The EU as a transformative economic force

by Frank Schnittger Mon Jan 29th, 2018 at 07:01:27 PM EST

John Fitzgerald is the son of former Taoiseach Garret Fitzgerald and a distinguished economist in his own right. Now semi-retired, he writes the occasional commentary of the performance of the Irish economy. He has an interesting take on the transformative effect of EU membership on national economic performance generally.

The economic crisis that began in 2008 affected EU members in many different ways. One of the most important was a loss of confidence among many citizens in the ability of the EU to improve their living standards.

However, even a cursory examination of the data shows that membership of the EU has helped transform the living standards of a huge number of its people.

Beginning with the 1973 accessions of Ireland, the UK and Denmark, successive waves of EU enlargement have shown similar patterns of impact for members. Initially, significant adjustment costs may have arisen. However. in the long run, access to the EU market has allowed new members to grow rapidly and to gradually catch up with the living standards of existing members.

Divide and Conquer?

by Frank Schnittger Sun Jan 21st, 2018 at 09:02:11 PM EST

Britain's favourite tactic in gaining and running an empire was to divide and conquer: There was always some local comprador bourgeoisie willing to give their loyalty in return for immediate financial gain. So long as you had a superior military presence and at least some local elites on your side, subduing or marginalising those opposed to you could become a relatively straight forward process. Even a huge and populous country such as India could be governed as long as you had most of the Maharajas on your side. The fact that India, as a whole, was impoverished by the process did not detain the Imperial office unduly.

Britain  seems to think that employing similar tactics with the EU could pay similar dividends. Theresa May's recent visit to Poland with a full ministerial entourage at a time when the EU and Poland are at loggerheads over the latter's alleged violations of judicial independence sent a none-too-subtle message to Brussels: We can make a lot of trouble for you if you don't give us a good deal. Eastern European countries have an interest in remaining as close as possible to the UK's belligerent attitudes to Russia and nuclear deterrent capabilities. Boris Johnson and David Davis' "charm offensive" in Germany sought to highlight some German Industries' dependence on the UK market.

It will certainly be much more difficult for the EU to maintain the unanimity it displayed in Phase I of the Brexit negotiations when the differing national interests come into play in the trade negotiations. Germany, France, Holland, Luxembourg, Ireland, Eastern European and Mediterranean countries will all have different priorities. Macron has just become the first major European leader to visit 10 Downing St. in a long time. You know you are in trouble when even Trump displays no enthusiasm for a state visit with all the royal bells and whistles.

Europe's Frontier: A Rusted Iron Curtain

by Oui Sun Jan 7th, 2018 at 09:58:35 AM EST

"Europe faces a threat to its cohesion. But this time it's on the eastern front, not the western"

The Observer view on the EU's eastern bloc | Editorial - Jan. 7, 2018 |

European leaders have been at pains over the past 12 months to emphasise that Brexit is not the only or even the biggest issue confronting the EU. They do so, in part, to keep the British in their place. But they also speak the truth. Whether it is eurozone reform, the rise of xenophobic extremism or growing pressure exerted by Russia ...

Yet the EU's biggest challenge in 2018 may be none of the above. It comes from within. It has been slowly emerging along the bloc's central and eastern flanks since the so-called Visegrád Group of Poland, Hungary, Slovakia and the Czech Republic acceded in 2004.

○ Europe's unprecedented challenge from the authoritarians in the east | The Guardian |

More below the fold  ...

Front paged - Frank Schnittger

In international trade, there are no best friends

by Frank Schnittger Sun Dec 31st, 2017 at 04:29:43 PM EST

John Bruton is a former Irish Prime Minister and EU ambassador to the USA. Like Leo Varadker, he was leader of Fine Gael, the most conservative and arguably the least nationalistic party in Ireland. Indeed he was the leader of the least nationalistic and most conservative wing of that party. So much so, that that he was dubbed "John Unionist" by his rival, Fianna Fail leader and then Taoiseach, Albert Reynolds, for his willingness to crack down on IRA violence and to accommodate Unionist demands on almost everything.

