Settling Down – at last?

While stuck-in-a-groove Remainers continue to disparage the growing return to ‘normality’, with their whingeing ‘ah! buttery’, and some are still calling for a second referendum to ‘correct’ the first, there are signs that a more reflective and deeper intelligence is beginning to assert itself.

Even the Economist, previously driven almost hysterical by the threat and then the reality of an ‘out’ vote, appears to be calming down, though still ‘ah! butting’ whenever it feels it’s gone too far the wrong way.

There are some useful guides to the way things may be going in their 3 September edition.

Remainers predicted that Leave voters would soon suffer from an acute case of buyer’s remorse. Yet as the summer has worn on, the mood has changed. Companies have not fled Britain en masse. The pound has stabilised and the FTSE 250 is up on its pre-referendum level.”

“Some of the gloomier pre-referendum forecasts ignored the possibility that the authorities would respond to a Leave vote by propping up the economy.

[I]n the short term the economy seems to be faring better than some economists had predicted. Consumer spending appears to be healthy. In July retail sales rose by 4% compared with the year before.”

“Britain now hopes to avoid entering recession, as many, including the Treasury, forecast before the vote.”

Ah! but…

“The Bank of England had forecast growth of 2.3% in 2017, but now expects just 0.8%. Following the vote to Leave, the government and the bank have been forced to use monetary and fiscal policy just to try to keep growth in positive territory. And Brexit itself, of course, is still to come.”

Interesting that the author seems to believe that, had the circumstances been different, the government and the bank would not have used monetary or fiscal policy to try to sustain growth. All the positive stuff they feel obliged to report is only because we are still in the phoney war.

Elsewhere in the same edition they offer some analysis of the risks to the eurozone from the diversity that remains, despite the concerted efforts to impose EMU:

“German saving and Greek suffering are two sides of the same coin. Seemingly prudent budgeting in economies like Germany’s produce dangerous strains globally. The pressure may yet be the undoing of the euro area.”

“Within the euro area, the struggling Mediterranean economies need faster rates of GDP growth to bring down unemployment and stabilise government debt. Germany’s enormous surpluses mean that its households are buying less from other countries than they ought to. That hurts the growth prospects of the periphery, and raises the risk of a politically induced break-up.”

We made the related point often, in earlier posts. In order to achieve its declared aim of economic growth that benefits all, the EU mandarins have to argue that diversity is dangerous and a threat to the success of their mission. Hence all the emphasis in the Five Presidents Report on eliminating divergence and reducing all economies – and jurisdictions – to a bland uniformity. To achieve this, which would certainly be against the wishes of majorities of voters in the member states, who enjoy their distinctiveness, the EU has had to abandon democracy, leaving a notional parliament talking to itself. This is not sustainable, given citizens annoying preference for the mess and muddle of their own economies and politics over the threat of the imposition of a grey uniformity in which they have no say.

Changes in Britain’s circumstances will take two broad forms: improvements to Britain’s position in the world, and worsening of the EU’s. The first will result from Britain’s own efforts – if they happen – and the latter from the EU’s own inadequacies – not the voters’.

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