Themes-20: Risks and Crises-2

EU cannonMichel Barnier, the EU’s chief Brexit negotiator, made it clear that the EU would stick to its guns—the mandate—and it did; the draft withdrawal agreement is an elaboration of the mandate and does not stray from it. He claimed that all the problems resulting from the UK’s decision to leave the EU were the UK’s fault, but he has not reflected, let alone commented, on the reasons why so many British voters want to get out.

Barnier stated firmly that the EU does not want to compromise on “who they are”, which as they see it is deeply ingrained in the EU treaties; it is that vision of goals and values that they want us to accept, so that we will all love the project. But (see in particular Only Believe) the reality of the EU is so far from the vision that the whole edifice is at risk, all the time, of being shown up. A majority of British voters probably sense this disparity, while the Remainder prefer to pray to the vision. Remainers should beware because they are not backing a project that aims to achieve its vision but putting blind faith in that vision, despite what we can see.

Négociation sur le Brexit  (07/06/2018)

In a book subtitled Europe after the European Union Ian Kearns looks critically at the risks that face the EU project and the crises that it has to manage and concludes that it is still worthwhile. Our two posts review in some detail his cool analysis but come to a less enthusiastic conclusion.

Although the case that Kearns makes is clear and strong, it is a perspective from ‘above’, from the level of government, civil service and business, it does not reflect the views of ordinary citizens and voters. Like many among what are loosely called the ‘elites’, Kearns labels opposition to the EU as populist pandering. He echoes the EU’s own complaint at the lack of unity, or uniformity. It is the absence of self-analysis that brings the greatest risk to the project. Eurozone debts

Collapse-1 (04/08/2018)

In Part 2 of his valuable book Kearns lists many of the risks that the EU faces, and some of the crises that it can expect as a result of mismanaging these risks. Separatist demands within member states are essentially calls for fragmentation and the EU’s response is to call for unity (by which they mean, but won’t say, uniformity). They talk over the heads of separatists, and critics more generally, because as higher beings they don’t feel a need to listen, although a failure to listen, and to try to understand what they would hear, is at the heart of the terminal risks they are taking, politically and economically.

The powerful EU institutions have not proved able to manage the risks because of a fundamental contradiction between expecting uniform solutions and failing to provide convincing ones.

Collapse-2 (05/08/2018)

A ‘no deal’ Brexit presents risks for both the EU and the UK. According to the Cassandras, the UK will be unable to buy its favourite food items, and farmers and distributers in the 27 remaining member states will lose a significant market. No doubt popular sandwiches and lunches will have to change, which may be uncomfortable in the short term, but new habits of food purchase and consumption will soon be established and stabilised. BLT

Farmers and manufacturers in the EU will surely have something to say to their leaders, national and federal, which may cause them to soften the present high-level, tough-guy attitudes. An interesting twist is that much of the UK’s exports within the EU will be hard to replicate, unlike tomatoes, although much effort is being expended to steal Britain’s service industries on which EU countries currently rely.

Bacon, Lettuce and Tomatoes (01/08/2018)

One year ago the UK Government seemed resolved to leave the Union, the Single Market and Customs Union, taking “back control of our money, laws, and borders, and begin a new exciting chapter in our nation’s history”, according to the White Paper agreed by the Cabinet at the time. Now we feel less confident of the government’s intentions, even though (or perhaps because) the two remaining candidates for the job of Prime Minister make all the familiar noises about leaving.

Another reason for rising doubt results from the hard line taken by the EU to impose its mandate on the UK, during and beyond any transition period. The only prospective deal on the table does that, to the detriment of the UK, and they have talked themselves into a corner from which they are unable, politically, to amend it.Pressure-1

To leave without a deal is anathema to most UK parliamentarians, so there is a risk that they may accept the awful deal that is on the table; in other words the UK may do a u-turn from “no deal is better than a bad deal” to its reverse.

