Disorderly Brexit Increasingly Likely, EU Blinks on Derivatives-Clearing in London

No one can afford even the smallest hiccup in derivatives.

By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

After months of furious lobbying, the City of London Corporation has finally got what it wanted: recognition by the European Securities and Markets Authority (ESMA) of the three biggest clearing houses it hosts, LCH, ICE Clear Europe and LME Clear. This will allow the three to continue providing services throughout the EU even in the event of a no-deal Brexit, which is looking increasingly likely. It will also limit the potential for disruption in central clearing and prevent any negative impact on the financial stability of the EU, says ESMA.

Clearing is where a company acts as a middleman between financial trades, collecting collateral and standing between derivatives and swaps traders to prevent a default from spiraling out of control. Since the 2008 Financial Crisis and the inexorable expansion of derivatives trading, clearing has become an integral part of the global financial infrastructure.

For the City of London, clearing is the jewel in its crown providing thousands of jobs, billions of pounds in annual profits and a vital strategic edge over rival financial hubs. London is the global leader for the clearing of all kinds of currency-denominated derivatives, particularly the euro. The London Clearing House (LCH) says it clears €927 billion ($1.05 trillion) worth of euro-denominated contracts a day, roughly three quarters of the entire global market. The second-largest operator in the sector, Paris, clears just 11% of the transactions.

For years, the French government, together with the European Central Bank, have tried to wrest control of the clearing of euro-denominated transactions from the City of London, for largely justifiable reasons. And Brexit was supposed to provide the perfect alibi. But alas, it hasn’t happened.

Instead, with just five weeks left until Brexit Day (March 29), a number of major EU Member States, including Germany, France, the Netherlands and Italy, are fast-tracking national legislation to enable bankers to continue to service the 18 trillion pounds ($23 trillion) of derivative contracts that could be disrupted if the UK crashes out of the EU without an agreement. According to Bloomberg, the Dutch legislation may even allow brokers and high-speed traders to conduct new business from London, at least for a while.

It wasn’t meant to be like this. Since the day the British people voted to leave the EU, rival European capitals, in particular Paris, have done everything they can to lure London’s financial service providers across the Channel. Many banks have indeed moved some of their operations to other cities, in particular Berlin, Paris and Dublin, but not remotely on the scale many think tanks had predicted. Paris has even made moves on London’s gold market.

But the most coveted prize of all was London’s clearing business. However, any attempt to move euro clearing away from London to the continent was likely to take years to implement, ramp up costs for companies across the region and be hugely disruptive to a market that had already played a leading role in the last global financial crisis. As it turns out, two and a half years is not nearly enough time to uproot and move en masse such a large, complex market that took decades to develop in one of the world’s most bank-friendly jurisdictions.

In October 2018, the International Swaps and Derivatives Association (ISDA) and six national trade bodies within the EU released a paper on “The impact of Brexit on OTC [over-the-counter] derivatives.” It features a summary table of 16 steps EU authorities can take to “mitigate adverse impacts of Brexit”. The table contains eight items marked in red as “immediate/high-impact”, seven in orange as “immediate/low impact”, and only one in yellow as “delayed impact”.

In other words, if done badly, bad things could quickly ensue. With a disorderly Brexit looking increasingly likely, the EU appears to have taken note. Last week German Finance Minister Olaf Sholz even said that “everyone in the financial market is totally calm” about a possible no-deal Brexit. “Because they know it’s well done, well prepared and well thought through and it will work somehow. For the transport of goods, it will be more complicated.”

For the City of London and the myriad interests it represents, the latest concession by Brussels and national EU government is a move in the right direction. But it’s still only “a partial and temporary fix,” says Miles Celic, the chief executive of the City’s most influential lobbying group, City UK. “Time is running out to resolve these technical issues, and while such temporary fixes are essential, long-term stable solutions are needed to provide the certainty that customers and clients across the whole of Europe and beyond need.” By Don Quijones.

“If you are looking to buy a house in Q1 you will have the market to yourself.” Read… London Housing Meltdown Spreads as Pre-Brexit Angst Batters Market Sentiment

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  66 comments for “Disorderly Brexit Increasingly Likely, EU Blinks on Derivatives-Clearing in London

  1. MCH
    Feb 22, 2019 at 1:35 pm

    I think everybody will collectively figure out how to kick the can down the road, whether it’s an extension or something else. The City of London just got there first, and managed to make the EU blink.

    What’s amazing is that everyone on the continent keeps trying to grab a piece of London’s action and they aren’t coordinating it in anyway. The EU isn’t trying to be a monolith here. Paris is fighting Frankfurt is fighting anyone else to get a piece of the action. No wonder they lost.

    Ultimately, the Brits are gonna get whacked with a crash out, but the EU aren’t going to be that much better off, it’s a lose lose for both sides. But the EU for the most part still acts like it has far less to lose. And in the end, that’s probably going to hurt them.

    • Caradoc
      Feb 22, 2019 at 3:27 pm

      The EU will want revenge no matter how long it takes. Good recent podcast with Bernard Connolly, sacked for speaking out in the 90s. Probably on YouTube under moneyweek podcasts, released this week.

