Brexit

After a lot of consideration of both sides, I voted for Britain to leave the EU.

I don’t like the direction the EU took after 2008. I’m in favour of smaller governments, and thought the EU worked well as a trade and customs union. In 2008 and 2011 they used the economic crisis to push for closer political integration, while forcing member states to nationalise the debts of speculators, especially in the distressed countries like Ireland, Iceland, Portugal, Spain and Greece. Living through 40-50% youth unemployment and having all your friends emigrate was pretty horrible. And Greece is ten times worse. 
Seeing the suffering inflicted by the European Central Bank on Greece and Ireland turned me off the European project. Because we were in the Euro, we lost the autonomy Britain and Iceland had to determine fiscal policy. They had that autonomy because they stayed outside the currency union. Ireland especially was forced to privatise essential public services, to pay the international financiers guaranteeing the huge loans for bank bailouts.
So as I’m in the UK, I thought we should maintain that sovereignty and resist globalism. There is another side to my vote, and that was for Ireland: if the UK leaves the EU, it leaves Ireland as the sole English-speaking country still in the EU. There was a saying in Ireland that “England’s difficulty is Ireland’s opportunity”, and there has already been talk of the North of Ireland remaining in the EU, while the rest of the UK exits. I think there’s potential for a united Ireland there, so that was very exciting to think about.
I think the UK is more responsive out of the EU, and it’s firewalled from big ECB disasters, like the Italian bad loan crisis, like Greece and Portugal needing another round of bailout. Plus the EU needs UK military spending: only France has kept its military spending since the 90s.
The consequences are here already: our savings in Pound Sterling have already taken a hit, but there was always going to be a large amount of volatility associated with a referendum like this. The furniture manufacturer I work for now didn’t hedge the Dollar and Euro changes by buying futures contracts, and they are saying the outlook ahead is uncertain. They’ve cancelled the free Christmas party, so it looks like they will be cutting back across the board.
Stocks have already regained what they lost after the drop last Thursday (not that stocks mean that much when they’re so inflated by QE worldwide). I don’t think the UK will lose the common travel area, which has existed in one form or another since 1922. So it’s not catastrophic, but since 2008, it has essentially been 8 solid years of shit. I don’t think it will drastically improve either way. I think it’s going to get worse, in fact.
People are ready for something else politically but many young people here were heartbroken that the UK voted to leave the EU. So the UK is now quite divided over what’s next. Nevertheless, I don’t think staying in the EU was a guarantee of safety, and I don’t think greater political integration was the solution to the systemic financial risks that have been crippling the periphery of Europe since 2008.
To put a cap on it: my girlfriend’s mother only got electricity in her childhood home when she was 7 years old – she’s under 50 – and she lived in the capital of Ireland. They got an indoor toilet in the 1980s. As long as things don’t get that bad, we’ll survive. As the developing world catches up to the developed world, I think there will be a convergence of living standards, but I think it means a reduction for many in the developed world. There will be many opportunities to make a living, but things are getting weirder and weirder. History is starting to happen.
Advertisements

4 thoughts on “Brexit

  1. Iceland is not in the EU. In spite of having 100% control over their fiscal policy, they took a much bigger hit in ’08 than anyone within the EU area.

    Britain has close ties to EU markets, so anything they do going forward will still be very much influenced by what happens in those markets. Only difference – they no longer get voting rights, and may still have to pay fees to maintain access without getting any subsidies back. It seems to be a classic case of parochial mentality outweighing long-term benefits, all coming to a head due to an internal Whig power struggle. The EU cannot prevent crises from happening in member countries with deep, structural economic faults, but the same countries didn’t do a great job of going it alone either.

    OTOH it would be nice to see an united Ireland and an independent Scotland – big opportunities all around.

    That said, Britain is yet to pull the trigger on leaving the EU and the referendum is not binding. Given the “oh shit” reaction of prominent Leave campaigners, it remains to be seen how and when things happen.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s