Wednesday, 7 December 2016

D.I.V.O.R.C.E

I've avoided divorce so far by never achieving the blissful joy of marital status. I say that as though my hermit lifestyle was by choice or design. It isn't. I've mentioned this several times but for new readers I have a deeply unattractive STEM mindset that acts as a highly effective partner repellent. If you also have a STEM mindset and have found success in affairs of the heart do get in touch with tips as a matter of urgency because the handsome looks you see in the profile photo are fading fast. If you're one half of a STEM couple then I recommend getting in touch with Norris McWhirter or Brian Cox because you've either broken a world record or a physical law of the universe.  Enough with this nattering, let's get on with the UK's divorce settlement with the EU, otherwise known as Article 50.


What sort of issues will be discussed in the A50 negotiations? Let's look at just one issue to see how complicated it can get and also to illustrate how trade negotiations can only begin once A50 is complete. In the spirit of a deeply unattractive STEM mindset let's look at pensions. My old mate Bernd from Bochum (party guy, look him up when you're next in Bochum) has a lot of concerns about this because his sex robot technology business is directly affected. Bernd, this one's for you if you have any remaining eyesight. To be honest, I've not had much contact with Bernd lately. He's spending an awful lot of time in the office with the door locked and all the blinds down. What is he up to in there?

I wouldn't customise a sex robot with glasses, a wedding ring and a purple shirt but she looks happy enough with her purchase.
The EU has a number of satellite organisations such as the European Medicines Agency and Euratom, which provide oversight on technical aspects of European policy. If you're lucky enough to live it large on the EU gravy train then you are legally entitled to the pension laid out in your employment contract. That holds true if you are an unelected fat-cat Nazi Stalinist at the EU Commission or a lowly admin assistant at one of the other fronts for Satanism set up by the EU. Part of that pension will have been funded by the contributions that the UK has been making to the EU. It's not hard to see that the UK has obligations to continue funding those pensions. After all, they worked on behalf of us for many, many years so we need to keep up our side of the bargain. How do we do that after we leave the EU? Well, that needs to be negotiated. It needs to be decided if there will be a one-off payment or if the UK will continue to pay annually for all of its accumulated obligations. It might get even more complicated if the UK decides to remain accountable to some EU institutions but not others. Arriving at a final separation figure can quickly turn complex and fractious, just like any other divorce. There is a lot to agree and time is short.

Can it get any worse? Yes, of course it can. The EU allows all workers to transfer their pensions as they move from one country to another.  In fact, you don't even need to move country to move your pension because it is a single market and EU citizens can decide where to stick their cash as they wish.  The operation of the transfer scheme is laid out in Regulation No 1094/2010 of the European Parliament so this is legislation that will be included in the Great Repeal Bill.   I'm directly affected by this because I have paid 7 years into the Swiss state scheme and to a scheme set up by my Swiss employer.  If I wanted to leave Switzerland at some point in the future it would be good to know that I could take my contributions with me to wherever I end up. What happens after Brexit? Will the UK simply terminate all its obligations, meaning that pensions in the UK are stuck there and pensions in the EU can no longer transfer to the UK? That doesn't sound right because those pensions were accumulated with the understanding that a future transfer was possible. I don't see the good citizens of Canary Wharf being very happy about that, either. In simple terms, the UK has obligations that it needs to maintain.  This is what Brexit actually means.

What on earth are we going to do with all those pensions?  An even more fundamental question is whether the UK intends to remain shackled to Beelzebub himself through the European Insurance and Occupational Pensions Authority, the EU institution that provides oversight for EU pensions.  The UK Government has made no statement on this to date. I doubt if they even have a plan.  To be honest, it doesn't even appear to be on their radar.  There is actually a problem with the timeline here because the Government can't really walk into A50 negotiations without first having a clear strategy for how it will manage all the UK's ongoing obligations to the European pension system. If they decide to tear up an obligation they will either have to pony up some dosh as reparation or replace it with a separate system to moderate UK/EU relations.  A replacement system will require the appointment of a court to adjudicate on disputes, the creation of an institution to provide technical oversight, and some kind of committee that defines the minimum commonalities of the EU and UK pension systems required to allow pension transfer. It will look a lot like the European Insurance and Occupational Pensions Authority sitting alongside the European Court of Justice and the EU Commission.  For this to operate the UK will have to contribute to the salaries of all sorts of unelected bureaucrats, many of whom will be active diabolists. Does Brexit still look like Brexit?

Anton Lavey snapped in the EU's main library. He is making the Satanic sign of "Brexit means Brexit"

Instead of worrying about the divorce settlement the UK Government are banging on and on about trade and tariffs.  Right now, this is not the priority. I'm hoping I've made it clear that any discussion about a trading relationship can only begin after the UK has finalised its long-term commitment (or not) to its existing EU obligations. An integrated trade deal is obviously contingent upon the UK maintaining as many of its EU obligations as possible through treaty agreements. Conversely, the more we divorce ourselves from EU institutions and courts, the harder it becomes to reach an agreement about participation in the single market.  My point is that trade can only be discussed after  the legal relationship between the EU and the UK is clarified and ratified.  The EU knows this well but my hunch is that the penny hasn't yet dropped for David Davis.

