The EU is getting fed up with the Brexit negotiations, saying the UK has wasted all the talks in July by not offering any real compromises. They wonder if UK wants a deal. But I still think deal more likely than not (this year). A thread on why I'm slightly optimistic. @CER_EU /1
A). EU wants a deal and has already signaled some willingness to compromise on eg fish, state aid, ECJ. B). HMG's handling of CV-19 has led to questions about its competence. If no deal causes chaos - queues at ports, broken supply chains, food shortages - then more questions. /2
C). No 10 is getting worried about Scotland. SNP may do v well in next spring's Scottish election and would do even better if BJ bungles Brexit by going for no deal. Unionists in Scotland pray for a deal. (No deal would also make the N Ireland-GB border much harder to manage.) /3
D). Business has been v quiet of late, believing that calls for a softer Brexit would be counter-productive and could incur the wrath of No 10. But business leaders tell me come October if no deal looms they will start to scream. People may worry about jobs. /4
Ever since Peel was PM, the Tories have been close to big business - till very recently. That distance may not be sustainable, especially since Labour under @Keir_Starmer is starting to court business. So there will be pressure on BJ to get a deal. And there's still time. /4
Both sides in the Brexit talks claim they are united and that this strengthens their hand. This is sort of true. The EU governments stand together in backing @MichelBarnier. France is the toughest on many Brexit issues, and Germany softer, but that is the role they play. /5
As for the Brits, it is true that no cabinet minister challenges @BorisJohnson's plan for a hard Brexit. But there are nuances among the people who matter on Brexit. Apparently Cummings is indifferent to whether there is a deal. /6
.@DavidGHFrost is now in a strong position. Apparently he wants a deal but only if his red lines are not breached. EU officials find him inflexible. According to some, the PM is a bit keener on a deal than his chief negotiator. BJ is certainly a more flexible character. /7
The 4th person who matters is @michaelgove, who is in charge of no deal preparations. Perhaps because he has had to think about what might ensue from no deal, he is the keenest of the four to clinch a deal. /8
Another cause for optimism is that the joint committee run by Gove & Sefkovic is working quite well and has - for now - defused N Ireland as a problem issue. HMG will respect the terms of the withdrawal agreement (having earlier hinted it would not accept border checks). /9
True, several knotty issues still need resolving - fish, the ECJ's role, state aid and other level playing field provisions, and data adequacy - but on all of them compromises are conceivable, with good will on both sides, as my colleague @SamuelMarcLowe has often written. /10
There's one argument where I think the EU will prevail if there's an accord: the overall structure of the deal. UK wants a set of disconnected agreements in different areas. EU wants a 'Greek temple' with a single system of governance tying the various 'columns' together. /11
UK fears the EU punishing it in one area, for actions in another. But while UK is entitled to ask for safeguards, the EU will never accept another example of the 'Swiss model' that it hates, ie a series of disparate accords, each with different governance. /12
EU points it that it (and UK) need a single association agreement containing various bits to ensure Euro Parl ratification. MEPs wouldn't dare vote down whole thing, but could easily block a deal on say judicial co-op. An AA also makes it easier to avoid nat parl ratification./13
If there's a deal, it will lead to a much harder Brexit than many Britons expect. Many sectors of the economy will take a hit, eg from border friction, lack of access to the single market or the difficulty of hiring. But it is wrong to argue that no deal wd be not much worse. /14
The difference is not just that 'WTO terms' tariffs would cripple industries like cars and farming. The politics would be v different. An acrimonious no deal would hit economic confidence and make it v hard to improve co-op on trade and security, for a long time. /15
On the other hand even a thin deal of the sort BJ wants would be a base that could be build upon. In future years, when Brexiteers relax about Remainers 'sabotaging' their Brexit, and the French realise that the UK on its own is not going to out-perform the EU.../16
....rational actors in the UK and the EU can start to build a more constructive and business-friendly set of institutional links. This could benefit the economy and security of the UK (and the EU). If at some point there is a Labour government this process could speed up /ENDS