I give you this background to emphasise that there has been no more conservative and Anglophile figure prominent in Irish politics, and one sympathetic to both UK Conservative and DUP Unionist concerns. And yet he has some dire warnings for the UK about the difficulties they are likely to encounter in phase 2 of the Brexit negotiations:

Those dreary Steeples, again.

by Frank Schnittger Thu Dec 21st, 2017 at 10:44:17 PM EST

As Brexit rapidly recedes from the front pages of European newspapers I imagine that problems specific to N. Ireland will induce an even greater yawn in everyone outside Ireland and nerdy political and diplomatic circles.  Never mind that problems specific to the Irish border have already effectively meant that the UK has had to concede continued regulatory alignment with the rules of the Single Market and Customs Union post Brexit in phase 1 of the Brexit talks. This in turn rules out the Canada plus, plus, plus option and means the UK will effectively remain within the European Economic Area, whether it realises or not.

Admitting a mistake

by Frank Schnittger Tue Dec 19th, 2017 at 02:24:56 PM EST

Admitting a mistake, in life as in politics, is, for many people, one of the hardest things to do. An Independent opinion poll now shows "Remainers" with a 10% lead over Brexiteers and this rises to 11% if don't knows are excluded or pushed for an answer. However most of the change of heart is amongst those who didn't actually vote in the referendum.

BMG Research head of polling, Dr Michael Turner, said: "The last time Leave polled ahead of Remain was in February 2017, and since then there has been a slow shift in top-line public opinion in favour of remaining in the EU.

"However, readers should note that digging deeper into the data reveals that this shift has come predominantly from those who did not actually vote in the 2016 referendum, with around nine in ten Leave and Remain voters still unchanged in their view.

"Our polling suggests that about a year ago, those who did not vote in the referendum were broadly split, but today's poll shows that they are now overwhelmingly in favour of remaining in the EU, by a margin of more than four to one."

So the bottom line is that Brexit remorse is predominantly among those who didn't actually vote in the referendum. Few who actually voted for Brexit have changed their minds.

The changing balance of power

by Frank Schnittger Wed Dec 13th, 2017 at 02:10:18 PM EST

Brexit talks to be suspended if Britain goes back on its word

Brexit discussions will be suspended if British commitments in phase one talks are reneged on, EU ministers have warned.

Ministers yesterday worked, as one senior EU official put it, to "David Davis-proof" the so-called divorce commitments agreed by the UK last Friday.

In a sharp diplomatic putdown to the UK, they backed proposals which will prevent what Tánaiste and Minister for Foreign Affairs Simon Coveney and others called "backsliding" by the UK.

This was a response to weekend suggestions from Mr Davis, Britain's Brexit secretary, later repudiated, that the deal was not legally binding but aspirational.

There's a determination that what has been agreed in phase one would be properly protected and seen through and there would be no backsliding

Guidelines for the next round of talks on transition arrangements for the UK will contain explicit warnings that phase two talks will be suspended if commitments in phase one are reneged on or not "faithfully" enacted in legislation.

Never has there been a clearer indication of how the balance of power has changed in these negotiations. Ireland has plenty of historical experience of being the weaker, supplicant, party in a negotiation, and the many humiliations one has to endure in that role.

The UK may have experienced similar emotions in dealing with the USA post WWII, put if so, is still in deep denial. Having to deal with individual EU27 nations on equal terms, as part of the EU, may have been part of the motivation for Brexit. Brexiteers fondly imagined that the UK could deal with the EU27, taken as a whole, from a position of strength as it retook its place among the major independent powers in the world.

Lessons learned from Phase 1 Brexit negotiations

by Frank Schnittger Mon Dec 11th, 2017 at 03:24:55 PM EST

I have just received a copy of a leaked internal EU negotiating team memo entitled:

"Lessons learned from Phase 1 Brexit negotiations":

1. Never compromise. Stick to your opening negotiating position and the UK will come around in the end.

2. It doesn't matter how ambitious or even ridiculous our opening demands, the UK is desperate for a deal.

3. Keep May in power. She needs a deal to stay in power and the UK pro-Brexit papers will praise ANY outcome as a magnificent achievement by her.

4. Waffle on about general principles in the talks, and then slip a lot of important detail into the actual text at the last moment. Davis is so disinterested in detail he probably won't read it anyway.

5. Praise the UK negotiators in public as being incredibly tough opponents across the table.  The Tory press will lap it up and chalk up the results as a great victory for Britannia.

6. Even if we get 100% of what we want, yammer on about the difficult compromises we had to make to get a deal.

7. Set artificial deadlines whenever it suits us. The Brits will travel through the night to meet them.

8. Keep the Irish on side. They have 100 years experience of negotiating with the Brits. Garret Fitzgerald got the Anglo-Irish deal through even after Thatcher had said "out, out, out" to every option on the table.

