Britain offers more money for an orderly Brexit but the Irish question resurges

Last Friday European Union Council President Donald Tusk (first from right) met the British Prime Minister Theresa May (first from left). Shoot location: Brussels – Belgium. Shoot date: 24/11/2017. Copyright: European Union.

If last Friday’s Reuters report from Brussels is correct and Theresa May and Donald Tusk agreed to solve the Brexit dead-end in ten days, then the wild Brexiteers must have retreated  and the orderly exit side has won the first round. Tusk, the President of the European Council said in a tweet that he told the British Prime Minister “We need to see progress from UK within 10 days on all issues, including on Ireland”. Allegedly, May agreed with this timetable and agenda.

Reportedly, May has the unanimous support of her government in it, including the concession of the aggressive Brexiteers like Boris Johnson. Reuters wrote, “An EU official said that May agreed in the one-hour discussions that Dec. 4 was the ‘absolute deadline’ “. It was not possible to confirm all that from other sources. In any case, May wouldn’t have agreed if she didn’t have the green light of her government, given her overall weak standing in Britain’s perturbed political scenery.

The prerequisites

May’s consent to follow European Union’s timetable and agenda is not the only indication for a breakthrough. There is also information leaked to the British Press saying the UK government is prepared to double UK’s divorce payment up to GBP 40 billion from 20 billion a few weeks ago. If all that stands, then the Brexit Gordian Knot may be resolved. In detail, Brussels’ agenda for the divorce talks presupposes agreement about three issues concerning the past, and only then the sides can negotiate the future trade and financial relations. The most important of the three issues is the cost London has to pay to get the divorce.

Britain, however, has been so far insisting the three prerequisites which regard the past and the future relations must be discussed and agreed in parallel, hoping to trade between past and future. However, Berlin and Paris have made it clear that London has to do this the EU way, on the grounds that the departing party is Britain. Still, the UK government, the country’s public opinion and the Britain’s political elites are deeply divided. Half of them support a hard or no-deal Brexit and the rest go for a conciliatory divorce. The leader of the hard Brexiteers in the government is Boris Johnson, the Foreign Secretary, while the other side is expressed by Philip Hammond, the Chancellor of the Exchequer .

The divorce cost

The UK government acknowledges there are divorce obligations which have to be honored, but so far May has been offering something around GBP 20bn to cover that. Brussels estimates those obligations at around € 60bn. It’s this abyssal difference that has brought the Brexit talks to a deadlock. In view of that, the British Press leaks saying 10 Downing Street is prepared to raise the divorce indemnity to GBP 40bn were quite positively received in Brussels. Commission sources considered it as a major step forward. They state, if the prerequisites are settled, that the discussion about the future trade and financial relations can start right away.

Let’s turn to the other two requisites, apart from the cost, that the EU wants to be resolved before trade is tackled. There is white smoke for the second question, concerning the 3.5 million mainland Europeans who live and work in Britain and the 1.5 million Brits who live in the continent. This issue is being negotiated thoroughly for a long time and it seems the rights of those millions of expatriates can in one way or another be guaranteed. The third problem is more complicated. It’s about the only land borders between the UK and the EU after the Brexit. It’s about the 499 km of the border line between the Republic of Ireland and Northern Ireland. Eire is an integral part of the EU, while the Northern part of the island is a constituent part of the UK, bound to leave the EU together with the rest of the Kingdom.

The Irish problem

Today, this border line exists only in maps and the Irish people cross it in and out as if it’s not there, since both sides still belong to the European Union. It’s as if one crosses from France to Belgium and then to Germany without reducing speed on a highway. After the UK leaves the EU though, there have to be border controls and customs checks. As things stand now, the Irish people on both sides of the line cannot stomach a new partition.

More so, because the freedom of crossing has constituted the base for the Good Friday or Belfast Agreement, which brought an end to the long and deadly civil conflict in Northern Ireland. This was a disastrous confrontation between the Anglophiles and the Nationalists. The political scenery in the entire island both in Eire and the North is now crumbling only in view of the likelihood real borders are being again enacted. Yet, even those problems can be resolved, employing solutions involving technology and well trained personnel.

Still, Britain and the Republic of Ireland are at odds over London’s inaction in this matter. This weekend things turned sour on the Irish border question. Liam Fox British international Trade Minister said there can be no arrangement on this Irish issue before the future trade relations between the EU and the UK are agreed. On the other side of the fence the Irish EU Commissioner Phil Hogan said “Dublin would ‘continue to play tough’ over its threat to veto talks about trade after Brexit unless Britain provided guarantees over the border between Northern Ireland and the Republic”. Eire would never accept a hard border along the 499 km line. According to Hogan “If the UK or Northern Ireland remained in the EU customs union, or better still the single market, there would be no border issue”.

Money matters

This leaves the divorce cost as one of the two major issues blocking the Brexit negotiations. The 27 EU leaders who have unanimously set the agenda of the talks and imposed it on Britain are to meet again on 14 December in Brussels, to discuss the Brexit circumstances. Apparently, this is the last chance Britain has to submit an exit offer the EU leaders can discuss. It has become clear than it’s a matter of money. If Britain doesn’t pay or pays inadequately, the other 27 have to foot the EU budget vacuum which the Brexit is to create. The UK in its 44 years as a member of the club has undertaken countless obligations, which have to be honored. Very possibly though, this includes also the…bankers’ money who made London what it is today. Let’s dig a bit deeper here.

To be reminded, the banks which operate in the London City financial hub and make unbelievably much money from the rest of the EU and the rest of the world, cannot accept a hard Brexit. It will surely block their pan-European and global business. It’s not a secret any more the London’s financial leviathans would have preferred Britain to have voted ‘remain’. So they vie for a Brexit which should not be ‘leave’ for them. However, they are far away from this eventuality and hard or no-deal Brexit still threatens the financiers. To their dismay, they found out 10 Downing Street doesn’t much care about all that. Even worse, the Brexiteer populists in the government emerged to be rather hostile to the bankers’ demands and worries. As a result, the London money magicians apparently have started working underground, favoring a soft or a quasi-no Brexit. Everybody knows what bankers do when working underground.

Bankers’ play

It seems then, the British extreme Brexiteers in the government and the Parliament, who for very many months have been supporting a really hard or even no-deal Brexit, could barely withstand the joint pressures from mainland Europe plus the machinations of the banks. Only last week, the leader of the global banker ‘community’ Lloyd Blankfein, the Goldman Sachs CEO ‘advised’ the Brits to vote again and why not this time choose ‘remain’. Still over this weekend Liam Fox, one of the Brexiteer champions tried to create a new deadlock for an orderly divorce. it seems the banks haven’t yet paid much attention to him.

In conclusion, it’s highly possible the UK government is now trying hard to start negotiations for a standard Brexit. By this they presumably aim to avoid a solitary sail in rough high seas and at same time serve the interests of the London City financiers. With the money problem more or less is solved the Irish question cannot stand in the way for the long awaited breakthrough.