The Brexit

[DJQuag]

So June 23rd is fixing to be the biggest referendum I've ever participated in; a yes or no vote as to whether the United Kingdom should remain in the European Union.

Frankly, and I usually make fun of people like this, I'm still undecided. I can see the advantages of being in the EU, but there are certain things that rub me the wrong way. For one, we get to give a lot more money to the Union then we get back in return, sort of like New York State as compared to Alabama, and the EU isn't integrated enough for me to find that kind of thing worthwhile.

For another, I'm not sure I like the virtual open border system they have going here. I'm sure opening the floodgates for Eastern European immigrants really helped out Eastern Europe, but I don't see any advantages for the UK.

[cherrypoptart]

I have to admit that I'm smiling a pleased little smile at seeing your instinct for survival kicking in.

I fully expect the European Union to collapse now as a direct result of the inability to handle the invasion of millions of people which could have been handled over a period of decades just fine but is collapsing the socialist support systems of the countries which apparently thought a limitless amount of goodwill would translate into a limitless amount of resources to take care of massive numbers of people who will take years to assimilate and get on their feet.

The UK will be doing itself a huge favor by leaving now before they suffer a similar collapse by which I mean massive debt as a result of huge financial expenditures on immigrants that it's now shown aren't as quick out of the gate to get good paying jobs that allow them to be not only self-sufficient but contributing members of society. I'm not blaming the immigrants though necessarily because it stands to reason it will take time not only get an education to help get them off the ground but for many of them just to learn the language which may take a couple of years by itself. As with most things in life, the key is moderation and assimilating new immigrants into a country is no exception.

[AI Wessex]

I've only read lightly on the Brexit issue, but virtually all of the reports say leaving the Union will hurt all sides economically, with the biggest trading and manufacturing countries (England, Germany) hurt the most.  DJ, can you tell us dumb Americans why it would be a good thing?

[TheDeamon]

I'm just a yank, but from what I've gleaned over the years about some of the dissatisfaction about the EU from the UK perspective is:

1) Control over monetary policy, while the UK has some degree of self-determination on this, like many EU members(And actually more, since they're not part of the Euro), they still have obligations under the EU charter that means their central bank also answers to the EU.

2) Control over foreign policy, again, there is some degree of self-determination here, and most EU members are at least partial members of NATO as well, but membership in the EU also means turning over some degree of control of foreign policy over to the EU.

3) This is the bigger one right now: Membership in the EU also includes a number of reciprocity agreements between member states as to citizens/permanent residents and their ability to enter other member nations without need for travel visas and such being arranged beforehand. So if Greece grants someone permanent resident status to "a person of interest" to MI5, under the EU charter, there is only so much Britain can do should that person then decide to enter the UK. So if in theory, you happen to have France, Germany, and a number of other EU member states that are having problems with Islamic Extremism due to overly generous immigration/political refugee policies said member states were practicing, being able to roll back those reciprocity agreements might be a very big temptation at the moment.

[D.W.]

DJQuag, isn't the open border policy still something you can "opt out of" like the currency?  Does the decision to stay translate to "all in" where previously it was a "well we're mostly in the union..."?

Would this referendum change things if they vote to stay in?

[DJQuag]

If we stay in, nothing changes. The Prime Minister and people inside the EU government promise that if the UK stays, there will be compromises, but at the same time they've said there is no leeway on certain rules, which happen to be the ones that people are unhappy about.

The open borders thing works like this; once a country joins the EU, citizens from there can go to live and work in any other country inside the EU with absolutely no restrictions. There is no opt out.  Also, official licences and documents from one country must be accepted in another. In practice, this can result in things like my half blind Greek ex using her Greek driving license, which is much, MUCH easier to get then a British one, to drive in the UK. Also, every time a new country joins the EU, there is a massive flood of immigrants from the new countries into the West. And I can't really blame them...why not move to a new country, if you'll have all the same rights as the citizens there, there is nothing to stop you, and the new country is wealthier and has a better social benefit system? The insane refugee policies of certain European countries also makes this something that is not necessarily a good thing at the moment.

