There are two kind of crisis which countries must guard against. The first is a political crisis. The second is an economic crisis. But sometimes an economic crisis extends to become a political crisis and vice versa. We are now engulfed in a political crisis. In 2008 we had an economic crisis which was sudden and catastrophic. But it did not become a political crisis; in fact it was the Brown government’s finest hour. This time we are at risk from the political crisis breeding an economic crisis which is slow and creeping and the worry is that it could become quite bad. Although the markets are having a jolly after their Big Fright as the Brexit result became known, the underlying situation is tense because everything about it is far from clear.
All the informed opinion is that the real economy is going to slow. The markets are buoyant now because they know that the B of E has set up crisis liquidity and is going to ease monetary policy all the way to QE if needs be. The political crisis can hardly get worse and there are signs that people are coming to their senses. One or two good candidates are emerging for the PM vacancy on the Tory side. As a matter of national interest the rules should be changed so that when a party is in government the new leader has to be selected by the parliamentary party only and quickly. The luxury of touring the country, hustings and the whole rigmarole should be one of the perks of opposition. The Tories are brilliant at mounting leadership coups, back stabbings and treachery and in their forest great oaks crash to the ground with breathtaking suddenness. Labour on the other hand is completely inept at the coup business. They have mounted one but the oak still stands, because in their forest nobody has a saw.
However up ahead it does not look good. Little publicity has been given to certain key decisions in Europe. The Council of Ministers, in charge of Brexit under the terms of the Lisbon Treaty, has decided that the terms in the treaty are quite different to the stuff we have been told here. First the terms of Britain’s exit have to be separately negotiated and it has to go. Only then can discussions begin about a new trade deal with what is now a third party country. Nobody told us that and moreover nobody bothered to find out. Repeat we have to go first, lock stock and barrel, then knock on the door for talks about a future deal.
That is a game changer. A bombshell. Perhaps somebody whispered it to Boris? No wonder he fled the field.