9. If talks break down, blame it on the Irish.  They have form in that regard and that explanation fits neatly into existing media narratives in the UK.

10. If the Brits threaten a no deal Brexit, call their bluff. Oh wait, we already have...

PS If we have to concede something in the negotiations to get a deal we don't really like conceding, we can always say that provision was never legally enforceable anyway and can be safely ignored. Davis has said that's ok.

Media narratives on Brexit (Phase 1) deal

by Frank Schnittger Sat Dec 9th, 2017 at 07:04:18 PM EST

I'm beginning to wonder whether we have over-estimated the power of the Brexiteers and associated media.  Here is a selection of front page headlines in UK media:

THE TIMES: "May bounces back" - May's position actually strengthened??!!?

FT: 'May's triumph blunted by Tusk warning on tough choices ahead'  ... Triumph???

Daily Mail: "Rejoice! We're on our way" - little indication that a hard Brexit has been all but ruled out

DAILY MIRROR FRONT PAGE: 'Mrs Softee' - mildly critical

DAILY TELEGRAPH: "The price of freedom" - some indication of the compromises made

The Independent highlights just how much work there still is to be done on the post-Brexit relationship between the UK and the EU

Guardian:"Deal is done but EU warns of more delays"

EXPRESS: "Huge Brexit boost at last" 'nuff said

i:"Britain sets course for soft Brexit"

Saturday's Sun:  leads on an attack on EastEnders star Jessie Wallace - "Glass attack on TV Kat" - with a minor headline "Champagne Brexfast" welcoming an historic agreement

STAR: "Jungle `bully' Dennis gets record complaints" - no mention of Brexit

"Sufficient progress"

by Frank Schnittger Fri Dec 8th, 2017 at 12:09:45 PM EST

Brexit deal: Main points

The European Commission is to recommend to EU leaders that Brexit talks with the UK move on to the second phase after it deemed "sufficient progress" had been made, including a deal aimed at preventing a hard border in Ireland.

Below are the main points of the new agreement.

• The agreement promises to ensure there will be no hard border - including any physical infrastructure or related checks and controls - and to uphold the Belfast Agreement in all its parts.

• It makes clear the whole of the UK, including Northern Ireland, will be leaving the customs union.

• It leaves unclear how an open border will be achieved but says in the absence of a later agreement, the UK will ensure "full alignment" with the rules of the customs union and single market that uphold the Belfast Agreement.

• However, the concession secured by the DUP is that no new regulatory barriers will be allowed between Northern Ireland and the rest of the UK without the permission of Stormont in the interest of upholding the Belfast [Good Friday] Agreement.

The agreement also covers the rights of EU citizens in the UK and the UK contribution to the EU Budget and outstanding liabilities. The full text is available here. For the purposes of this story, I will limit comment to the section relating to Ireland and N. Ireland.

Brexit means not very much at all?

by Frank Schnittger Wed Dec 6th, 2017 at 01:04:14 PM EST

Arlene Foster, the leader of the DUP, has been delaying even a phone conversation with Theresa May, and as yet there are no plans for the two to meet, despite the fact that May is due in Brussels at some stage this week to present her final offer on Phase one issues to the EU.

It's getting to the point where no one sees much point in even meeting May any more. After all, the EU agreed a deal with her team, and then she promptly overturned it at the first sign of resistance. Juncker could be forgiven for asking her to confirm that she has achieved agreement from her cabinet and all other key players before even scheduling a meeting again.

Anglo-Irish Agreement on Border strangled at birth

by Frank Schnittger Mon Dec 4th, 2017 at 05:57:13 PM EST

The crunch has indeed become a crisis. Agreement between the UK and Irish governments on the Irish border question was reached this morning in time for Theresa May's lunch meeting with Commission President Juncker, only to unravel when May spoke to DUP leader Arlene Foster by phone during the meeting.

From the Mid-Atlantic to the Irish Sea

by Frank Schnittger Sat Dec 2nd, 2017 at 10:29:22 AM EST

As noted in previous diaries here and here, the Brexit talks (phase 1) are reaching a climax. Two of the three main issues have been more or less resolved. Agreement has been reached in principle on the UK contribution to outstanding obligations to the EU budget, and the status and rights of EU emigrants to the UK, with Theresa May essentially capitulating to EU demands on both issues. However one issue remains unresolved: the Irish border question - to the acute embarrassment of the Irish government which has an almost neurotic wish to avoid the limelight as being the one holding up the talks process in general.