The Stay campaign is saying that prices will go up, and the country will lose export revenue, because of lost trade agreements. And I suppose that's possible, and it's the main reason I'm still on the fence. The UK is a big market, though, and I have a gut feeling that most of the countries in the EU will be happy to make agreements that are identical to what they have now.

Basically the whole continent is stuck between the Articles of Confederation and the Constitution, and it's not a very good place to be. And the whole place consists of different nations that have literally been at each other's throats for centuries, and are still racist to each other. I have my doubts that the unification process will go anywhere near as smoothly as the United States' did.

ETA - The fact that the UK is obligated to give a certain amount of money each year to the EU, and gets a lot less in return, is another factor to consider.

[DJQuag]

Also, proper campaigning only began last week because, by law, any political campaign can only take place in the ten weeks leading up to the election.

Can you imagine? A presidential campaign that lasted only ten weeks? It'd be great.

[NobleHunter]

The Scots would be grumpy (well, more grumpy) and might try to leave again because they'd rather stay in the EU. No idea what the Welsh think.

Fresh trade agreements might be hard to come by. The rich countries would be upset that the UK left and the poor countries would be skeptical af about the cost/benefit ratio. Not to mention the dislocation would leave the UK in a weaker position for the short term.

[TheDeamon]

The open borders thing works like this; once a country joins the EU, citizens from there can go to live and work in any other country inside the EU with absolutely no restrictions. There is no opt out.  Also, official licences and documents from one country must be accepted in another. In practice, this can result in things like my half blind Greek ex using her Greek driving license, which is much, MUCH easier to get then a British one, to drive in the UK. Also, every time a new country joins the EU, there is a massive flood of immigrants from the new countries into the West. And I can't really blame them...why not move to a new country, if you'll have all the same rights as the citizens there, there is nothing to stop you, and the new country is wealthier and has a better social benefit system? The insane refugee policies of certain European countries also makes this something that is not necessarily a good thing at the moment.

The Stay campaign is saying that prices will go up, and the country will lose export revenue, because of lost trade agreements. And I suppose that's possible, and it's the main reason I'm still on the fence. The UK is a big market, though, and I have a gut feeling that most of the countries in the EU will be happy to make agreements that are identical to what they have now.

These two kind of come together, as you then get the question of what happens to all of the "EU workers"(/long term "visitors") that currently reside in the UK should it leave the EU? I could imagine that is going to cause no small amount of disruption in the labor market as that transitions(and many of the EU types likely end up needing to vacate).

Which isn't to mention housing markets that will likely slump at least for a bit, probably mainly towards the slum end anyhow, but having an outflow of immigrants, or at least, a cessation of the inflow, would be felt there. (But hey, beneficial towards the native/legal types that remain who are looking for a place to live/start their independent life, cheaper housing!)

The Stay campaign is partly correct, but partly insane. Prices will likely go up, that cheap labor you've been getting courtesy of overly liberal immigration policies of other EU member states will cease being directly beneficial to UK Businesses, which means the labor market will likely tighten up, which means likely worker wages to follow, which will have the follow on of higher prices as businesses are going to pass that expense down the line.

The UK by itself is a large market, being slightly larger than the state of California by itself. You'd be correct, most EU member states would be very likely to quickly instate new trade agreements with the UK in (diplomatically) short order, as that is a lot of money their own nations businesses would risk missing out on in the interim.

There might be a few nations that try to hold out as a punishment, but in the grand scheme of things, most of them probably either don't, or won't, turn out to matter much in the grand scheme of things for the UK. Funny thing about money is that it has tendency to find its way into places where its wants, so if they don't want to welcome UK goods and money into their country, I'm sure there are plenty of others who will be more than happy to have at them instead.

[DJQuag]

The Scots would be grumpy (well, more grumpy) and might try to leave again because they'd rather stay in the EU. No idea what the Welsh think.

Fresh trade agreements might be hard to come by. The rich countries would be upset that the UK left and the poor countries would be skeptical af about the cost/benefit ratio. Not to mention the dislocation would leave the UK in a weaker position for the short term.

