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Impact of Brexit on the UK: grounded planes, stockpiling food, brexodus...
#1
Impact of Brexit on the UK: grounded planes, stockpiling food, brexodus...

There are many reports in the media about the impact of no-deal and other Brexit scenarios in various economic and other sectors. Is it all scaremongering? Which are real problems and how severe are they? Which things will change after 29 March 2019 even if the Withdrawal Agreement and hence the transition period come into force?



To provide information for evidence-based debate, here are some EU27 documents which refer to the impact of the no-deal scenario: 

Preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019
Communication of the European Commission
19 July 2018
https://eur-lex.europa.eu/resource.html?uri=cellar:cb76570b-a9c2-11e8-99ee-01aa75ed71a1.0005.02/DOC_1&format=PDF
The communication was sent to the European Parliament, the European Council (= the EU members), the Council (of Ministers), the European Central Bank, the European Economic and Social Committee (= 350 members representing economic and social interest groups in Europe; workers, employers, other civil society groups), the Committee of the Regions (= representatives of the EU regions) and the European Investment Bank. It overviews the actions which the stakeholders (governments, businesses, organisations, people) have to take to prepare for Brexit following 60+ Brexit preparedness notices published by the  European Commission (see below). It refers to two Brexit scenarios: (1) signed Withdrawal Agreement with a transition period until 31 December 2020 and (2) 'no deal' (= the UK crashing out without a withdrawal agreement and without a transition period). I strongly recommend you have a look at this document.

EU27 Brexit preparedness notices to stakeholders
https://ec.europa.eu/info/brexit/brexit-preparedness_en
https://ec.europa.eu/info/brexit/brexit-...notices_en
The European Commission has published 60+ Brexit preparedness notices providing advice to stakeholders (businesses, organisations, people) how to prepare for the changes after Brexit (in particular in case of a no-deal scenario). The first notices were published in November 2017; a vast majority have been already published several months ago.
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#2
There is only one kind of Brexit: 100% out

The Independent, 3 September 2018:
[Boris johnson] wrote: “The fix is in. The whole thing is about as pre-ordained as a bout between Giant Haystacks and Big Daddy; and in this case, I am afraid, the inevitable outcome is victory for the EU, with the UK lying flat on the canvas with 12 stars circling symbolically over our semi-conscious heads."
https://www.independent.co.uk/news/uk/po...20461.html

What exactly was the UK supposed to get from the 27 EU members during the exit 'negotiations' according to Johnson?

There is nothing grand to 'negotiate' about under Article 50 anyway (no matter how the British politicians and media lie about it). The 'negotiations' are actually just a legal procedure to technically disentangle the UK from the EU in some orderly way. Nothing more.

Article 50 clearly states that there is only one kind of Brexit: on 30 March 2019, the UK will be automatically 100% out of the EU (as an automatic legal consequence of triggering Article 50) = out of the EU treaties and consequently automatically out of all things related to EU membership: out of the EU customs union, the EU single market, Euratom, Open Skies, EEA, Europol, European Investment Bank, EHIC, EU scientific cooperation, Galileo, Erasmus, EU's WTO schedules (including the allowed agricultural subsidies which the EU has negotiated at the WTO and is administering them under the CAP), 750+ agreements with third countries which the UK used to have as an EU member... 

‘Soft’ Brexit does not exist. It is a delusional British fabrication. 

Exit means the UK automatically losing everything related to the EU. Everything – every last shred of it.

Of course the UK can beg the 27 EU members to get some association with the EU - but the UK is begging from the weak position of a third country (which is stupid enough to have also totally isolated itself and unilaterally torn up 750+ agreements with other countries, thus having zero trade agreements with any country in the world and even un unclear WTO status), not as an EU member. And to get anything from the EU27, the UK will have to make big trade-offs – because the large EU27 have much more to offer to the small UK than vice versa. In trade negotiations, size matters.

The UK can beg, but we are not obliged to give the UK anything.
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#3
Impact on rail transport (Eurostar)

Eurostar will not run if there is a no-deal Brexit, French Europe minister warns (Independent, 13 September 2018)
Eurostar trains would be turned back from Europe if Britain crashes out of the EU without a deal, a leading French minister has warned. Nathalie Loiseau, the minister for European affairs, said it was “correct” that both trains and planes from the UK would be barred without an exit agreement.
https://www.independent.co.uk/news/uk/po...36316.html

No news here. As the French minister for EU affairs, Natalie Loiseau attends meetings of the EU27 GAC which has the mandate to decide about Brexit issues.