      Both sides have miscalculated politically from the first time Cameron was shipped off to discuss any changes.

      Not sure the UK has the balls to do what it needs to.

  2. c smith
    Feb 22, 2019 at 1:51 pm

    The Brits showed one of their aces, and the Euros folded.

  3. Lemko
    Feb 22, 2019 at 2:04 pm

    This is confusing for sure… It is really hard to be this incompetent by accident, so it is likely on purpose but why botch something as important as Brexit ? I initially thought Brexit would not happen, but now I believe the 3 month delay.

    If European shot callers want to end this business cycle and blame it on a no deal Brexit instead of Capitalism gone wrong again then I understand what they are doing, other then that narrative, it’s very confusing

    • Bankers
      Feb 22, 2019 at 4:27 pm

      Steven Guinness is providing a thoughtful look at this e.g.

      https://stevenguinness2.wordpress.com/2019/02/18/point-a-to-point-b-and-the-misdirection-along-the-way/

      the view on Brexit is mostly in the second half of that. It isn’t confusing as long as you don’t try to make sense of it all :-/ .

      • Lemko
        Feb 22, 2019 at 8:46 pm

        Great Article! Thanks Bankers

    • Leser
      Feb 25, 2019 at 1:30 pm

      Confusing indeed – all parts to the negotiation table want to remain: Tory gov’t, Labour opposition, and of course the EU. So are these pained contortions just theatre to placate the Brexit voters until the charade can be dropped? There seems to be a powerful influence though on the Tory party preventing them from throwing in the Brexit towel just yet. I’ve been wondering what this influence is.

      @DQ great article as always and also appreciated the Olaf Scholz quote exposing himself as the bumbling idiot he is.

  4. Javert Chip
    Feb 22, 2019 at 3:14 pm

    Moving huge volumes of financial transactions to EU-infested & highly over-regulated Paris is a non-starter.

    French over-taxation & socialist regulation are a bad mix with capitalist finance.

    Paris, dream on.

  5. kk
    Feb 22, 2019 at 3:28 pm

    All the benefits to the EU and all the risks to UK PLC, why wouldn’t the EU agree. Banking is a great business till it’s not eg the royal bank of Scotland lost more money in the great financial crisis than it made in profits over 200 years

  6. Feb 22, 2019 at 3:33 pm

    The City of London does not fall under UK regulation. It really is a matter of intent among the voters. If you are content housing a rogue international financial center in your capital city, then what does it matter?

    • mick
      Feb 22, 2019 at 4:23 pm

      Yes, as is Washington DC and the Vatican. All are city states, which do not observe the laws of the land.
      Anyone willing to do a little research on this topic will have their eyes opened nice and wide.

      Our democracy is a myth, our freedom can be removed in the blink of an eye.

      • Nicko2
        Feb 23, 2019 at 3:14 am

        The global order isn’t so bad! Would you prefer your marching orders direct from Beijing?

        • mick
          Feb 23, 2019 at 12:09 pm

          @Nicko2

          I can see you haven’t done 5 mins of research before opening your mouth about this topic, for if you had, you would know the “Global Order” is exactly that and it won’t be long before the west greatly resembles the east.

  7. mick
    Feb 22, 2019 at 4:18 pm

    Nothing orchestrated by the status quo class will cause a panic, no matter how much fear porn the mainstream media puts out. In fact, the amount of fear porn released is an inverse indicator to the likelihood of anything happening.

    So, given this fact, Brexit will be a pop-gun going off.
    When the real event happens, which causes panic, it will come out of nowhere and therefore give the public no chance whatsoever to prepare.

    This is evidence of the kind of leadership this world has and should serve as a warning against putting hope in a political leader of any stripe, no matter how believable their speeches are.

  8. AndyK
    Feb 22, 2019 at 4:45 pm

    Long-time lurker, first-time poster here.

    My guess is that the global systemically-important financial institutions don’t particularly want close scrutiny/governance of the derivatives market by the EU regulatory structures. I’m just imagining the impact of the financial equivalent of the GDPR (General Data Protection Regulations) – perhaps something like ‘Gross Derivative Exposure Regulations’, causing all concerned to have to put their gross exposure to derivative products/contracts on their balance sheets? Wonder what skeletons might pop out of the closet? I can certainly think that Deutschebank (for one) might not welcome such scrutiny.

    [Disclosure] I am a Brit who voted to leave and would do so again; not for the usual reasons trotted out by many, but because I have long believed that the administrative infrastructure of the EU is doomed to collapse. It is better to be on the outside of a collapsing building, ready to render aid to those caught inside, rather than be trapped ourselves. When I am challenged about “What could possibly cause the EU to collapse?” my one word reply is “Debt”.

