Brexit: New Yorker cover

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John F
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Brexit: New Yorker cover

Post by John F » Sat Jul 09, 2016 10:23 am

Image
John Francis

absinthe
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Re: Brexit: New Yorker cover

Post by absinthe » Mon Jul 11, 2016 7:02 pm

A nonsense of course. Many countries have broken away from imperial control or act entirely independently and do well, without ever having been near the EU. Australia, Canada, New Zealand (and now Switzerland that has scrapped its application) have done very well. Japan and China are nothing to do with the EU.... no walking off cliffs there.

People seem to think the EU is the way forward - you'd think for the world. Seriously, it can't manage what it already has but is keen to suck in about five more poor economies, all with high unemployment and riddled with dent and the picture starts to form about a deliberate intent to surround Russia. I think many in the UK now realise the EU is being used by America as a tool to provoke Russia - but that's a different story.

The EU is not in good shape. Christine Lagarde issued another warning today that the Euro/Eurozone is teetering on the edge of collapse (something that Soros predicted a year ago).... There might be short term suffering in the UK but it really is better off out. At least it isn't in debt to Germany so leaving is far easier. We import about 50% more from the EU than we export to it, thus any attempt to thwart trade will be a significant blow to EU member states, particularly Germany.

John F
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Re: Brexit: New Yorker cover

Post by John F » Tue Jul 12, 2016 5:38 am

Not absurd at all - a perfect visual metaphor for what a small majority of voters in the UK have done to themselves and their country. Whatever you may think of the EU - and nearly half the voters in the UK wanted to remain in it - British withdrawal will hurt Great Britain economically, it's just a question of how badly. In other respects it's a leap, or a stumble, into the unknown, unknown even to many of those who voted for it.
John Francis

jserraglio
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Re: Brexit: New Yorker cover

Post by jserraglio » Tue Jul 12, 2016 12:41 pm

Love Barry Blitt's cage-rattling NYer covers, like his infamous Obama "fist bump" cover ... Insert Ugly American caricatures into this one and you might visualize as alternative "silly walks off a cliff" the RNC convention or Fall election.

absinthe
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Re: Brexit: New Yorker cover

Post by absinthe » Wed Jul 13, 2016 9:58 am

John F wrote:Not absurd at all - a perfect visual metaphor for what a small majority of voters in the UK have done to themselves and their country. Whatever you may think of the EU - and nearly half the voters in the UK wanted to remain in it - British withdrawal will hurt Great Britain economically, it's just a question of how badly. In other respects it's a leap, or a stumble, into the unknown, unknown even to many of those who voted for it.
It was a democratic vote. More than half who voted wanted to leave. Given the state of the EU (which, with the best will in the world, is not in good shape at present) there are as many unknowns to staying as they are to leaving.

The latest IMF report tells of the euro (the single currency) on the verge of collapse. The euro was always weighted in Germany's favour. The Eurozone is teetering on the edge of recession. Should that occur the net donors to the club face one of two things: the euro is abandoned leaving a vast debt mess - or b) a huge bailout will be needed, most of which will come from Germany. It's too late for the "European Stability Mechanism" to save it without that, itself, becoming part of the priblem. With Germany now aware of the cost of Merkel's immigration policy, an absurdity from any economic viewpoint, it could be in trouble.

The main concern of the leavers, though, is Brussels' latest power grab and Juncker seeming to lose his mind, obsessive about an EU superstate. Now, that might be fine for most EU nations. Their politicians are hardly world-class - a bunch of wets most of them who need a leader like Merkel to nanny them along. However, Juncker has raced for fiscal, monetary and cultural integration across 28 disparate states (soon to be 33 (or 32 without the UK)). It isn't going to happen as neatly as he thought. Years ago looming resentments were anticipated and now they materialise in nationalism almost everywhere. It would only take AfD and Marine le Pen to gain significant power, plus the forthcoming Austrian referendum to yield an anti-EU, anti-immigrant president, to shake things up. Orbon and the Visegrad 4 are already at Merkel's and Juncker's throats. But there it is - Juncker, whose previous job was running a country about the size of Fiji, lording it over 600 million EU citizens with not a clue about the tasks he's putting other nations to.

