Brexit and the waning days of the United Kingdom

[Sheilbh]

There's an element of that for sure in other countries too especially with a more clientilist system - see PASOK - but it's general. The SDP are polling dreadfully, as I say the venerable Dutch Labour Party is now floating around or just below 10% and way behind former Maoists; the PS and Labour are both under threat of losing their heartlands to the populist right and, in the case of Labour, have lost a chunk to populist nationalists. I can't really think of anywhere where the mainstream left is doing well - possibly Italy at a push.

I think part of it is the limitations on economic policy. It's like New Labour it works when there's lots of money and you just have to redistribute it, but the options for the left in the EU post-crash are incredibly limited. I think the EU as a whole is a bit like New Labour in that, it's flaws were disguised by economic growth and expansion but post-crash it's struggling.

Also who can blame populists for thinking there's an elite out to get what it can and out of touch with ordinary people, just look at Europe's leaders recently: Kohl, indicted; Chirac, indicted; Schroeder, shilling for Putin; Blair, shilling for any Middle Eastern tyrant; Berlusconi, at least an honest crook.

[Sheilbh]

I'm sensing a Brexit is now a real possibility, thought that's only based on talking to ordinary people and presupposes they stay motivated enough to go out and vote on the 23rd.

I started off thinking it wouldn't happen but I've started thinking in the last few weeks it might.

If I had to bet I still think it'll be like Scotland. A few scary polls right about now and then 55-45 (or tighter) to remain.

[mongers]

I'm sensing a Brexit is now a real possibility, thought that's only based on talking to ordinary people and presupposes they stay motivated enough to go out and vote on the 23rd.

I started off thinking it wouldn't happen but I've started thinking in the last few weeks it might.

If I had to bet I still think it'll be like Scotland. A few scary polls right about now and then 55-45 (or tighter) to remain.

Indeed.

Perhaps it'll come down to which side can put out the greater negativity over the last 3 weeks? 


edit:

Though I think where it's not a clean fit with Scotland is, then exit was a choice between the know and walking out on a stable relationship and into the dark night / unknown.

This month's vote could be seen as someone choosing to stay in an apparently abusive costly relationship, in terms of net contributions or immigration and deciding to leave and make a fresh start elsewhere.

[Zanza]

Why do the British care about the Eurozone so much? You are not even part of it...

[mongers]

Why do the British care about the Eurozone so much? You are not even part of it...

Do we, in the 'debate' so far, it's been a minor issue, immigrations and net contributions seem to be the focal points.

[garbon]

make a fresh start elsewhere.

What is the UK going to float off and join the Pacific Rim or the US?

[mongers]

make a fresh start elsewhere.

What is the UK going to float off and join the Pacific Rim or the US?

I'm not saying it's ration or am I supporting such a position, but some/many think 'we' can sail off into some recreated colonial grandeur that exists just over the horizon.

[Sheilbh]

Why do the British care about the Eurozone so much? You are not even part of it...

It's not a big issue. Though it is in lefty circles I know. Small blessing of Corbyn winning the leadership is that his one compromise with the rest of the Labour party is that he came out in favour of remain. If he'd lost I'm sure he'd be campaigning to leave and we'd be on our way out.

Personally I've got lots of friends from the Eurozone, as I say many of them are encouraging me to vote leave in the hope that it would shock the EU into reform. I'm not sure what we get out of it though

The only other way it's an issue is the sort of Dan Hannan line of argument that we should 'stop shackling ourselves to the sclerotic economies at the Western end of the Eurasian continent' and trade with the world.

[Zanza]

Populism isn't losing, but it is not yet winning either. The answer to this populism can't be to just give up and disband the EU. The answer must be to find a more positive narrative again, to embrace the disenchanted and find answers within the EU to their concerns. I find the idea that disolving the EU now would somehow make the populist go away unconvincing.

What if their concerns boil down to reducing immigration and changing economic policy?

I basically agree. As I say one of the reasons I'll vote remain is because I think the risks probably outweigh the possible benefits, but if we're in the same position in ten years and the EU hasn't changed then I'll probably be an outer. There is a real problem with the left for Europe - see the collapse of mainstream centre left parties everywhere - that Europe is kind of okay with EU leaders being basically racist and it seems broadly okay  with Orban and creeping authoritarianism, but trying to have an economic policy that's basically anything left of Blair isn't possible. If it doesn't change I think we probably have to stop lying back and thinking of Europe.

Merkel's conservative party moved so far to the center that a recent survey suggests that the conservative party is now seen as slightly left of center by Germans. So the center-left in Germany is now CDU + SPD, which still comfortably leads. That said, they obviously embrace a Schröderian economic policy, which is similar to Blair's Third Way. But I don't think the issue with the EU is that it follows a liberal policy. Agreed on the tacit tolerance of Orban and his like or just now sucking up to Erdogan.

I think everywhere it's a function of globalisation, I just think that the EU is a really intense local version of globalisation with an actual elite running things - sort of how I think the Eurozone crisis is in many ways a mini-version of the global financial crisis. The Eurozone especially has sclerotic growth. In real GDP it's still not got to the 2008 peak. It also seems to be diverging into a low growth, low inflation, low interest, high unemployment zone of its own in comparison with the US and the UK (which have different issues).

All of which is currently improving. The GDP has surpassed the 2008 peak, unemployment is going down, growth has been better the last quarters etc.
Do you think all of the economic problems could just be solved with a currency of their own? It's not like countries with their own currency haven't had all of these aspects. I think there is more to it than just the currency. That said, I think the Eurozone should just have written off all the bad debt, especially in Greece.

