The fact that Brexit will be a total disaster brought about by deceitful propaganda and an illegitimate, undemocratic procedure, is now firmly established. Brexiteers, if you are not yet ready for reality: print and read in 2 years.
The election has produced a bigger remain-majority in Parliament:
“Hard Brexit” is a logically consistent, albeit disastrous, course of action. “Soft Brexit” is a nonsensical placeholder for the other logically consistent and only sensible course of action (until that becomes permissible to think and speak): “Stop Brexit”. Interpreting Labor-votes as endorsing “Hard Brexit” is ridiculous and desperate. “Soft” is the tactically smart “Stop”. A second referendum is a similar placeholder: systemically more consistent but electorally less effective.
Coming events will produce a bigger remain-majority in the general public:
- Brexit negotiations will expose the utter lack of strategy, preparation, competence, and capacity of the UK-side.
- The UK public will experience the piling up of overwhelming, unresolved and lose-lose negotiation-fronts; the timescale becomes visibly unrealistic.
- The resulting impasse in the separation agreement will highlight the Government’s logistical and intellectual inability to autonomously engage in new trading-agreements.
- A continuing slowdown of foreign direct investment will weaken employment.
- Lost economic momentum, ratings-downgrades, and Bank of England policy will depress Sterling further.
- The city will accelerate its move to the continent as hopes dwindle and GBP compensation evaporates.
- The drop in EU-immigration will accentuate supply problems in key sectors (e.g. healthcare, construction, agriculture) and sustain imported inflation.
- All of the above will damage public finances and necessitate further austerity.
- Consequently, real household incomes will continue to fall.
- Real estate prices will drop creating home equity squeezes and undermining consumer spending further.
- Separation desires in Scotland, NI, and Wales will flourish.
- A weak and fully absorbed Government will become domestically inactive: Heathrow-expansion, HS2, Trident, policing, (health)care, will go unattended and unfunded.
- Any serious national security challenge will be difficult to respond to forcefully.
- These developments will diminish other nation’s interest in pursuing UK trade deals.
- All opposition parties will thrive, but also the DUP and the Scottish Conservatives will have to respond; Remain Tories will feel emboldened, Labour Leavers go silent.
This economic and constitutional state of emergency supersedes anyhow misused democracy nonsense, e.g. “will of the people”. I see the following scenarios:
- A Corbyn Government: his Remainers and coalition partners can force a stop of the Brexit process, if he does not come to that conclusion himself. Seeing the imminent collapse of UK governance, the EU will agree.
- An open-ended transitional agreement at EU terms (continued free movement, payments, and European Court of Justice oversight), likely to become permanent or the departure-point for a Brexit reversal. The time and experience gained will cure the British public and its (probably changed) Government from the Brexit virus.
Luckily, no Government will be strong enough to leave without a deal in these circumstances. That would amount to becoming a failed state because the combined lack of domestic economic substance, international integration, and responsible political leadership would make orderly statehood unsustainable.
At this point, your political class in England and Northern Ireland lacks the experience, moderation, and intellectual calibre to exit and replace EU rule, even if that were beneficial. It will take years until it learns (and is trusted) again to be a constructive, let alone influential EU member.
Ironically, renewed EU membership (in an irreversibly diminished role), will turn out to be the only road to the UK’s continued existence as a sovereign and united state that can generate the means to sustain its identity and dignity.
* Arnold Kiel is a self-employed Management Consultant, father of two sons in British education, and very concerned about their future in this Europe
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74 Comments
Well thank goodness the EU is there to show us dumb Brits how to run our sad little lives.
What you call hard Brexit is simply the default setting if no agreement is reached. Apart from that this seems like another startling example of the seer abilities regularly exhibited by some remain supporters. No ifs, no maybes, no doubts. just pure conjecture presented as certainty.
All you say may very well come to pass, but even when faced with inevitable disaster do not under estimate the desire of the brave Brexiteers to carry on. The tend to need repeated lessons in reality before they even begin to have an inkling things are not going right.
I agree with most of this, though scenario 2 seems more likely than scenario 1 because Corbyn has always been ardently anti-Europe, and is still so – he whipped his party into supporting article 50. Much of the public is still fairly oblivious, most of them don’t read the Guardian, let alone these columns, and the right wing press which dominates the UK media will lull too many into thinking that Brexit was the best thing that ever happened. Or if there are problems, then it’s a sacrifice worth making for Queen and Country. Therefore I think the pull factor – of a flourishing Europe – is likely to be more effective than the push factor, as I’ve argued in my post about gambling on a second referendum.
Arnold , I know there has been talk of Tim and religion, but I think you have been watching too many Charlton Heston movies , biblical , epic , proportions !
Arnold,
good speech here by Professor Vernon Bogdanor https://www.youtube.com/watch?v=L9edfG1utRg
I met another regretting brexiteer today & when I suggested he write to his MP,he thought that idea a good one & will write to him.
.
My concerns are well summed up in Arnold’s contribution. Brexit is epic stupidity.
John King, have a horrible feeling that you’re right about scenario 2 being the more likely. At the moment that looks to be the way things are going. It will leave us subject to laws we have no part in making and part of a continent we have no part in shaping.
Paul Murray, that will be the EU telling us dumb Brits how to run our lives.
