|

UK Prepares for No Deal: Attorney General Says Early Elections Can't Stop Brexit

fxsoriginal
​​​​​​

Another Remainer hope got tossed on the rocks of reality today. There's only one long-shot left.

No Deal Preparations - Eurointelligence Take

The British government has stepped up no-deal preparations - with a cabinet war room, an advertising blitz, and a fiscal offensive.

The attorney general’s legal opinion is that early elections do not force the government to ask for a Brexit extension - in other words no-deal can happen during an election campaign.

The attorney general has thus neutered the one trump card MPs thought they had in stopping a no-deal Brexit. They assumed, wrongly, that the government would have to request a Brexit extension in case of an election. The EU would, of course, grant an extension if a request were made. But there is nothing in UK or EU law that would force Boris Johnson to make such a request. We should always remember that it was Theresa May who sought the Brexit extensions in March and April. She could have frustrated parliament if she had wanted to.

In the meantime, the UK treasury will spend an extra £1bn on no-deal preparations. As we hear this morning, the government is also planning a big no-deal advertising campaign - all this while parliament is in recess. The government has some five weeks of uninterrupted propaganda from the bully pulpit with no parliament in attendance.

Johnson will set up three government committees. A war committee, as the media calls it, to prepare the exit strategy. It will include Johnson, Michael Gove, and Sajid Javid, the new chancellor. It meets twice a week. Then there will be a daily operations committee under Gove, and an economy and trade committee.

We still do not rule out a deal with the EU. The prospect of a no-deal Brexit - likely coinciding with a recession - might concentrate minds on both sides. But the political obstacles are even harder now. It is technically possible to envisage a fudge on the Irish backstop, but Johnson is now insisting that the backstop is formally dropped. The EU cannot accept that.

Johnson's Big Lie

Remainers all along said Johnson was a liar and would not deliver Brexit.

If there was a lie, it was Johnson intended to deliver no deal all the time, not that he really wanted a deal.

Most assumed he could not or would not pull the trigger. As I said all along, he will.

Like Eurointelligence, I do not rule out no deal, but it will have to be a good one for the UK.

Politically, a deal is difficult.

One Remote Chance

The only chance left to stop no deal is if there is a motion of no confidence and within 14 days Labour, plus the Liberal Democrats, plus a number of Tory rebels can all agree on an interim prime minister who would then ask for an extension.

Even then, Boris would have to lose the election.

Forget about it.

Johnson Still Claims a Deal is Likely

Amusingly, the Guardian Live Blog reports Boris Johnson rejects Gove's claim government now assuming no deal Brexit most likely outcome.

If you are seeking a lie, consider that. Of course, he really could believe it.

Johnson claimed that he was willing to “go the extra mile” to reach a Brexit deal with EU leaders - even though Number 10 has set a precondition for talks.

Asked if he was planning to meet EU leaders personally to try to find a solution to Brexit, he replied:

"Look, my approach is to be very outward-going. I don’t want the UK to be aloof or hanging back. I want us to engage, to hold out the hand, to go the extra mile, the extra thousand miles. And what we want to do is to make it absolutely clear that the backstop is no good, it’s deal, it has got to go. The withdrawal agreement is dead, it’s got to go. But there is scope to do a new deal. There’s no point in coming out of the EU if you’re going to end up being run by the EU. And that was the result of the backstop. "

Johnson reasserted his claim that the chances of a no deal Brexit could be as low as a million to one. Asked if he still stood by the claim he made at a Tory leadership hustings about the odds of no deal being a million to one, he replied:

"I think it is absolutely right that we should go for a deal, and there is every chance that we can get a deal. And I think with goodwill and with common sense, that is what we will achieve."

When pressed again on whether he stood by his one million to one claim, Johnson replied: "Provided there is sufficient goodwill and common sense on the part of our partners, that is exactly where I would put the odds."

Conflicting Demands

  1. Johnson reiterated his precondition for talks is the backstop has to go.
  2. The EU says a precondition for talks is agreement on the backstop.

Million-to-One There is a Deal?

Well, here's the new condition on those odds: "goodwill and common sense" on the part of the EU will prevail.

What a hoot.

It's possible, but don't count on it.

Author

Mike “Mish” Shedlock's

Mike “Mish” Shedlock's

Sitka Pacific Capital Management,Llc

More from Mike “Mish” Shedlock's
Share:

Editor's Picks

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.
 

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.

How AI, blockchain, stablecoins are shaping a new global economy – Circle CEO Jeremy Allaire

Artificial Intelligence (AI), blockchain technology and stablecoins are emerging as core pillars of a new global economic system, according to Circle’s CEO, Jeremy Allaire.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Bitcoin steadies as traders eye US–Iran talks

Bitcoin (BTC) price is stabilizing around $68,000 at the time of writing on Thursday after a 6.2% relief rally the previous day amid a broader downward trend.