hkloss1:
Good read from the FT
Brexiters must lose if Brexit is to succeed Any compromised final deal will indeed likely upset Brexiteers, fearing a watering-down of the whole thing that is enough to sell away much of the upside from Brexit - such as getting the money back we currently send to Brussels any time soon.
On March 29, the British government is to notify the EU of its intention to leave. This will be a big moment in a tragedy; it will be a tragedy for the UK, but it will also be a tragedy for Europe. It is an appalling way to celebrate the EU’s 60th anniversary. The tragedy in the longer term is how we’ve allowed the country that produced the Nazis get away with “letting the allies execute it’s own government”, and then allowing the succeeding German governments to reverse-take over the European continent “Politically” to the same ends (sans-holocaust - so far) Germany should have been put under full British rule at the end of WWII at least as much as Britain was put under German rule upon the death of Queen Anne.
Even if the exit negotiations go well, the decision to leave the EU will have huge consequences for the UK. Economically, it will lose favourable access to by far its biggest market. Politically, it will create great stresses inside the UK and Ireland. Strategically, it will eject the UK from its role in EU councils. The UK will be poorer, more divided and less influential. Access to the single market can hardly be described as “Favourable” if our balance of trade with it sees us paying “fees” to then also lose money on that trade. If we’re out of it, we gain the moment we stop losing the money - something I’ve banged on about since the very beginning. It is true though, that we are more divided. It was already true that we’re less influential, because our MEPs don’t get to turn anything significant over in Brussels, even damaging proposals such as the EU Army or Allowing Erdogan’s Turkey to join the EU further down the line.
Brexiters will deny all this. They are wrong. The evidence on modern trade is clear: distance is of enormous importance. The supply chains that link physical goods and services together work best over short distances. The models on which Brexiters rely ignore this reality. This is also why the creation of the single market required substantial regulatory harmonisation, which allows relatively frictionless cross-border trade. Brexiters will discover, too, that all trade deals impose constraints on national autonomy and the more market-opening the deal, the tighter the constraints.
Trade, traditionally is at it’s most lucrative when over the greatest distance involving the most disparate goods. The Silk Road for example. It is very difficult for both sides in a “free trade club” that is anything but - to not break their own rules to get ahead in such a zone, and indeed this has happened on an industrial scale. Euro truckers from Holland will now have a Romanian driver for example, being paid below UK minimum wage (which is supposed to be illegal) and frequently breaking the law to “get ahead” whilst here. Only this morning I find myself being overtaken in the third lane by a 60mph Dutch TNT truck who clearly couldn’t wait for me to complete my own 56mph overtake of a supermarket artic in lane one… Meanwhile, I have no chance of getting any jobs on the EU continent, even if I have the qualifications to get them. It’s a lot harder for UK citizens to get work on the continent than vice-versa. So much for “Harmonization”! Being a member of a political Union, which actually translates as being owned by Brussels means that EU citizens can break our own laws with impunity via the “For the greater social good” imperative, which of course no British Citizen ever had a say on. If we’d imposed our laws upon any incoming workforce, a lot would not bother coming here, and companies would be reluctant to lose money on their trade with us. The whole “single market” thing is heavily tilted in favour of socialist governments, and against Nationalist ones. Even Gorbachev remarked “Why are they trying to re-create the Soviet Union in Europe?” when talking about the European Commission…!
01:5804:39 HQ MP Benn Sees Need to Be Frank About Brexit Challenge
Brexiters will also learn that geography is political destiny. The UK can never be a non-European country. It will always be intimately affected by developments on the continent. But now, faced with a threatening Russia, an indifferent US, a chaotic Middle East, a rising China and the global threats of climate change, it is removing its voice from the system that organises its continent. The UK is no longer in the 19th century. It is in the 21st. Isolation will not be splendid — it will be isolation. Whilst it baffles me why we have this inconsistency regarding very different foreign policies towards China and Russia right now - future governments like the idea of borrowing more cheap money from China, effectively bankrolling the world debt bubble right now whilst bigging-up the so-called “Threat” from Putin’s Russia, which is just an excuse not to lessen expansionistic NATO.
Also, the concept of man-made climate change gets pushed upon us by the religious-faith denying Science community with the same fervor as some kind of new age religion. Natural climate change is very real, and we need to prepare for it. NOT pretend that it’s somehow man-made, and can be altered by completely trashing our economies. Cheap Electricity with arbitary innovation are the keys to the whole world’s prosperous future. Minimum Wages and enforced bottom-up efficiency at the expense of ordinary people - is not.
The departure of the UK is also a tragedy for Europe. The UK has long been the standard-bearer for liberal economics and democratic politics. It is one of the continent’s two strongest military powers. It has close links to the English-speaking countries. It has a global perspective. It has, at least until now, been pragmatic. Its views on what would benefit the EU (the single market and enlargement) and what would harm it (the single currency) were right. This much is true. We live in a nil-sum economy, and for one side to be a great gainer - the other side must become a big loser in the scheme of things.
Only someone ignorant of history would dream that Europe would be more prosperous, stable, influential, democratic and liberal if the EU shattered into 28 national pieces. The system of nation states has repeatedly proved unstable. In this case, with the US increasingly withdrawn, the EU’s collapse might lead to a struggle for hegemony between Germany and Russia or, worse, a pact between them at the expense of weaker neighbours. If the EU does survive, as I hope, Germany will dominate. The Germans do not want this. Why do the British? Germany may well dominate - but from now on - it must pay for it’s own political projects. Once Britain leaves, France and Italy plus a few others will follow. Germany will be putting in all by itself for everyone - which is right and proper for the style of EU they actually want to run.