    • Bankers
      Feb 22, 2019 at 6:55 pm

      In a roundabout way to my view. The worst problems in Eurozone countries are due to an administrative and political chaos which is funded and woven with the help of EU finance and debt. Leaving EU will in itself not immediately make UK more upright in financial or business terms, but it will make UK government much more directly accountable and that should repercuss on the rest. It would also bring UK society back to itself. In EU, politics has become a sham and overtly corrupt. EU has just become the catch all excuse that blankets any honest and direct accountability, it is like politicians are served on an EU plate from which to act from. As EU is not a territory but a supra national set of accords it is a continual untouchable hypothesis that forever evades any scrutiny – it is never itself but all the nations, which one’s own, one is told, agrees with.

      So to me the debt is a tool being used, and undoubtedly it will be prominent if EU disintegrates, but if it disintegrates it will be for other reasons, such as reactionary movement, social deprivation, or even EU making fundamental political mistakes as it actually tries to measure up in the real world to the responsibilities it is slowly claiming. In other words, an administrative and social chaos that has been created by attempting to sideload new formats onto traditional structures which were previously the strength and stability of any country.

      Without Euro and its associated debt, this would not have been possible, so you are not wrong either.

      • HMG
        Feb 23, 2019 at 12:27 am

        Looks like “Debtgate” coming soon.

        • Bankers
          Feb 23, 2019 at 1:28 am

          Some kind of official reckoning, but I am not sure that everyone will accept the reconciliation offered, maybe they won’t be given much choice though

          https://www.mirror.co.uk/news/uk-news/valencia-vs-celtic-screaming-football-14029578

          Those are Irish Scots in Spain which is probably about as confusing as you can get in terms of positioning regarding EU? Spain had its protests and oppression a decade ago, with the Indignado movement, now exuberance is “frowned on”, particularly political exuberance as per Cataluña, but foreign revellers will do. France is having its own protest to similar effect, and Italy’s hybrid government is a wonder of synthesis that still leaves me perplexed.

          Too many people being more in charge acoss EU, all feeling entitled to positions that have not been properly earned, and a lot of average people balking at the result. New politics arises to assimilate them but it tends to not be convincing and so you have such an increasing rejection by voters of their system, voting and representation. Who knows where this will all lead.

    • Leser
      Feb 25, 2019 at 1:39 pm

      Very interesting thought and makes perfect sense. City UK are obviously extremely slick lobbyists and perhaps here they have the support of much more than their local crew.

      As commented elsewhere, the City of London is possibly the most important money laundering venue on the planet, it certainly is for the really big tickets which require a sophisticated laundry ecosystem hidden behind respectable facades. Upsetting that applecart would surely upset another category of players of influence.

  9. cashboy
    Feb 22, 2019 at 5:39 pm

    The City of London is the centre of the world for money laundering.

    One can form a UK company in 24 hours for US$16. Open a bank account within 3 days. Make a few bank transfers. Close the company bank account and close/strike off the company for US$14.

    • Nicko2
      Feb 23, 2019 at 3:19 am

      Actually, mainland USA is the centre of legal money laundering. It’s all a matter of perspective.

  10. robt
    Feb 22, 2019 at 5:43 pm

    Money knows no borders, and all the apparatchiks and the nomenclature of the EU, who found a home after the collapse of communism, can sink in their miasma of corruption and delusion, watching the UK thrive after Brexit despite all their efforts to exercise dictatorship and micromanagement of diverse economies in their dream of penalizing the creators of wealth to the benefit of supplicants but ultimately only to the benefit of those who wish to rule over all.
    Watch this whole rotten mess fall to pieces in future years as more nations choose to reassert their national identity and sovereignty and leave – especially the ones who pay the bills.

    • Nicko2
      Feb 23, 2019 at 3:25 am

      The thing about the EU, there are far more powerful and persuasive reasons to stay united, than be divided. For example, the expansion the new silkroad into the heart of Europe necessitates a united policy among EU partners. Money talks.

  11. BC
    Feb 22, 2019 at 6:02 pm

    Why isn’t Britain doing more to subvert tenuous EU unity? Lost among the mainstream media brexit debate are the legitimate sovereignty issue of the EU tie up. They are not alone in sharing these concerns. Italy, Spain, Portugal, Greece, and even non-urban French all have legitimate grievances with the EU which is essentially functioning as a German proxy govt at this point. Does Britain not realize what kind of vulnerability exists there? If Brussels doesn’t let Britain go on its own terms, it could so very easily break up the whole thing.

    • Feb 23, 2019 at 4:52 am

      Britain is not united in opinion on how to handle leaving the EU or whether to do it at all. However, the majority do see EU as a valuable future trading partner and ally. As such, they have nothing to gain and much to lose if they are seen as meddling in politics on the continent. Even if the EU did break up, the UK would not want to be seen as a cause of it.

      Also keep in mind that an EU breakup is by no means inevitable. Even if a euroskeptics came into power in a number of countries, they are more likely to fight for changes to the system than to abandon it altogether. Euroskeptic representatives could abandon the path to “ever closer union”, move toward a tougher immigration stance, or change it in other ways without abandoning the trading bloc or military alliance.

    • fajensen
      Feb 23, 2019 at 6:01 am

      … French all have legitimate grievances with the EU …

      Sure they have. But that doesn’t also mean that rallying to the cause on behalf of a totally self-absorbed and narcissistic Britain looks like such a winning move to anyone. Especially not while the British are sneering at them and making threats.

