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Bamboozled by Brexit?

Blog, Brexit · 6 December, 2017

It was all going so well…

Last week we saw quite a bit of movement on the issue of Brexit, after what appeared to be deadlock came a flurry of announcements of progress being made in many different areas.

Firstly we found out that, for the first time since their introduction in 2014 all of the major banks passed stress tests which pitted their balance sheets against two dire economic scenarios.  This led the governor of the Bank of England, Mark Carney, to say that the banks could survive a ‘disorderly Brexit’.

However, all this progress was halted on Monday when reports surfaced that Theresa May has pulled out of a deal which would have moved the Brexit negotiations on to trade – the negotiations that the government have been calling for months.Secondly the pound sterling jumped 0.9% up to $1.3367 on the report of a UK-EU agreement on the Brexit divorce bill of €44.55bn and finally there were reports that the Irish impasse was close to an end and agreement would be reached soon, so far so good.

Why has May pulled out this vital deal?

The deal on the Irish border hung on there being ‘regulatory alignment’ between Ireland’s North and South.

The DUP, whose parliamentary votes could bring down May’s Government, said that they would not accept this ‘regulatory alignment’ if this would mean that regulations would diverge between Northern Ireland and the other parts of the UK.
This makes economic sense as Northern Ireland’s biggest trading partner is Great Britain.  However, a hard border is not an option either because the economies of the Republic and Northern Ireland are so closely intertwined; many goods and services cross the border every single day including 30,000 people.

A key issue is that the UK has said that it is going to be leaving the single market and the customs union.  This means that the border between the Republic of Ireland and Northern Ireland will now become the border between the EU Customs Union and the single market, therefore, all the checks and balances need to be put in place for goods entering and leaving Northern Ireland.   This creates a border which has not been there since the Good Friday agreement – which would be both politically and economically problematic.

Institutions, institutions and more institutions

The UK is trying to maintain the Good Friday Agreement while leaving one of the institutions that the agreement was built on; the European Union. The EU, with its shared economic, social and legal structures, was an assumed component of the post-Good Friday peace. Without the EU many of the delicately negotiated compromises including how the island trades, no longer make sense. It is a bit like trying to maintain the laws of physics after getting rid of gravity.

L. Mencken famously said: “to every complex question there is a simple answer and it is wrong” –much more work and negotiation must be done to find the answer to the difficult question of the Irish Border.

Let us pray

Let us keep decision makers in your prayers this week while the difficult conversations continue.  Particularly pray for those who live on and around the Irish border, whose lives could be radically changed by decisions that are made this week.

 

Filed Under: Blog, Brexit Tagged With: Brexit

Rachel Allison

Previous Post: « Should Donald Trump come to Britain on a state visit?
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