Policy balance
The recent appointment of Sanjay Malhotra as Governor of the Reserve Bank of India (RBI), replacing Shaktikanta Das, signals a pivotal shift in India’s monetary policy dynamics.
The deadline for a deal looked fanciful before the present crisis; now it looks impractical, even impossible, and must be extended.
The roller-coaster narrative of Brexit will very probably resume again as the spread of coronavirus has come to bear on the process, indeed a momentous phase in Britain and Europe. The deadline for a deal looked fanciful before the present crisis; now it looks impractical, even impossible, and must be extended.
Honouring that deadline when a public-health emergency rages is not possible at a time every aspect of government ought to be reworked, reviewed or suspended. So too must the time-frame for a formal deal with the European Union. Yet another round of Brexit negotiations, due to be held in London next week, has already been cancelled. Officials on both sides of the Channel have more urgent matters to attend to, which in itself is a measure of the scale of the crisis.
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As the economic confusion over Brexit gets worse confounded, it doesn’t diminish the urgency of settling the equation between the United Kingdom and the European Union. Humans have been direly affected on both sides of the Channel, and the enormity of this tragedy must transcend any reconstruction of contemporary economic history… to suit the agenda of Boris Johnson (successful) and Theresa May (not quite) before him.
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Well might the Prime Minister hit the pause button; but there are two reasons that are very probably holding him back. One is the fear of looking weak in the perspective of Eurosceptics. Another is that he shares the belief, espoused by some zealots, that tearing UK businesses out of EU markets can be done without cost. That myth was generated in a different era, and was embedded in ideological aversion to continental regulation coupled with a romantic notion of Britain as a buccaneering trader.
Such complacency must be shaken now that many UK enterprises are facing a new and unforeseen calamity. Perhaps the practical merits of continuity in trade might at last impose themselves on the Conservatives, who previously relished disruption for its own sake. Mr Johnson’s gung-ho Eurosceptic rhetoric once suggested indifference to risk, but in response to coronavirus he appears to have discovered a new capacity to engage with evidence and a new flexibility in economic policy. Such pragmatism must be applied also to the Brexit question. An extension to the transition period will surely have to be sought.
Only obsolete doctrine and the British Prime Minister’s vanity are against it. With human life at stake, it is imperative that such obstacles are set aside. Addressing a calamity is more urgent than the nationalist essay towards a goalpost, seemingly momentous though it is. His supreme ambition is a Canada-style model, which is far removed from the seamless arrangements currently in place. Even if most tariffs and quotas are eliminated, there would be checks and friction at the border. Perhaps such issues can for now be kept in abeyance. Let the world recover. Let human beings survive.
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