I’ve read Moneyweek for quite a few years now. It’s the most economically and financially literate summary of mainstream media that I’ve found, essential for anybody who takes their own retirement funds seriously. Sometimes, it’s nearly possible to forget that it’s still written by journalists.
The magazine’s editorial choice is absolutely unambiguous. Moneyweek wants Brexit.
Well, OK, I’ll qualify that a little bit. Brexit in the short-term, at least. I’m not sure I see a clear set of conditions that would prompt Moneyweek to support (re-)joining a reformed European Union, or what reforms would trigger such re-evaluation.
Note: Moneyweek is a subscription-service, but some of the articles relating to the EU referendum have been made freely accessible. Copyright resides with Moneyweek.
In all cases, check out the comments from the public that appear under most articles. In many cases, they are as illuminating as the articles themselves.
One article that summarises Moneyweek’s position
A summary of Moneyweek’s position is set out by Charlie Morris. Morris recognises that EurIneers think that reform of the EU is possible, and that it is reformable only from within. By contrast, Brexiteers think reform - useful reform? - is impossible, so - like any half-decent investor - the best strategy is to cut your losses and quit.
Morris continues. The Eurozone has locked Greece into economic hell. Moreover, Morris notes that the Eurozone has also locked in a reverse-redistribution, apparently by design, whereby the rich north gets richer, and the poor south gets poorer. (I think that’s debatable: one could equally well argue that the Eurozone was designed to be non-discriminatory, but that investors will invest only into social cultures of transparency, of rule of law and of a good, strong work “Protestant” ethic. Also known as “the north”. In other words, “the south” lives up to its stereotypical complacency and thus earns the trust of no/insufficient direct foreign inward investor(s).)
After considering some of the other “what ifs” and “how tos” of the mainstream referendum debate, Morris comments on views from the City. He cites one view from one hedge-fund manager who sees the referendum as a question of democracy rather than business/economics/trade. He cites another view that says that London has taken 100 years to have a competitive edge in the finance business; it would take another 25 years for a competitor to replicate the same effect.
For me, two paragraphs sum it up:
In short, the problem is that while the EU may have been built on free-market ideals, it is a long way from achieving those ideals. The regulatory burden and the European parliament’s supremacy over national parliaments is unwelcome. But most importantly, by design or otherwise, the EU’s actions and structures drive its members towards a centralised social and political model, fed by high taxation. In turn, that means that power will always flow towards and serve the interests of the biggest, most influential partners in the EU – Germany and France. That attitude is holding back the rest of Europe, particularly those countries locked into the euro. That’s a great pity.
But we don’t have to remain part of that. There is no doubt that Britain would thrive alone. We might have to endure some short-term upheaval, but in the longer run it’s better than remaining in an unreformed EU. The EU in its current form serves neither Britain nor Europe. It must undergo radical change. And if it can’t or won’t, then Britain should go it alone.
List of other articles
Moneyweek lists its other articles on the EU Referendum at http://moneyweek.com/economics/eu-referendum/. There are at least 60 articles so far (as at 01Jun2016).
Moneyweek has interviewed BoJo and former governor of the Bank of England Mervyn King, amongst others [disclosure: King has a new book to plug]. There even an article which is sceptical about the scepticism of Brexit (!), a bond fund manager who believes that Brexit is all talk and no action. And the editor-in-chief claims she’ll buy four funds if Brexit happens.
The interview with King is particularly interesting. To quote just one extract:
Merryn Somerset Webb [interviewer]: One of the things that you say in the book is that you think government have been very dishonest with their electorates about the way the Eurozone has to work. They haven’t told the electorates that the only way for the monetary union to work is for there to be a proper fiscal union and a supranational organisation above democracies?
Lord King: Yes, and, of course, as soon as they get close to saying something similar to that they realise that there is popular discontent with that proposition. And, indeed, it comes both from the countries that would be required to pay for those in difficulty, like Germany, where taxpayers show no enthusiasm for paying what would be a large proportion of their GDP to countries in the south.
But, interestingly, the opposition also comes from the potential recipient countries because they have no wish to have the conditionality that would be required to persuade Germany to make these payments. They have to have some control over the size of the transfers if they’re to be made and there is no legitimacy in any framework in Europe for making those decisions.
So, for me, King has explained why the EurIn campaign has chosen not to reply to my email to it of 16Apr2016.
And the editor-in-chief writes two key sentences elsewhere that imply one major problem with governance in the European Union. It’s the same problem that arises wherever political power is centralised. Lobbying. Webb writes (my emphasis):
But remember why so many of them [big, multinational firms] love the EU. They’ve lobbied to make it work for them – and to make the EU bureaucracy think that capitalism effectively is multinationals.