The big issue as I see is that a deal is only in the interest of a small number of politicians. Think about it, Brexiteers would be happy to crash out of the EU without a deal as they would get what they wasn’t whilst opposition. The SNP would love us to crash out if it led to independence because the economy tanked. Jeremy Corbyn would love the economy to tank as that would = more Labour voters at the next election. Only a few politicians like Ken Clarke want a deal as they know it could be curtains for the Tory party when this all goes wrong.
Resistance is futile! Surrender now or you will be exterminated!
I think we’ve heard this kind of thing before. Nein Danke!
While I see plenty of scope for Brexit being a harmful disaster for the UK, all of this post assumes that the Government of the day doesn’t succesfully blame the EU when things go wrong. Every bad outcome, every breakdown in negotiations will be blamed on intransigent European countries trying to bully the plucky UK which is only trying to stand up for it’s citizens……
Arnold Kiel:
What do you think will happen in 2019 when there are Euro elections during which the various candidates for Commission President face each other in televised debates around Europe?
Whatever the state of negotiations, the UK surely be on the outside looking in. Ironically, I think there will be far more media interest than when the UK did have a vote.
I think we need to look at this from the other side, how much it costs to stay in the EU and what was the likelihood of UK achieving significant changes that apparently even EU ‘remainers’ said were necessary.
Would we be prepared to fund or populate an EU army as well as meet NATO commitments and then our own. What happens when greater integration in the form of social union’, i.e. harmonisation of welfare systems comes along ? Many ‘remainers’ appear to think that there is no ambition to move much beyond the EU’s present set-up yet that is obviously not the case.
We are supposed to pay a fixed and transparent contribution for EU membership yet we have also managed to run up a $100 billion bill on top of this.
Just how much are you prepared to pay for EU membership ? Is it good at any price ? How much would our un costed commitments be to the EU in 10 or 20 years time? $150
billion/$200 billion?
What could we have looked forward to had we remained in, an emboldened EU with little reason to accommodate essential reform.
Although some may not acknowledge it the EU has, in the last twelve months, already changed their attitude towards where it goes from here, There is even talk of controlling surges of migration.
Brexit has changed the political landscape and mindset in the EU for the good and there is every reason to think that the UK can come to a mutually beneficial arrangement with the EU.
I would fully support a (privatised) EU army and a (privatised) EU wide healthcare system, as well as Britain joining the Euro.
Unfortuantely with rampant nationalism on the Tory side, and rampant socialism on the Labour side, the chance of any of the above is sadly slim.
Undoubtedly the government will try to blame the EU but as people get poorer they will find blame doesn’t heat the house or feed the kids. The USSR blamed the evil capitalists but in the end blame alone couldn’t support the system. If the EU is successful and we are not no amount of blame will keep the present leaders in power.
’10.Real estate prices will drop’
Sorry but are you George Osborne? Falling house prices eh…Awful. Terrible. Stuff of nightmares. Really.
Vote for the EU to maintain boomer house prices.
Crikey. Are you George Osborne under another name?
More generally, a Norway type of arrangement would be very, very sensible indeed. And in fact the EU might do will to think about the EU IN EZ OUT question rather more fully. The EU is at a crossroads and, to my mind the UK referendum was a symptom of the problem, not the cause. The EU is not an optimum political area. To say as much is, I think a statement of nothing but fact. The political overreach may manifest itself in different ways (UK – free movement, Greece – Economy, Italy – Banking system etc) but what we have is not a real polity.
The EZ will need far, far deeper political integration than it has now. That will include fiscal transfers well beyond the current convergence funds. It will include something that looks like a single treasury with real powers – used with regard to BOTH surplus and deficit countries. It may well involve an EZ Parliament. Possibly in the longer term it might even need a single welfare system for free movers. Macron’s thinking on the future of the EZ is not wrong. However such integration will surely need to be put to the EU public in a referendum and the European Constitution showed where that leads to.
Some states will want such a deeply integrated EZ – but not, I suspect, by any stretch all. At that point some sort of formal two-tiers looks inevitable and EEA IN EU OUT looks to me like a good start.
Norway like arrangements would be good for the UK and probably good for the EU too.
Tony Lloyd – ‘It will leave us subject to laws we have no part in making and part of a continent we have no part in shaping.’
No. There seems to be this idea doing the rounds that Norway is some sort of EU-lite. It is a very sensible compromise and one, frankly the UK should have looked at decades ago. Norway does not by any means implement all EU legislation:
‘According to Norway’s Foreign Affairs (NOU 2012:2 p. 790, 795), from the legislative acts implemented from 1994 to 2010, 70% of EU directives and 17% of EU regulations in force in the EU in 2008 were in force in Norway in 2010.[4] Overall, this means that about 28% of EU legislation in force of these two types in 2008 were in force in Norway in 2010.’ https://en.wikipedia.org/wiki/Norway%E2%80%93European_Union_relations
Moreover Norway (and EFTA) is involved in international rule-making bodies – http://www.telegraph.co.uk/comment/columnists/9813101/Norways-fax-democracy-is-nothing-for-Britain-to-fear.html
Try here for Norway and the ECJ – https://m.forums.theregister.co.uk/post/reply/2827874?
I’m not for a moment saying it’s perfect. But the Norway option is one that is a clear next step for the UK.
Anyone who thinks a punishment deal will make leavers crawl back to the EU with their tail between their legs will be disappointed.
Well said Martin. The EU want a deal so the UK does have some cards. Talking about unconditional surrender to the EU is bad politics.