It's kind of an unwritten rule with these types of referendums, that they're a once in a generation type of deal. Both sides agree beforehand that the loser isn't going to try and push for another vote anytime soon. Scotland is in the UK for the foreseeable future. And Wales? Looking beyond the fact that they've been connected to England since literally the early 1300's, the standard of living they enjoy now wouldn't be possible if they were a sovereign state. Economically, they're the Alabama to England's California, and they know it. They're not going anywhere.

I agree with TheDaemon on trade agreements. The UK is a large market that European countries make a lot of money out of. There might be a public show over it for a while, and a small holdout, but most if not all of them would fold. The United Kingdom is not Greece.

[DJQuag]

TheDaemon

I seriously, seriously doubt that if we left there would be mass deportations. What would more likely happen is the government would say, whoever is here, can stay here. But they'd tighten the controls considerably, and the United Kingdom would once again be the entity that gets to choose who can come to live here.

As for the housing market, most of us would appreciate a slump. The American custom of the rich people buying all of the cheap houses as rental investments landed over here a few years ago, and most younger people are flat out unable to get a house. I can't remember the exact numbers some paper published on how long someone making 35-40k, American dollars, would take to be able to afford the down payment, but it was absolutely ridiculous.

We offer housing to the homeless, but unfortunately, there just isn't enough at the moment. The waiting list can be months if you're a healthy adult with no children.

[NobleHunter]

There was enough chicanery (or so I've heard from my pro-Independence friend ) that the Scots may not feel like being polite. If the UK stays in the EU it probably won't come to much but if the UK leaves, the Scots may feel sufficiently ignored and betrayed to try and leave again.

[TheDeamon]

There was enough chicanery (or so I've heard from my pro-Independence friend ) that the Scots may not feel like being polite. If the UK stays in the EU it probably won't come to much but if the UK leaves, the Scots may feel sufficiently ignored and betrayed to try and leave again.

What does Scotland get out of the EU anyhow? I know Scotland generally comes out ahead from being part of the UK, but I'm fuzzy on what they'd view the actual benefits of remaining in the EU as being when weighed against the drawbacks.

I'd also be inclined to think many Scots want out of the EU as well. I doubt it's going to be a landslide for or against an EU exit up there, but it's probably going to track with much of the rest of the UK.

[NobleHunter]

I don't think Scotland faces much in the way of drawbacks. I think they'd be a net recipient of any cash flow and--according to my Scottish friend--they want the immigration. The impression I get is that they need people to do relatively high value jobs, probably in the resource sector. It's not like England where migrants pour into the urban centers and chase low wage and low value jobs. Since immigration policy is set by Westminister, it doesn't reflect what Scotland needs.

I think they also approve of a loose federal style of government. Brussels would mostly leave them alone and give them a venue in which to tell Westminister to get stuffed. What's not to like? I think Stay will beat Go by a handy margin in Scotland.

ETA: If only as a way to send a pig head to 10 Downing Street.

[NobleHunter]

So. My preferred commenter on all things British (okay, the only one I read but still), Charles Stross, SF author and general wise-ass, has succumbed to the inevitable and commented on Brexit. For your reading pleasure:

Round 1, from 2013: http://www.antipope.org/charlie/blog-static/2013/03/thinking-the-unthinkable.html

Round 2, just now: http://www.antipope.org/charlie/blog-static/2016/04/the-unavoidable-discussion.html

Round 1 is a pretty convincing argument for Team Pig Head being utterly nuts. ETA: Whoops, Team Pig Head might be for staying. It's a faction in his party that wants to leave. I'm confused.

[TheDeamon]

Reading through round 2, I'm trying to decide if we're talking about home repair, or rearranging deck chairs on the HMS Titanic in regards to the EU in general. For that matter, even in home repair, if certain maintenance issues are ignored long enough, the only option often becomes to tear it down.

Which isn't to mention another option, and that is to liken certain aspects of the EU instead to a house that is either on fire already, or is starting to see a copious amount of smoke in the lead up to actual flames starting to erupt.