Then, of course, there's the "free movement of labour" - a nice dream when the outfit was set up in 1957. The relevant economies were closely balanced. Free movement was bidirectional. Take on weak economies however and the obvious happens. Take on 20 weak economies and the second-most overcrowded country in the EU - Britain, with its generous welfare, comes in for the influx. We would need to build TWO new towns the size of Syracuse every year to accommodate the current rate (that's before Albania, Macedonia, Turkey, etc., are drawn in). According to a recent report by Migration Watch EU migrants are in fact a burden to the UK economy to the tune of approx £1 billion last year. It added up a total cost of benefits and services received, subtracting the tax receipts from said migrants.

http://www.migrationwatchuk.org/press-release/448

It was perfectly within the power of the EU to do something about this particular situation. Cameron achieved nothing. Juncker and Merkel proved intractable. The free movement rule is cast in stone. The Brexit vote however has forced them to rethink. They know there's a problem. Elite or not their ivory towe is in danger of collapse. They can see all around - the Swiss scrapping their EU application altogether; Denmark planning its own referendum; the government of Holland actually refusing its people a referendum; France pushing for one. Hungary having one to decide whether to defy Brussels' migrant quota... No one likes the EU... except certain of the net takers presumably.

Various other reasons exist....but there it is. 17 million UK people wanted a UK government, not a governor which is what it'll be if we stay. Many who support(ed) remain hold this vision of what the EU set out to be, not what it has become; what it will become if the increasingly Germanised Brussels has its way.

And all this, before we move on to America's involvement and interests - we haven't missed them.....

Seeing the New Yorker cover reminded me of the Ministry of Silly Walks....

.......

jserraglio
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Re: Brexit: New Yorker cover

Post by jserraglio » Wed Jul 13, 2016 11:37 am

Another POV

http://www.newyorker.com/magazine/2016/ ... -of-brexit

THE FINANCIAL PAGE JULY 11 & 18, 2016 ISSUE
HOW WILL BREXIT SHAKE OUT?
The U.K. and Europe will find economic needs clashing with political ones.
By James Surowiecki

A few days after the United Kingdom voted to leave the European Union, Nigel Farage, the head of the U.K. Independence Party, made a curious speech to the European Parliament. Farage has spent nearly two decades railing against the E.U., and his speech went viral, thanks to the unbridled scorn he showed toward his listeners. Less commented on was the end of his address, which struck a very different note. He begged the E.U. to make a tariff-free trade deal with the U.K., and promised that the British “will be your best friends in the world.” Farage was articulating the fundamental dilemma of Brexit. In 2015, forty-four per cent of the U.K.’s exports went to E.U. countries, and fifty-three per cent of its imports came from them. Although London is famous as a global financial center, it enjoys that status largely because it’s a gateway to the Continent. So, while the referendum pushes the U.K. away from the E.U., economic needs require it to stay close.

Brexiteers insist that leaving will let the U.K. discard stuff that many voters dislike—free movement of labor, high budgetary dues, nitpicky regulations—without jeopardizing the country’s access to Europe’s tariff-free single market. Matthew Elliott, the Leave campaign’s chief executive, promised that the U.K. would “be able to trade with the single market on free-trade terms, without paying into the system or accepting freedom of movement.” And Boris Johnson, in a post-Brexit article, insisted that “there will continue to be free trade, and access to the single market.”

Tell that to the rest of Europe. From the start of the push for Brexit, European leaders warned that the U.K. ran a “very serious risk” of being shut out of the single market. Last week, at a meeting of the E.U.’s heads of state, that message was reiterated: the U.K. cannot leave the E.U. and have “à la carte” access to it. Even if some of this is posturing, markets are anticipating a much harder landing than what Leave promised. “If the British believe that they’ll be able to negotiate a special opt-out deal, they’re delusional,” Nicolas Véron, a fellow at the Peterson Institute and the European think tank Bruegel, told me.

There are several models for how a future outside the E.U. might look. Like Norway, a non-E.U. member, the U.K. could join the European Economic Area, retaining access to the single market while reducing its budgetary contributions. But that would mean accepting free movement of labor, the very thing a huge number of Leave voters voted against. The same would be true if it tried to emulate Switzerland, which has more independence of the E.U. than Norway but also more limited access to the single market. The most likely outcome is that the U.K. will end up with a trade agreement like one that Canada recently negotiated: it pays virtually no tariffs and is able to sell goods throughout the single market. It doesn’t make any contribution to the E.U., and there’s no free movement of labor. The U.K. could keep selling raincoats to the E.U., while the Germans would keep selling B.M.W.s to the British.