LJP – I seem to remember Norway is disgruntled with their own position and was advising us against trying to emulate them. Is it not true that our own present deal, hard won by a succession of Prime Ministers, is the envy of the other countries?
John King – Well, Norway knocked back the EU in 2 referendums. If you look at that wiki link it gives links to polling which doesn’t suggest to me that they are belting out Ode to Joy in Norway.
As to the UK’s current deal…difficult. There are problems. The EU’s balance of contributors to beneficiaries is not good. Free movement is hopelessly asymmetric. Doubtless some of the problems in this picture are things the UK government could/should have done more on. The EU is an unlovely place and it’s not easy to see where reform comes from. I think the best I can say is that I wouldn’t be keen on a ‘hard remain.’
All of which would make sense if the UK public acted in a logical way regarding Europe which us remainers believe from recent experience they do not…
I would put an alternative scenario where the Tories paint it as the big bad EU trying to bully us plucky Brits. Labour won’t have the courage to risk offending their returnees from UKIP and will continue to be ambiguous about Europe. Watch how they squirm when asked whether the ECJ should continue to have the final say on citizens rights or trade agreements..
May (or more likely the odious Buffoon) will win an election as the only party willing to stand up to said bullies. And “by Jingo” we enter a dangerous phase of anger bordering on enmity to those who should be our closest friends and allies…(whose leaders incidentally haven’t helped the situation with their own posturing)
All of which is a complete nightmare but at least as likely as your scenario…
I do get rather tired of people inventing an EU they don’t like and then using it as a stick to push their anti EU agenda. The EU has meant peace in Europe – it at least in the EU – for over 50 years. If for no other reason Brexit is madness.
I respectfully suggest that before you post further you read a basic textbook on how the EU works, because sadly, like the Tory Brexit team, you believe the myths and have no clue about the reality.
Having taught HE students about the EU I can tell you that most of them told me that I was wrong before I referred them to serious academic sources and they learnt better.
40 plus years of lies and misinformation about the EU, sadly including members and MPs of our own party have created myths that have become accepted as facts.
Take just one of them in this thread, the imaginary EU army. Or another that the €100 billion we may have to pay is somehow an additional ‘punishment’ levy when is fact it is what we contractually agreed to pay as our contribution to EU schemes over the current 7 year period – some which would come back in the form of grants or subsidies.
If we are an evidence based party, we need to start by finding the truth about the EU not making it up, as far too many people have done.
2 is not possible under WTO rules. Temporary discrimination against WTO members (which is what custom union or single market membership allows) without an official treaty is only allowed as part of an implementation period for an agreed trade treaty. The UK can not have a long transition.
In addition, the EP that limited any transition to 3 years, which seems designed to placate the WTO.
The most pro EU party has 7% of the electorate and even some of that vote isn’t sold on the EU as 30% of lib Dems voted to leave. The EU is not as big issue in the UK. It’s a side issue and mostly the preoccupation of the commentariat.
Jackie,
You do realise that both the Norwegian and Swiss options need to allow freedom of movement; hard sell to your fellow brave Brexiteers that one is. As they would point out what is the point of being half in, half out.
I can understand your reluctance to contemplate hard Brexit but when you stepped off the cliff you lost the ability to defy gravity and hard Brexit looks like the rock we are hurtling towards. Still I suspect you will be far from the only one to claim this isn’t your sort of Brexit, when Brexit finally happens. The problem you have is as “project fear” pointed out the logical conclusion was hard Brexit and not some sort of sun lit uplands many Brexiteers seemed to think would happen
glen,
You keep telling yourself Brexit isn’t a big issue, because it is and it’s becoming bigger by the day. As they say de nile isn’t just a river in Africa and you seem to be swimming in it.
Brexit is a big issue and but ironically by concentrating on little else it is hurting both the Lib Dems and UKIP.
Frankie.
I just look at the election results.
You on the other hand keep claiming the sky is falling or is about to fall or may fall in the future and using the same brave brexiteer shtick in virtually every post.
The truth is inflation as gone up a little, but no where near the high teens it reached in 1992 when the EU was formed or the 24% it reached in the mid 70s. In truth productivity when down on joining the common market and has been going down ever since. Deindustrialisation. multiple recession, stagnant wages and low voter participation do not indicate anything that positive. Certainly, not all the EUs fault, but equally certainly a long way from the promised land of stability, growth and block on the economic right regularly trumpeted by Europhiles.
Glen,
When Jackie who’s main concern was eastern European migration, tries to push Norway (that’s free movement by the way) you know the jig is up. The economy is getting worse, confidence is falling and you can whistle in the dark all you want, it has started and it will get worse. I know you don’t want to believe leaving the EU is a big deal, but it is and even you will start to see the issues as much as you don’t want to. At the present time the temptation is to shut your eyes and wish it away, but it isn’t going away is it. I suspect in a years time like the black knight you’ll be hopping around shouting tis but a flesh wound, eventually you’ll announce a draw.
@ Arnold
Not heard form you in a while. Missed your Germanic directness but this article does not disappoint.
