The Brexit story is starting to get exciting again. May is likely to persuade the cabinet to support a semi-soft Brexit proposal soon which will be sent to Brussels.
That's when it gets interesting. Right now, the noises are that it will be rejected but this could lead to the collapse of the May government.
The bigger picture, as Euro-intelligence reports, is darkening rapidly.
A NATO conference looms in mid-July which could lead to the de facto collapse of American support for European security.
A Trump-Putin summit could lead to further moves, including a US pull out from Germany, a Trump decision to stop military exercises near the Russian border and potentially a future easing of sanctions.
I found the general lack of interest about the risks of a disastrous NATO summit within the European political and media elites startling. It seems that the European political class is in denial.
https://www.eurointelligence.com/public.html
The transatlantic political crisis is also progressing in ominous ways. The Washington Post has the story that the Pentagon has undertaken a cost and impact assessment of the withdrawal of US troops stationed in Germany - which is seen as a potential precursor to a US withdrawal from Nato. The paper writes that Donald Trump was apparently shocked when he heard that there were still 35,000 active US troops on German soil. The paper writes that the study is still at a technical level.
Separately, there were reports last night of a legislative draft that would allow Trump to abandon WTO principles in his trade policies. Officials noted that the legislation was unrealistic and unworkable, but the president seems to be pressing ahead also as a means to build up pressure on the US' trading partners. We may laugh at Trump’s suggestion to Emmanuel Macron that he should leave the EU in order to get a better deal with the US. But we take note when John Bolton is dispatched to the UK to discuss the option of a zero-tariff zone. The US giving the UK a lifeline in case of a hard Brexit is not exactly what the EU wishes to see - and it may drive a wedge between EU member states in the final months of the negotiations.
The EU, meanwhile, said it would earmark $300bn worth of US goods for trade sanctions if Trump were to go ahead to slap tariffs on European cars.
Where will all this end? Roger Cohen answers the question in his New York Times column with a fictional scenario under which Trump would end US support for Nato and end up destroying the EU. This is what could happen according to Cohen:
"A briefing paper prepared by his national security adviser, John Bolton, is leaked. It defines the president’s strategic objective as 'the destruction of the World Trade Organization, NATO and the European Union.’ Much progress, it notes, has been made toward all three goals. ‘The liberal democratic club is crumbling under the weight of its own decadence and political correctness.’"
We don’t think Trump will succeed to destroy the EU, but he could cause lasting damage. The EU is at greater risk from forces on the inside. (see also our separate article on Matteo Salvini).
We have looming Trump tariffs on EU (read German) cars, which will cause huge damage to the German car industry.
Plus Germany is edging closer to recession this year!
https://www.telegraph.co.uk/business/20 ... le-merkel/
The numbers coming out of what is meant to be the powerhouse of the eurozone over the last few weeks have been terrible. On Friday, we learnt that retail sales are in freefall, and this week is likely to produce more bad news on industrial production. In fact, Germany is only a whisker away from an outright recession. Over the last decade, Merkel has created a dangerously unbalanced economic model based on massive trade surpluses and cheap labour. If that comes unstuck, it will be her downfall.
Bottom line - German car industry is facing a perfect storm - trade tariffs within months against their second largest market (USA), a economic recession within Germany and the wider EU is facing a collapse of NATO which is the guarantee of military security.
Any prospect of a American withdrawal from central Europe will terrify the east European member-states who have dark memories of Russian occupation after the war.
Economic self-interest and a strategic desire to keep the Brits tied to European security would suggest that Merkel/Macron, once autumn kicks in, will quietly order Barnier to work on a semi-soft deal in line with May's preference.
This is what Berenberg Bank (a German investment bank) has been predicting all along.
https://forecastingintelligence.org/201 ... of-change/
What on earth is a semi-soft Brexit? To quote the bank, “the UK stays close enough to EU rules for many goods and some services to avoid a hard border in Ireland. UK remainers could support a deal that keeps the UK partly aligned with the EU while the Brexiteers could back such an agreement as it would offer the UK some room to pursue its non-EU ambitions. The UK and the EU could probably find a solution the Irish question – possibly a bespoke customs arrangement.�
Peace always has been and always will be an intermittent flash of light in a dark history of warfare, violence, and destruction