Slides from discussions of 27 EU members about the impact of Brexit on transport were released in February - for info on impact of Brexit on rail transport, see pages 8-9:

Internal EU27 preparatory discussions on the framework for the future relationship: "TRANSPORT"
(21 February 2018)
https://ec.europa.eu/commission/sites/be...018_en.pdf

In July, the EU27 published this Brexit preparedness notice:

Notice to stakeholders: withdrawal of the United Kingdom and EU rules in the field of RAIL TRANSPORT
(10 July 2018)

According to Chapter III of Directive 2012/34/EU establishing a single European railway area, in order to provide rail transport services, railway undertakings need a licence: they are entitled to apply for it in the EU Member State where they are established. The licence is valid throughout the territory of the Union... as of the withdrawal date, licences issued by the United Kingdom will no longer be valid in the EU-27. Railway undertakings holding such a licence and wishing to continue operating in the EU-27 as of the withdrawal date will have to apply for a new licence in an EU-27 member state...

Railway undertakings providing cross-border services between the United Kingdom and the EU-27 and wishing to continue after the withdrawal date, will have to comply with the legal requirements applicable both in the EU-27 and the United Kingdom. These undertakings will therefore have to ensure that they have a licence valid in the EU-27 for the sections of the cross-border services located in the territory of the EU-27Establishment in one of the EU-27 member states is a precondition for acquiring an EU-27 licence…

Directive 2007/59/EC15 lays down the conditions and procedures for the certification of train drivers operating locomotives and trains on the railway system in the Union. In particular, it requires that the train driver obtains a specific licence and a specific certificate. The licence is issued by a competent authority of a Member State while the certificate is issued by the railway undertakings and infrastructure managers. According to Article 7, a licence issued by a Member State is valid throughout the territory of the Union while the certificate is valid on those infrastructures and rolling stock identified on it. As of the withdrawal date, licenses and certificates for train drivers issued in the United Kingdom will no longer be valid in the EU-27.

https://ec.europa.eu/transport/sites/tra...nsport.pdf

In case of no deal, the UK will become a third country in relation to the EU27. The UK will no longer be an EU member. The EU treaties and all other agreements which the UK used to have under the EU umbrella will cease to apply to the UK. The UK will be 100% out.

This also means that rail licences and train driver licences issued in the UK will cease to be valid in the EU27.
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#4
Ajda - it's perfectly clear what the Brits want: ALL the benefits of EU membership, with NONE of the obligations. It may be a pretty coarse description, however to me it appears they want to preposition their country as parasites on OUR backs. Where is their national pride? Do they have any?
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#5
Not so much national pride than national vanity and bluster. A very colonial attitude. I should know (I'm French).
Joke apart, I recently read an article on how the UK tried to negotiate its entry in the EEC. Since the beginning they tried to change the nature of the European construction by asking varied cake options. They were firmly told "Take the whole package or stay out". So here we are again, with them trying to impose the same old same old while leaving. They probably thought that the EU would be weakened by Brexit and other inner and outer challenges (Trump, Russia, migration crisis, populist movements...) and would relent more easily than when the EEC was a compact group of 6 countries.
I still think they will blink first. How else are they to face their own people?
But the big question remains the NI border, with the poisonous DUP holding the government hostage and no sensible opposition to speak of. Their contempt for the Irish question is beyond the pale. They are sorely missing the point if they think that the EU will cave in on that. Beside Ireland being a very popular member state, it would be as much a blow to the European unity as to give them access to the SM without the related obligations.
The EU wants them to sign the WA they agreed to last december, especially on security and defense (see the French behind that). I just wonder what face-saving trinket they will be offered.
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#6
On the topic of the entry negotiations: http://blogs.lse.ac.uk/brexit/2017/11/09...th-the-eu/
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#7
Brexodus of car manufacturers?

There have been several news reports recently about car manufacturers located in the UK implementing Brexit contingency plans, stepping up Brexit warnings etc., for example:

Jaguar Land Rover says about 2,000 staff will go to three-day week
Castle Bromwich move comes after carmaker was accused of ‘scaremongering’ about Brexit
https://www.theguardian.com/business/201...eek-brexit

Honda warns no-deal Brexit would cost it tens of millions
Carmaker says it could face higher tariffs but stresses it is committed to Swindon site
https://www.theguardian.com/business/201...fs-swindon

BMW plans to shut Mini plant for a month after Brexit day
Carmaker says Cowley closure minimises impact of supply disruption if there is no deal
https://www.theguardian.com/business/201...it-no-deal

Let us have a look at each of these three cases and what their announcements may actually mean.