We are in a difficult position and this dangerous game we are playing is as much of the EU’s making as it is the UK. We seem to be set on a path to mutual harm here and your headline of ‘Unconditional’ surrender is testament to it. To project your analogy we could be on course to another Versailles, where history teaches that the victors and vanquished need to be careful not to sow the seeds of future problems. IMO The UK has made a historic mistake and the typical hubris of the EU has locked us into a situation where both sides will lose in the long run. Rather than ‘Unconditional Surrender’ the sensible thing to do would have been for the EU to offer a concession, even temporarily. Anything that could have validated a second referendum. That moment has probably passed. A Labour victory, may have been an opportunity for a re-set but that didn’t happen. Only hope now is that this government will stumble and at that moment there will be another window that both sides need to recognise as such. At this moment I feel ‘We will never, never, surrender’, and we are set to condemn many generations to lost opportunity. Sad. Sad.
Frankie,
More the sky is falling stuff and more unsupported assertions.
As for the rest of it. I don’t think so. I think as we leave the EU more people will realise it’s essentially a bunch of lobby groups and doesn’t actually amount to much.
There is no such thing as a soft brexit. There’s just leaving the EU or pretending you have left. By running on an anti-democracy ticket, Tim Farron got the lowest ever vote share this party has ever had and instead of realising the mistakes from the campaign people like you want to stumble further into the political abyss. But it’s alright because we had a net gain of 3 seats isn’t it!
The leavers fought against the overwhelming referendum result (roughly 2:1) for 40 years to get it reversed. Somehow not accepting the referendum result when it was solidly “Remain” is OK but not accepting it when it is narrowly “Leave” is undemocratic.
Arnold Kiel “Unconditionally surrender to the EU or be a failed state”
That’s not terribly emotionally aware. Sadly, it won’t intimidate hard Brexiteers. Instead it will just stiffen their resolve.
The headline of this article is deeply offensive and very unhelpful.
No words………………this kind of communication is exactly why we find ourselves where we do, as a bitter and divided country.
Let me make a confident prediction if that is what you want Arnold.
I confidently predict that if you are right, the attitude of the electorate will be:
“which part of the pompous, middle class, sanctimonious untrustworthy, conservative bedding, one issue little party is there not to like?”
Time to vote labour!
Whereas if we actually had a real well thought through vision for the country ………………… “they seem to believe what we do about how the country should be. They seem to be on our side……………maybe we should support them and vote Lib Dem!”
Barry,
That is a false equivalence. The EU has grown massively since the first referendum, and shown itself to be an ever-growing, overly bureaucratic illiberal beast of a union
Thank you all for your insightful feedback. Some unstructured follow-up from my side:
First of all, I highly recommend the speech from Prof. Vernon Bogdanor (link provided by Joseph Bourke above); says it all and much better than me. It also terminally addresses the Norway option.
Another view at the UK’s state of affairs: after 7 years of growth, record corporate tax receipts, unparalleled cuts to public budgets, and employment at an all-time high, there is still an annual public deficit of 50 billion and household debt reapproaching historic records. Growth has stopped now. That means that the UK’s current way of life is beyond its means. This situation, Little Jackie Pepper, makes stable or rising real-estate values so important; there is no other driver of private wealth (or at least inflation-protection) for low and average earners.
Leading Brexiteers want to stretch this situation to breakpoint to force through ultraliberal policies of tax- environmental- and labor-dumping and compete head-on and unprotected with the world’s fittest. The winners of this strategy will concentrate within 5 miles of the city of London. That’s an option, but surely not the one the following Brexiteers want.
These conflicting visions together with inadequate means are all the ingredients needed for state failure.
The EU, on the other hand, is a relatively effective mechanism to protect the wellbeing of this literally old continent. Ironically, most leavers want more such protection, not less, so their voting behavior on June 23, 2016 can be interpreted only psychologically. An institutional mechanism that protects an expensive and ageing continent against the nimble, young and aggressive Asia has limits and will never satisfy everyone.
continued
I do not agree at all to the notion that the EU is also at fault and should make concessions. Which concessions?
First of all, the ECJ. Most leavers still want to have free trade with the EU and accept that the set of rules underpinning the single market needs an enforcer. All the laws enforced by the ECJ could have been vetoed by the UK. It hardly ever ruled against the UK, and if it did, rightly so, and never on anything that really mattered. This was never a real issue, and is now abused as one of the last Brexit-justifications. Also this bluff will be caught.
Secondly, free movement. Another non-issue, as immigration has underpinned the UK’s economic growth. So-called immigration-concerns are purely emotional, therefore, Cameron had no argument to ask for a break. Do not forget that 75% of post-2000 arrivals are non-EU. Freedom of movement is objectively good for the UK, so how can upholding the beneficial principle of the 4 freedoms amount to “punishing” the UK?
Exiting one of these freedoms means exiting the single market. It’s entirely a UK-choice.
Contributions and transfers are part of the game of keeping Europe economically and politically together. Again, Britain could have (and occasionally has) vetoed every EU budget. It normally hasn’t done so for good reasons.
Finally, I could have been more sensitive in wording my headline, but wouldn’t you agree that the UK has forfeited its credibility an an EU-shaper for some years to come?
@ Arnold
‘I do not agree at all to the notion that the EU is also at fault and should make concessions. Which concessions?’
Freedom of movement.
Don’t get me wrong, I feel that our problem of immigration is as much of our own making as of the EU’s but sometimes perception is everything.
The EU attitude to the vote was ‘We are the EU, all powerful. we’re not going to talk to you until you trigger Art50. So put up or shut up.’ I don’t know whether they thought the UK wouldn’t go through with it but the result will be the degradation of the overall project and the weakening of Europe. Unless attitudes change on both sides the UK will leave. Their will be no ‘deal’ because there is no deal to be had. The UK will suffer as you describe but it will not fail. It will be painful but it will regenerate. As such it will have it’s own gravitational pull and that is a danger for the EU. Will Germany agree to bail out the indebted states of the EU? If not then Italy may well be pulled away. Greece should have gone a long time ago.
