Brexit Is Teaching Britain A Lesson In Humility; Boris Johnson finalizes EU Exit Deal!

thatrapsfan

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Opinion Brexit
Brexit is teaching Britain its true place in the world
Politicians and voters alike have nourished delusions about the nation’s global role

In one sense, Boris Johnson is right. The Brexit process has indeed felt like a national humiliation. How many Brits have felt our innards shrivel at key moments of the negotiations? And I am not talking about the incidents of diplomatic bumbling, of unwarranted second world war references and Dad’s Army condescension. I am talking about the parts of this process that have gone as predicted.

Perhaps we should step back from the bloviated rhetoric. Humiliation is too strong; a national humbling is more accurate. The philosophy of Brexit was that, freed of EU constraints, the UK would take its rightful place in the world. This is indeed what is happening, but alas that place is not as the great power of their imagination. The UK’s place in the world is hardly terrible but, as Mr Johnson learnt during his brief but undistinguished term as foreign secretary, our emissaries no longer bestride summits like Castlereagh.

For far too long British politicians, journalists and voters have enjoyed a patently distorted vision of the nation as indispensable world player. Now the nation is facing the painful truth that the UK is not as pre-eminent as it has liked to believe.

For proof, look at the negotiations over the Irish border. One need not get into the rights and wrongs to see that the UK has essentially been pushed around by Ireland, because the EU has thrown its weight behind the demands of its continuing member. The hard fact is that the power imbalance has meant the UK is being forced to choose between the chaos of a no-deal Brexit or undermining the constitutional integrity of one of its four sovereign parts and signing up to a significant amount of rule-taking. This is what happens when a single country that is not America or China negotiates with a global trading bloc.

From the sequencing of the negotiations to the empty scorecard of British wins, the entire process has been a lesson in power politics. Few who saw the TV programme on America’s London embassy will forget the smirks as an US official described the British Brexit delusions: “They sort of see it as a negotiation between two equal parties.”

One should not overstate this. Britain is not Latvia. It still carries heft. It is a top 10 global economy (fifth, sixth or ninth depending on the market and your choice of methodology). It remains a military power, with a nuclear deterrent and a seat on the UN Security Council. It is the only European nation with access to US intelligence through the “five eyes” programme. Its pre-eminence as a financial centre will not immediately be dissipated by Brexit. The UK will still get its call, but after France and Germany and just before Canada. Life in the top 10 is different to life in the top three.

Much of the UK’s global clout derived from its being one of the big nations of the EU. Margaret Thatcher used that very platform to help create the single market, drive forward global trade and entrench democracy in eastern Europe. The 1970s champions of Britain’s membership were right in arguing that the alternative to pooled sovereignty was not more influence but less.

Now Britain is about to taste life as one of the loudest of the next level of voices. In this tier, maintaining influence beyond military matters, requires the painstaking unbombastic alliance-building that saw its existing political and diplomatic practitioners so derided as sell-outs by our chauvinistic MPs and media. It might, for example, mean expediting entry permits for Moldovan trade representatives so they do not delay the UK’s ambitions at the World Trade Organization.

And how will the UK’s status be reflected in its new trade deals? One has only to look at Donald Trump’s treatment of Canada to see that his negotiators will offer no special favours to the UK. Mr Trump is pro-Brexit because he wants to see a weakened EU, not to play benefactor to the UK. EU nations will be similarly cut-throat. Nor will sentimental attachments affect Commonwealth nations. Too many Brits fail to grasp that former colonies do not look back to the empire with unalloyed affection.

While this has all been understood by serious figures in government, too much of Britain’s politics, culture and its self-image have been driven by its colonial past and the national myths built up around the last war. It is why the Brexiters cling so desperately to the theory that Theresa May has betrayed Brexit. The alternative is to accept that it is their own reckless chauvinism that has reduced the UK to the role of supplicant with its former partners.

Adjusting to a reduced status will require a reality check in our media and our politics and a touch of humility. If Brexit helps the UK come to a more accurate realisation of its global significance, some good may yet come out of this wretched business. Still, it seems an expensive way to learn a lesson.
 

Orbital-Fetus

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I was speaking to a couple of friends who live just outside of london about this.
they would both agree with the premise of this article.
 

thatrapsfan

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I started to read it but can I get the cliff notes?
-Many of Britain’s political and media elite have nourished the notion that it’s still a major global power

-Brexit negotiations have shed light on the delusion. The UK has far less leverage to negotiate a favourable deal with the EU then Brexiteers believed

- Much of the UKs sway was tied to its EU membership. Outside of it can only continue to be influential through multilateral instituons - which pro Brexit people dislike

-Trump is pro-Brexit because he wants to weaken the EU. This doesn’t mean he will cut them a favour in potential free trade negotiations ( just look at Canada)

-Brexit is giving the people who believed the UK is still a major power a needed wake up but it will come at a great cost.
 

bnew

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They're in a terrible negotiating position and if they abort Brexit they definitely will be in a weaker position before this fiasco.