Chequers White Paper (04/09/2018)

By November 2018 the EU was piling on the pressure, thereby increasing the risks for both parties that a deal would not be possible (this was a month before the awful draft withdrawal agreement was published, and accepted by Theresa May and her government.

The EU keeps saying that they have to abide by the rules, although they don’t when it suits them (see Themes-10). But they did promise to minimise possible “risks arising from an exit without a deal, under strict conditionality and with limited duration”.

Rules are Rules (17/11/2018)

Many commentators have noted the difference in perceptions of Brexit between the generations, with (us) oldies voting in larger numbers in favour of leaving and the young things being proportionally more in favour of remaining. There are risks either way and, since we cannot forecast reliably how the EU will look in 20 or 30 years—or even if it will still exist—the risks are not measurable.

However, there are some clues available, including past performance, forecasts from experts, and our own judgements. These aren’t always consistent but the temptation to guess the future is too strong to resist.

EU efficiency-3While some EU economies are transfixed with low or negative growth, the project faces major problems. There is a risk that one or more member states may default on its borrowings. If that happened inside the eurozone then the EU would be unlikely to be able to handle it, with successful economies being reluctant to bail out vulnerable ones. That in turn will destroy the already weak trust that member states have in the safety of the shared currency.

Do not go Gentle (19/11/2018)

A misleading claim often made by Remainers (such as Chancellor Philip Hammond) is that “nobody voted to be poorer”, as though that would convince leavers that they had voted the wrong way. Of course in the actual Referendum there was an implicit risk that Brexit, particularly a ‘no deal’ version, would carry some risk, as would remaining. But the referendum was straightforward, leave or stay. No one, notably Remainers, argued that the vote was otherwise. It is obvious that nobody voted to be poorer, they all—both Remainers and Leavers—voted on the actual yes-or-no question they were asked.

Many different reasons have been put forward, and speculated on, for why people voted as they did, but no one on either side is entitled to speak for those on the other side, though that hasn’t discouraged the commentators. Despite ‘expert’ forecasts, the economic consequences of Brexit are little clearer now than they were at the time of the Referendum, particularly as we still don’t know whether there will be a deal agreed or not. The present UK government’s view is that a ‘no deal’ exit will result in chaos.

Nobody Voted to be Poorer (26/11/2018)

Stubborn-1Risks from Brexit have been increased by the EU’s stubborn refusal to discuss a future relationship until the UK has left the EU, ostensibly because the UK will then be a ‘third country’ which, apparently, is different from being an ex-member. This is the attitude that will bring on break-up sooner rather than later.

Yet another risk of Brexit comes from internal disputes among the member states of the United Kingdom. Remainers resistant to reason argue that the Scots will have, and win, another referendum to leave to UK. But the EU itself has said that it doesn’t plan to take on any more members (and it doesn’t want to encourage the Catalans or other separatists) so that line is not promising.

Meanwhile the EU has made the border on the island of Ireland an issue, for political reasons rather than with any concern for its citizens or ex-citizens.

Bloody-Border Line (12/02/2019)

One of the risks of a federal government that is remote in practice from its citizens is that a big government can become in thrall to other big organisations, such as multinational companies. The EU is already dominated by the biggest of its member states—Germany and France—and, to a lesser extent, to other combinations such as the Visegrad Four. It was manipulated fraudulently by VW, which lied about its emissions reports and is reluctant to publish its own report on the scandal for fear of upsetting other big companies (see https://euobserver.com/institutional/145333).

Talent drainAnother risk is the drain of talent, economic, political and administrative, from member states to the ‘centre’. This can result in a crisis of capability, as has been seen in the imbalance between the parties to the Brexit negotiations. The big government is able to pick and choose its civil servants from the national talent pools.

If the UK leaves the EU without a deal, the punishment regime will harden and member states will be expected to go along with this despite any damage to their own economies that may result from the severance of economic ties.

Here’s the Power, Where’s the Glory? (25/04/2019)


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