Tag Archives: UK referendum

Brexit – the Fallout

JR Max Wheel

29 June 2016

The bad tempered debate about the referendum result continues to rumble on in the UK and Brussels. It would be charitable to suggest that this is chiefly the shock effect and real fear of cross EU contagion, but it is more.

As is usual faults are evident on both sides, in the UK for failing to prepare for both possible outcomes of the vote and selling the notion that exit would rapidly bring an end to the key issue of uncontrolled migration whilst preserving beneficial trade concessions from the Single Market. The campaign was marked by outrageous and frequently unsubstantiated claims by both Remain and Leave sides and further fuelled by a unpleasant rise in racial tensions, which have lurked beneath the surface in Britain, and well before the advent of a faux multicultural narrative; the same tensions are by no means confined to the UK, but exist across Europe and beyond.

In principle, it should not be beyond the grasp of a mature EU that not all member countries, for historical and cultural reasons regard its federal ambitions as either necessary, desirable or even feasible. That much has been obvious since the Maastricht, Nice and Lisbon treaties, the last being the (failed) attempt at creating a European constitution) rammed through as a treaty. This exercise in overreach really triggered the widespread anti EU feelings of the sceptics, and not just exclusively in the UK. It is no accident that M. Monnet believed in a Commission of elite decision-takers as clearly the serfs could not be expected to run matters themselves, a de haut en bas attitude that prevails even today -an historical core feature that makes for a large part of the EU’s democratic “deficit”.

The crash of 2008 and its consequences and the economic damage wrought by the single currency, essentially incapable of adjustment, should itself have required a major rethink by administrators in Brussels, at Council, Commission and Parliament level. They signally failed to do so and fatally pressed on, triggering serial economic crises in Southern Europe which continue to this day. The mantra of “more Europe” was again trotted out as the only solution, despite the fact that France and the Netherlands notably, submitted Lisbon to referendums and decisively rejected its implications.

The migrant crisis is for many the final straw; it shows the EU as incapable of coordinated rational response on either sensible humanitarian or socio-economic grounds. This is not to pretend that it is or will be easy to resolve; but clinging to artificial constructs in the face of an unprecedented movement of people was irrational and irresponsible. The root causes are well known, however the limp and disoragnized response revealed EU power structures to be incapable of rapid or rational action. The freedom of movement of peoples is a wholly aspirational and Utopian idea, born in the 1950s and its current extreme form, utterly inappropriate in the highly mobile globalised 21stC.

By now the problems piling up at the EU have reached breaking point – Euro mismanagement and ongoing suffering from economic woes, borders exposed as dangerously porous, rapid accession of low income new states, a mishandled accession approach from Ukraine resulting in a barely contained war and the annexation of Crimea and a bureaucracy, for whom no issue seems too small or insignificant but to require the dead hand of a meddlesome Brussels.

This is both dangerous stasis at one ahand coupled with over focus on trivia:  further integration is stymied, even to support the currency, let alone protect common borders or to consult on matters of foreign policy. Worse, policy making is driven by appointed staff, whose remoteness from member states’ own electorates leads to the perception and frequently the reality, that national laws and customs become increasingly irrelevant.

The continuing increase in wealth inequality despite the excesses leading up to 2008, but in reality a much longer time horizon back to the mid 1970s (since when wages as a share of GDP have been static or falling) and the increasingly powerless lower or eroded middle classes add up to a toxic brew. The EU project is now suffering an existential threat and the UK referendum is merely the lightning rod, but the blame game persists with no one focused on how a modern Europe can be made both democratic and dynamic. Tying essential trade issues to mass migration on  the immovable notion of an “essential” pillar or “freedom” verges on lunacy.

The Visegrád group of Central/Eastern European countries have already begun to demand reform of EU institutions, even as extremist parties have picked up momentum and arguing for national referendums in France, Italy, Greece, Finland and the Netherlands. Those who have benefitted from the opportunities arising from globalised trade in goods and services are being challenged by those who have not and whose communities have changed radically and who sense that nationals are being pushed to the bottom of the queue for hard-pressed public services. Rationality does not enter into that argument, even if it is part perception and part reality. Anger fuels political upheavals.

If the EU is to mean anything and to survive, let alone thrive, it must change fundamentally, that means either real economic and political integration, which is what more Europe means, and seems wildly unlikely or it means a move to a more flexible set of political arrangements, a Europe of associated nation states trading freely and with their agreeing which issues require pan European cooperation, rather than diktats handled down from a supranational Commission to a rubber stamp Parliament. Since the currency problem cannot be fixed and acts like a latter day gold standard, it must be made flexible to allow for external adjustments, which don’t repeat the errors of the 1920s/30s, where the only way to achieve it was via falling employment, wages and GDP.  A measure of how vital this is the prevalent fear that Germany, the de facto EU paymaster may itself lose out in the wake of Brexit, outvoted by austerity ridden Southern Europe. The clock is therefore ticking for both sides and contrary to mainstream media,  it is not solely due to the threat or reality of Brexit.