Was reading this article yesterday, the UK is taking some massive L's.

Bloomberg - Are you a robot?

A $240-Billion-a-Day Market Is Leaving London Ahead of Brexit

The City of London is being dealt another Brexit blow.

CME Group Inc. is moving its European market for short-term financing, the largest in the region, out of London because the exchange operator wants to guarantee continental firms can continue to use it if there is a no-deal Brexit.

The decision, which was taken before CME took over the business from NEX Group Plc last week, is the first example of a major financial market leaving the U.K. While every sizable trading venue has set up a regulated entity in the EU because of Brexit, BrokerTec -- as the business is known -- is the first to move an existing market from London to a continental European city: Amsterdam.


“All of our euro-denominated bonds and repo will move to Amsterdam,” John Edwards, managing director of BrokerTec Europe, said in an interview. “We saw no benefit in splitting liquidity pools. Our U.K. business will not be able to provide services to the European clients.”

Contingency Plans
BrokerTec isn’t alone in planning for the worst. Stifel Financial Corp. is ensuring it can continue offering financial services in Europe by buying the brokerage operations of Germany’s MainFirst Holding AG. And BNP Paribas SA plans to move between 85 and 90 employees from its global markets unit in London to other European financial centers in case of a hard Brexit.


BrokerTec Europe currently employs as many as 90 people in London, according to a person familiar with the matter. A third of those are front office, with the remainder working in technology or support roles.

About 210 billion euros ($240 billion) per day of European short-term financing instruments were traded on BrokerTec in October, Edwards said. That market will be shifted to CME’s Dutch subsidiary, NEX Amsterdam BV. BrokerTec’s U.K. entity traded an additional 59 billion euros of U.K. gilt repo deals, which will all remain in London post-Brexit.

BrokerTec’s European government bond cash market will also move to the Dutch city, while its gilt market will stay in the U.K. The company doesn’t disclose trading volumes for its cash bond markets outside the U.S.

New Customers
CME completed its takeover of BrokerTec’s owner, NEX, last week. BrokerTec has been signing up customers to trade with NEX Amsterdam BV, which still needs regulatory approval, since the summer. It plans to open the new market in February, well before the U.K. leaves the EU on March 29.

BrokerTec wanted to eliminate the risk that its EU-based clients could lose access to the European repo market. Some of Europe’s biggest trading venues and trading firms have warned of the danger of “split liquidity pools,” where trading becomes more difficult and costly because investors on different sides of the North Sea can no longer trade with each other.

“Nobody knows what the European landscape is going to look like in five months’ time, let alone three years’ time,” Edwards added.

Edwards declined to say whether NEX Amsterdam would employ more than the 12 people that it said would work for the Dutch entity when it announced its choice of the Netherlands a year ago.



BrokerTec has applied to be a regulated market in the Netherlands, even though it operates as a multilateral trading facility in the U.K. Multi-lateral trading facilities have to apply the Dutch bonus cap — Europe’s toughest — on employees, but regulated markets are exempted from the limits on pay.

A report released in July by EY showed investment from abroad in British financial-services firms fell 26 percent in 2017. During the same period, Germany experienced a 64 percent increase, while the figure for France more than doubled. London still attracted more inward investment in financial services than any other EU city, but the gap with Paris, Frankfurt and Dublin was narrowing.

(An earlier version of this story was corrected to show the $240 billion figure was per day during October, not for the month.)
 

BoBurnz

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No deal brexit is happening and it's going to be both glorious as a representation as to what happens when you allow rote populism to rule the day, and ugly as sin because there's going to be 30+ years of austerity because of it. :whoo:

Will be a fascinating case study for future civics professors that's for sure.
 

FaTaL

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-Many of Britain’s political and media elite have nourished the notion that it’s still a major global power

-Brexit negotiations have shed light on the delusion. The UK has far less leverage to negotiate a favourable deal with the EU then Brexiteers believed

- Much of the UKs sway was tied to its EU membership. Outside of it can only continue to be influential through multilateral instituons - which pro Brexit people dislike

-Trump is pro-Brexit because he wants to weaken the EU. This doesn’t mean he will cut them a favour in potential free trade negotiations ( just look at Canada)

-Brexit is giving the people who believed the UK is still a major power a needed wake up but it will come at a great cost.

When things like this happen there’s always a hidden agenda, could it of been the Russians who planted the seed?
 
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