Western Europe has had known demographic issues since the 1990's, their solution(even in the UK) was the importation of labor from foreign markets to infill those shortages. That influx of foreign labor has caused, and is causing shifts in the underlying demographics, and some of the consequences of those changes and associated policies are starting to be witnessed. So whether  or not exiting the EU right now is (comparative) madness may be relatively moot,  its looking at what the possible scenarios are 10, 20 or possibly even 30 years down the road.

It could be very well be possible that an early exit may be a net harm regardless(happening too soon), but it is also possible that while it may cause short and even medium term problems, it puts the UK on a better footing for the long term. But that still requires a solution to the underlying demographics issue. Even then, the UK exiting the EU doesn't completely help, because many of the "problem demographics" can still likely get in by means of the Commonwealth.

[TheDeamon]

One other consideration in all this discussion presupposes that the EU itself remains stable after the UK leaves. With the Eurozone issues(Greece, Italy, et al that the UK is only indirectly involved in as they're not on the Euro themselves), as well as the immigration issues that are being experienced on the continent. It is possible that a UK exit may destabilize the EU entirely, and after a subsequent election cycle in other nations, like France or Germany, some may start making their own withdrawals from the EU.

If either France or Germany withdraw, particularly after a UK exit, that's pretty much it at that point from my understanding of the European politics involved. It certainly would be lethal to the Euro as a currency, if nothing else. If the EU doesn't get the immigration issue under control, the reactionary governments that are willing to leave so they can do it "their way" are going to come. It isn't a question of if, but when. A UK exit now simply speeds up that time table, as it lowers the bar for how bad things need to get first.

Whether the UK remains or leaves after this vote, I'm still not expecting much out of the EU for much longer, it probably only has a few decades left if that. I'd be highly surprised if it's still around in any immediately recognizable form 50 years from now, if it is, its inherent nature is going to be very different from what it is today(and would likely outrage many people in it right now). That is one bet I'd almost be willing to place a wager on.

Of course, on the other hand I have my own home continent to look at. I don't see anything happening that should actively prevent the US from still being around 50 years from now, although I see plenty of indicators that the trip isn't likely to be very pleasant for anyone. Some of those indicators also could lend credence to the idea of the US itself breaking apart, but I wouldn't put any kind of odds on it happening just yet.

[AI Wessex]

DJQUAG, I am reading this as a 'Trump" moment for Britain,  but that cooler heads will prevail. Will you stay or go?

[DJQuag]

I'll be voting Remain,  but the polling is neck and neck at the moment. I'd like to say that I'm confident that Remain will win, but I know a scary amount of people planning to vote leave.

[Pete at Home]

I'd have a hard time deciding if I were in your place.  Hopefully, if you leave, you can offer to come back with conditions.

[DJQuag]

Thing is,  the UK has all of the opt outs and conditions right now that they're ever going to get. Most everything that the Leave campaign has been putting out there is false. Once I had that explained to me, and verified it, the choice went from hard to very easy.

[NobleHunter]

Fun Fact: the referendum is not legally binding. Parliament can decide to ignore it. Though the resulting political chaos would make the Trump campaign look like a model of organization. The PM has said he'd resign if Leave wins and it seems likely the party will split. That means the government would fall and an early election.

The problem with leaving and trying to come back is that a Leave vote would be tremendously disruptive as everyone hedged their bets against a permanent break up. Brussels and London would have to try very hard to avoid everything going to *censored*. London would be headless and there's probably a better chance that Brussels would be trying to make it worse, pour encourager les autres. The EU's nightmare is that Brexit would lead to a general rush for the exits. So they might try to make it as painful as possible.

The worst case scenario for Leave would be to suffer through all the disruption of leaving only to run into the mess caused by the EU breaking up. They'd get hit coming and going. Waiting for the potential to become actual would at least limit the Pound to one crash instead of two.

[Athelstan]

For what it’s worth I just voted Leave. It’s a personal choice and I can understand why people would vote Remain. I just asked myself is the EU, as it is now, an organisation I’d wish to join. As I answered myself a resounding No I felt honour bound to vote Leave.