Jaguar Land Rover

Deliberately winding down production to three-day weeks in a specific car assembly factory is a big decision - it has knock-on effects on thousands of people in the just-in-time supply chain. No car manufacturer will screw its long-term reliable partners in the supply chain just like that - unless it is about to make some major changes.

While JLR is decreasing its output in the UK, it is increasing production in the EU27 (including big investment and creating new jobs). Assembly of the new electric I-Pace is located in Austria:

Jaguar I-Pace to be built by Magna Steyr (November 2016)
http://www.autonews.com/article/20161128...agna-steyr

JLR also built a new factory in Slovakia:

Jaguar Land Rover to Invest $1.5 Billion to Build Plant in Slovakia (December 2015)
https://www.wsj.com/articles/jaguar-land...1449838825
followed by
Jaguar will kick off its production in early September (May 2018)
The company has recently opened a training academy [in Nitra, Slovakia] to educate its future staffers... Jaguar Land Rover currently employs 1,300 people, 97 percent of whom are Slovaks... Jaguar Land Rover plans to employ 2,800 people in its Nitra plant by 2020... It is expected that the carmaker will create a further 22,000 indirect jobs.

https://spectator.sme.sk/c/20837948/jagu...ember.html

At the same time that JLR workers in the UK are put on 3-day weeks, JLR has dozens of job advertisements for highly-skilled workers in Slovakia (https://www.profesia.sk/en/work/jaguar-l...e_num=1000) and is recruiting hundreds of new production workers via agencies.

Note that apart from costly problems with Brexit, the owner of JLR (Tata Group, India) has had another big problem in the UK recently due to UK's idiotic decisions and attitudes. Remember the Tata Steel crisis in the UK in 2016: How the UK steel crisis unfolded (April 2016) https://www.theguardian.com/business/201...s-unfolded Here is what the UK government was doing to 'protect' steel industry in the UK:

UK accused of leading efforts to block limits to Chinese steel dumping (April 2016)
Britain acted as ringleader in preventing increased tarrifs on cheap imports to EU, according to European Steel Association

https://www.theguardian.com/politics/201...se-dumping

While the British politicians were lying to the British people during the Tata Steel crisis how they would be able to save the British steel industry if it were not for that evil EU, the Tata bosses know exactly that the UK government was actually doing.

So in the last few years, both Tata Steel and Tata Motors have had huge problems in the UK due to UK's decisions and attitudes. I strongly suspect that the Tata bosses now regard the UK as a hugely risky, unreliable and unstable business partner. If you were a Tata boss, would you invest anything in the UK after recent blunders?

Likely outcome: JLR (Tata Motors) will pull car manufacturing out of the UK and move to the EU27. It depends on the exact Brexit scenario how quickly this happens. Maybe JLR will keep an R&D centre in the UK, but even this may relocate to the EU27 if there are problems with recruitment of highly-skilled staff due to end of FoM and/or if the JLR employees with UK and other non-EU27 citizenship have to wait in long lines every time they travel to the Schengen zone (ETIAS visa waiver, UK and non-EU27 citizens in the slow lane at the Schengen border after Brexit).

Honda

Just like other car manufacturers located in the UK, Honda has been repeatedly warning that it will only keep production in the UK after Brexit if it remains 'profitable'. So Honda warning again that Brexit will be costly together with its assurances that it is 'committed to Swindon site' (without any signs of actual commitment) is a rather bad omen for the UK.

Honda is a Japanese company. The EU27 and Japan have recently signed a big cheese-for-cars trade agreement. The major trade-offs were Japan opening its market to import of EU food in exchange for the EU27 opening their market for import of Japanese cars. Honda was never particularly interested in manufacturing cars in the EU (see list of Honda production sites https://en.wikipedia.org/wiki/List_of_Ho...bly_plants ). Swindon is the only Honda factory in the EU assembling cars - and it will be out of the EU after March 2019.

Likely outcome: Honda 'remains committed to Swindon' means that Honda will let its Swindon factory die rather than relocate it to the EU27. After Brexit, it will import cars to the EU27 from its other factories around the world, possibly with increased production in Japan due to the EU27-Japan trade deal (Swindon may in the end 'relocate' to Japan).