Personally, I am a believer in Europe. I do not want to see it split, but it has to see its own part in this tragedy and if the opportunity arises opt pragmatism.
Arnold,
There has not been seven years of growth. For much of the coalition there were endless arguments about whether it constituted a double dip. Minimal or invisible growth at best.
As for the “non issue” of immigration if over seventy percent of the population want it lower then it is actually a pretty big issue. Also. Calling concerns purely emotional very much depends on how you view what you think drives those concerns , what you think society is for, how you view nationhood and whether or not you think emotions invalidate an argument. Plus you can’t pin everything to economics, coz it’s a reductionist argument based on highlighting some evidence and ignoring other evidence. I note some Remain in the remain camp are quite happy to talk up their emotional attachment to Europe.
The problem with the article is that it lists predominantly economic and administrative reasons for ‘staying in’. I agree that there is over 90% possibility that all the points listed will happen. The inflation, loss of pound value, lower living standards are already happening. We are living in Brexit now.
Leaving the reason aside, the political dynamic comes into the play. All of the above one can blame on the EU – the recent coinage of ‘punishment deal’ is ground preparation for that. Also, people are prepared to suffer economic pains for what they see as an overall good – Brexit vote was one example, a better example is re-unification of Germany. All my German friends moan about it – how much it costs, how unfair it is, how it ‘split the country’ … But none of them would reverse the process.
So in two years time the Prime Minister Boris Johnson can declare that ‘the deal the EU offered would cripple Great Britain in years to come and I have therefore decided to leave the EU without any deal’ – notice the passive tense (EU offered us a deal) rather than active participation (the deal HM Government negotiated)
And when we are out it will take a generation, another IMF bailout and significantly stronger EU to persuade the public to re-join. Nobody like admitting own mistakes.
I hope I am wrong.
@ P.J.
By necessity, the EU is rigid. How could it have engaged in informal pre-notification discussions with the UK outside the contractually provided Article 50 process (designed by an Englishman for the UK)? There was no mandate from the 27, and it would have been impossible to obtain.
The last time the UK regenerated after an economic near-death experience was after joining the EEC. The UK consists of two separate worlds: London with it’s high-value services sector will always find a way. The rest of the country depends on integrated pan-European industry supply chains and agricultural- and fishery-subsidies. This second world has no future outside the single market.
Concerning Italy and Greece, you find my view under
https://www.libdemvoice.org/is-the-euro-a-good-reason-for-euroscepticism-and-brexit-53952.html
@ Glenn
Regarding Brexit as a side-issue, or minimizing the subject as merely economical is puzzling to me. Admittedly, my focus is on economics, but, as a foreigner, I find the UK the most money-centric society I have ever experienced. And rightly so. At least 79 people were burned alive in Grenfell tower fore purely economic reasons. How could a society’s economic wellbeing ever be a side-issue? It is THE issue.
Immigration is less a generic popular concern than a systematically cultivated scapegoat to cover up the inability of your political class to provide for and harness this rare blessing of having a growing and rejuvenating population bonded by the world’s principal language (and, historically, exemplary tolerance).
A debate between Daniel Hannon and Sarah Ludford would have been interesting.
Little Jackie Paper 26th Jun ’17 – 9:20pm: Look at the polity known as the UNITED states. Their history contains a lot of variety which is amazingly persistent. Have a look at what Jefferson was saying about money issued by the various states and the debts they incurred being centralised.
@ Arnold
“……….free movement. Another non-issue, as immigration has underpinned the UK’s economic growth. So-called immigration-concerns are purely emotional, ………”
Simply impossible to know where to start?
A failed state? You mean like Somalia? Thanks for the warning, I’ll stock up on tinned food
@Arnold Kiel,
“I do not agree at all to the notion that the EU is also at fault and should make concessions. Which concessions?”
The EU should start by making some concessions to itself. If the EU economy was in better shape the movement between the EU and the UK wouldn’t be as asymmetrical as it is. The UK has become an employer of last resort for many young people from the EU.
If we’d had the referendum just 10 years ago before the eurozone troubles became apparent we would certainly have seen a different result.
The EU could start by reviewing the so-call Stability and Growth Pact which produces neither stability nor growth. The limit of 3% of GDP budget deficit makes no sense at all. What’s special about 3%? Where’s this figure come from? How was it calculated?
In other words, fix the EU’s problems, or at least make a significant effort, and UK opposition to membership will quickly wither.
Arnold.
Mass immigration is not, never has been and never will be popular in Britain. I don’t think it has been a scapegoat at all. I think if anything the exact opposite. There are endless spokes people, tv programs, articles and politicians queuing up to say how awesome socially/economically it is. All also saying the British should feel honoured, are uniquely tolerant whilst announcing nativism is beastly or whatever. But ordinary people remain stubbornly unconvinced.
I really don’t understand why you seem to be regarding Labour as being anything other than pro-Brexit.
Their Leader has been a Bennite, Little Englander, and Brexiteer for over 40 years before the term was even invented. He sabotaged the referendum campaign. Why would he now come to the conclusion to try and stop it?
