One week after Britain voted marginally to leave the European Union, the blogosphere is still out in full force, anti-democratically crying out for a second referendum or a general election to re-write an inconvenient history. Some pundits are talking about “I voted to remain, but I believe in respecting democracy” but, of course, we can calculate when such people will change their tune. This is Project Fear The Aftermath.
In the UK
OsBo disappeared for a weekend, only to resurface on the Monday 27 June 2016 to talk in a balanced way. If only he had the wits to have remained balanced during the campaign! On 01Jul2016, he announced the abandonment of his target to achieve a budget surplus by 2020, stupidly blaming his crass choice on the referendum result. The lack of sustainable economic growth between 2010-2015 had nothing to do with it? Really? Yeah, right. Project Fear The Aftermath continues.
On 24Jun2016, credit rating agency Moodys’ revised its opinion on UKGov’s creditworthiness (in Moodys’ language, from “AAA” to “AA1”). Moody’s decision buys into the faith that leaving the EU shall result in lower economic growth in perpetuity, completely ignoring the evidence that suggests that UK economic growth had failed to materialise in earlier years for reasons completely disconnected with the European Union as a political entity, but at least partially connected to subdued demand for all products within the Eurozone (50% of UK’s trade is with Europe). But Moodys is no neutral observer. UKGov creditworthiness has been dubious since 2007, because policy choices taken since 2007 have simply kicked the tin can down the road (ie. the nationalisation of toxic bank debt), instead of picking the tin can up and cleaning it out properly (ie. sending banks to the insolvency courts). Moodys knew this at the time, so Moodys’ announcement of 24Jun2016 is simply Moodys facing up to the truth as it was years ago, using the referendum result as a convenient, face-saving excuse. Moodys has arguably overstated UKGov’s creditworthiness for years! Project Fear The Aftermath continues.
In the EU
Sometime on 21/22Jun2016, two members of the European Parliament voiced their opinions that a Nordic bloc led by a Brexited Britain could be born (also reported in the Sunday Express) Said Morten Messerschmidt MEP, "The Maastricht treaty turned a commerce-oriented operation into an ideological operation with ever-closer union. It became an entity by itself. It's a shame it needs a political earthquake to shake Brussels but it's not Britain that's wrong, it's Brussels." The Express continues the theme, painting a vivid picture of the European Union’s gravy train, driven by fat-cats, funded unaccountably with taxpayers’ money.
Yet, on 24Jun2016, reactions by the European Union, and its member nations, left a lot to be desired. The upshot seems to be that the EU believes UKGov should invoke Article 50 immediately and that no negotiations of any sort should take place until such invocation. It looks like a face-saving way of buying time. Yet the same EU is supposedly terrified of “uncertainty” caused by delay. At present, UKGov is still a member of the European Union, so nothing has yet changed. Invoking Article 50 will itself change nothing, except that in 2 years time, subject to negotiation, the UKGov shall cease to be a member of the EU; it is the course of negotiations during those 2 years which shall cause some uncertainty about future outcomes. So are these European governments demanding the urgent and rushed creation of two years of certain uncertainty?! Project Fear The Aftermath continues.
Possibly, but there is another explanation: if the European Union really wants to kick-start (or, more accurately, kick-resume) its plans for continued ideological federalism, then an Article 50 application by UKGov gives the EU a very clear cut-off date from which UKGov can be isolated from future EU law. It simplifies negotiations considerably for both sides. It looks like UKGov hasn’t spotted that yet, or has underestimated the political desperation of Eurocrats to preserve their power-base. If so, then the delay to which the European governments refer cannot be about “economic uncertainties”, it must presumably by about “deepening integration and locking remaining members into the EU permanently”. Project Fear The Aftermath continues.
On 03Jul2016, the Express (not a credible source) reported that Denmark is frustrated at the slow speed of EU decision-making following a plan to have powers relating to security transferred from nation states to Europol. To understand the issue, it seems prudent to consider Europol as part of a wider move relating to the Single European Army. At the same time, on 21Jun2016, the Civil Liberties Committee of the European Parliament voted in favour of basic security checks on EU nationals entering the Schengen Area (how many European citizens would have assumed these checks already take place?) (reported by a local newspaper, the link on Europa seems not to work, I wonder why). Demands for a “Dexit” have been uttered (source 1, source 2) and “Swexit” is reported to be more likely than prior to the UK referendum. That said, the latter three sources might not be credible.
Fancy a slight conspiracy? On 01Jul2016, the Express (not a credible source) reported that the next European annual budget is coming up, and in that will be all sorts of things whose announcements were delayed to avoid influencing the UK referendum. The article is essentially saying “Phew, look what we’ve escaped from”. But the article is pure spin, and needs to be seen as such. How so? It seems that the EU might already be working on the basis that that UK is already gone, and is pressing ahead with its integrationist/federalist agenda without the obstructive Brits.
