UK and EU caught in a giant game of bluff

It is going down, but this is not part of a natural progression to eliminating the threat completely. Globally, every country is making the same risk calculation and all are at different stages on easing the lockdown.

The European Commission has been underlining how important it is for farming and food that social life moves back towards where it was just a few months ago. The new normality will be about wearing masks and social distancing, but tourism and a reopening of hotels and restaurants will help restore balance in food markets.

Under lockdowns, supermarkets became the only market. Like farmers, they deserve credit for keeping the food chain going through difficult times. However we now know the food service sector is a key part of the equation that creates a successful food market.

The hope in Brussels is that as this recovers, red meat and wine markets will stabilise and help lift the entire food market. The Commission knows only markets can deliver improvement. It lacks the financial resources to pump more into support. We are at the baby steps stage, but those can grow as sound decision making and common sense confirm we can live with the virus.

But while a lockdown can be imposed, recovery cannot. A reluctance to eat out and travel will remain; people everywhere are suffering financially and that will get worse as we move into the phase where the lockdown has to be paid for. Many businesses will never open again and those that do will cut costs to survive.

Spending power will be eroded, but these are trends from which core industries like agriculture are protected. Prices may not be where we want them to be, but our market is there every day. That is a foundation on which to build better times – and it is a foundation many other businesses will look at with envy.

In all of this there are politicians whose spin is relentlessly positive. Michael Gove falls into that camp, as the minister with responsibility for negotiating a Brexit deal with Brussels. He is continuing to insist a deal can be done before the June deadline when the UK will have to decide whether or not to seek an extension of the transition period.

In Brussels this is seen as inevitable. The Commission has published its negotiating mandate and confirmed there are no signs of an accommodation being reached. The UK has opted not to publish its mandate. Instead it is repeating the mantra that it wants a free trade deal with the EU similar to Canada or Korea. Ministers put their hands over their ears when they are told these are not comparable situations, either in scale of business, structures or above all the interlinked nature of the EU-27 and UK economies.

This is all a giant game of bluff, with the stakes made higher by the post-coronavirus economic wasteland both sides face. The EU is convinced the UK needs a trade deal more that it does. This is not true, and in the tough financial times that are looming it cannot commit to forever bail out countries, including Ireland, that would be devastated economically without free access to the UK. London is equally bullish, believing that if it cannot get a trade deal with the EU others, most notably the US, are waiting in the wings. They are not, and a deal with the EU is the by far the best prospect.

Ministers like Gove believe their own rhetoric that they have got Brexit done. They believe any compromise would weaken this 'victory'. Conditions change and seeking time amidst a disease crisis to secure a sensible outcome would only be regarded as weakness by the most extreme Brexiteers.

The UK also needs to accept that it does not hold all the cards and that it is going to have to accept some of the EU mandate. Equally the EU needs to accept that Brexit is a reality and that a sensible deal with the UK will not encourage other member states to leave. What is needed is mature judgement but what we are getting on both sides is petty political point scoring and bluff.