt.

That’s a big problem because while UK consumers may say they like the idea of buying locally, their buying habits speak otherwise. For example, just 41 per cent of the strawberries bought in Britain are consumed during their June, July and August season. The remainder is imported out of season, some from Europe or North Africa, some from further afield.

Retailers have done their best to respond. Range reviews have been conducted. We don’t tend to notice, but they regularly change through the year. They are changing now in ways they don’t usually change. Imported ranges have, for example, been simplified. Tesco has stated that it didn’t return fridges it rented during Christmas. It and Lidl have said that they’ll be hiring extra customs officials to get their produce fast tracked. Investments have been made in software and logistics planning.

Money has also been spent on beefing up security too. One of the more specious arguments against a second referendum is it would cause social unrest. A no deal would all but guarantee it. It would brutally expose the lies told by Britain’s politicians. It would be remiss of me not to note that there will be some positives, and they may persist if Britain avoids the looming cliff edge. They include supermarkets becoming less likely to reject wonky or odd shaped veg (although that was already in train) and their efforts persuade shoppers to eat seasonally. Packaging may reduce, and the top to bottom reviews some retailers have conducted of their businesses will serve them well whatever.

The British Prime Minister Theresa May held different bilateral meetings with her European counterparts and EU leaders to discuss Brexit. May’s meetings came on the side-lines of the EU-Arab League summit in Sharm El-Sheikh. PM May met with the German Chancellor Angela Merkel as the two leaders attended the EU-Arab League summit in Egypt. They did discuss Brexit, they discussed the UK parliament, things that have been happening at the British Parliament, and things that are happening this week, the UK government official said in a statement. She also informed her German counterpart that she still believes an agreement can be sorted out by the scheduled exit date of March 29.

During the meeting, May has insisted to the EU leader that she is against extending article 50 to allow more time for talks on a withdrawal Brexit deal. Article 50 would keep the UK in the EU beyond the planned withdrawal date. The British Minister discussed Brexit-related issues also with the Dutch Prime Minister, Mark Rutte, and the European Commission President, Jean-Claude Juncker. Commenting on his meeting with May, Juncker said that he had a good, constructive meeting with May on Brexit on the side-lines of an EU-Arab summit.

On 29 March, Britain is supposed to leave the EU, following a new meaningful vote on Wednesday this week, but May said that the vote could be delayed until 12 March, according to the statements. May also met with the European Council President Donald Tusk, who emphasised the need for clarity that any proposed solution would command a majority in the Commons before he was prepared to put it to the remaining EU’s 27 leaders, according to British media. Negotiations between the UK and EU over the agreement lasted for about 20 months, following the referendum on Brexit in 2016 when the majority of voters voted for the UK’s withdrawal from the EU.

At the same time there is an uncertainty inside NATO as more member states are slowly coming around to the idea that the US commitment to NATO is waning. They know the Europeans will have to spend more on their own defense, to take the security of their continent seriously and to reassure the United States that they are not piggy-backing on their big ally. Yet it was Britain that blocked the EU from establishing a common military headquarters when Barack Obama was proclaiming his pivot to Asia. It was Britain, egged on by the anti-EU British tabloids, accused the European Commission (the EU’s executive branch) of wanting a more integrated defense policy, even a European army something that is highly unlikely to come about within the foreseeable future.
The EU as a collective has no common strategic outlook and hates the idea of hard power, while most individual member states oppose ceding sovereignty to Brussels over defense. British objections to a common European defense and security policy exacerbated and exploited these differences. A Europe without Britain, however, would find it much easier to set up coalitions of the willing on specific issues while bypassing the EU, something that France wants because EU defense is going nowhere.

This suits Britain. It could join such coalitions. As for Germany, it has used Britain’s opposition to more defense integration as an alibi for inaction. Brexit could therefore help the E.U. to clarify what it wants to become. The Irish rightly dread a no-deal Brexit. It could lead to the introduction of border controls between Northern Ireland and the Republic of Ireland. Such controls disappeared thanks to the Good Friday Agreement that ended decades of sectarian violence in the province. The astonishing ignorance shown by Brexit supporters about the impact of a no-deal Brexit on the sustainability of the peace accord exposes the arrogance and shortsightedness of the governing elites, whether they belong to the ruling Tories or the opposition Labour Party.

There’s going to more than resentment in Ireland if Britain leaves. A peace process is at stake. It’s time for the Commission and the member states to bring Brexit to its logical conclusion. Get an exemption for Northern Ireland. There is a precedent of sorts. The Russian exclave of Kaliningrad, which is sandwiched between EU members Poland and Lithuania, obtained a special exemption from the Commission in 2012. It allowed Kaliningraders to enter Poland visa-free as long as they remain within 30 kilometers (19 miles) of the border. It was a hugely successful decision.

That deal is now dead. The Polish government failed to appreciate the benefits of the exemption and canceled it to great dissatisfaction on both sides of the border, since so many had benefited from it. Yet that innovation offers a possible model for a future post-Brexit Irish-Northern Ireland border. The bottom line is that the EU, freed from British ambivalence, would force European leaders to decide their own destiny. No more excuses.

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