Why it's time to accept the fact that Brexit may never actually happen

[Denzil_DC]

...

Leaving the EU is so difficult, and the consequences are so economically damaging, that it may be easier for prime minister Theresa May's government to endlessly delay the process rather than to actually leave.

Morgan Stanley economists Jacob Nell and Melanie Baker published a fascinating note to investors this morning in which they attempt to figure out how the UK will actually leave the EU, and what the UK's post-Brexit relationship with Europe will look like.

Nell and Baker do not make any specific predictions about how the UK will leave the EU, but they do point out two key facts:

* The EU will not give the UK a deal in which Britain gets access to the single market but opts out of the "freedom of movement" requirement that lets EU migrants into the country. In fact, the EU cannot give this deal to the UK because it would represent an existential threat to the EU itself: If one country gets access to the single market while controlling its own immigration borders, then every country in the EU will want to do the same.
* Leaving the EU will cause such massive damage to the UK economy that it might be political suicide for any government to actually leave despite the fact that a majority of people voted Leave in the EU Referendum.

Full article: http://www.independent.co.uk/news/uk/politics/why-its-time-to-accept-the-fact-that-brexit-may-never-actually-happen-a7148816.html

An article by Jim Edwards from Business Insider UK republished by The Independent, which omits some of the embedded links in the original.

The article about Nell and Baker he refers to is "Morgan Stanley just admitted that it doesn't really know what Brexit will do to the British economy": http://uk.businessinsider.com/morgan-stanley-on-uk-recession-and-economic-uncertainty-2016-7

Another article linked explores legal advice to the House of Lords that Article 50 can be untriggered before the process has run its course: "There's a loophole in Article 50 that lets Britain back into the EU whenever we want" (not the most accurate headline) http://uk.businessinsider.com/brexit-how-does-article-50-work-2016-7

[muriel_volestrangler]

1. There are contradictions here

The Independent write-up claims leaving "will cause such massive damage to the UK economy "; but Nell and Baker, who the writer says is the basis for that, say "we have high confidence in the direction of our forecast and the central role of investment, but not in the depth of the slowdown or profile of the recovery". So they said they don't know if it would be massive or not.

He asks:

"7. Do the Tories really want to go into the 2020 election defending a policy that hurts the economy and increases unemployment?"

Why not? They've done it before. Thatcher massively increased unemployment, and Tory voters loved her. This time, they have the excuse of "the will of the people". And they'll tell people that decreased immigration will mean more jobs, whether it's true or not. The bit about hurting the financial sector is more likely to change a Tory government's mind, admittedly.

[Denzil_DC]

4. But all the current indicators are that there's no prospect of maintaining

existing trade agreements and establishing new ones while insisting "that decreased immigration will mean more jobs". Even senior Tories admitted after the vote that Brexit wouldn't decrease immigration, but at best would lead to "a better class of immigrant" under some sort of points system.

So under that regime white-collar workers might feel the pinch, while blue-collar/lower-skilled/unskilled workers would be faced with taking up the slack of the lower-paid/more unpleasant vacancies that would no longer be filled by immigrants - jobs they largely haven't been inclined to take on up to now despite punitive sanctions etc. And the pool of available jobs may well contract because of the withdrawal of companies to locations abroad in the face of continued uncertainty and predictions of a severe economic downturn, if not outright crash and recession.

Whether it's true or not will matter more and more as time goes on. It's one thing to make rash campaign promises ... Impatience will have set in with a vengeance by 2020, whatever happens.

[BooScout]

2. Wishful thinking at best nt

[Denzil_DC]

3. I posted this because it goes against the current narrative, as food for thought.

And yes, I think the author may well have an axe to grind, judging by his other Business Insider UK articles.

But a week's a long time in politics, as we've just had confirmed, so six months/a year ...

In that spirit, here's an article with a slightly less eye-catching headline:

'Mission Impossible' - Tight Brexit timeline unsettles Germans

... behind the scenes, senior German officials who spoke to Reuters on condition of anonymity due to the sensitivity of the issue, say they fear a swift move by London to invoke Article 50 of the EU treaty risks creating an impossibly short window for negotiating Britain's departure. ... They spell out two possible scenarios.

Under the first, the EU would revise its position and agree to a prolonged period of negotiations before Article 50 is invoked. That would win both sides extra time before the clock starts ticking, but it would represent a climbdown and probably provoke outrage in some EU capitals, notably Paris.

The second option, in the event May triggers Article 50 early next year, would be for Britain to settle for a very basic framework for its future ties with the EU, based on an existing model similar to that of Norway or Switzerland.

...
A third senior official said it took the EU three years to seal its divorce from Greenland, a negotiation that was focused almost exclusively on fishing rights.

That third official estimated it might take at least six years to complete the process.

The article points out that in the near future other electoral events and related shenanigans are going to preoccupy Germany, France, the Netherlands, Spain and Italy, among others, which may lead to a change of leadership and possibly new perspectives on the Brexit process.

It cites British diplomats acknowledging that May's Brexit team currently has "a starry-eyed view of what concessions London can win from the EU", and there are wrangles within the EU about who will lead the European side of negotiations, which won't be resolved until September at the earliest, and whether a hard-line or more emollient approach will prevail.