The UK side have been convinced firstly, that the Irish government could be fobbed off with vague assurances of an invisible, frictionless border enabled by new technology. Then the UK side were convinced that the EU side would abandon the Irish government once it had settled the two other issues of most concern to the rest of the EU 27. Now that Donald Tusk has stated, in no uncertain terms, that the Irish government's position is the EU position, and that there will be "sufficient progress" to move on to trade talks when the Irish government says there is, the UK side has taken to denigrating the Irish government.

Varadker is said to be weakened by internal scandal, threatened by his deputy leader, Simon Coveney, and fearful of being outflanked by Fianna Fail and Sinn Fein. He is said to be young and inexperienced, without the convivial emollient manner of his predecessor, Enda Kenny. The UK appears to be going through the five stages of grief: denial, anger, bargaining, depression and acceptance. Having been in denial that there was any Irish border issue at all, we have had the anger at the impertinence of the Irish government for even raising it. We may now be about to move into the real bargaining phase.

Oops! What am I still doing here?

by Frank Schnittger Tue Nov 28th, 2017 at 12:42:33 PM EST

It is now ten years to the day that I published my first diary here, entitled "OOPS what am I doing here?". In it I asked:

Are we all frustrated journalists here, failed academics, or seers whose genius the world just plain refuses to recognize?

Or is this just that wonderful human institution, an Irish pub without any beer, but where everybody gabs just for the sheer fun of it?

Every newcomer wonders how and where they will "fit in", and whether they would be better off going elsewhere.  Just what is your unique selling point?

The "about us" tab gives very little of the history of this blog - who are the distinguished contributors, who are the editors, what have you all achieved in the past other than allowing people to let off some steam?

I don't expect you all to rush off to justify yourselves, particularly to the new kid on the block, but what exactly are your brand values and why should I spend time here rather than elsewhere?

Is it a mutual admiration society, a community learning experience, an opportunity to brag about how much I know on certain topics, a forum to exercise my debating skills or just a nice friendly place to be?

The crunch risks becoming a crisis...

by Frank Schnittger Sun Nov 26th, 2017 at 10:29:32 PM EST

_{Michael Collins in London during treaty negotiations in October 1921. Collins, the first and last Irish politician to sign up to a hard border. Photograph: Hulton Archive}

I wrote last week that a Crunch time is coming soon... in the Brexit negotiations. Well that crunch time may just have become a whole lot crunchier. A domestic political scandal may cause the Irish Fine Gael minority government to lose a vote of confidence this week resulting in a snap general election as soon as Dec 19th., just after the crunch meeting of the European Council to decide whether the Brexit talks can move on to stage two.

Should a general election be called, Varadker will lose any flexibility he may have had in determining whether "sufficient progress" has been made in Phase one of the talks on the Irish/UK border to allow the Brexit talks move on to phase two. He might as well hand the reins of Government on to Fianna Fail/Sinn Fein if he doesn't hold the line on this issue.

Theresa May may be concerned about losing power if she losses the support of arch Brexiteers or Remainiers within her party, or indeed the support of the DUP, but Varadker's problems are much more acute: His Government is only sustained in office by Fianna Fail abstention and they can cut his lifeline at any time. Neither Fianna Fail nor Sinn Fein will tolerate any softening of the Government's line against a hard border, so an election cannot but result in a hardening of the Irish Government's opposition to UK government double speak on the issue.

A good example of how Brits were mislead on the EU

by Luis de Sousa Wed Nov 22nd, 2017 at 04:57:11 PM EST

Days ago I was embroiled in a closed mail-list discussion on Brexit regarding the Common Agriculture Policy (CAP) and wild life protection programmes. The subject was a reportage by a famed British euro-sceptic journalist, aired just days before the referendum:



I attempted to show my colleagues the dimension of the falsehoods in this reportage, but George Monbiot seems to be a holy cow of sorts in environmentalist circles, thus my argumentation was not welcome. Under the coat of a left-leaning environmentalist, George Monbiot engages in unconstrained bashing the EU, sowing unwarranted mistrust and scepticism. This makes for a good example of how the British public has been mislead, that must be fully understood. Therefore I leave here my reasoning for future reference.