At the same time they've decided to impose and follow very strict rules which means there's really minimal difference between, say, Monti's unelected technocratic government and Renzi; there's not that big a difference between Sarko and Hollande.

And that would change once you leave the EU? All of the sudden, your country would no longer be at the leash of financial markets and there would be a big consensus that liberal economic policy is the right one? 

[Zanza]

Why do the British care about the Eurozone so much? You are not even part of it...

The only other way it's an issue is the sort of Dan Hannan line of argument that we should 'stop shackling ourselves to the sclerotic economies at the Western end of the Eurasian continent' and trade with the world.

Where is that rest of the world? Brazil and Russia have much worse economic problems than the Eurozone, India, Indonesia, Turkey and Middle East are unreliable, China's growth is still impressive but going south. You already trade a lot with the US and I don't see how that would massively increase outside the EU. So really, where is that legendary rest of the world you want to trade with? New Zealand?

[Sheilbh]

Merkel's conservative party moved so far to the center that a recent survey suggests that the conservative party is now seen as slightly left of center by Germans. So the center-left in Germany is now CDU + SPD, which still comfortably leads. That said, they obviously embrace a Schröderian economic policy, which is similar to Blair's Third Way. But I don't think the issue with the EU is that it follows a liberal policy. Agreed on the tacit tolerance of Orban and his like or just now sucking up to Erdogan.

I wonder if that'll end up like it did under Blair. By the end New Labour were seen as ever so slightly centre right and I think it explains a lot of the Labour party's eight year run into the abyss.

Do you think there'd be a more conservative reaction in the CDU after Merkel's gone? Any chance of an SPD recovery then?

All of which is currently improving. The GDP has surpassed the 2008 peak, unemployment is going down, growth has been better the last quarters etc.
Do you think all of the economic problems could just be solved with a currency of their own? It's not like countries with their own currency haven't had all of these aspects. I think there is more to it than just the currency. That said, I think the Eurozone should just have written off all the bad debt, especially in Greece.

Real GDP is only just the last couple of quarters recovered to 2008 levels. The biggest reason I think the Eurozone is it seems the most likely reason to explain the divergence between countries that had relatively similar growth beforehand. Even unemployment within the EU ran on similar lines, if there was a difference between the Eurozone and the EU28 it was within about half a percent it's currently at almost 1.5%. What is different now that makes this the longest, slowest and weakest recovery in Europe? If you just look at the Eurozone real investment recovered after the 92, 80 and 73 recessions over 4-7 years. Currently real investment is still at 85% where it's been since about 2010 of its pre-recession peak and falling again. The consensus five year growth for the Eurozone has fallen to 1.4% - if that was the return, who would invest?

I mean look at Scandinavia where there's a real striking divergence:


They are all culturally similar. They're all top 10 ease of doing business countries with plenty of structural reforms and a solid Transparency International. But they all have generous expensive welfare states. I think the most likely explanation is that Finland is a member of the Euro, Denmark is in ERM II and Norway and Sweden aren't. The first two have limited or no control over their monetary policy and both have to adhere to the Stability and Growth rules, the latter have their own monetary and fiscal policy.

Yeah Finland is hit by particularly bad external shocks - the collapse of Nokia and demand for wood products. They had similar shocks in the 90s but their currency could and did depreciate by 40%. Now they're stuck with a persistent deficit due to a three year long recession, with falling GDP, falling revenues and automatic stabilisers and they're cutting the budget every year. If ever there was a situation where you think Keynesian ideas might work surely it's one like that, but that's not possible for Finland.

And that would change once you leave the EU? All of the sudden, your country would no longer be at the leash of financial markets and there would be a big consensus that liberal economic policy is the right one? 

It wouldn't change but it would be democratic. I could vote to change economic or immigration policy. If I don't like the current policy then I can try and get the current lot out. If I felt strongly I could campaign for a change. At the minute that's not possible in large areas of policy because of European rules: immigration, state aid, stability and growth to name three.

Also I feel connected to my country and feel that I could help change it. I can argue with people and maybe even win UKIPers round to the joys of multi-cultural Britain. There's not much I can do to challenge, say Fico or Orban.

[Sheilbh]

Where is that rest of the world? Brazil and Russia have much worse economic problems than the Eurozone, India, Indonesia, Turkey and Middle East are unreliable, China's growth is still impressive but going south. You already trade a lot with the US and I don't see how that would massively increase outside the EU. So really, where is that legendary rest of the world you want to trade with? New Zealand?

Yeah those places. BRICS etc.

Of course the answer to that is that actually Germany has very high levels of trade with China so the issue may not just be trade barriers or to do with the EU

[viper37]

but some/many think 'we' can sail off into some recreated colonial grandeur that exists just over the horizon.

you can start with Canada, it's not over that idea yet.

[Tamas]

The Left is imploding everywhere because it has won the ideological war decades ago. What were leftist rallying cries a generation ago are now firmly entrenched as the status quo, with nobody wanting to attack them.

And yes, one of my biggest issue with the Leave crowd is that when they talk about the economic future they sound EXACTLY like the Hungarian and other radicals who declare Europe is done for and we should align with Russia and China who are the future of the world. A notion that is already being proven as totally wrong.

[Josquius]

The europe is done for rhetoric defies all logic.
3 years ago it would be a valid argument. Always 45% youth unemployment in greece! OMG doom!
BUT EVERYONE IS NOW RECOVERING.
Seriously. These people cant read simple numbers. Even Greece is posting better numbers these days than it was when it stood on the brink.