Mailvox: BREXIT update

From a UK observer of the Brexit shenanigans:

The EU is prepared to offer Britain an extension to the Article 50 period. The offer is from 29 March 2019 to 18 April 2019, a total of 14 working days. Theresa May has wasted more time than this repeatedly since November. In return for agreeing to the extension, the EU wants £7bn. i.e. £500m per working day. Whilst there is probably a majority in Westminster for an extension to Article 50, such a financial penalty could be sufficient to extinguish that majority and deliver Brexit on time.

It is notable that they are making this offer before we have asked for it. Previously they said they would only make an offer if we asked. They are clearly worried about the economic contraction of the Eurozone currency economies. In particular, the EU estimates that Germany will lose 100,000 jobs in a ‘no deal’ scenario.

One of the things which the EU was adamant that Britain should pay for as part of its departure was the cost of offices in London which would no longer be used for European agencies. Mr Justice Smith ruled this week that the 25 year office lease of European Medicines Agency, signed in 2014, is not legally frustrated by Brexit. There is no legal obstacle to the EU continuing to run its affairs from Britain, and therefore the EU is liable for the full 25 year lease of £500m. There talk of appealing to the European Court of Justice, however, the law and the contract is very clear. There is a reason that international companies choose English Common Law as the basis for their deals, even when neither of the parties is actually English.

As part of Brexit, the German government has considered setting up English language courts in order to attract international business. They have completely missed the point that what attracts contractual parties to London is English Common Law, not the English language. It is the same thing that keeps the financial industry here, together with the fact that the banker’s wives get bored in Frankfurt, Paris and Geneva. Don’t underestimate the attractions of London’s social life. Places like Frankfurt don’t even have the quantity and quality of office accommodation to attract anything other than minimal “post office box” offices to establish a legal presence. Similarly, most of the European Medicines Agency staff will remain in London to seek other healthcare jobs and the Agency will need to be re-staffed with new people.

When the £39bn EU financial demand was first mooted, several groups of lawyers took a look at the basis for this demand and concluded that the EU did not have a legal basis for its demands. Ensuring that the EU does not get a penny to which it isn’t legally entitled is part of demonstrating responsible behaviour to the EU. Today the EU is saying that any discussion of future relationship after a ‘no deal’ scenario would be prefixed by a demand for the money. Britain should not attempt to strike a deal with an organisation which is clearly behaving outwith the law. How could we possibly trust an agreement with them? They are not “agreement capable”.