And on what basis do you determine that there is a bigger remain majority in Parliament, when we gained far less seats than the SNP lost? The increase in seats for Labour, a pro-Brexit Party who want to leave the Single Market, was heavily towards Corbynista candidates who will be heavily in favour of Brexit.
Until we stop pretending that Labour are in any way progressive, internationalist, or liberal, it will be harder for us to find a voice which actually appeals to those who switched to them in the election.
Frankie – ‘When Jackie who’s main concern was eastern European migration, tries to push Norway (that’s free movement by the way) you know the jig is up.’
I’ve been in favour of a Norway option for some time now. I’ve long felt that EU IN EZ OUT doesn’t make much sense. Eastern European migration I have nothing against per se – ASYMMETRIC migration is a concern. A big one.
If you are interested by the way Mrs Paper is an East European migrant. Over the past 20 years I’ve helped, housed, supported and financed people from Eastern Europe. What have you done for the cause beyond signalling your virtue?
I do hope Mrs Paper doesn’t find herself on the long and growing list of people who are being kicked out of the UK directly as a result of Brexit
On failing:
A Parliament dominated by radicals, a structural public deficit of gbp 50 billion (despite crumbling services and record-low interest rates), household-debt rising at stagnant incomes, factual rationing of (health)care, opaque, unenforced building (self-)regulations, no runway since the beginning of mass-airtravel, nuclear power provided by French/Chinese against a pledge of household utility-contracts, likewise, an ancient and rented nuclear deterrant, armed forces fitting in one football stadium, overpopulated and understaffed prisons where violence, drugs, and telephones are commonplace, child-poverty at 30% and rising, 22nd for literacy and 21st for numeracy out of 24 countries, a currency at a 30-year low and falling, 23.000 known radicalized citizens… And now add jeopardizing 50% of this country’s trade to the picture.
On Labor
You are right, Martin Walker, Christian and John King, my bet on Labor is not risk-free. My reasoning: Corbyn is left of the EU, but will find very little support there, he does not have a militant leave-backbench, we will be even less able than May to form a functional leave-cabinet, remain-unions largely own him, leaving is at odds with his anti-austerity program, he is not hardened on immigration, he will hopefully need to enter into a coalition. But, most fundamentally, I believe him in siding with the many, not the few, which, from a prosperity-standpoint, logically excludes Brexit. Therefore, my reluctant conclusion is that a Corbyn-intermezzo in British politics is on balance beneficial.
On the EU
Italy, Greece, and now less so Spain and Portugal have their own problems which affect the Eurozone. The EU is not the problem. If you look at Northern Ireland, Wales, Scotland or the Midlands on a standalone-basis, the economic picture is probably similar to southern Europe. I am convinced the the EU’s integration-approach to fundamentally similar problems will outperform the UK’s separation-approach.
Factually, deficits >3% are happening and are being managed, but a deficit > growth still increases debt/gdp. What is healthy about that?
@Arnold,
“a deficit > growth still increases debt/gdp. What is healthy about that?”
OK but all your saying is that you can’t consider the deficit in isolation. If you try to cut the deficit and growth ceases or even turns negative the ratio can increase very rapidly in any case. This is just basic arithmetic. But as I was educated in the “failing” state of the UK maybe you don’t agree?
The GDP of Greece has fallen by 30 % since 2008. Greek Debt has risen by 75%. I’ll leave you to work out how much lower the Greek debt/gdp ratio would now be if Greek GDP had remained the same or even grown at a few percent p.a. since 2008.
According to my figures, Greek GDP was Euro 236 bn in 2008. It is now Euro165 bn. In other words that’s the amount of spending p.a. in the Greek economy. If austerity measures are too severe, imposed in some futile exercise to try to balance the books, then spending falls and GDP falls with it. The debt /gdp ratio ends up worse than ever. This is exactly what has happened in Greece.
So the chances of Greek creditors being repaid get ever smaller as the Greek GDP shrinks. The priority for the EU has to be to get some growth back into the Spanish, Greek, Italian and French economies. That can only happen if austerity measures are eased and looser fiscal rules are not only allowed, but even encouraged, by the ECB which is the nearest the EU has to a central government.
There’s no need for any IMF involvement. Greece and the other countries need euros which the IMF cannot directly supply. The ECB can supply as many as it wishes subject to the constraint of creating too much inflation if it overdoes it. That’s not at all the problem at present.
Yes sure, we know Greece needs to have a better tax system. But that alone won’t fix the problem. In any case if the EU wants reforms, it just makes them a condition of handing out the euros.
Germany might consider the effect on its neighbours of running such a large surplus. What’s the point of having euros flood into the country never to re-emerge? Germany is a euro black hole. Germany’s surplus has to be its trading partners deficit. If that’s the way Germany wants it then maybe it’s fair enough. But only if they welcome other countries running deficits so they can run their surplus.
Arnold
I’ve read the article and most comments below it, but right from the start something bothered me and I couldn’t at first work out what it was. As.an intelligent man, you must now realise that the British voter just shrugged off the fearmongering during the referendum last year and voted to leave anyway. So why have you stepped up fearmongering an extra couple of notches when you must know it doesn’t work on the British voter? Actually it is possibly that constant repeated attempts at fearmongering might even strengthen the resolve of the British voter for a clean Brexit.
