Tag: Brexit

The Olds have it! the Olds have it!

The ‘wiser’ generations, generally speaking, have a keener ear for nonsense. The EU, no doubt, a mushy construct of liberal ideology, bureaucracy, and hubris, must register on their radar with the footprint of some alien mega-spaceship – the stuff of Independence Day. The babbling of the ‘young’ can be dismissed as endearing but deluded naivety. So the grey voters crowded into the voting booths, walking sticks and all.

The tragedy is that now, in the wake of ‘having it their way’, this wiser generation has apparently paused, ‘realized’ its terrible mistake and, equipped with a wandering index finger, on the closest keypad, and in half an hour, has found an ‘online petition’ and signed it. Today, that petition is upwards of 3 million votes.

The most irresponsible part of this process is the lack of conviction.

Meanwhile, the lacklustre response that we have had from the EU means that they are still bureaucratic. The fact is that Juncker hasn’t yet resigned and that Merkel is still throwing her weight around as if nothing had happened, while Hollande and Tusk wallow in repeating useless platitudes;  and instead of begging the UK to sit at the table and discuss reasonable demands, these lords of Europe remain as supercilious and hubristic as ever. The fact that they claim to have looked at all options, mock Cameron for failing to prepare for Brexit, and yet have no contingency plans in place and that they insist on walking blindfolded to a political crisis of epic proportions means that they are as liberal and self-obsessed as they have ever been.

But the EU’s moves are being carefully watched by those young economists and young social commentators who voted stay, but who are now starting to think they might have voted the wrong way.

 Those working for the markets wonder, what country will follow Britain’s exit. Greece? Portugal? Italy? Will we see the partitioning of Spain with the Catalonian vote only 3 weeks away? How will the EU negotiate further fiscal consolidation between the Eurozone members, when each member can now play the Exit card?

juncker

Those with more of a cynical edge who write blogs wonder- how will a divided EU stand up to Russian aggression and export its principles of democracy beyond Europe? Can Europe really afford or allow the break-up of the United Kingdom? What happens to the UK’s seat as a permanent member of the UN Security Council? Should the UK’s permanent membership, in any case, or in the near future, be substituted for England and would Scotland, independently have its own claim?

There is, of course, the matter of greed: France and Germany, jealousy watched London become the financial capital of the World and profit from the riches that came with it. The French sacrificed their national pride to keep Paris beautiful, unharmed by German planes – so why aren’t American Investment banks flocking to Paris or to Frankfurt for their European headquarters? The answer is that investment bankers too have a keen sense for nonsense.

The UK will undoubtedly face economic consequences. It is widely expected that asset prices will fall, starting with house prices. The housing market has received two shocks this year, firstly, when Osborne (welcomingly) increased stamp-duty for second-time buyers, which so far has led to a 5% downward correction in house prices and secondly, with the Brexit vote. Real Estate Funds like JJL and CBRE have already started postponing their planned UK investments. CBRE only invested £180 this year, compared to £650 in 2013. Many leading investors are predicting a correction averaging 10% in the commercial real estate sector, particularly in London.

 The DAX, CAC and FTSE, which are all very good indicators of economic expectations, have dropped to 2011 prices. The pound and Euro are both taking a beating against the dollar and other currencies, while bonds yields have dropped to record lows; which together with an appreciation in the price of gold, indicate investment is drying up.

 It is perhaps too early to tell how the general economy will react, but a correction downwards in GDP figures is widely expected. The low exchange rates might improve exports, but that is expected to more than be countered by the fall in investment and consumption.

However, this isn’t all bad news. The fall in asset prices will provide much-needed relief to some social anxiety. Housing might, in this way, become cheaper for first-time buyers. Wages in the lower thresholds will probably increase as unskilled European labour goes home. The NHS will have fewer patients and doctors may have an easier time working, maybe only 10 hours a day. Parents will scarcely have to worry about getting places in schools.

The real losers might still be the EU. The money that was flowing out of depressed continental assets and into the UK, won’t stop flowing out. Switzerland and Norway will probably have their hands full in the near future. The hostility to investors remains a core principle of French liberalism (thus the EU); simply ask Emmanuel Macron.

Greece remains a troubled asset, (property of the German state – before Tsipras came along, whoever knew you could actually buy a country?) and fiscal unity seems to claim exponentially more of Draghi’s seemingly infinite life-line. The EU may just survive Brexit and is determined to do so; it may even survive another shock like Brexit (should we call that Catalonia?), but it won’t be able to avoid a third shock.

DONKEY

Nothing is written in stone. The will of ‘the people’ might change and a second referendum, whether Blair proposes it or not, may become a political necessity given the weight of the UK in the global political arena. However, rather than turn around and backtrack, we should be further convinced that the outcome of the referendum was the right one. If the EU buries it’s multi-headed self in the sand and refuses to acknowledge that we didn’t leave on a whim, let the olds have it; the olds have it.

Cameron gets his place in history

cameron.jpgNot a triumphal end to Cameron’s tenure sadly, but there are many things we can be proud of- not least the fastest growing Western Economy and his social vision which saw Gay marriage pushed through despite the whinging of many backbench MPs in the party who saw fit to misquote scripture (see my previous blog on this!). Against the odds, Cameron won the last election and secured Scotland in the UK. Triumphal! It now falls to someone else, maybe, and I hope, Boris, to patch up the problems left behind. A great man who has achieved great things leaves behind a problem that is perhaps even bigger than any of his successes.

