Black Friday
So the Brexit voters
have won, certainly for the moment and maybe forever. Article 50 of
the Treaty of Rome will be invoked to start the UK's exit process.
The Article is unclear on whether the exit process, once started, can
be stopped and reversed but that remains the one straw for people
like myself to clutch at. Maybe……….if the terms of exit prove
unacceptable even to a right-wing Conservative Britain, just maybe
the UK can still stay in the EU. Much may depend on whether the
remaining 27 EU countries want to retain the UK enough to try
last-ditch persuasion or whether they simply can't be bothered any
more.
I find it ironic
that, to claims of more democracy, populism, the big weakness of
democracy, has won. Who really has won? Boris Johnson and Nigel
Farage, obviously, and the tabloid comics such as The Sun, The
Express, The Star and The Mail. Oh, and Donald Trump and Sarah Palin
from the USA have expressed their approval. By their friends shall
ye know them. Above all, xenophobia has won.
Who has lost? Just
about everybody else, in the near future. The UK just got smaller in
importance on the world stage and may even get physically smaller if
Scotland springs a new referendum and votes to leave the UK. Less
probably, but possibly, Northern Ireland may just vote to merge with
its southern half in order to stay in the EU. Still less likely, but
possible, are moves already taking place for London to declare itself
an independent city.
The UK economy
loses, with growth forecasts from the major economic bodies all
downgraded, the FTSE 100 down 8% and the pound at its lowest for more
than a decade. Private sector employment in the UK must suffer too,
as foreign-owned multinationals move their UK-based operations
serving Europe into EU countries. The CEO of JP Morgan is on the
record, about a week ago, as pointing out it employs some 3500-4000
people in London to service the European market. If the UK voted
Leave, he said, that operation would have to be moved to Europe. How
many staff would need to be retained to service just the UK market?
Friend Steve commented, on learning that Sunderland, with its Nissan
car plant employing thousands making cars for Europe, had voted
Leave: “It must be the first time that turkeys have voted for
Christmas”.
Another irony is
that, with even more austerity and cuts looming, a new army of civil
servants will be required for, among other things, increased border
controls with quite probably no different terms for entry, to
negotiate EU exit terms and to negotiate separate trade agreements
with some 100 countries which are currently covered by EU agreements.
I wonder how that lot are going to be paid for? Increased spending
on the NHS……..Where is Boris Johnson going to get his promised
£350 million?
Europe also loses.
Chaos will threaten for a time. The overbearing interventionist
bureaucracy in Brussels will now certainly be overhauled, if only to
avoid demands for referenda in other countries. But the EU will
survive; the political will for that is too great for it not to. The
result is likely to be a much looser Union, quite probably a two-tier
Europe with countries all having opt-out clauses for any central
legislation they find unpalatable. Probably the power of the
Commission will be curtailed and that of the elected European
Parliament increased. In fact, exactly my worst-case scenario, the
EU we always wanted with us outside it.
The EU also retains
some strengths, in particular its bargaining position with the UK.
It's opening position will certainly be that everything remains the
same except that the UK has no say in its future legislation. But
the UK will have to accept that legislation and pay (significant)
amounts to the EU. That is the case with Norway and Switzerland, the
other European countries outside the EU with which it has trade
agreements. I have previously pointed out that the immigration
situation remains the same, in or out; open movement of labour will
have to be maintained. That also is a condition of other EU trade
agreements. The alternative to agreeing to these conditions? No
trade agreement. Some 40% of British exports go to the EU and will
then have to find other markets somewhere in the world or suffer a
tariff barrier. Cheaper than China, India? England is, and always
has been, a nation that lives off its exports; it has few natural
resources. It imports, makes and trades. Imports will cost more
(devalued pound) and exports will hit tariffs. A stronger economic
Britain?
I have one economic
hope. It is that the rising cost of living (through weaker pound and
imports), rising unemployment (as pointed out) and increased public
sector costs will hit home early, in time for this decision to be
reversed. Otherwise I can forsee only economic misery for the UK.
Whether those who voted Leave in the belief that Britain will be
stronger are right remains to be seen. The financial markets can't
see it, which is why they called the referendum result wrongly; they
didn't think Britain would vote for economic suicide. And if this is
simply the result of some people being irritated by annoying
legislative details or thinking there are too many Polish plumbers in
their locality (a situation that won't change, as pointed out) then
this decision will indeed be a tragedy of Shakespearean proportions.
What about little
old me? I shall try for French citizenship, for which I qualify in
principle. So goodbye Little Britain. I knew you when you were a
country of which I could be proud to be a citizen.
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