      The British negotiation strategy seems to be to deliberate antagonise everyone that Britain wants or needs something from.

      One assumes this cleverly conveys the impression upon the wogs that the wogs services are is not strictly needed (and generally substandard and beneath contempt from civilised people) in order to make the wogs collapse in a quivering heap of insecurity and self-doubt and immediately give Britain whatever it is it wants / needs to make them stop.

      That plan maybe worked for a while way back when Britain could afford guns to go with their gunships, it is a sign of derangement that the British establishment thinks it will work now.

      Or maybe “Global Britain” simple doesn’t get that “Internal Consumption Only” messaging gets around these days and is seen by everyone? Derangement again!

      Or maybe everyone else just have bigger problems and actual concerns with the US making increasingly aggressive claims on their sovereignty and trade than they have with Germany or “Brussels”?

      “Brussel”s and Germany, in spite of their undoubtedly many flaws, are just not going to randomly sanction or attack anyone like the US is so keen to threaten with at every possible moment.


      The only ones screwing up Brexit is the British Government. It is a good thing that the leave date was hard-coded so there is an end to the farce.

      • BC
        Feb 23, 2019 at 12:17 pm

        I have yet to witness any good faith effort by the EU to attempt an orderly Brexit. The reasons are numerous for Brussels to act like this. Additionally, Britain clearly has a half-willing negotiator as leader. If this continues, It will go down as Britain’s great humiliation. Pretending like they have no recourse in this and that Britain must accept Brussels punitive terms is silly.

  12. Joe
    Feb 22, 2019 at 6:06 pm

    Will Brexit turn out to be an updated Y2K?

    Scaremongering up until the last minute only to learn that the adults were not going to lose their businesses.

    • fajensen
      Feb 23, 2019 at 6:11 am

      Nope.

      Thousands of engineers, like me, spend 4 years fixing and testing ancient code and equipment to avoid date-time problems at year 2000, which is why not much happened.

      Britain has spent two years bickering over the equipage for the unicorns that the EU shall give to them because their leaders “promised the kids” that everyone would have one.

      I.O.W. Not a lot (cough!) of preparation work has been done for Brexit and the results will show it!

  13. Cashboy
    Feb 22, 2019 at 6:38 pm

    Brexit has been handled by incompetant career politicians in the UK that have never held a real job.
    Theresa May (Uk prime minister) and her mob couldn’t negotiate themselves out of a paper bag.

    I always think how Thatcher would have handled Brexit and pretty sure it would have been as follows:
    1) travelled on the date of the leave referndum reult to Brussels EU Head Quarters and filed section 50 Notice to Leave the EU.
    2) Informed that leaving two years from that date and no conversation about “deals” and remind the EU buro-craps that they will be US$12 Bn per annum down.
    3) Stopped issuing National Insurance numbers to EU members.
    4) set up a task force to start negotiating trade terms with countries including EU member countries.

    The EU would have been banging on government door pleading for a deal.

    But what the UK has is a situation where the UK citizens want to leave ASAP but their democratically elected parliament doesn’t want to leave and looking at leaving only in name and been delaying the event.

    I ask myself what is in it for the parliament officials because why would they be going against the referendum decision?
    One reason could be that most failed politicians in tehir own country end up as MEPs on the gravy train. Nick Clegg, Kinoch family and even Donald Tusk (curent EU president and Polish reject).

    It is obvious that if the UK left the EU and prospered as a result, many countries in the EU would follow.
    It is obvious that if the UK left the EU with “No Deal” and therefore did have to pay the US$49 Bn to the EU in a divorce/trade agreement; the EU would be skint and the Euro would more than likely fall dramatically.

    The UK has all this propganda (instigated by the UK government) suach as:
    1) that UK airlines will not be able to fly over EU territory
    2) there will be no medical drugs supplied
    3) UK citizens will starve due to no food imports
    4) companies will leave the UK and move to the EU territory

    Brexit has been a great excuse for companies to lay staff off; go bust and restructure or move to lower wage countries.
    A classic example is Airbus that its main sales are in the Middle East and Asia and has a larger cheaper more efficient factory in China and has massive cancelled orders of airplanes and has nothing to do with Brexit.

    • Javert Chip
      Feb 22, 2019 at 7:47 pm

      With the exception of Germany, the EU without Britain is a pile of financial junk & bad debts. 2016 numbers:

      o UK is the 2nd largest economy (16% of EU) behind Germany’s 21%
      o UK economy equals the total of the 19 smallest 19 EU economies
      o UK is the EU’s 2nd largest customer – a vindictive EU could easily shoot itself in the economic foot (there are a lot of other places to vacation and buy cheese & wine…).

      Brexit is certainly somewhat of a risk (especially near-term) for the UK. However, Brexit only makes the remaining EU smaller & weaker, with a much larger percentage of dependent & poor member countries (Greece, Spain, Italy, Portugal & others).

      In Churchill’s memory, the UK should schedule Brexit for the 4th of July.