Front paged - Frank Schnittger

Crunch time is coming soon...

by Frank Schnittger Sun Nov 19th, 2017 at 02:15:34 AM EST

Leo Varadker has been upsetting a few people in the UK:
The SUN Editorial

THE SUN SAYS Ireland's naive young prime minister should shut his gob on Brexit and grow up.

Leo Varadkar may not like Brexit but he needs to accept it's happening

We are Ireland's biggest trading partner and nearest neighbour.

The effects of a "hard Brexit" could be catastrophic.

Yet Varadkar's rookie diplomacy, puerile insults and threats to veto trade negotiations are bringing it ever closer.

We can only assume his arrogance stems from a delusion that he can ­single-handedly stop Brexit.

Indeed Ireland's political establishment clearly believes we can be forced to vote the "right" way at a second referendum, just as they made their citizens do over the EU Lisbon Treaty they initially rejected.

It is not going to happen.

David Davis rightly names France and Germany as the roadblocks to progress, even as other EU nations want a deal.

He should not overlook the showboating obstinacy of Ireland's Varadkar, a man increasingly out of his depth.

With friends like these...

by Frank Schnittger Tue Nov 7th, 2017 at 05:52:00 PM EST

A correspondent points me to two interesting perspectives on Brexit. The first is an American perspective by Steven Erlanger, the chief diplomatic correspondent for The New York Times, who has just completed four years as London bureau chief. The second is a twitter storm by Jonathan Lis on his discussions with unnamed Brussels staff, purporting to give an informed Brussels perspective on how the Brexit negotiations are going. Both authors can be viewed as broadly sympathetic to the UK cause, and yet this is what they have to say:

Steven Erlanger: No One Knows What Britain Is Anymore

Many Britons see their country as a brave galleon, banners waving, cannons firing, trumpets blaring. That is how the country's voluble foreign secretary, Boris Johnson, likes to describe it.

But Britain is now but a modest-size ship on the global ocean. Having voted to leave the European Union, it is unmoored, heading to nowhere, while on deck, fire has broken out and the captain -- poor Theresa May -- is lashed to the mast, without the authority to decide whether to turn to port or to starboard, let alone do what one imagines she knows would be best, which is to turn around and head back to shore.

I've lived and worked for nine years in Britain, first during the Thatcher years and then again for the last four politically chaotic ones. While much poorer in the 1980s, Britain mattered internationally. Now, with Brexit, it seems to be embracing an introverted irrelevance.

Should the EU intervene in Catalonia?

by Frank Schnittger Sat Oct 28th, 2017 at 04:55:07 PM EST

As someone distrustful of extreme nationalism and committed to the European ideal as the best way we have yet found of maintaining peace and prosperity in Europe, I am utterly conflicted by the drive for Catalonian independence.

On the one hand I am committed to the European principle of subsidiarity - that decisions effecting peoples lives should be made with their maximum involvement and as close as possible to their own communities.

I therefore have no problem with negotiations for greater Catalonian autonomy, if Catalonians generally are unhappy with decisions made on their behalf by the central government in Madrid.

But granting Catalonia full sovereignty is an altogether different matter. It implies that Catalonia will have its own borders and army and distinct relationships with the EU and all foreign states. On what basis could it be granted?

The Brexit effect

by Frank Schnittger Wed Oct 25th, 2017 at 09:43:20 PM EST

Worst case Brexit scenario could see Irish GDP fall by 9%, says EU report

A new study into the effects of Brexit on UK and EU trade, particularly agricultural trade, warns that Ireland's GDP could be harder hit than the UK.

Its main scenario analysis, based on a hard Brexit, foresees a fall in Irish GDP of 3.4 per cent, compared to a fall of 2.4 per cent in the UK. This is broadly in line with the predictions of other recent studies.

The report predicts that Irish agricultural exports to the rest of the world could fall by more than two thirds (71 per cent, or $6.5 billion).

The Brexit effect on the GDP of the whole of the EU27 would be of the order of only minus 0.3 per cent. The report, "EU-UK agricultural trade: State of play and possible impacts of Brexit", was written by economists for the European Parliament's agriculture committee.

The report even suggests the fall in Irish GDP could be as high as 9.4 per cent in the most malign scenario studied, if "non-tariff mechanisms" combine with new World Trade Organisation (WTO) tariffs to hamper Irish agricultural exports gain access to the rest of the EU and world.

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