So we are in a Theresa May induced coma at the moment. Parliament is away and the news isn’t all about Brexit…only of course it is. The idea of putting off the meaningful vote until January is that it would mean that MPs would lose their bottle when facing up to the problems associated with leaving the EU without a deal. However, as with most of Theresa May’s political calculations, I think that all that has really happened is that most MPs have now accepted the unacceptable, leaving without a deal, as what is actually going to happen and have started to think about how best to make this work to their own advantage. There will be some who will fight until the bitter end but my feeling is that the battle has been lost and now we must all move on and make the most of our new suboptimal world.
Of course the one country that is going to be screwed more than any other is the Republic of Ireland. Not only will they have lost their big beast in the European Union who was willing to come to their aid when needed but also they are looking very exposed to other EU countries who will be looking around for someone to blame. They could end up facing the worst of all world should the British government introduce taxation policies designed to attract big business from abroad to locate their international HQ’s in Britain. If this were to happen then there is a possibility that a major part of the Republic’s tax base could disappear which would cripple the economy and most likely bankrupt the government.
Of course the EU could help them but this also assumes that the EU’s central role will remain unchanged post Brexit. Up until now there has been a great amount solidarity amongst the other 27 EU countries when deal with the Brexit negotiations. However, should the EU’s policy fail i.e. Britain leaves without a deal then you can expect that solidarity start to breakdown especially if EU products start to be priced out of the UK market – the most likely one to feel the pinch would be wine imports – wine is produced in vast quantities outside of the EU and these producers would be only too happy to sell as much wine as they can to the UK – especially if the tariffs are reduced. (I wrote about this back in 2016 and the data gives you some idea of the problems the EU wine producers would face.)
The thing about wine is that it is very easy to place import duties on and we have been doing that for as long as there has been import duties. If this were to happen then one of the countries most affected would be Italy and the current government aren’t exactly best buddies with the EU at the moment. A reduction in wine exports to the UK as a result of a failed EU negotiation is going to flame the fires already smoldering in Italy. With Britain gone then Italy becomes the third largest country in the EU and suddenly has a lot more political clout than it did before. This would mean any EU strong arm tactics against the Italy are less likely to work. This could in turn cause the Italian economy to take a nosedive starting a Euro crash which requires the EU to call upon the financial muscle of Germany as well as the financial capacity of the city of London to help sort out. (No there isn’t anything like the capacity within the EU – perhaps one day there might be but it is doubtful – just look at how many jobs financial institutions have shipped out of the city to other EU countries. If you want a career in high finance you’re not going to get the opportunities in Frankfurt that you are in the city of London.)
In short if we think that things are suboptimal in April 2019 should Britain leave without a deal then things could go very badly wrong for the EU as well. If this is the case then what hope is there for the Republic of Ireland getting much in the way of meaningful support from the EU?
Of course this is all ifs and buts and maybes. Unfortunately we are reaching the point of no return and my feeling is we are all going to have to get used to the United Kingdom of Great Britain and Northern Ireland being outside of the European Union without any trade deal in place after the 29th of March 2019. Expect April to be an interesting month! Not sure what use all those new Irish passports are going to be?
Beam me up Scottie!