      • HMG
        Feb 23, 2019 at 12:12 am

        Don’t you mean 6th June ?

        It’s hard to know fully what is going on in the background. Maybe this derivative issue has been resolved otherwise many derivatives involving Deutsche Bank might ‘blow up’ and the losing side of the derivative have been able to walk away.

        Now that is settled maybe Mrs May can increase her threat level over the backstop and push Barnier, Junker and Tusk into a corner. Despite this I think she maybe getting throughly fed up with having to go cap in hand every week to Brussels. Could it be that she has been converted into a ‘leaver’ because of the disputable way they have treated her this year ?

        For what it’s worth I think it’s either No Deal or extension, re-vote leading eventually back to Remain.
        In which case all Olly Robbins hard work will have been in vain.

        But my crystal ball is a bit cloudy at the moment but when the fog lifts I’ll let you know the answer.

        • HMG
          Feb 23, 2019 at 12:13 am

          I think I meant to say despicable but my iPad over ruled me !

        • GuiriCateto
          Feb 23, 2019 at 1:38 am

          Churchill was for a United States of Europe, I think that is what Javert is referring to (with a slight touch of irony).

        • HMG
          Feb 23, 2019 at 3:24 am

          Maybe he was for the United States of Europe, but how do you know he wanted the UK to be in it ?

        • Bankers
          Feb 23, 2019 at 9:58 am

          https://winstonchurchill.hillsdale.edu/churchill-britain-and-european-unity/

          has quite an in depth look at that.

          When UK joined EEC it was also viewed as stab in the back to members of the Commonwealth, especially in terms of trade and residency. This had all been brewing since the turn of the century as new format was being searched to maintain empires, and commonwealth readjustment was an everpresent theme , Edward VII being notably francophile, to the point of home country neglect according to some.

          Either way the Entente, naval treaty and the point chosen of entry into WW1 are only indicative of the pragmatic choice of the UK’s position of alliance and its resulting spoken and unspoken commitments.

          I look at that period through to post WW2 more as one drawn out conflict , and as far as necessity and invention go , “When Britain and France Almost Merged Into One Country” at The Atlantic shows just how far any country might venture should the need arise. Alas the French made another choice, Petain had already decided on armastice with Germany.

          So maybe UK really never fully fitted into a continental Europe, and maybe never will. What is funny is that the continent is now more united than at any point in history, nor the romans coquered the north, but it isn’t the happiest of unity either, and some would say much more superficial or fragile than it appears.

        • HMG
          Feb 23, 2019 at 10:35 am

          Just confirms my thoughts.

          Several remarks have been made over the last year or two about how pro-European Churchill was and how certain some people are that Churchill would have been a Remainer.

          I think the jury is still out. His History of the English Speaking Peoples surely would leave a large element of doubt about what he would have done if he was in No 10 today.

          To weld ourselves into a permanent relationship with France and Germany, he might think could only lead to long term disaster. France and Germany together would probably have got his approval but UK, France, Germany, Spain & Italy. Somehow I think not.

      • Javert Chip
        Feb 23, 2019 at 8:59 pm

        The only on-topic Churchill quote I Can give is “…“We are with Europe, but not of it,…”.

        Churchill wanted a strong “US of Europe” to keep Germany in line. Britain alone, as they discovered in the beginning of WWII, they could not do it alone; the rest of Europe was a required partner.

        This Financial Times link (https://www.ft.com/content/3d6bbabc-7122-11e6-a0c9-1365ce54b926) is very comprehensive analysis; reading them in context helps clarify of what appears to be, at first glance, Churchill’s confusing statements.

        GuiriCateto was correct about my “…the UK should schedule Brexit for the 4th of July” statement (although June 6 would also be sweet).

        • HMG
          Feb 24, 2019 at 1:56 am

          Yup !

          This ft.com link sums up Churchill’s view perfectly.

          “With Europe, but not part of it”.

          Our special 200 year relationship with the USA is still and always should be of paramount importance. Churchill knew that and maybe, amongst other reasons, it was partly because he had an American mother even his political opponents could see that in 1939 there were some ‘hidden’ underlying important reasons why Churchill should be in No10.

          I’ll ask my friend Michael Dobbs next time I see him.

          Not forgetting Canada, Australia and New Zealand.

          ‘History of the English Speaking Peoples’.

    • fajensen
      Feb 23, 2019 at 6:35 am

      You are explaining very well why Britain will get nothing and why the EU now believes that it will be better off with a Britain “set aside for a while” and stripped of any political influence.

      Dictating terms is not “negotiating” and dictating terms garnished with threats from what is a significantly weaker position is just going to be killing any goodwill there may have once been. The UK is simply not the equal of Washington or China.

      If Britain had been a rational actor, they would have negotiated their deal amongst themselves and unofficially with Brussels before kicking off A.50. Going down the chute with no idea about what to do next was very stupid.

      PS: Those 39 Beeeelion GBP is about 79 EUR per head in the EU. I think the blow to the economy will be minor if we have to skip one restaurant meal one year.

