With or without EU
The future of Britain remains unclear
The writer has experience in Forex G10 spot currency trading with Citigroup ICG and financial consulting with Royal Bank of Canada. He tweets @thehouseofsaad
Via Brexit, Britain has engaged in the national equivalent of hitting oneself in the face with a rusty lead pipe because a giggling Nigel Farage and Boris Johnson told them it was a clever idea. Self-immolation, while inadvisable, can get results, but it needs direction beyond the act itself. Otherwise, it is absurd and unnecessary.
The future of Britain remains unclear. On March 29th, 2017, Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty (which provides steps to exit the EU within two years) despite having done none of the groundwork to set such a monumental decision in motion. May often displays good decision-making when she is not calling general elections that cripple her party, reshuffling her cabinet like an overly stimulated child would a half-deck of cards, voluntarily drawing red negotiation lines that the EU readily uses against her, giving atrocious speeches, or giving even worse interviews.
March 29th, 2019 is when Brexit becomes official, barring an extension that would have to be agreed to by the EU (which is unlikely). Few people think that a comprehensive deal can be reached by that time. The EU has remained firmly in control of negotiations throughout the first phase of Brexit talks, and this is likely to continue. By playing hardball and already preparing negotiating guidelines, they are rightly seeking to make an example out of Britain for opting to exit. The exit bill alone (£40b) is cause enough for other members to think twice before leaving.
Britain’s attempts to create a customised model that includes key features of EU membership while avoiding less desirable items (such as regulatory homogeneity and free movement of people) are unlikely to garner success. The EU’s chief negotiator, Michel Barnier, has previously gone on record having said that Britain would not be given a tailored deal that would give it the best components of deals with Canada (few commitments) and Norway (stable provisions). If Britain insists on leaving the customs union, exiting the single market, and wanting regulatory divergence, then any deal would likely be limited to trade in goods.
Britain can also thank its Brexiteers for the maddening grab bag of problems that have spawned directly on the nation’s borders. Scotland is demanding a second referendum in late 2018 that Parliament is trying to ignore away. You would be a tad demanding too if your 2014 Scottish Referendum to exit Britain failed by a 5% margin partly because Scots did not want to leave the EU. Meanwhile, Ireland has proved a competent manager of chaos. Irish Prime Minister Leo Varadkar was able to secure a commitment from May to have Northern Ireland operate under EU guidelines and regulations as per usual whether or not Britain comes to an agreement with the EU. The Irish were also able to extract an agreement that there would be no hard border between Northern Ireland and the Republic. Overall, this is a shaky agreement. May’s majority in Parliament is in large part due to the Democratic Unionist Party, which says it will not allow a deal that creates either economic or political distinctions between Northern Ireland and the rest of the United Kingdom.
In the event that this agreement collapses and Britain reaches a No Deal scenario with the EU, the British can at least rest assured that a new Irish uprising will be a very minor concern in light of the larger looming horrors of the shade. Even before Brexit, Britain’s annual growth was not exactly stellar. With Brexit, the number becomes squashed and ugly. Like Boris Johnson. Tariffs on imports and exports will shoot through the roof. This is to say nothing of the industries that will be affected by the loss of EU certification, the diminished capacity to export to the EU, the loss of EU privileges for airlines, the relocation of multinational corporations (as has already been seen in the financial services industry), and the hit to the GDP (which is estimated to be 6.5% by 2030).
But wait! There’s more! The pound sterling, having already been slammed by the initial Brexit decision, will take a further dip in the event of No Deal, and will then continue to get slapped around in forex markets. Oxford Economics forecasts the cost to the economy to be £125b by 2020. Luckily, £125b will not mean as much then as it does today since Britain can also expect rampant inflation.
An administration is only as good as its leaders. May has proved ineffectual and uninspiring, but she manages to scrape by. It could always be worse. Just look at the David Cameron shaped hole left in the walls of 10 Downing Street. Or look ahead to the very possible Corbyn government. When he is avoiding taking a meaningful stance on what Britain’s relationship with the EU will look like, Corbyn can be seen advocating populist socialism, a doctrine of economics that would likely collapse a country as entrenched in the global economy as Britain is. In fact, it tends to collapse whatever it touches. Just ask Latin America.
Reversing Brexit is not impossible, but it is highly unlikely. The worst-case scenario for Britain is if talks fall apart and No Deal is secured. The best case would be a deal similar to the one the EU has with Canada, but even this would leave Britain much worse off compared to its pre-Brexit state, especially when it comes to its financial services industry. Even a pro-business leader like French President Emmanuel Macron walked the EU party line during May’s recent visit to France. So far, Europe has shown few signs of disunity on the subject, although this could come to change as talks evolve and nations begin to see the specifics of how Brexit might hurt them, too.