[AI Wessex]

The US coverage of the Brexit vote has increased significantly lately, with lots of interviews of leaders on both sides of the issue.  What I find surprising is how hopeful the "Leave" side is, without much hard evidence for why and how things would be better, and how equivocal the "Remain" side is.  John Oliver got it neatly in his rant on his show last Sunday night, that there is nothing to love in the European Union, but leaving it would be disastrous.  The song at the end of the piece is fantastic.

[DJQuag]

Yeah, that was a really good bit. I especially liked the part about all British people having a natural instinct to tell Europe to go *censored* itself...mostly because it's true.

[NobleHunter]

For what it’s worth I just voted Leave. It’s a personal choice and I can understand why people would vote Remain. I just asked myself is the EU, as it is now, an organisation I’d wish to join. As I answered myself a resounding No I felt honour bound to vote Leave.

That's probably the best argument I've heard for Leave. A bit too idealist for me though. I'd pay rather more attention to likely consequences.

[Seriati]

I think the surrendering of sovereignty to the EU government, without direct representation, would be enough of a deal breaker for me.  But, I don't feel strongly either way.

[NobleHunter]

There's a European Parliament that I think is directly elected in the UK. I'm not sure every country in the EU does it that way though. I'm not sure where it lands on the spectrum of representation.

[DJQuag]

There is a European Parliament, whose members are voted for by the electorate of each member country.

There really isn't much sovereignty at all given up. There are regulations and such that businesses are required to follow, but I don't really see that as giving up sovereignty. We don't HAVE to follow them; it's just the price to be paid if business wish to trade with the largest economy in the world, tariff free.

[Pete at Home]

I'm curious where it lands on the spectrum of federalism.  Seems to me that the EU has become at this point more controlling than the US fed was before the civil war.

[DJQuag]

I need to get to sleep, but early results aren't looking good. I'm going to bed assuming I'll be waking up go some bad news.

[AI Wessex]

Birmingham and London will be reporting later than outer areas, and should pull the vote toward "remain".  Not clear if it will be enough.

[D.W.]

The google update I'm watching seems to flip flop which side has the narrow lead every time I hit refresh.   

[LetterRip]

I will predict that it will be 'leave'.   61% of the remaining vote would have to be 'remain', and there are less than 4 million votes left to count, I just don't see it happening.

[cherrypoptart]

Any predictions on the world economy or other consequences of a vote either way?

They are saying the U.S. futures markets are way down now in anticipation of a Leave result.

I wouldn't have expected our stock market to suffer so much from either result but maybe I'm just not seeing how interconnected everything is.

[LetterRip]

What will happen is anyones guess.  The impact on those who are currently living outside of the UK, such as retirees living in Spain will be problematic (due to loss of reciprocal travel and health care agreements).

There is a good chance of Scotland doing another referendum and possibly leaving the UK in order to stay in the EU.

http://www.telegraph.co.uk/news/2016/06/24/what-happens-if-the-uk-leaves-the-eu-we-reveal-what-to-expect-if/

[TheDeamon]

Any predictions on the world economy or other consequences of a vote either way?

They are saying the U.S. futures markets are way down now in anticipation of a Leave result.

I wouldn't have expected our stock market to suffer so much from either result but maybe I'm just not seeing how interconnected everything is.

Looks like markets and the news has decided it's a vote to exit the EU, markets are down almost globally, except the usual refuge stocks(ie gold). Trade has reportedly stopped on a few exchanges due to volume of trade/speed of decline triggering failsafes.

[TheDeamon]

There is a good chance of Scotland doing another referendum and possibly leaving the UK in order to stay in the EU.

http://www.telegraph.co.uk/news/2016/06/24/what-happens-if-the-uk-leaves-the-eu-we-reveal-what-to-expect-if/

That assumes there still is a EU for a newly independent Scotland to join up with by the time they were independent and able to join the EU on their own.

[TheDeamon]

London would be headless and there's probably a better chance that Brussels would be trying to make it worse, pour encourager les autres. The EU's nightmare is that Brexit would lead to a general rush for the exits. So they might try to make it as painful as possible.

They have a catch-22 going on this, punishing the UK also means disrupting a major trading partner, markets are already disrupting themselves over this, although that may be just a momentary blip. But the Eurozone market taking a sustained dive is bad for both the Euro and the EU in general.