      • Bankers
        Feb 23, 2019 at 11:07 am

        UK influence in the world is much diminished, and it has its own troubles to deal with, but EU was never going to be an answer to those. Like parts of the south of Europe, particularly the western seaboard, historical Germanic (indo European even) influence is only partial in UK. That is part of the antagonistic relationship the UK has with northern Europe.

        The point of resentment is that the UK has been “infiltrated” by EU law, membership of EEC was foisted, UK politicians becoming soft in the process. We are stepping back half a century of direction due to the result. Would you prefer a blunt “EU sucks” ? The financial and business side come after this . You might think rational negotiation is a priority, but to many in the UK severance is the priority, and they do not fear it. There are many people who are going to feel insulted, diminished, or left out, because of the circumstance, at others not accepting their “savoir faire” .

        Let’s turn this around – what great initiatives have EU proposed to resolve what would otherwise be WTO ? EU is so stuffed – did we ever even witness a full open debate between member countries on what their positions would be? On what Brexit signified at a national level, at an EU level ? No, and in fact they are not even allowed to negotiate with UK as countries, they are silenced by EU, the loss of sovereignty and choice is astounding.

        It is unfortunate, and I am done with over-posting trying to explain this.

        • HMG
          Feb 23, 2019 at 3:37 pm

          I appreciate what you are saying even if no-one else does.

          Maybe our scepticism is unwarranted. Only time will tell. But deep down all those U.S., Canadian, and UK soldiers 6ft under in the cemeteries near the Normandy Beaches must be turning in their graves as they witness Mrs May going to Brussels every week on bended knee.

          Mr Churchill may have had his faults but lack of courage was not one of them.

        • EMHO80
          Feb 23, 2019 at 4:29 pm

          Hello Bankers, I have a few questions I hope you won’t mind answering.
          How was the UK infiltrated by EU law? It always had a seat and vote in EU Council and Parliament. The UK had 1/28 of the Council votes, and 12.8% of the Parliament. That does not include former UK allies like Baltics/Poland etc who voted alongside her and allies of convenience.
          More often then not the UK got what it wanted. It also received plenty of opt-outs and financial rebates.
          Also, the EU duty/responsibility is to negotiate trade deals on behalf of its member states. Which is something that the member states agreed to via treaties.
          So, why should this change now? It has served the member states well, especially considering that there is strength in numbers and the UK will be isolated and in an inferior psition.
          If EU countries negotiated separately they could be played off against each other. Remember the term Perfidious Albion?
          I am sure that was/is the hope of HMG.
          Finally, pooling some parts of your sovereignty is not giving it up, especially since a mechanism exists for returning said sovereignty home via Article 50.
          It is not the EU’s fault that HMG has proven itself incompetent!

          Edit: This comment is a repost from further down, where it was posted by mistake.

        • Javert Chip
          Feb 23, 2019 at 9:41 pm

          EMH080

          Examples of how UK was infiltrated by EU law (AKA loss of sovereignty):
          o EU court is superior to UK courts
          o UK cannot control her own boarders
          o Brussels “encourages” tax harmonization to discourage tax competition with high-tax (read France) states
          o New EU fishing rules (very recent)
          o plus 12,000 other EU regulations

          Examples of UK loss of sovereignty:
          o No individual in the EU (let alone UK) casts a vote to elect the EU president (Claude “the drunk” Juncker)
          o The 2004 proposed “EU constitution” was rejected by popular referendums, but was essentially crammed down without a popular vote via the Treaty of Lisbon
          The Eu has a bad habit of not accepting “binding popular votes” that it loses – the offending state is threatened, and made to vote again

          General observation: if you don’t know what sovereignty is, you might not realize you’ve lost it.

        • EMHO80
          Feb 24, 2019 at 12:47 am

          Javert Chip

          Thank you for your reply.

          I must say that you are grievously misinformed how the EU works. To answer your points in order:
          -The EU court is only superior in areas where it received competence via its member states ( UK, France, Italy etc).
          -UK always had the power to control its borders. Citizens of other EU countries had to find a job within 3 month of arrival or be enrolled in university or supported by a spouse, otherwise would have to leave. The UK never enforced this rule, other countries like my home of Germany did!
          -Yes, the EU wants to harmonize taxes to prevent cheating. However, the UK and Ireland (among others) have on multiple occasions blocked these regulations. Domestic tax law remains domestic. Why?- Because member countries chose to maintain their tax authority!
          -I don’t know much about EU fishing policy, but again the UK was a part in writing and voting on these laws.
          -Well written regulations are a good thing, and most EU regulations are that. Look at roaming charges, or food safety, or vacation rules (mandatory 20 days per year minimum!).