Still, some leaders have tried to make the best of the prime minister’s recent trip to France. Like Boris Johnson. The foreign secretary and discount Trump clone was reported to have said that he wanted to explore the idea of building a 20-mile bridge from Britain to France. Given the man’s tenuous grasp on A to B connections, this is an excellent step forward at the primary school level.
Published in The Express Tribune, January 27th, 2018.
The future of Britain remains unclear. On March 29th, 2017, Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty (which provides steps to exit the EU within two years) despite having done none of the groundwork to set such a monumental decision in motion. May often displays good decision-making when she is not calling general elections that cripple her party, reshuffling her cabinet like an overly stimulated child would a half-deck of cards, voluntarily drawing red negotiation lines that the EU readily uses against her, giving atrocious speeches, or giving even worse interviews.
March 29th, 2019 is when Brexit becomes official, barring an extension that would have to be agreed to by the EU (which is unlikely). Few people think that a comprehensive deal can be reached by that time. The EU has remained firmly in control of negotiations throughout the first phase of Brexit talks, and this is likely to continue. By playing hardball and already preparing negotiating guidelines, they are rightly seeking to make an example out of Britain for opting to exit. The exit bill alone (£40b) is cause enough for other members to think twice before leaving.
Britain’s attempts to create a customised model that includes key features of EU membership while avoiding less desirable items (such as regulatory homogeneity and free movement of people) are unlikely to garner success. The EU’s chief negotiator, Michel Barnier, has previously gone on record having said that Britain would not be given a tailored deal that would give it the best components of deals with Canada (few commitments) and Norway (stable provisions). If Britain insists on leaving the customs union, exiting the single market, and wanting regulatory divergence, then any deal would likely be limited to trade in goods.
Britain can also thank its Brexiteers for the maddening grab bag of problems that have spawned directly on the nation’s borders. Scotland is demanding a second referendum in late 2018 that Parliament is trying to ignore away. You would be a tad demanding too if your 2014 Scottish Referendum to exit Britain failed by a 5% margin partly because Scots did not want to leave the EU. Meanwhile, Ireland has proved a competent manager of chaos. Irish Prime Minister Leo Varadkar was able to secure a commitment from May to have Northern Ireland operate under EU guidelines and regulations as per usual whether or not Britain comes to an agreement with the EU. The Irish were also able to extract an agreement that there would be no hard border between Northern Ireland and the Republic. Overall, this is a shaky agreement. May’s majority in Parliament is in large part due to the Democratic Unionist Party, which says it will not allow a deal that creates either economic or political distinctions between Northern Ireland and the rest of the United Kingdom.
In the event that this agreement collapses and Britain reaches a No Deal scenario with the EU, the British can at least rest assured that a new Irish uprising will be a very minor concern in light of the larger looming horrors of the shade. Even before Brexit, Britain’s annual growth was not exactly stellar. With Brexit, the number becomes squashed and ugly. Like Boris Johnson. Tariffs on imports and exports will shoot through the roof. This is to say nothing of the industries that will be affected by the loss of EU certification, the diminished capacity to export to the EU, the loss of EU privileges for airlines, the relocation of multinational corporations (as has already been seen in the financial services industry), and the hit to the GDP (which is estimated to be 6.5% by 2030).
But wait! There’s more! The pound sterling, having already been slammed by the initial Brexit decision, will take a further dip in the event of No Deal, and will then continue to get slapped around in forex markets. Oxford Economics forecasts the cost to the economy to be £125b by 2020. Luckily, £125b will not mean as much then as it does today since Britain can also expect rampant inflation.
An administration is only as good as its leaders. May has proved ineffectual and uninspiring, but she manages to scrape by. It could always be worse. Just look at the David Cameron shaped hole left in the walls of 10 Downing Street. Or look ahead to the very possible Corbyn government. When he is avoiding taking a meaningful stance on what Britain’s relationship with the EU will look like, Corbyn can be seen advocating populist socialism, a doctrine of economics that would likely collapse a country as entrenched in the global economy as Britain is. In fact, it tends to collapse whatever it touches. Just ask Latin America.
Reversing Brexit is not impossible, but it is highly unlikely. The worst-case scenario for Britain is if talks fall apart and No Deal is secured. The best case would be a deal similar to the one the EU has with Canada, but even this would leave Britain much worse off compared to its pre-Brexit state, especially when it comes to its financial services industry. Even a pro-business leader like French President Emmanuel Macron walked the EU party line during May’s recent visit to France. So far, Europe has shown few signs of disunity on the subject, although this could come to change as talks evolve and nations begin to see the specifics of how Brexit might hurt them, too.
Still, some leaders have tried to make the best of the prime minister’s recent trip to France. Like Boris Johnson. The foreign secretary and discount Trump clone was reported to have said that he wanted to explore the idea of building a 20-mile bridge from Britain to France. Given the man’s tenuous grasp on A to B connections, this is an excellent step forward at the primary school level.
Published in The Express Tribune, January 27th, 2018.