That might sound like a great deal, but for the U.K. there’d be a big catch: the arrangement wouldn’t cover banking and other financial services. Right now, firms established in the U.K. can operate anywhere in the E.U., under a system known as “passporting.” If the U.K. loses passporting rights, banks will likely move much of their business out of London, probably to Paris, Frankfurt, or Amsterdam. As Véron puts it, “There’s a very real possibility that the City will be significantly hollowed out.” This would hit the British economy very hard, since banking is one of its biggest industries. Although being less reliant on banking might be good for the U.K. in principle, the adjustment would be brutal.

The Brexiteers are confident that none of this will happen, on the assumption that Europe is bound to see that the status quo offers the best deal for everyone. The E.U. sells the U.K. hundreds of billions of dollars’ worth of goods and services every year, so both sides have an incentive to keep things as they are. But this is naïve. For one thing, many European countries would be happy to see their own banking sectors flourish at the U.K.’s expense. The French President, François Hollande, has already said that financial clearinghouses would have to move out of London if they wanted to continue to clear European trades, a loss that he said would “serve as a lesson” to those who “seek the end of Europe.”

As Hollande’s comments suggest, the negotiations over a new trade deal won’t be about economics alone. They’ll also be about politics. European leaders, in deciding how they should treat the U.K., will be thinking, in part, about Brexit’s effect on the stability of the E.U. itself, which they very much want to preserve. Studies show that international institutions work best, and are most effective, when members feel that leaving has a high cost. So, even if driving a hard bargain with the U.K. does some damage to the E.U.’s economy, that may be a price worth paying, in order to show Euroskeptics everywhere that leaving has consequences. “You’re willing to do things for family members simply because they’re family,” Véron told me. “But when you’re no longer in the family you’re out.” In choosing Brexit, British voters decided that ideological considerations trumped economic ones. They can hardly complain if Europe makes the same choice. ♦

James Surowiecki is the author of “The Wisdom of Crowds” and writes about economics, business, and finance for the magazine.

absinthe
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Re: Brexit: New Yorker cover

Post by absinthe » Wed Jul 13, 2016 7:22 pm

As situations go, the popular economic arguments largely hinge on the abstract rather than the actuality of what's happening in the EU itself. Typical in a way, based on the utterances of politicians and economists who rarely agree anyway. Greece might have ditched the Euro and the EU if Tsipras hadn't sold his people down the river. Such is the debt even after massive haircuts that Greece will run under the most distressing austerity for perhaps 4 decades. It was not the Greek people who brought it on themselves. One can always blame them...they elected their governments but....they were lied to, baited with invalid promises etc., and now they suffer. France and Italy are in runaway debt. Cyprus ran into horrendous debt. In spite of the ECB's presence, Cypriots (the people) were divested of their savings/deposits as part of the rescue deal....something that has now been tabled for all eurozone countries.

As for the banking side, London because a big financial centre long before the EU was ever thought up. It achieved that by being one of the easiest places in the world to set up a competent bank and this it remains - far easier than the States (as several banks have found out) and vastly easier than Germany/Frankfurt. I doubt things will change much. The settlement of euro transactions has come under threat but then the euro itself is under threat at the moment.

Yes, there will be economic adjustments but given the state of the EU it needs all the trade it can get. Hollande is not considered a serious politician by the French, hugely unpopular, his outpourings seem to be taken seriously only by propagandist journalists. France is tied to Germany's apron strings. Put in the simplest way, Britain has stirred up a lot of trouble for Brussels. And perhaps that's good. It needs reform. I mean, when a country can't even set its own welfare rules....when it can't even decide what to tax and not, it's losing its sovereignty fast.

There are benefits from staying in the EU but how long the EU is going to last in its current shape is something the economists and most commentators haven't factored into their models.

If I had a worry it's that the Remainers have no plans for any figurative earthquake cracking up the EU and, as a member, the UK would certainly be dragged down by it.

Here for example is one of those nice little disbenefits - just one of many.
http://www.express.co.uk/news/politics/ ... an-Britain

meanwhile we have British children homeless on the streets and elderly destitute turning to foodbanks... in a welfare culture...?

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