          Loss of Sovereignty:
          -Junkers is one of many “presidents”, the term does not mean what you think. It is more like chief minister.
          -All the presidents were either appointed by elected heads of state (EU Council) or by EU parliament. My MEP is Thomas Mann.
          http://www.europarl.europa.eu/meps/en/1922/THOMAS_MANN/home
          -In regard to the Constitution /Treaty of Lisbon matter, there are so many myths/lies circulating that it is pointless to argue over it. I recommend that you read up on it from the source.
          http://ec.europa.eu/archives/lisbon_treaty/index_en.htm
          -I also recommend the EU Commission, EU Parliament websites for proper education.
          https://ec.europa.eu/commission/index_en

          http://www.europarl.europa.eu/portal

          -I know what sovereignty is, pooling parts of it, while being able to repatriate said sovereignty later is not giving it up.
          As a final note: The UK initiated Article 50, which in essence is a divorce procedure, it is up to the UK to be prepared and capable to make success of it.
          Best regards.

        • HMG
          Feb 24, 2019 at 1:42 pm

          Your “over posting” has been much appreciated by me, if no-one else.

          I have been out all day trying to earn some schekels. And what do I see on TV. When I get back ? Theresa has delayed to vote again until 12th March !

          Well looks as if neither 4th July and 6th June are the appropriate days.

          It’s back 2000 years to the man who first conquered Britain (well just a day early).

          “Beware the Ides of March”.

          ‘Running down the clock’. Did they have clocks two thousand years ago ?

          Where’s the Soothsayer ?

        • EMHO80
          Feb 24, 2019 at 2:45 pm

          Hello HMG

          I must say that I don’t follow your statements. Were they directed at me?
          If so:
          What do you mean with “over-posting”?
          What has this to do with the Ides of March?
          Are you saying that if Brexit is not delivered, politicians will be murdered?
          To me it seems PM May is forcing parliament to support her bill, or risk a crash out!
          That is, she is ensuring the UK will leave one way or the other.
          Is that not what you want, to be free from the EU?
          I am glad you earned some shekels today. Wouldn’t €£$ been more appropriate?
          Also, you did not engage with my replies to Javert Chip, you merely dismissed them.
          To me that is a sign you couldn’t make a well thought through counter argument, so chose to be flippant towards me.

        • Javert Chip
          Feb 24, 2019 at 6:13 pm

          EMHO80

          (I hope this post falls in the correct sequence)

          You and I have vastly differing opinions about the EU. Neither is going to convince the other.

          Based on various EU polls & elections, it’s apparent hundreds of millions of “EU subjects” don’t agree with you.

        • EMHO80
          Feb 24, 2019 at 6:39 pm

          Javert Chip
          Thank you for your reply.
          I agree with you that our positions are too far apart and that neither one will convince the other.
          For your information, I am a pro-EU eurosceptic. In my opinion saving and fixing the EU is far better than thrashing it and returning Europe to chaos.
          To me it is like having a leaking roof on your house.
          One option is to fix the roof and the other option is to burn down the house.
          I don’t know which polls you are refering to, but the ones in Germany and most of EU are positive, with exception to very specific issues.
          In regard to the elections, there has been a strong backlash against austerity measures (rightfully I think), which were pushed by UK and its allies in the EU, IMF and World Bank.
          Personally, the greatest disaster for european social democracy and social market economy was the collapse of the Soviet Union. With socialism discredited and no longer available as a counter weight to unfettered capitalism our elites have been able to go full on laissez-faire and cause great harm to many.
          Since the mid-90s we have seen this transformation to something benefitting the few and not the many, and I belief we can stop and undo this travesty, while preserving the great many benefits of EU membership.

        • HMG
          Feb 24, 2019 at 10:25 pm

          The Ides of March was a reference to 14th March.

          It has just been announced that the UK Government, of which I am not a member, will now have a critical vote on 12th March. There is also another ‘Ms Cooper’ vote now scheduled for 13th March.

          So by 14th March either all will be settled or everything will be as clear as mud.

          Just like trying to get these Wolfstreet Comments put in the right sequence !

      • HMG
        Feb 24, 2019 at 10:20 pm

        EMH080

        No it was Bankers reference to over posting that I was referring to.

        I found Bankers comments particularly incisive and interesting.

        I think there is more to Mrs May’s “running down the clock” that meets the eye.

        It could be that the Irish Backstop creates an EU end game which will mean, a few years down, the line we can only extricate ourselves from the 585 page legal agreement if we allow Northern Ireland to be annexed by Eire.

        Just a thought.

        • HMG
          Feb 24, 2019 at 10:34 pm

          The way I see it is Bankers, Javert Chip and myself see the complexities of Brexit from a Leavers perspective and EMH080 sees it differently.

          I’m still of the view that we should if necessary have another vote, exactly the same question as before. Except it’s made clear Leave means No Deal and WTO, and Remain means, as it always has done, Remain.

          No Way should we have this 585 Agreement , backstop, £39 billion etc etc. May’s Deal is what needs to be taken “off the table” !

        • EMHO80
          Feb 25, 2019 at 11:28 am

          HMG
          I was confused about your statements and thank you for clarification.
          My guess is that Bankers, Javert and you are british, so I hope you make a success of Brexit.
          There seems to be a major misunderstanding of what the ECSC/EEC/EC/EU were meant to be, it was always about ever closer union.
          From the preamble of the Treaty of Rome to Maastricht, the intent was very clear. I learned this in school back in the early nineties. So I was always confused why british were so upset and in my opinion confused of what the project was about.
          Perhaps your politicians and media misguided/lied to you, but the EU is not guilty of that.
          But enough of this, I wish you a save journey and hopefully we will be good trade partners and neighbors henceforth.

