THREAD:

THE WORM HAS TURNED

1. I thought Barnier looked rattled when he gave the short update on the trade negotiations earlier today. He'd lost that air of confidence & his English wasn't as polished as previous occasions.

2. He needs to be careful with his language, especially when it comes to boasting how big the EU trade bloc is compared to Britain. WTO rules exist to prevent inequality & unfairness in trading positions. That aside the 'insignificant' trade deficit must now be more apparent.

3. Boasting of 450 million punters is all well and good, but how many of them will be living in solvent, affluent countries when the pandemic has unfolded to its full potential? And how many will be spending to the extent they were just a few months ago?

4. I remember reading an article last year. The Danish government had written to Mrs May asking for assurances on fishing opportunities in the event of a no deal Brexit. The Danes became very worried when No.10 didn't respond.

5. It's not just a matter of Danish fishermen, it's the fish processing plants & the market they sell into. Production lines, packaging, recipes and so on cannot be changed at the drop of a hat without loss of time, trade, money & brand loyalty.

6. Think of it as going to buy your favourite brand of cod in parsley sauce only to find it's been replaced with a different fish & sauce. It takes time & money to entice buyers to switch to something different & there's no certainty the replacement will be a success.

7. So something that might only be worth a few GDP points to us suddenly becomes a huge worry to countries that rely more on fishing related industry as a bigger part of their economy & employment.

8. That is why Barnier is keen to try & use fishing opportunities as the proverbial sprat to catch a mackerel, trying to obtain the same fishing opportunities for member states in return for an unknown trade deal outcome.

9. When Mrs May was interviewed by Laura Kuenssberg shortly after resigning as PM, she admitted regret in letting the EU dictate the sequencing of the Withdrawal Agreement & PD negotiations. The EU are trying the same tactic again, but hopefully we will learn this time!

10. Aside from the leverage that fishing opportunities gives us in the negotiations, there's also the promises given to our coastal communities & they won't forgive if they're once again sacrificed for other industry sectors.

11. We can see how uncertainty in the markets will totally change the power dynamics. Smooth single market access is no longer a certainty as countries close their borders to manage Covid19.

12. Freedom of Movement will be resented if it results in reinfection of countries that have spent billions in trying to contain the pandemic to manageable proportions. We're all in this together has a hollow ring about it when member states hoard PPE & act in self interest.

13. The powerful German economy is reliant on a trade surplus. We saw major job losses within their car industry at the back end of last year & the current crisis will only add to those losses. Running a continual surplus becomes a huge problem when Europe shrinks economically.

14. And waiting in the wings will be Trump. You watch, he'll make Germany's eyes water with tariffs. The US has long grown tired of the economic stagnation in Europe & if it means tearing the house down to build something better, he'll do it.

15. So I do believe it is crunch time for the EU. The wealthier countries have to decide a rescue package for the poorer. The poorer countries will have to try & sell it to their people & that may not be easy given that everyone knows what happened to Greece.

16. Guy Verhofstadt might get his way & a 'more Europe' EU emerges from all of this. But it won't have 27 member states & if they try to do it by stealth, without referendum, they will get the full force of populism on their backs & not many of the shaky governments will survive