In the world
Meanwhile, the major issue of the world remains 0% interest rates creating a moribund world economy in which saving and productive investment just isn’t worth doing. The only private-sector investment plans that the referendum result might have impacted are those which had not started as at the UK’s general election of May 2015 (including those plans started but not yet beyond the ‘point of no return’). In a 0% world, financial engineering is more profitable - on paper, if not in reality - than productive investment. In other words, the referendum result becomes a convenient excuse of poor performance, not a cause of poor performance. Project Fear The Aftermath continues.
On 28Jun2016, Reuters reported that America changed its mind about relegating UK to second-class trade status. It looks like America’s self-interest has percolated to its leaders minds more quickly than self-interest shall ever (if ever) percolate to European leaders’ minds. Project Fear The Aftermath has a limitation after all! But not quite. Reuters also reported an academic blaming the death of TTIP on Brexit and not a French preference for economic protectionism. Oh dear. Project Fear The Aftermath continues.
In big business
On 03Jul2016, German regulators invoked economic protectionism on the proposed merger of the London Stock Exchange with Deutsche Börse. In spite of the two companies believing their merger plan was “Brexit proof”, it seems that neither company foresaw the corporately racist nature of regulatory protectionism. “BaFin [the German regulator] said last week that London could not host the headquarters of the planned European stock exchange giant if London is outside the bloc, saying it would be hard to imagine that the most important exchange in the euro zone would be steered from a headquarters outside the EU.” Bearing in mind how much law the European Union imports from Switzerland (not in the EU) so as to impose it on European member nations, the double-standards are breathtakingly distasteful.
On 01Jul2016, Herald Scotland reported that EasyJet has started negotiations to move its headquarters from UK to EU. “Negotiations” is an exaggeration. In fact, all it would need is to create a new parent company within the EU. This new company would then be the licencee of the group’s air operator's certificate (and this is probably related to the Single European Sky). RyanAir would probably do the same, and International Airlines Group already does just this. There is nothing to negotiate!! It is unlikely that any company would move its operations or head office staff lock-stock-and-barrel to the EU, unless a European regulator threatened some more corporate racism/protectionism to induce as such. And such racism/protectionism would have been equally likely to happen even with UK inside the EU anyway. The nature of airlines - and airports - is they physically exist/visit foreign jurisdictions. Project Fear The Aftermath overstated, but apparently not felt here.
On 30Jun2016, HSBC confirmed that it wasn’t going to rush moving its HQ anywhere. Having concluded in 10 months ending Feb2016 that HSBC would remain headquartered in London, the bank has no appetite for panicking in the aftermath of the referendum result. The ‘passporting’ on which HSBC relies is an EEA thing anyway, not an EU thing. Project Fear The Aftermath not felt here.
Racism in the UK
One big negative of the referendum campaign and its result has been a resurgence in racism.
In retrospect, I see this as an inevitable consequence of Project Fear and Project Fantasy, the choice by political spin doctors to avoid meaningful political debate and replace it with raw, uncontrollable emotion, combined with a choice by the Labour Party to silence the immigration debate for more than 50 years by branding any such discussion as “racist”.
There are too many sources to quote, so here’s the Huffington Post on 02Jul2016.
In short, this racism has been a disgraceful conflation by the far right to inject their racist agenda into UK ordinary life. It led to the murder of a Parliamentarian on 16Jun2016 during the campaign. It has led to racist abuse being shouted to anybody in the street who ‘looked different’. The P-work has resurfaced in ‘mainstream’ use (it had disppeared since the 1980s). One of my own European friends has been told he was a “rapist” and should “pack his bags and go home”.
Moreover, some incidents could only have been possible by planning, for example the firebombing of a Halal butchers in the West Midlands. This racism is basically home-grown terrorism.
It’s as if the football hooligans are trying to re-define “Englishness” in their own image, which is highly distasteful.
My instincts tell me that any attempt to ignore or to reverse the marginal referendum result would be a big mistake. The popular will is clearly for Brexit, even if marginal.
There was no viable strategy for a EurIned UKGov anyway, and there is even less for a Brexited-But-Let’s-Ignore-The-People UKGov.
The implications on the street for a UK Parliament that voted against the (marginal) will of its people is unthinkable.
The European Union looks set to push ahead with its ideological federalism, as if Britain were no longer a member of the European Union.
The European Union looks set to behave in such way that ideological federalism will preserve the union’s integrity. But noises from Sweden and Denmark suggest absolutely the opposite, that ideological federalism could trigger referenda on Swexit and Dexit.