  14. EMHO80
    Feb 22, 2019 at 7:04 pm

    Thank you for this post.
    If I remember correctly, the EU Commission had plans late last year to give London Clearing houses an extended period of time to wind down their trades and transfer business to the EU. Now that a crash out is highly likely, this extension will need to be longer. In early January talk was for a 1 year extension.
    Is this still the case, or is it now not time limited?

    • Feb 23, 2019 at 7:17 am

      EMH080, as Cilic says, it’s only “a partial and temporary fix,” albeit a very welcome one for the City. The only source I could find that mentions an actual time limit on ESMA’s recognition of the London clearing houses is The Daily Express, which puts it at 12 months (https://www.express.co.uk/news/uk/1089629/brexit-news-no-deal-brexit-consequences-uk-clearing-houses-esma-deal). That would chime with the 12-month extension granted by the Commission in December. I wouldn’t be surprised if that is also extended further down the road.

      • EMHO80
        Feb 23, 2019 at 12:29 pm

        Thank you for your reply. It seems my memory still serves me well occasionally!
        I know eureferendum.com and nakedcapitalism.com also had articles on extending financial permits to London.
        I believe the EU will see its interests by granting time-limited extensions to UK businesses in specific fields, until EU enterprises are able to assume these function without the UK.

    • HMG
      Feb 25, 2019 at 2:25 am

      EMH080

      How fortunate the DUP , because of Mrs May’s disasterous decision to call an Election ended up with some critical seats representing the balance of power in The Houses of Parlaiment.

      Just consider how different events would have been had not that had happened.

      I apologise for my over posting but for us UK ‘victims’ of Brexit the outcome could change our lives and our children’s lives for the next 50 years.

      And at least my over posting is done in small bites, even if not always grammatically correct or with correct spelling (thanks to my iPads incompetence).

      When! a long time ago, I spent 3 years at the reveered institution we did not have iPads and I did not study PPE. Hence at that time I never learnt about the Oxford Comma, like what (sic) many of my illustrious contemporaries did.

  15. Realist
    Feb 23, 2019 at 4:57 am

    I have been wondering why the Brits don’t have any plan B when they haven’t even got a plan A regarding Brexit …

    Somehow reminds me of the days of the Suez when Washington DC did show the Brits their place …

    • HMG
      Feb 25, 2019 at 2:37 am

      Churchill son-one-law wasn’t up to the job. Churchill knew it but the son-in-law didn’t .

      Another Chuchillian error. As I said above W.S.C. had his faults, ask an Australian on ANZAC Day.

      We will not know whether Mrs May has a Plan B for a few weeks. It just could be she has got a Plan B , Plan C , and Plan X (there it is, The Oxford Comma: Mrs T went To Oxford too ) up her sleeve from the very beginning . Yet to be revealed.

      My Last Post on the subject.

  16. Brian James
    Feb 23, 2019 at 11:03 am

    Feb 21, 2019 Brexit: Stop political posturing and start negotiating a trade deal now – Stuart Agnew MEP

    https://youtu.be/hYOPOCuiKj4

  17. RD Blakeslee
    Feb 23, 2019 at 12:41 pm

    Jeremiads and Kudos re Brexit have abounded for some time now.

    My interest is as to how it will affect the human spirit, pocketbook issues aside.

    There were Jeremiads in 1773, too:

    http://teachingamericanhistory.org/library/document/arguments-against-the-independence-of-these-colonies/

    But human liberty here and freedom to develop our own culture was obtained, at least for awhile.

    After all the nitty-gritty bang-bang is over, the British will remain British and that’s good for every citizen of that erstwhile fair land UMO.

  18. Rosebud
    Feb 23, 2019 at 5:29 pm

    I like Leeds United ‘the Peac$cks’ to win The Championship division, and Liverpool ‘the Reds’ to win The Premier league.

    Fearless is one of my favourite Pink Floyd songs.

    Britain is one of the true leaders on this planet. I salut you.

  19. NewWorldOrderFAILURE
    Feb 23, 2019 at 7:16 pm

    Either sovereignty is or it is not. A country collects tax to pay for the activity within the boundary of the border. THEY cant have it both ways. Global companies must recognise sovereignty and pay tax where active. Then you have exWTO chap saying Brexit is a moot point as globalisation and integration is inevitable. He is firing from the A I – is coming for your job next – corner. The cost of not treating topography as a limited economic asset ie trees provide oxygen to breathe still fails to walk the MBA economic halls of solution frameworks.

  20. yngso
    Feb 25, 2019 at 3:10 am

    Now they’re talking about a 21 month delay.
    “The people” tried to solve one problem, and thereby created a lot of other ones. So far the Brits have only insisted. They need to start thinking, and if they can’t, the economy will do it for them long before 21 months have gone. The delay will become indefinite, and May not happen…

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