1. Unpalatable is indeed more preferable to unacceptable. But the backstop has to be sufficiently unpalatable for the EU too. Part of the problem is that in order to make UK-wide work it will have to contain broad regulatory alignment with institutions to guarantee it
2. The more comprehensive this alignment is - level playing field provisions, ECJ dispute resolution and Commission oversight - the more the negotiation over the backstop becomes the "fullstop" to use @jl_owen's phrase
3. If the two sides do reach agreement over a backstop that looks like the CER's Jersey option it could represent the highwater mark of compromise. Both sides would have diametrically opposed incentives in continuing to negotiate.
4. The UK would want more access for less alignment without having to apply free movement and without accepting ECJ. The EU would want to include free movement in exchange for futher provisions on services.
5. There would be few incentives for the EU to offer much more than they already have as the UK would have given up level-playing field and would be under the jurisdiction of the ECJ for goods.
6. The UK would either need to negotiate a NI specific protocol if it wanted a more conventional free trade agreement, or it would end up accepting something like the EEA but worse if it wanted to include services (free movement, automatic updating, fewer channels of influence)
7. Despite the impact it will have on the future relationship, I still think a UK-wide option better serves the people on the island of Ireland than a NI-specific one. But the more the EU exact from the UK on regulation the more likely it becomes the only viable compromise
8. This leaves a choice for both sides between trying to make a UK-wide backstop as palatable as possible, or to accept a functional solution that is not sustainable long-term to ensure something else is put in place.
9. If now is the maximum leverage the UK can muster in negotiating a compromise of the four freedoms then it probably needs to go for broke and look at what institutional provisions it could live with to enforce the agreement and what rights it might have to influence regulations
10. Whatever happens, either the refusal of a NI protocol goes or the rejection of regulatory alignment does. Either will inevitably shape the future relationship. The Government is now at crunch point and must take the decision on regulatory alignment it has been avoiding. ends/