I do think throwing the book at Britain in the hope of discouraging further plebiscite outcomes like Brexit elsewhere is likely to backfire on them big time(it will likely incite the others to "exit while they still can"). Only time will tell what they do, but the EU is certainly in dire straights right now.

[LetterRip]

Good analysis by the NYT

http://www.nytimes.com/interactive/2016/06/23/international-home/brexit-leave-repercussions.html

[cherrypoptart]

Well it looks like it's done. They left.

As an American I have never been more proud of the country that my ancestors revolted against as I am today.

And I do wish them well.

[cherrypoptart]

One thing that struck me in the NYTimes piece:

"President Obama has suggested that the United States would not rush to create a new trade deal with Britain."

Is he really that petty and spiteful?

[LetterRip]

There is no rush to negotiate a new deal because the current agreements last for at least two years.

[cherrypoptart]

Why would they even mention it then?

Are the current agreements with the EU or with Britain?

My understanding was that Obama did indeed intend to punish Britain for leaving and threatened exactly that.

https://www.youtube.com/watch?v=6dRY23epOF4

"UK's going to be in the back of the queue."

[LetterRip]

Once Britain invokes Article 50, it will have a two-year window in which to negotiate a new treaty to replace the terms of EU membership. Britain and EU leaders would have to hash out issues like trade tariffs, migration, and the regulation of everything from cars to agriculture.

http://www.vox.com/2016/6/23/12021222/brexit-what-happens-next

So like I said, two years (actually a bit longer since Article 50 will be delayed awhile to see if something else can be worked out...)

As to the purpose of the statements - like statements of many other politicians - it was a bluff to scare the UK populace to stay in the EU.  Just like the UK parliament was saying 'there is no plan B' (when of course they were making the plans for an exit but pretending not to, because not doing so would be idiocy but they wanted to scare the populace).  The wealthy (especially bankers/financial corporations) wanted the UK to stay in the EU and the politicians were doing their bidding trying to scare the populace to stay in.  Now that the bluff has been called, noone is going to want the UK economy to collapse because it will cause massive damage to everything else - so they'll negotiate reasonable treaties in a reasonable time frame, etc. and things will go on much as before.

[cherrypoptart]

They are saying that the pound is crashing to a thirty year low. So does that mean that British real estate and other goods are effectively on sale? I bet someone is going to make a lot of money off of this even as others lose a lot more. I wish one of those people could be me.

[DJQuag]

Well it looks like it's done. They left.

As an American I have never been more proud of the country that my ancestors revolted against as I am today.

And I do wish them well.

Of course you can be proud. You don't have to live here. You don't have to suffer the consequences, so hurray for idealism and small government, right?

With the drop of the pound, I've taken a ten percent pay cut. And that's just the beginning. We're screwed.

This entire thing has been ringleadered by conservatives who are looking for American style wage slavery and and a complete lack of oversight and regulation, and first needed to be rid of the EU. They'll be free to stop pretending that their goal isn't to privatise the NHS, as well.

And they did it by suckering in the stupid and the uneducated. They lied through their teeth, time after time. Hell, they even lied to the racists. It is a fact that we will be LESS equipped to deal with illegal immigration then we were before.

[LetterRip]

The pound was climbing this past week, then it took a sharp dip with the result announcement, and now it is almost back to where it was at the start of the week.  So, while I'm sure a few currency speculators made some nice money, the value is about the same as it has been for awhile.  The '30 year low' was only for a couple of minutes as currency speculators panicked and probably some idiot algorithms did some bad sells.

[DJQuag]

European leaders are already crapping themselves. There certainly won't be favorable or similar trade deals; they are not going to do anything that lets the pro exit forces in their own country think that it will be an easy or forgiving process.

To anyone in the States who is depending upon common sense, basic research, and intellectual integrity stopping Trump this fall...don't. I know I'm never going to trust a general electorate again.

[AI Wessex]

Ouch, I thought the vote would fail.  There's no idealism here, just an illusion of taking control.  Let's hope this isn't the first of a series of dominoes to fall, as the economic and political stability of the whole world is now facing risk.