Although events are unfolding at a rapid pace, a lot of these things are largely irrelevant. It looks like the Conservative Party will hold itself together and conduct an orderly leadership election. The sheer panic of Friday 24rd of June is now over, and the markets have rebounded. There will be no annulment of the result, no re-runs, and no early general election.
The rhetoric of the Leave politicians has changed. There has been a huge amount of back-pedalling by the Leave campaigners, who now recognise late in the day the need to cooperate closely with Europe. They now recognise that they must (1) stay in the single market, and (2) retain bank "passporting" rights, which mean that our banks can operate in Europe from London. By default, both of these would be forfeited if we left the EU.
The markets have responded positively, because if Britain does maintain access to the single market and passporting, then it's almost business as usual. But I fear their optimism is premature.
The British Labour Party is in a mess, but this is largely a side-show. We won't get a general election until May 2020. I hope the Labour party pull themselves together and form an effective opposition, otherwise there is a democratic deficit in the country which is good for no-one.
The campaigns to annul the referendum are in my opinion counterproductive and will lead nowhere. Politicians who voted for the referendum (all of them bar one?) did not do so with their fingers crossed. When they voted for a referendum, they also promised to uphold its result. It’ll be lively, but they will.
The real wiggle-room is that "Leave" promised many general things, none of which they can deliver. What "Leave" actually entails is so vague, that we may simply leave the EU and join the EEA, which is almost the same thing. This of course would be ridiculous, as then none of the Leave campaigns promises would be fulfilled, and we just lost our veto in Europe. The Leave campaigners would see this as a step in the right direction, and therefore a victory. It would be much better than falling out of the EU altogether, at least economically. But this is not compatible with the referendum result.
The most likely timetable is:
A few unlikely scenarios:
The negotiations will be about values. European values pitted against British values. European values are everything that Leave's values aren't, and that could be a problem. The EU is desperate to uphold its values, and to say "we are right and you are wrong." An example will be made, and we will be bowed into defeat. Furthermore, the EU is keen to justify itself, and therefore will want the UK to fail, to show the benefits of the EU.
The fact is that without its veto, Britain is in an extremely weak bargaining position. We will hear "red lines" being drawn up by both sides. Depending on who says what, the markets will respond. But we are simply looking at a period or uncertainty, and reduced investment. Our politicians and diplomats are too chicken to actually pull out of the EU altogether, that they will be prepared to sign absolutely anything as the two year exit deadline approaches. This is what the markets are betting anyway.
If you still doubt that the EU are tough principled negotiators, look at Greece.
The new terms we get with the EU will somewhere between less favourable and utterly shitty, but we will still sign it. It's a very good deal now, but it could still be a good deal then. For the minor "price" of accepting more immigration (which is actually an economic benefit), we could access the single market. But that is not the referendum result Leave were looking for, and if they don't like it now, then any future deal will be even worse. Out should be out. Maybe there will be some kind of fudge, but bombing out of the single market is exactly what Leave wanted (well, until they actually thought about its consequences anyway).
The Leavers will claim victory because we would have more "freedom", but it will be a pyrrhic victory. The freedom will only be to withdraw from the EEA, which is no different to our existing freedom to withdraw from the EU. They misunderstood that the EU regulations we lived under were simply to standardise goods and services, not to remove sovereignty, and the UK was instrumental in writing them. Under the EEA, we still have all the same constraints as before but can't negotiate them. With a veto, we could have stopped the slippery slope to federalisation, but now we can't.
Personally, I think Britain and the British need to be humbled. Obviously, I mean no personal ill towards my fellow countrymen, but sometimes you need tough love. Britain isn't Great, it's just another place. The nationalists need to learn that Britain needs the EU far more than the EU needs Britain. For a country to be great, it means a great economy and great international influence. The EU delivered both of these, and now we are looking at neither.
Further ahead, the EU won't disintegrate, and it won't go away. The United Kingdom may. If good comes of this, it is that we will serve as an example to others, and it will force us to change. Britain was nothing but an anchor on the EU, which can now go its own way. The saddest part is that change was already coming. In terms of the vote, today's youth are much more international and outward facing than their predecessors, and see international borders as a hindrance not a benefit. Our next generation will be eyeing it jealously.