Yet Brexit is going to happen, thanks to David Cameron’s folly in agreeing to the referendum, mismanaging the negotiations and bungling the terms of the referendum itself. Going through with Brexit is not a constitutional necessity; the referendum is not binding. But it is a political one: the Conservative party would shatter without it. Cameron has already paid the personal price for stealing UKIP support which ended up getting him over the line into a majority government. Unfortunately, his resigning only serves to disunite unless Theresa May can actually pull this off. We are completely at Theresa May’s mercy until 2020 now then. This isn’t very satisfactory for Brexiteer non-Tory voters like myself - but it’s going to be even less palatable for the Pro-Tory Remainers who don’t feel any particular allegiance to this “Crowned” Prime Minister they find as their new boss now.
But the mood of the negotiations and their outcome are still to be determined. We know they are going to be complex and difficult. We know that the process of withdrawal and deciding upon the details of a new relationship are not going to be completed inside two years. But we do not know how these negotiations will be approached. This is not so true on the EU side, where priorities are clear, as on the UK side.
Imho if it takes two years - it’ll never happen. This is a binary snap-off, do-or-die proposition now. We must expect every single step of the way for Remainers to continue resisting, which will likely push the “negotiating time” over the two years, with a hope of course that if Brexit is not done by the next UK General election - then Theresa May’s Conservatives will suffer for this “lack of progress” in the polls. This makes for considerable political instability in this country for the next three years then - let alone two. Brexit being completed early - should be a desirable thing for all by this point, but knowing human nature for what it is - I doubt the resistance is going to stop any time soon.
Reaching a deal is a necessity. This is most obviously true for economic reasons: seeking to obtain better market access from relatively unimportant markets, while suffering a large deterioration in the terms of access to the UK’s most important markets, would be ludicrous. Failure to reach a deal on money owed, treatment of persons, shared institutions, the nature of future trade arrangements and the transition to them would poison future relations. Britain would be the bigger loser: the impact on Scotland might be terminal for the UK. Yet the effect of a brutal divorce on the EU would also be large.
This is a bit like Poker: You’ve got three aces, but alas there are four hearts on the board, and you don’t hold any hearts in your hand, let alone the ace of hearts you need to have the nuts here. Your opponent puts you all-in… You’ve already put a substantial amount into the pot. Are you “pot committed?” Are you going to cut your losses, and ditch your losing three aces? or are you going to call, - when your opponent might indeed be bluffing about having the ace of hearts - but turns over some trash with the deuce of hearts - and takes all your money away anyway.
If a deal is to be reached, the UK, as the weaker party will need to make concessions, starting with the money owed. That is not only the sensible thing to do. It is the right thing to do. The country has obligations that come from more than four decades of membership. As a civilised and trustworthy country it must fulfil them. That’s just it. We’re not the weaker party, just the smaller party facing up to a legion of 27 countries that are obviously going to put their collective (socialist) interest ahead of Britain’s…
This means, in turn, that the prime minister must be prepared to make a stand against those who desire no deal at all. The EU’s negotiating position is a reasonable one. The UK must be willing to reciprocate. It must make concessions to ensure a harmonious and co-operative relationship in future.
I don’t desire “no deal at all”, but I can see the need for “being prepared to do a hard brexit” because if you’re not prepared to totally trash what you have - you’re going to end up losing it anyway. We must not put ourselves in the situation where our opponent can keep drawing as many proverbial cards as they need to get the hand that beats ours. If our hand is ahead, but looking vulnerable (as is the case at present) then it’s for US to put THEM “All-In” and stop giving away the damned free drawout!
Theresa May has stated that “I am clear that no deal for Britain is better than a bad deal for Britain”. Let us hope that she does not believe this. Failing to reach a deal would be bad for everybody. Mrs May has no mandate for the threat she has made of turning the UK into a low-tax, minimum-regulation country. The internal divisions such a strategy would bring would make those created by the referendum look like a mock battle compared with a real one. The UK certainly needs a deal, but so does the EU. The tragedy would be far worse without one. It’s imperative that she does believe this. If there is still any “resisting Remainer” in her - we’re totally screwed!
I no longer hope that Brexit can be avoided. That does not mean it needs to be welcomed. Still less does it mean that it does not matter how it happens. The prime minister must reach a deal that preserves as much as possible of the UK’s economic, political and strategic relations with the EU. History will judge her by how much of this she achieves.
The UK economy will get a boost once we no longer send the membership monies, and it will get an even bigger boost - once we trade unrestricted this time - with the rest of the world. We didn’t become an empire on Gunboat Diplomacy. We did it on trade, and used Gunboat Diplomacy to keep things together once we’d built up that empire. America ditched us along the way, and in time plenty of other nations “losing out from the empire” did as well. Now we’ve ditched the EU. We’re a trading Island with a great edge in replacing what little we had with a rather large upsided ‘X’ variable now. If you roll a double 2 on a pair of dice - it’s not reckless or stupid to want to have another throw to “see if you can get something higher”. Sure, you might throw double one and end up with losing 50% of what you started with. But that is not only unlikely (1 in 36 chance of throwing double one, 2 in 36 chance of throwing one and two, 3 in 36 chance of throwing four, 16% chance in total of not ending up “with better”) but you only have a throw a five on the two dice or better (84% chance) to end up better off. Time to put a proper player and gambler in the driving seat who understands the odds being in our favour rather than this more standard politician Rhetoric" where you hear "I’m not a betting person but… "
martin.wolf@ft.com
msn.com/en-gb/money/news/bre … ailsignout