My gut feeling is that the UK Government is completely clueless. Are we really going to walk into the A50 negotiations without a divorce plan?  Are we going to see David Davis inexpertly try to talk trade and tariffs during a scheduled session on the technical aspects of replacing Regulation No 1094/2010.  You know what, I think that really is going to happen. 

Over and out,

Terry

PS I cover up my STEM mindset with topical impressions of zeitgeisty luminaries such as Ronnie Corbett, Michael Parkinson and Frank Spencer. The laydeez love it but I think I'm losing their attention when I use the word "zeitgeisty".

PPS I once had a short-tempered boss who haughtily told me, "you're not on the EU gravy train now, this is the real world". At the time I worked in a research group at the University of Bristol. Oh, the irony.

8 comments:

  1. There is something utterly terrifying about the total ineptitude of the British government in these (and so many other) matters.

    From the moronic way that Cameron refused to countenance any civil service preparation for a possible Leave vote (don't be silly, he told Nicola Sturgeon when she suggested it was a possibility) to the idiotic antics of the Foreign Secretary, or the reluctance of David Davis to hear anything negative, they are utterly astounding in their incompetence.

    Then there is Liam Fox. 'Nuff said before the watershed.

    That woman looks a lot like Donald Trump's daughter. You'd think she could have afforded a better quality sex robot that the speccy dude. Geez, purple shirts...

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    1. It is quite terrifying. Even the vote in Parliament to force the Government to reveal its plan doesn't change anything because it is a toothless proposal. I'm expecting to see a plan that involves which train they will catch and who will do the catering and nothing more.

      We can already see the EU out-manoeuvre the PM and her team. The UK Gov has even started talking about transitional deals, while Bernier from the EU said, sure, we can talk about that ... later. Later, when time is running out and the UK is in a weak position. The Brexiters don't realise that a transitional deal is not in the power of the EU. There is simply no legislation to make that happen. The EU will need to bend over backwards to bring it to life. It will take time, putting the UK in an even weaker position. The lack of knowledge combined with the chest-thumping and bluster is taking us nowhere at all.

      Cameron must be regretting not giving devolved regions a veto on the referendum. This could all have been avoided if he'd just done that.

      Liam Fox, of course, has just admitted in public that our post-Brexit WTO deal will be exactly like our current one. Even getting that far is fraught with difficulty with arguments over quotas likely to rumble on for some time. The UK has barely any room to negotiate a new settlement at the WTO without multiple disputes being issued.

      I'm away to get myself new specs and a purple shirt.


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  2. Sorry, a bit slow to reply. It took me a while to find that purple shirt I wore to a strange party in Kelvinbridge in 1975. Specs already in place.
    The arrogant clueless ignorance of the U.K. govt. has surprised and troubled me, and I didn't expect much from this bunch of chancers.
    In a past life I was for while an academic specialist in labour markets and an economic development practitioner (and you thought your stuff would bore the ladies, Terry!)
    It's clear that this UK govt. is clueless about stuff I do know something about, which leads me to suspect they are are also clueless about stuff I'm not so well informed on.
    It's like a slow motion train crash out there, and it's only going to get worse, will we be able to convince people in Scotland to jump off before the crash? I bloody hope so.
    PS many years ago I did get divorced, and it was a bit messy but better informed, negotiated and civilised than the UKs approach to "Brexit" (y'know I really hate that word.) That approach seems to be "give me what I want or I will cut my throat and you might get a bit spattered by blood...."
    I'd go to the pub now, but if there is anyone there they would laugh at my purple shirt.


    it was much more civilised, informed and reasonable than the UKs approach to leaving the EU.

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    1. There's going to be quite a fashion for specs and purple shirts, I reckon.

      I've always understood that there was the theatre of politics and then there was the hard graft of civil servants implementing policy. I just don't see how those civil servants could ever be directed in a meaningful way when representatives of the government say whatever pops into their minds. Utterly clueless. Maybe they are hustling the EU into thinking they are clueless when all along they have a cunning plan. I don't think that is the case, though.

      I do hope that Scotland can jump off if this goes really bad. It is going to need intestinal fortitude along the way.

      You're right that UK Gov is unnecessarily aggressive. With a qualified majority vote on A50 they ought to be wooing allies but they're doing the exact opposite.

      Wear that shirt with pride, get the glasses on and talk as enthusiastically as you can about labour markets and economic development. Everyone in the pub will be hanging on to every word.


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    2. ...Or maybe just "hanging"...

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    3. The more likely outcome, if truth be told.

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  3. Seems to an odd extra line in my last post.... Maybe I should just go t'pub.

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    1. No worries but it is still a good excuse to go to the pub.

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