The rhetoric of the Leave politicians has changed. There has been a huge amount of back-pedalling by the Leave campaigners, who now recognise late in the day the need to cooperate closely with Europe. They now recognise that they must (1) stay in the single market, and (2) retain bank "passporting" rights, which mean that our banks can operate in Europe from London. By default, both of these would be forfeited if we left the EU.
The markets have responded positively, because if Britain does maintain access to the single market and passporting, then it's almost business as usual. But I fear their optimism is premature.
The British Labour Party is in a mess, but this is largely a side-show. We won't get a general election until May 2020. I hope the Labour party pull themselves together and form an effective opposition, otherwise there is a democratic deficit in the country which is good for no-one.
The campaigns to annul the referendum are in my opinion counterproductive and will lead nowhere. Politicians who voted for the referendum (all of them bar one?) did not do so with their fingers crossed. When they voted for a referendum, they also promised to uphold its result. It’ll be lively, but they will.
The real wiggle-room is that "Leave" promised many general things, none of which they can deliver. What "Leave" actually entails is so vague, that we may simply leave the EU and join the EEA, which is almost the same thing. This of course would be ridiculous, as then none of the Leave campaigns promises would be fulfilled, and we just lost our veto in Europe. The Leave campaigners would see this as a step in the right direction, and therefore a victory. It would be much better than falling out of the EU altogether, at least economically. But this is not compatible with the referendum result.
The most likely timetable is:
- The Conservative leadership contest.
- 9th September 2016: New Conservative Leader announced, currently looking like Theresa May.
- September-October 2016: Invoking Article 50 to start exit proceedings. Pound drops.
- Tough negotiations for 2 years.
- Britain's economy steadily deteriorates.
- Recriminations and reflection
- September-December 2018: Britain completes its exit of the EU, reaching a deal in the 11th hour.
- Both sides claiming victory - or - WTO rules and further recriminations
- Further negotiations.
- 7th May 2020:A UK general election.
- Trade deals and a strengthening UK economy.
A few unlikely scenarios:
- The EU starts to disintegrate. Countries will wait to see what happens to the UK before jumping ship. After seeing the farce in the UK, there will be no more referenda for a while.
- A second independence referendum for Scotland. This will certainly happen if the real economy starts tanking or the EU negotiations fail.
- For some reason we abandon the exit.
- Government dysfunction and an early general election.
The negotiations will be about values. European values pitted against British values. European values are everything that Leave's values aren't, and that could be a problem. The EU is desperate to uphold its values, and to say "we are right and you are wrong." An example will be made, and we will be bowed into defeat. Furthermore, the EU is keen to justify itself, and therefore will want the UK to fail, to show the benefits of the EU.
The fact is that without its veto, Britain is in an extremely weak bargaining position. We will hear "red lines" being drawn up by both sides. Depending on who says what, the markets will respond. But we are simply looking at a period or uncertainty, and reduced investment. Our politicians and diplomats are too chicken to actually pull out of the EU altogether, that they will be prepared to sign absolutely anything as the two year exit deadline approaches. This is what the markets are betting anyway.
If you still doubt that the EU are tough principled negotiators, look at Greece.
The Leavers will claim victory because we would have more "freedom", but it will be a pyrrhic victory. The freedom will only be to withdraw from the EEA, which is no different to our existing freedom to withdraw from the EU. They misunderstood that the EU regulations we lived under were simply to standardise goods and services, not to remove sovereignty, and the UK was instrumental in writing them. Under the EEA, we still have all the same constraints as before but can't negotiate them. With a veto, we could have stopped the slippery slope to federalisation, but now we can't.
Personally, I think Britain and the British need to be humbled. Obviously, I mean no personal ill towards my fellow countrymen, but sometimes you need tough love. Britain isn't Great, it's just another place. The nationalists need to learn that Britain needs the EU far more than the EU needs Britain. For a country to be great, it means a great economy and great international influence. The EU delivered both of these, and now we are looking at neither.
Further ahead, the EU won't disintegrate, and it won't go away. The United Kingdom may. If good comes of this, it is that we will serve as an example to others, and it will force us to change. Britain was nothing but an anchor on the EU, which can now go its own way. The saddest part is that change was already coming. In terms of the vote, today's youth are much more international and outward facing than their predecessors, and see international borders as a hindrance not a benefit. Our next generation will be eyeing it jealously.
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