Saturday, July 11, 2020
Home News TCW Brexit Watch: At last it’s been said: ‘No-deal is probable’

TCW Brexit Watch: At last it’s been said: ‘No-deal is probable’

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TODAY I’m focusing on Der Bund – Bern’s Liberal paper – and two recent reports. Before you read, let me warn you that this is almost a socialist paper nowadays.

The previous managing editor is a neighbour and delightful friend. He was the first Swiss to become a member of the British Labour Party, and still thinks that Peter Shore was a bad influence and that people like me – pro-Brexit long before we joined the Common Market – are off our trolleys. We have highly entertaining debates.

The idea that British taxpayers don’t want to pay the bills of Continental taxpayers comes almost as an afterthought for the writer in London and his current editor!

At least it’s there in print at last, in Alexander Mühlauer’s opinion that ‘no-deal-Brexit is more and more probable’. That it could be to our advantage is a first. 

He claims that Boris Johnson, ‘known to be a man who doesn’t take the truth too seriously’ now admits he lied about free movement of goods between Britain and Northern Ireland – confirming TCW’s Brexit Watch analysis yesterday.


‘Before his furious election victory, the Prime Minister had promised that there would be no controls on the movement of goods between Great Britain and Northern Ireland after the Brexit. After all, the unity of the United Kingdom should be preserved.

‘Only now did Johnson’s government admit that this was not so. In order not to upset the Brexit negotiations with the EU, London confirmed for the first time that there would be controls. Johnson had lied.’

Mühlauer says (from his EU perspective) that ‘this meek admission from London is so far the only ray of hope in the negotiations with Brussels’. 

But his interpretation of the poor progress of increasingly irritable talks is that ‘a no-deal Brexit becomes more and more probable’.  He thus advises more pragmatism: ‘Neither the EU nor the UK can have any interest in exacerbating the economic distortions of the corona crisis with a no-deal Brexit. Anyone who, in this situation, believes that they still have to burden a society with the costs of a hard Brexit is simply acting irresponsibly.’

His narrative and framing of the situation as he warns of the ‘great danger that Johnson will once again be guided by ideological goals instead of economic reason’ will be manna to Britain’s Remainer faction.


There is however no arguing with his statement that ‘it will soon become clear which path the Prime Minister is taking’.  By June 30, Johnson must decide whether to extend the transitional phase, which runs until the end of the year. So far this has been rejected, ‘but that does not mean that he won’t change his mind’.


He exhorts Johnson to use his rhetorical talent to convince the Brexiteers in his party to choose ‘the sensible option’ of leaving the EU … ‘an extension would give him more time to continue the complex negotiations on the future relationship in peace. The economy would have planning security and would not have to prepare for a no-deal scenario at the end of the year’.


As he says, that would be entirely in the EU’s interest. To Mühlauer’s credit, he goes on make the case for a hard Brexit.

‘Great Britain would no longer have to pay billions into the EU budget. Some of the money would be used to pay tens of thousands of customs officers who have not been needed so far, but it would also provide scope for designing a new economic model for the UK.

‘And who knows, perhaps the UK will succeed in creating a competitor on the doorstep of the European Union that can react more quickly to the changes of globalisation than a sluggish 27-nation federation.’

Indeed. But he concludes rather feebly by saying this can all be better done in two years time, when the costs of the coronavirus are clear.


What he omits from consideration is that our most important trading partner is the United States, that we buy more from the EU than the US and Japan combined, that our trade with the EU should be reduced to about 15 per cent of ours – in other words, reflecting the EU’s share of the world economy – and our trade with China to shrivel to near enough zilch, and Western shoppers stop paying for Chinese communist political and military aggression.

Der Bund also published a comparison of the Swiss lockdown with Sweden’s relaxed version – two very similar countries, demographically at least. 

While Switzerland has enforced a lockdown, Sweden only advises its citizens to maintain social distance and observe hygiene rules. Compliance is largely voluntary.

Compulsory schools in Sweden remained open and public life was not brought to a standstill by banning assemblies and closing shops, cafés and restaurants.

Nightlife has never stopped, and public gatherings of up to 50 are allowed. Avoiding non-essential travel and public transport during rush hours is advised, but ‘stay at home’ does not apply.

Thanks to the gradual easing of the lockdown since the end of April, the Swiss and Swedish measures will be practically identical by June 8.

But there is a significant difference in mortality. Switzerland has so far carried out around twice as many tests per capita as Sweden. In Sweden, up to May 24, the death toll was 3,998 compared with 1,640 in Switzerland. About half the deaths in both countries came from old people’s homes and nursing homes.

Covid infections in Sweden currently show a doubling of 43 days and the number of deaths per million is above average, especially in comparison with other Scandinavian countries.

In mid-May, Johan Carlson, Director-General of the Swedish National Board of Health, told Der Spiegel magazine: ‘Hopefully we’ll get closer to (herd immunity), maybe in June.’

But on BBC radio, chief epidemiologist Anders Tegnell contradicted the idea that herd immunity is the strategy. Rather, he says, the pandemic is affecting different countries in different ways, so each government must make its own decisions – only time will show which was right.

By the end of April, antibodies to the coronavirus had been detected in only 7.3 per cent of Stockholm’s population. Tegnell admitted the figure was ‘a bit lower than we thought’. He assumes that about 20 per cent of Stockholm’s population is now infected with the virus.

His predecessor, Annika Linde, had originally supported the no-lockdown strategy. Now, however, she has changed her mind in view of the many deaths. ‘It was a clear error of judgment,’ she says.


The short-term economic outlook after the crisis is bleak for Switzerland and Sweden. The Swedish Institute for Economic Research and the State Secretariat for Economic Affairs say gross domestic product in both countries will fall by around seven per cent in 2020, followed by a recovery the following year.

It is still too early to judge the success or failure of either country’s Covid strategies. However, it can be said that the Swiss lockdown has apparently succeeded in containing the coronavirus and the medium-term outlook for the economy does not differ significantly from Sweden, which did not opt for a lockdown.

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Adrian Hill
Adrian Hill
Adrian Hill. Former soldier and diplomat, afterwards member of CBI Council and author.

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