Themes-18: Fear and Fragility

A précis of previous posts on this theme

RemainerRemainers argue mainly from economic considerations, based on the fear of bad impacts from Brexit. The forecasts on which the fears are based rely on negative assumptions and so have self-fulfilling outcomes. Most Remainers also assess the possible outcome against a scenario in which everything about the EU continues serenely onwards, without any terminal crises. Remainers seem to swallow EU propaganda whole, which is its main purpose but deceives many.

Economics and Emotions (01/06/2016)

Euro-scepticism continues to rise, and deepen, as do varieties of populist politics (the two phenomena are related). Populist national governments challenge what the EU declares are fundamental values. If the EU does not take action against governments that attack democratic rights and processes it will encourage other member states to go their own ways, possibly derailing further integration. If it does take firm action against miscreants then it risks rebellion against the federal centre. It has found no way to escape this fragility.

Euro breakupThe loss of confidence in the common currency inspires particular fear in the EU because leaders regard the euro as the key to stability and an important element in facilitating the growth of a European identity.

The EU is founded on the idea of drawing sovereignty to the centre but increasingly citizens of the EU are challenging both the foundations and the lack of democracy. The EU wishes to quash dissent by imposing uniformity across the region; always their solution is more EU not a less fragile union.

Evidence of Fragility (Summary) (22/11/2016)

The rapid growth of populism is alarming EU’s mandarins, who see it as a threat to their project. They clearly don’t understand what they fear, so their reaction is one of panic. They adapt to the populists simply by adopting some of their policies. To ease their own anxiety the EU resorts to breaking its rules, which is a fearful response to its citizens’ reaction to enforcement of the EU’s rigid and unjustified rules.

Populism-1If EU leaders and their supporters were confident that their project would retain members because they see the benefits, they could afford to tackle Brexit more cooperatively. But many citizens in member states declare their dissatisfaction because the EU has not delivered on its promises, and can’t; too many people know this. But the ideology is founded in their disdain for voters, which is why the putative EU government is not open to democratic replacement.

EU leaders take measures trying to offset the damage caused by their own blinkered incompetence but the problems are rooted where they dare not look – in the foundations of their project.

Panic Reactions (30/11/2016) and Brief Lies (28/07/2017)

Fear, uncertainty and doubt have powerful short-term effects on markets so they can behave unpredictably in response. We don’t claim that everything will be simple if Britain leaves the Single Market, simply that some institutional experts may have been selective in their choice of scenarios, or been selectively and sensationally reported.

Some rebalancing of Britain’s economy away from finance towards manufacturing might be the result of a failed trade negotiation with a hostile EU. Of course no one can be sure of the net outcome so we should pay attention to forecasts, but examine critically the evidence with which they support their claims.

Market Rules (24/08/2017)

Whitehall mandarinWhitehall mandarins say they know the risks of Brexit, though they may not understand these risks and seem unwilling, or unable, to consider the opportunities Brexit could open. Are the predictions made by Mark Carney and others better now than they were after the Referendum? Probably not as the algorithms haven’t changed. And the ‘facts’ they offer in support are often suspect and sometimes plain wrong.

The Bank of England Governor and his civil service colleagues, at the Treasury and elsewhere in Whitehall, are like the commercial managers in corporations (mostly accountants) who look at the worst that may happen to a new venture and decide not to chance it. That kills innovation and damages prospects.

Canny or Carney? (23/08/2018)

Talking with a Remainer about Brexit risks being deluged with its fearful consequences, usually at high volume and with little evidence in support. Planes will be grounded and food will become more expensive are just two examples. A ‘proper’ Brexit would be a big change in Britain’s circumstances and that is bound to cause disruption but it’s not possible to be sure how difficult it will be to get through this stage or at what cost. Blanket, ill-considered fear-mongering is unhelpful to cool analysis of likely outcomes and opportunities.

Fragile EU?One question too rarely asked concerns how long the EU can be expected to survive in anything like its present form, given its intrinsic fragility. The reasons for the EU’s intransigence are plain: apart from punishment for our apostasy, the threat to EU ‘unity’ and fear of a positive example being set by an escapee nation are at least as important. If Britain is to be reconciled with the EU we need to hear why we should want to stay and not why we should be afraid to leave.

Reasons to Be Cheerful (08/10/2018)

Before the referendum the Chancellor of the Exchequer, George Osborne, told everyone that families would be £4,300 a year worse off if Brexit happened. This number was achieved by plugging assumptions into an economic forecasting model that set the worst and most unlikely outcomes of leaving against good but very unlikely outcomes for the rest of the EU.

‘Project Fear, Mark2’ was already underway by late 2018, to replicate the Mark1 version which preceded the first ‘People’s Vote’. Major newspapers and City analysts joined a chorus of fear and doubt about the economic consequences of Brexit, as usual without much evidence and even misrepresenting established facts. It seems that fear rather than high expectations may be at the heart of the case to Remain.

Gawd Strewth! (20/12/2018)

The eurozone (EZ) created conditions that bankrupted several of its member states. If not for monetary union economically weaker states would see their currencies devalue and their exports become competitive but within the EZ that natural balancing process was abolished, so both self-support and EU support are denied.

Holey-EUThe markets and ratings agencies will confirm the actual risk created by economic and monetary union; many banks will become insolvent in practice, if not bailed out at the expense of taxpayers. French banks are by far the most exposed; Italy is economically big enough to threaten destruction of the EU project.

The risky EZ venture, which was meant to accelerate convergence, has actually driven its member nations further apart economically, with high unemployment, low growth and huge debts for some while others appear to be doing well. Unfortunately contagion will affect those outside the EZ and the EU, including the UK, whether or not it is still a member. As Europe’s financial capital, London is vulnerable to EZ collapse.

A dilemma faces eurosceptic MPs, whether to accept the Prime Minister’s ‘bad-deal’ or hold out for ‘no-deal’. It has been argued that we should accept anything that puts more distance between the UK and EU. However, the proposed withdrawal agreement does not appeal to enough parliamentarians to choose that route.

Die Another Day? (19/03/2019)

We believe that the extension beyond March 29 was made to encourage the UK to withdraw its Article 50 notice and to remain in the bloc. Either that or to force Parliament to accept the mischievous withdrawal agreement, which has been rejected three times so far though with reducing majorities against.

Three options-2The options, all distasteful in different ways, seem to have settled down to three: ratify the agreement as it is, withdraw without a deal, or withdraw the Article 50 notice.

The EU has said repeatedly that the only possible agreement is the one drawn up and agreed between them and the UK Government, which has been roundly rejected by UK MPs, and may—possibly by design—scupper Brexit, as Parliament is also opposed to leaving without a deal.

October ‘Dead’line (20/04/2019)



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