Brexit discussion thread IX (Please read OP before posting)

Zubeneschamali wrote: »

Boris is pretending to think he can "disaggregate' the WA - dump the backstop, 'reserve' the £39bn, but keep the implementation period, during which he'll negotiate a FTA.

Presumably the EU will allow this cherrypicking because they are afraid the UK will crash out.

https://twitter.com/BackBoris2019/status/1142505827452051463?s=19

Whats notable is that some EU leaders have speculated as to the potential consequences of the UK not paying the money it owes, preferring instead the general "breach your obligations under international law", some of the consequences could be:

1. Seizure of UK Gov assets within the EU e.g. their money on deposit with the ECJ, rebate due (not sure when exactly its to be repaid so unsure of this exactly), investments in common ventures e.g. Gallileo, PESCO etc, potentially stop the pensions and severance of UK MEPs (not sure they will do this though as the individuals could potentially sue in their own right) etc. So they "save" / "reserve" £39bn but the EU will "save" / "reserve" several billion of UK assets and non payment of liabilities to offset the loss. Granted, it wont be the full amount, but still.

2. Sue in the UK for breach of contract. UK will defend this on a jurisdictional basis e.g. that it is an EU agreement and all such obligations cease once art 50 period ends. I accept that they do have a stateable defence, but its not clear if it will succeed. EU Treaty law will cease, but the multi annual funding meetings are not strictly speaking covered by EU law as I understand them (but again its open to debate). If they win on jurisdiction, then surely the ECJ has the power to determine if they have breached their obligation or not. I wonder which way they will rule. The UK hasnt stated any substantive basis upon which they dont owe the money, so whichever court has jurisdiction will likely find against them.

3. Loss of reputation, sterling drops as markets percieve them as defaulters. Again, even if a clever argument about jurisdiction wins in court, China, Russia, Saudi etc will all be cautious about this supposed safe haven that doesnt repay money if it doesnt suit them politically.

4. They talk about GATT 24 and how the EU "can" agree to a temporary free trade area. If the UK reneges on its lawful debts, far from agreeing to a free trade area, the EU could seek to impose sanctions on the UK pursuant to the WTO dispute resolution system. I doubt they would do this for medicines or other essentials, but on everything else.

5. My theory is that part of the EU sees a chaotic hard brexit as an opportunity. Banking is the jewel in the UKs crown, making up something like 6% of GDP generally but indirectly making the city of London a financial powerhouse. Frankfurt, Dublin etc would like some of this. And despite what many city bankers would like you to believe about the UKs unique talent base of people etc, in reality, London grew as the safe haven in the EU but with strong commonwealth and US links. The EU member states cannot be seen to be directly competeing with the UK for this business at the moment, as that would be contrary to EU rules and ettiqute. But, if the UK leaves on a no deal, Id expect a lot of EU packages to encourage moveable financial firms to relocate inside the EU. When the Brexiteers talk about the German manufacturing lobby putting pressure on the EU, the same cannot be said for Uk based banks putting pressure on the london government. Theyll make their downside risk money on the no deal chaos, then simply relocate to Frankfurt with a nice EU relocation grant.

I wonder what Boris thinks about these consequences of withholding the money they owe, quite apart from any semse of shame or scruples being a gentleman debt defaulter