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I am inclined to think that, despite the serious wobble with the pound as Brexit hit the headlines, we can still work with Brexit. And, moreover, I think there is a future outside the EU. The debate certainly puts issues firmly on the table, and now I hope Europe will also take these same issues seriously, because if the EU fails to reform under this pressure, then we have made an even bigger miscalculation and we have given even more backbone to the monster growing on our doorstep or at least across the channel! Let’s be frank, the EU has had and has ignored warnings in the past- Greece should have been a wake-up call, but the response from Merkel and her cronies was arrogant and wrong. Brexit is altogether a bigger thing and cannot or should not be so lightly tossed off. Barking orders at Britain, as she barked at Greece, will simply not do. (And we thank God we do not have Varoufakis to make a case to Merkel, the man who might have a charismatic presence but who thought Game theory should ever be taken seriously).

yiannis

The negative legacy that Cameron leaves behind is the one, however, that will probably enter the history books, particularly if Nicola Sturgeon follows through- Cameron will be the man who fractured the EU and who broke up the United Kingdom. The double whammy in union-break-ups! Going back a bit to the infamous “purring” story, there is a hint of hubris in this story that must be evident to a man like Boris steeped in the classics. I hope that was partly in his mind when he was paying tribute to the PM yesterday. Nobility will emerge! And I wonder whether there is room to consider a salvage operation that leaves Scotland and Northern Ireland in the EU? As nothing is clear, nothing can be ruled out!

The EU debate had been going on even before Cameron entered politics as an advisor, but he witnessed the damage it did at first-hand to the tail-end of the Thatcher Government and throughout the Major administration. Blair had a better ride but some close calls from Europe too, especially in 2006 when other EU countries acted fast enough to spare Blair his own Referendum chaos; Blair was lucky in power in a way that the last two Conservative Prime Ministers have not been but I hope, and I presume, nevertheless, that Cameron, like Sir John Major, and in contrast to Blair, will mature into a Statesman of stature once he leaves office. To this end, Cameron sent a letter round today with the following, which I think makes it clear he already has his eye on the bigger picture:

The British people have made a choice. That not only needs to be respected, but those on the losing side of the argument, myself included, should help to make it work.

Federalism vs Nationalism

As I write, I note that Lord Feldman is stepping down as Chairman of the Conservative party at the same time David Cameron quits in October. Their successors will have quite a juggling act ahead, because whatever Britain does next, the mess in our own backyard across the channel shows no signs of going away. They are victims of something that has been going on for about 20 years now.

andrew-feldman

Today’s BREXIT news is just one example, albeit a dramatic one, of the collision between Federalism and Nationalism that has been building up for a few years now across the EU, and looks set to continue with the Spanish referendum, as well as calls in France for a referendum and a revival in Greece of GREXIT ambitions as a third bailout inches forward.

We could try some cod-psychology and say that the rise of Nationalism is a response to some wider global phenomenon, but the truth is that we have no way, at the moment, of judging where it comes from, except that across Europe and beyond, there is a genuine wave of far-right activism, seen most strikingly in the recent Presidential election in Austria, while Jobbik has had tremendous success in Hungary (where it organises a uniformed guard to police Roma areas), as has Poland’s “Law and Justice” Government which came to power in October, the Swiss People’s party, Marine Le Pen’s Front national, the “Freedom party”in the Netherlands, and the Danish People’s party scoring 21% in the last election- Then there are “The Finns”, the Sweden Democrats and down in Greece, the abominable Χρυσή Αυγή as well as our own UKIP here in the UK. I am not sure about how Nationalist is “Our Slovakia” but it did quite well in the last election, and, of course, Germany has its own Nationalist party called “Alternative for Germany” AfD, led by a fairly ferocious woman called Frauke Petry who thinks it is legitimate to shoot refugees (“the use of armed force is there as a last resort”) and that women (I assume she means German women) should have at least three children. there are less successful but equally vocal right wing movements in Italy (the Northern League), the IRL in Estonia, the LDPR in Russia, Slovak Nationalists, Attack, Svoboda, Serbian Radicals and the HČSP, otherwise known rather worryingly as the Croatian “Pure” Party founded by war criminal Ante Pavelic which currently says it is against “NATO, the EU and Gay Marriage”.

ivan HCSP

There has also, oddly, at about the same time, been a surge in committed socialism as seen in the rise of Tsipras and Corbyn, two people who I am sure mean well but who manage power with a spectacular mix of arrogance and incompetence. The arrogance comes from the size of the  popular vote that thrust them into office (we should be careful not to confuse legitimacy with popularity) and the incompetence- well, that is clearly a natural gift in each case. Both have a certain charm. I might enjoy having these men round for tea, and I am sure their conversation would be tremendous fun, but I would not trust either to run my country. Indeed, I think neither Tsipras nor Corbyn ever expected to be elected and so both could offer all manner of promises and absurdities to their respective electorate that they now have to make good and neither was fully prepared for the job. Today, both men seem mostly committed to dithering or forgetting to wear a proper tie.

Modern Europe has also seen a rise in political idealism, what I imagine Mrs Thatcher would have called “Federalism”, most notably in the personnas of Tusk, Jean-Claude Juncker and of Frau Merkel, all of whom, I think, are deeply mistaken in the way they see the European project and their own roles within it. Of course, with hindsight, I am sure they might have surrendered more to David Cameron in the months before the Referendum, but that is the problem with so many of these people- they are locked into a belief that their own ideology, and their own authority moreover, whether European, far Right or far left, is of paramount importance to their overall identity. People are bigger than these passing belief structures, and the only way to tackle such ideologues is to be big enough to bend slightly. The EU was defeated by BREXIT because it was perceived to be undemocratic and inflexible, which quite bluntly is a valid belief.

I think it does not automatically now fall to others within the EU to sort out its future. We still have a role to play in what happens, and we have an interest in the way our neighbours operate. It can no longer be “business as usual” and it is not just about our future!