Wednesday , January 16 2019
Home / Mish's Global Economic / Time Running Out for Brexit Deal and That’s a Good Thing

Time Running Out for Brexit Deal and That’s a Good Thing

Summary:
The truth is there are simply no newsworthy Brexit developments. The reason is that, as of now, there is still no majority for a deal. So let us focus instead on smaller pieces of the puzzle that might become relevant later. One of those was a small item in the Financial Times from the Hauts-de-France region in Northern France, whose president is demanding a constructive attitude by the EU in the case of a no-deal Brexit. Expect to hear more of this as we approach the Brexit deadline. If the EU plays it tough to the bitter end, not only Hauts-de-France will be clobbered along with the UK. The EU could in theory turn a no-deal exit into a de-facto blockade of the UK. But a far more likely scenario would be a no-deal Brexit accompanied by a multitude of mini-deals to keep goods and people

Topics:
Mike Shedlock considers the following as important:

This could be interesting, too:

Mike Shedlock writes Trump Again Threatens to Leave NATO (That’s a Good Thing)

Mike Shedlock writes No-Deal Brexit is the Most Likely Outcome: 2nd Referendum the Least Likely

Mike Shedlock writes Brexit Vote: 432 No, 202 Yes – Motion of No Confidence Tomorrow

Mike Shedlock writes Yet Another Fed Study Concludes Phillip’s Curve is Nonsense

The truth is there are simply no newsworthy Brexit developments. The reason is that, as of now, there is still no majority for a deal.

So let us focus instead on smaller pieces of the puzzle that might become relevant later.

One of those was a small item in the Financial Times from the Hauts-de-France region in Northern France, whose president is demanding a constructive attitude by the EU in the case of a no-deal Brexit. Expect to hear more of this as we approach the Brexit deadline. If the EU plays it tough to the bitter end, not only Hauts-de-France will be clobbered along with the UK.

The EU could in theory turn a no-deal exit into a de-facto blockade of the UK. But a far more likely scenario would be a no-deal Brexit accompanied by a multitude of mini-deals to keep goods and people flowing for a short transitional period (not to be confused with the 21-month transitional period now under discussion in the Brexit negotiations).

The simple reason is that this would be in the best interest of the regions of northern France, Belgium, the Netherlands and parts of Germany, all of which are very keen to keep the disturbance to their economies to a minimum.

The FT has interviewed the president of Hauts-de-France, who wants a no-deal transition until the French and UK governments have a border infrastructure in place to guarantee orderly flows. He has calculated that an extra clearance time of just two minutes per truck would produce vast queues on both sides of the channel.

The trucks, companies and factories that will be blocked will be those of the north of France, the whole of France and Germany."

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Leave a Reply

Your email address will not be published. Required fields are marked *