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Good morning. David Meyer here in Berlin, filling in for Alan.
Perhaps some good will come of Brexit, at some point. But for now, its core incongruities are causing an unholy mess.
At the center of the mess is Northern Ireland, the only part of the U.K. that has a land border with the EU. That fact has put the U.K.’s Brexiteer administration in an impossible position: given that it rejected staying in a customs union with the EU, customs checks have to go somewhere, but every option is a bad one.
The checks can’t go on the land border, because a hard border would threaten the apparently-still-quite-fragile Good Friday peace agreement, struck in 1998 between the unionists/loyalists who favor Northern Ireland staying part of the U.K., and the republicans who want to join Ireland. So, under the Brexit withdrawal agreement that took effect a year ago, Boris Johnson’s government agreed to put the customs checks in the sea between the province and the island of Great Britain.
Unionists hate this, because it means treating Northern Ireland differently from other parts of the U.K. And so, two days ago, a bunch of loyalist paramilitary groups—yes, they’re still around, as are republican paramilitaries—withdrew their support for the Good Friday Agreement until the U.K. and EU agree to allow “unfettered access for goods, services, and citizens throughout the United Kingdom.” They said they will stay peaceful for now, but warned British Prime Minister Boris Johnson that the peace deal will suffer “permanent destruction” if they don’t get their way.
But, in trying to keep those goods moving across the new, marine customs border, Johnson’s government has managed to enrage the EU—with different, negative consequences now hoving into view.
When the Brexit transition period ended at the start of this year, the sudden need for filling out lots of paperwork caused serious problems in the flow of goods from Britain to Northern Ireland. The U.K. asked the EU for a two-year extension to the grace periods for Irish Sea border checks, but the EU said no, so—also on Wednesday—the U.K. said it was unilaterally extending those grace periods.
The European Commission had a fit, pointing out that this was the second time the U.K. was reneging on very recent commitments. There could be legal consequences for this, but, more urgently, the European Parliament has now postponed its ratification of the Brexit trade deal that was agreed at the last minute before the transition period ended.
The message is clear: honor the withdrawal agreement, including its intra-U.K. border checks, or thin-deal Brexit becomes the no-deal Brexit everyone was worried about.
There’s no pleasing everybody in this situation, and either side’s displeasure comes with very real and unpredictable consequences. And that’s what happens when you claim an extremely complex and equilibrium-shattering proposition is as simple as a slogan. “Get Brexit done”? That’s been achieved. But we still don’t know the cost.
More news below.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
Texas overcharge
Texas's power-grid operator erroneously allowed a whopping $16 billion worth of electricity overcharges last month, according to an independent market monitor that recommends retroactively repricing the wholesale power market for 33 hours during the catastrophic winter storm. The recommendation would be a boon for many market players who found themselves having to buy power at a peak price of $9,000 per megawatt hour. Wall Street Journal
AstraZeneca and age
Germany has done a massive U-turn on the issue of the AstraZeneca vaccine's suitability for older people. Having previously said there wasn't enough data to recommend it for over-65s (a stance the European Medicines Agency did not take), Germany's vaccination committee now says it's fine for all adults. Fortune
Italy vs Australia
Italy has blocked the export of 250,000 AstraZeneca doses (made in the country) to Australia, on the basis that AZ is likely to undershoot its delivery commitments within the EU. Australia is being quite understanding, with Prime Minister Scott Morrison acknowledging that the situation is far worse in Europe than Down Under, but it's still a bombshell for both the pharma and political worlds. Fortune
Facebook A.I.
Facebook has unveiled a new A.I. that could make it possible to train machine-learning systems using much less labeled data than is currently necessary for the task. The new A.I., named SEER, was itself trained on over a billion Instagram images. It essentially allows machine-learning systems—of the sort used in self-driving cars or medical imaging diagnostics—to train themselves with less supervision, which should mean faster training. Fortune
AROUND THE WATER COOLER
Female directors
Netflix hired female directors for 23% of its films in 2018 and 2019, which is well above the industry average but still far from parity with male directors. So now the company has committed $5 million to fund training and mentorship for female filmmakers in off-screen roles. The cash comes from Netflix's $20 million annual commitment to diversity and inclusion efforts. Fortune
Scream test
A Dutch entrepreneur named Peter van Wees has come up with a novel idea for COVID testing. In lieu of nasal (or the other end, if you're visiting China) swabs, van Wees has created an airlocked cabin in which you're supposed to stand and scream. An industrial air purifier then collects your screamed particles, which are checked for the coronavirus. Getting tested and getting to vent after a year of this pandemic? Genius. Reuters
Fintech year
"The new normal created by the pandemic brings huge opportunities" for the financial technology industry, writes Ant Group CTO Xingjun Ni in a piece for Fortune. "Fintech will have to focus on a few important priorities in 2021 as we work toward serving more users and gaining widespread acceptance." Fortune
Arctic intrigue
In an episode only now made public, China offered three years ago to buy or lease a city's airport in Finnish Lapland, but was rebuffed after the city (Kemijärvi) informed the Finnish military. The Chinese delegation wanted a base from which to carry out Arctic research and observation flights. However, the airport is close to a Finnish military firing range, making the expansion that China wanted impossible. Euractiv
This edition of CEO Daily was edited by David Meyer.
