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(Seven-minute read)

 

Brexit is now set to become the best optical illusion of 2010.

But don’t panic there are still plenty of blatant lies to be told before it severs all ties with the European Union.

The path to a hard Brexit will now be paved with lots of them.

Parlement no longer has a say in the negotiations with the European Union. They now can’t really deliver anything except their own opinions.

Politically, Brexit represents a rise in the disgruntlement of the average person: the working or lower-middle-class citizen, who feels unheard, left behind, disenfranchised.

This is sneered at as “populism”

Apart from in Britain, populism has manifested itself with the election of Donald Trump in the US. This is terrifying. There is Marine le Pen in France, who is not going away.

So if Britain has the nerve to pull a no-deal Brexit, Europe can do nothing about it.

The European Union after decades of good neighbourly relations will have no option but to treat Britain like an adversary- trade wise.

Why?

Because Border disruption does not stop at customs checks.

Because if it concedes or gets embroiled in piecemeal cherry-picking trade deal it will lose all creditability, leading to a Singapore economy operating on its doorstep with tit-for-tat tariffs.

The result will be a cultivated facade that is going to require countries to be extremely careful in dealing with the British Government.

So where are we?

BREXIT was 90% about the UK itself, and 10% about the EU. With the withdrawal agreement passed this no longer applies.

Maybe the European Union can continue as if nothing had happened, but it won’t be the smart thing to do.

The EU can survive Brexit but to do so it must reform and reform very very quickly.

The smart thing to do would be to use this opportunity to make a structural adjustment, make the “ever deeper union” with the original four countries, and understand that the rest of the EU members only want the trade.

Thus the risk to the European Union would not be primarily in Brussels but in the domestic political landscape of the member states.

Its only course of action is a comprehensive trade deal not just with England but with London, or no deal.

As a no-deal will risk stripped London of their lucrative EU “passports” that allow them to sell services to the rest of the union it will have to join the single market or the European Economic Area that encapsulates the EU and non-members such as Norway. That will, in turn, requires accepting freedom of movement.

Or the City can go it alone and operate in a much looser regulatory environment.

Currently, London is the undisputed market leader in Euro – denominated derivatives, worth billions. It clears a whopping 972bn euro-worth of Euro-denominated contracts a day. Not to mention the employment it creates.

There are a number of potential scenarios, including that the current status quo prevails and the UK carries on trading with the EU under existing free movement principles. “That outcome is not beyond the realms of possibility,”

However, that means freedom of movement for goods, people and capital between the UK and EU will continue to operate. For millions of people who campaigned and voted for leaving the EU, this is will be difficult to accept.

By staying in the single market and customs union, the UK would be liable to EU rules and legislation regarding the free movement of goods, services and people across borders. Plus, it could put the UK in the dangerous position of still having to accept EU economic and political policy, while at the same time denying the UK a seat at the negotiating table.

Brexit damages both the EU and the UK. But the Brexit damage is greater to the UK.

Countries that have preferential trade deals with the EU but have not yet agreed to roll over those benefits for British exporters in the event of a “no-deal” Brexit. Still, more losses could come if Britain failed to conclude rollover deals with Vietnam and the MERCOSUR countries of Argentina, Brazil, Paraguay and Uruguay, which have recently signed trade agreements with the EU.

However, regions in Ireland face the most severe Brexit consequences, with potential economic exposure on par with the impact on regions of the U.K. that are currently most dependent on ties to the EU.

The UK could still end up being forced to comply with EU laws and regulations, as is the case with Norway and Iceland.

We are all looking at a disorderly world and you don’t have to be a blinkered horse to know that the digital age favours the fast and the small over the inflexible slow-moving bureaucratic.

The question should be “Will England be Part of Europe” instead of “Is England a Part of Europe“.

All human comments appreciated. All like clicks and abuse chucked in the bin.