BMW Mini

BMW announcing that it will close down its UK factory for one month in April 2019 is a huge business decision. Note the whole EU automotive industry in effect functions as one big factory spread across the EU, with just-in-time supply networks feeding parts into the final car assembly factories on deadlines which are a matter of hours. The minute the ordered car parts are finished, they are loaded onto trucks and sent to the next stage of production. Production facilities throughout the JIT supply chains (including the assembly factory) have very small warehouses - their storage facilities cover parts for two-day production maximum. So car production relies upon parts constantly smoothly and reliably moving down the JIT supply chains and feeding into the assembly plant. Where this JIT supply chain is also branched - some suppliers provide parts to several manufacturers (e.g. VW and Renault).

So any part of the JIT network (including the car assembly plant) cannot just like that close down for one month on a whim - this would have massive knock-on effects up and down the JIT network. The whole EU car manufacturing JIT network goes for summer holidays at the same time - in August (when car sales are lower due to holidays). So major maintenance work is always planned for August.

BMW shutting down its Mini factory for one month in April 2019 will have big knock-on effects in the JIT network - unless BMW plans to increase production in its EU27 sites. Moreover, BMW cannot compensate for loss of one-month production in April by working throughout summer (= by having annual holidays at the UK site in April instead of August) - in August, the JIT network will be shut down, and Mini UK does not even remotely have enough storage space to stockpile before the August shutdown all the parts needed for several weeks of production. So in effect, BMW decided to 'throw away' business worth one-month production at its UK site. BMW has only done this because it has some major changes in the pipeline (which it will not reveal publicly just yet).

Likely outcome: BMW will move production from the UK to the EU27. It will use the one-month 'maintenance' pause in April to pack the production lines and move them to the new site.
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#8
(13-09-18, 09:31 PM)Ajda Slovenia Wrote: There is only one kind of Brexit: 100% out

I wish there was.

You appear to think that all the British want to have some kind of half-way house between leaving and staying. This is not true.

The referendum showed a country where roughly half wanted to leave and half wanted to stay - the leavers having a slight margin.  The politicians all wanted to stay, but had promised to implement the results of the referendum.

The result is that the British politicians are trying to satisfy both sides by proposing a half-way house - a 'soft' Brexit as they call it.  This will satisfy no one. The Remainers want to stay fully in the EU. The Leavers (of whom I am one) want to leave completely - 100%.  The EU Commission and peoples also recognise two states - fully in the EU and fully out.  There is no 'partly in' state.

You will not be surprised to learn that the British people on both sides are just as unhappy with the British politicians as you seem to be. Both sides are calling for an election to sort things out, but it does not look as if the politicians are willing for this to take place...
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#9
I feel that the UK's tragedy lies indeed in its contradictions about its neighbouring area. While there might be some British people who are fully committed to the European construction as it is, they are IMHO a much smaller group than the vote for remain.
The UK would have been very happy not to join the then EEC if its economical needs didn't require it. Politically, it couldn't accept not to have a say on what's what going on in mainland Europe. Thus the entry. Brexit is the logical result of not being able to change the European construction according to its will. But the question remains. How to be totally out of its neighbours' block without losing its trading advantages and its political influence? It explains the many divisions in Brexiting Britain because people don't agree on the strategy.
For us, EU other countries, Brexit was the opportunity for a clarification. In that respect, I find the hard Brexiters' position much more consistent than many half in half out positions. On the other hand, it is hardly surprising that a badly prepared Brexit has little attraction for many remainers who are only pro-EU in a skin-saving way. The case for a committed UK in the EU has never been made, nor it is being done now by the new referendum proponents.

From outside, I cannot see how the UK can heal its divisions about Brexit (that is its positioning in its geographical area). Can you tell us how you see a path for Britain to find a real consensus on that conundrum?
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#10
(20-09-18, 07:23 AM)Dodgy Geezer Wrote: You appear to think that all the British want to have some kind of half-way house between leaving and staying. This is not true.

No, this was not my point. I only explained the legal specifications in Article 50.

According to Article 50, there is only ONE kind of Brexit: the UK 100% out = all EU things cease to apply to the UK. This is the automatic legal consequence of triggering Article 50. And neither the UK not the EU27 can do anything about it.

So the only thing available to the Brexit UK is begging the 27 EU members or some sort of a relationship with the EU - but from the position of a third country = a country which is not an EU member. In legal terms, Brexit UK's status in relation to the EU27 is exactly the same as the status of any other third country.

Barnier said at his very first press conference as our chief Brexit negotiator back on 6 December 2016 (= almost two years ago):

"I do not know what a soft or a hard Brexit are... I know what Brexit is."

It is rather amazing how the Brits seem to have problems with grasping such rather simple legal things. It is impossible to have any meaningful negotiations with a country that does not even understand its legal status in the negotiations.
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