So your language of ‘surrender’ and ‘failed state’ tells me that your fear and concern is not specifically for the British voter and the British economy once outside of the EU. So where does your fear and fearful language stem from? My only conclusion is it must be down to money. Is it that you are not fearful for the British economy, but fearful of the German economy when Brexit occurs? Are you being less than honest with us, in that you know and fear that the German taxpayer will have to step up and fill the EU financial shortfall when the British chequebook finally closes in a few years’ time?
If your fear is centered around what happens when British money stops going into the coffers of the EU, please be honest and say so, rather than pretending that you care about the British voter when it is very clear that you don’t
@ Peter Martin
I think we have exchanged our views on several occasions. Southern Europe has tried consuming ever more OPM while eroding its productivity for quite a while without success. Why not try the opposite, for a change? Productive, growing and investing companies are always a good thing, even if they are German. Other countries need more of them, not Germany less.
@ Sheila Gee
You seem to think that clear language and genuine concern are mutually exclusive. Even psychologists would disagree. There never was fearmongering, btw., it will all happen. So be careful not to adopt leave-slogans (unless you are a leaver yourself). The British voter will learn, the question is whether that will happen in time.
No, I am not concerned about the German economy or the EU-budget, really (we anyhow need an opportunity to cut payments to Hungary and Poland).
@Arnold
‘By necessity, the EU is rigid.’
The history of the EU is replete with lost referendums, concessions and second referendums.
But I wonder if there is not a fundamental thread running through this and other posts. Do you feel that the EU is primarily an economic project or a project to bring the peoples of Europe closer together and who knows at some distant point in the future, one people? My own battle with the remain/leave decision was very finely balanced until that headline in Der Speigel, I think it was. And I must admit that the way the EU treated the Greeks was definite a negative factor. The sight of people queuing up to withdraw their 60 Euro a day did not inspire solidarity with the institution. In fact I would suggest that that episode alone could have been decisive in the psyche of the referendum and could have swung it. It is time for the EU to examine what it is trying to achieve. If it is for the peoples of Europe it will swallow it’s pride and come back to the British people. If it is an Economic organisation, then goodbye and I will ‘Remain’ your affectionate neighbour.
@ Arnold,
OPM ?? Organic Pest Management, Optical Properties Monitor ?
OK Let’s go with Other People’s Money. Right? The euro is European money. Not just German money. The problem with German economists is that they think everyone else can be a mini Germany if only they copied the German model.
Sorry, Arnold, but Germany works because there’s only one Germany. We can’t all run an export surplus. It’s just not arithmetically possible.
Or if you think we all can, please explain how 🙂
“we anyhow need an opportunity to cut payments to Hungary and Poland”
Arnold, who is this (we) that you see as entitled to wield a big stick over the heads of Hungary and Poland? If the (we) you speak of genuinely believed in EU unity would it not be more grown up for Germany to look at its surplus and devise a supportive EU equivalent of the Barnett Formula for your poorer EU citizens? Time will show whether UK exit from the EU is a good or bad idea, but I’m confident as a British citizen that the British want no part of your (we) troubling inclination to wave a threatening stick at your less well-off EU neighbors.
P.J., if I correctly recall the Greek ATM-episode, this happened after Tsipras had negotiated an agreement with the EU and then, instead of honouring it, staged a referendum inciting Greeks to reject it. Totally irresponsible brinkmanship. Are you supporting unconditional and unlimited transfers? I completely fail to see where the EU (not only, but also an economic organization) has proudly turned away from the British people. It is your own Government, not the EU, that grossly neglects its citizens’ essential needs.
Indeed, Peter Martin, as long as 98% of EU public budgets are administered by nation states, individual governments are accountable to their citizens with respect of spending this money. Would you not agree that it is legitimate for German taxpayers to expect intense corrective action from governments that receive their financial support? We’d love to import more, but there are only so many olives one can swallow. The other option would be to make worse cars or machines; sorry, we can’t do that.
Sheila Gee, Hungary and Poland have been and still are major recipients. But I(!) am unwilling to fund with my(!) money the abolition of the free press, the independent judiciary, womens’ and LGBT rights, the right to asylum, free universities or teaching Darwin.
This article and the responses of it author, complete with cracks about olives suggests community spirit is pretty thin on the ground in the EU.
In fact it’s almost me convincing me that so-called hard Brexit makes sense and that really there is nothing to negotiate with coz it’s about the intractable demand for money and obedience, nothing much more.
@ Arnold,
“Would you not agree that it is legitimate for German taxpayers to expect intense corrective action from governments that receive their financial support?”
The move to a single currency means that you shouldn’t think in terms of German or Greek taxpayers any more than the USA, at Federal level, thinks in terms of New York, Californian or Mississippian taxpayers. US taxpayers, no matter where they live, pay their Federal taxes, according to their income, and the Federal Government spends where it is needed. This means there is a relatively successful, though it could be better, system of fiscal equalisation in the USA. The poorer states get back more than they pay in. The richer states pay in more than the get back. Loans wouldn’t work in the USA. The less affluent States would simply accumulate loans which they could never repay. That’s the nature of a common currency zones. Mississippi would end up like Greece otherwise.
They were warned that the euro needed a European government with EU wide powers of taxation to make it function properly. Except, incredible as it might seem, the PTB in the EU seem too stupid to understand this.
How about you? Can you grasp the problem?
@ Arnold and @ PJ,
The shameful episode of depriving Greek people of their euros, many of which were earned by Greek workers in Germany, not just at ATM machines but at the bank counters and internet banking too, shows that the euro doesn’t quite work as the totally common currency that people might imagine.
