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Secret Brexit Negotiations in the “Tunnel” to Begin

Summary:
The British Pound is up again on news of pending Brexit negotiation talks between the UK and EU. Tunnel Talks Q: What's the tunnel? A: A place where there are no cameras, cell phones, computers, or other communication. No one wants any leaks until a deal is reached. Green Light “They are giving the green light at the moment,” according to one diplomat. Even Donald Tusk is on board. From Eurointelligence It has been our experience - and that of Angela Merkel as well - that all important deals in EU politics happen at the last minute when they happen. Final deadlines matter, not procedural deadlines like October 17 or 19. The EU and the UK have until the end of the month to get a deal. Of course, they will need an extension to pass it. But, once a deal is done, that's a technical detail.

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The British Pound is up again on news of pending Brexit negotiation talks between the UK and EU.

Tunnel Talks

Q: What's the tunnel?

A: A place where there are no cameras, cell phones, computers, or other communication. No one wants any leaks until a deal is reached.

Green Light

“They are giving the green light at the moment,” according to one diplomat.

Even Donald Tusk is on board.

From Eurointelligence

It has been our experience - and that of Angela Merkel as well - that all important deals in EU politics happen at the last minute when they happen. Final deadlines matter, not procedural deadlines like October 17 or 19. The EU and the UK have until the end of the month to get a deal. Of course, they will need an extension to pass it. But, once a deal is done, that's a technical detail.

Maastricht was not settled by the officials who wrote the treaty, but by the political leaders who in the end compromised on areas where they previously said they would not. It is possible that Johnson compromises on the customs union. And that Varadkar will compromise on the length of the backstop. Or vice versa. Or both.

It is possible that the fragile parliamentary majorities in the UK may break down again. But the Brexit fatigue in the country is playing into Johnson's hand. If elections were to precede final ratification, Johnson's message to Get Brexit Done would be a better campaigning platform than Labour's pledge to negotiate yet another deal and put it to a referendum. Once a deal is done, Labour might have to consider its strategic options again. There is a case for supporting the deal and moving on, rather than promising another year or more of Brexit uncertainty.

Could other EU leaders still reject this deal? If Varadkar is happy, it would be hard for them to frustrate an agreement. It is the price EU leaders will have to pay for hiding behind the Irish prime minister so far.

And finally, perhaps the most important statement from Varadkar was the following: "I am now absolutely convinced that both Ireland and the UK want there to be an agreement that’s in the interests of Ireland and the UK, and the EU as a whole."

Revival of Theresa May's Deal?

Polls

Heading Towards the Tunnel

The Guardian Live Blog reports

EU member states give permission for 'tunnel' negotiations, says Barnier

The UK government had been keen to open “tunnel” negotiations with the commission on the detail of a deal, and this will be seen as a sign that progress is being made with the EU. These intensive talks are now set to be held in the days before the summit on 17 and 18 October.

Permanent Trap?

That's all we know other than Johnson had to give in on something.

I presume this will not be the same deal Theresa May negotiated, but it will likely have some of those aspects. Ireland probably gave up something as well.

The details are subject to negotiation.

If there is a way for the EU to keep the UK in a permanent trap, the UK may as well stay in.

Negotiations have finally begun!

Mike "Mish" Shedlock

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.

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