Let’s suppose the Westminster Govt had a severe disagreement with Nicola Sturgeon. Lets say she had a similar temerity to hold a referendum without the permission of the Westminster government. How dare she? 🙂 There’d probably be a mini constitutional crisis with harsh word spoken. But would the Westminster government retaliate by refusing Scottish people access to their bank accounts?
Even if they could, I doubt that any government would stoop that low. But because the pound is a genuine common currency there isn’t any technical way they could do that.
Glenn,
well, nobody on the continent ever wanted “my money back”.
Peter Martin,
there is no federal (i.e. EU-level) tax in the EU. In your view, no member of a currency union can be expected to manage its finances wisely, therefore, other members must either take control over this government’s finances, or fund it indefinitely and without limits or conditions. I indeed do not grasp this.
@Arnold
“there is no federal (i.e. EU-level) tax in the EU.”
Precisely. That’s the problem. There needs to be one to the extent of at least 10% of GDP.
“In your view, no member of a currency union can be expected to manage its finances wisely”
You have to remember that the euro is pretty much unique in the history of world currencies. There’s really no precedent. Everywhere else, with maybe just a few minor exceptions, we’ve always had one currency with one government. So what does “manage its finances wisely” mean? When the 2008 crisis hit, govts everywhere saw their tax revenues fall. Govts with their own currencies could spend in a countercyclical way to try to stabilise their economies. They could let their currencies float on the forex markets to help establish a new market value. They could create new money by QE. This option wasn’t open to euro countries. Those which didn’t have a high influx of euros due to an export surplus had a major difficulty. And not all countries can run a surplus as I’ve tried to explain. So they had to cut back their spending at the same time as their economies were moving into recession. This is just the opposite of what needed to happen to keep their economies functioning. But they didn’t have much option. All they could do was borrow to the extent of what was allowed, and maybe a bit more besides if they could get away with it, under the SGP. So, naturally they ended up with debt especially if the taxpayers were lumbered with the bill for bailing out the banks.
“fund it indefinitely and without limits or conditions.”
For the EU, the important thing is to ensure that its economy is functioning at close to its full potential. The euro, or any other currency, is just a means to an end. The limits for funding are too much inflation if the funding is overdone. Or too little production if the funding is underdone. It doesn’t make Germany any worse off if it recycles its surplus to keep the economy of the rest of the EU functioning. In fact it makes it better off. A malfunctioning economy isn’t good for the economy concerned and it isn’t good for German trade.
So you have to look at a bigger picture than most narrow minded voters can see. All they can do is count the pennies. You have to imagine how the EU has to work if it is a single country. Having moved towards a single currency, like it or not, that is what you have created.
There needs to be [a direct EU tax] to the extent of at least 10% of GDP.
Well, that aloe puts paid to the idea of Remain / Rejoin as there is no way, politically, a UK government could ever agree to such a thing. The population would riot.
@ Dav,
I understand the problem. German and Dutch taxpayers probably would feel the same. But it doesn’t necessarily have to mean that total taxation levels have to rise. It would mean, though, that we need to put a certain percentage of taxes into a common pot. I’d favour the US system of all income tax being paid at a Federal level.
Rightly or wrongly the EU has chosen to adopt a common currency. They were famously warned by Prof Wynne Godley that it wouldn’t work unless the EU had a common taxation system and an effective system of fiscal equalisation. He predicted:
“If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalisation, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation.”
Note that it’s not just the euro countries that have no power to devalue. Most EU countries not on the euro have their currencies pegged to it. That all sounded a bit far-fetched to many when he wrote it in 1992. But not now.
https://www.lrb.co.uk/v14/n19/wynne-godley/maastricht-and-all-that
I understand the problem. German and Dutch taxpayers probably would feel the same. But it doesn’t necessarily have to mean that total taxation levels have to rise. It would mean, though, that we need to put a certain percentage of taxes into a common pot. I’d favour the US system of all income tax being paid at a Federal level.
That would be completely politically unacceptable in the UK. Utterly. There’s simply no way any more than a tiny percentage of the UK electorate would accept any of their taxes being collecting directly by the EU. They object enough to taxes being collected by HMRC and then paid over to the EU!
The idea of directly-collected EU taxes basically makes it impossible to pretend the EU is anything other than a ‘United States of Europe’ and that leaves any campaign to Remain, or to Rejoin, dead in the water as there’s no way the British public would ever accept being part of such a thing.
@ Dav,
Reluctantly I do agree with you. This is why I voted Leave even though I’m essentially pro European! Probably more pro-European than most on this blog.
But my understanding of economics leads me to believe that, having made a decision to move to a common currency, the only future for the EU is to move quickly towards a USE. Not only isn’t there enough support for that in the UK, neither is there enough support anywhere else in the Europe.
So that’s where we’re at! Unfortunately.
But my understanding of economics leads me to believe that, having made a decision to move to a common currency, the only future for the EU is to move quickly towards a USE
Well, yes; wasn’t that the original intent of those setting up the single currency, way back when it was the ERM? They wanted a USE, they knew the peoples of Europe wouldn’t go for it, so they deliberately engineered a system which would trap them into a situation from which a USE was the only escape, whether they want it or not.
Best thing Gordon Brown ever did was keep us out of it.
@Jackie
Well I didn’t vote to remove their rights, can you say the same; no thought not.