The UK referendum has already damaged Europe: even a ‘remain’ result is not without cost to Britain and the EU

Bilateral meeting Tusk-Cameron. David Cameron, Prime Minister of the United Kingdom (on the right) received Donald Tusk, President of the European Council in London. Shoot location: London. Shoot date: 04/02/2016. (European Council – Council of the European Union Audiovisual Services).

Bilateral meeting Tusk-Cameron. David Cameron, Prime Minister of the United Kingdom (on the right) received Donald Tusk, President of the European Council, in London. Shoot location: London. Shoot date: 04/02/2016. (European Council – Council of the European Union Audiovisual Services).

The adult Brits are deciding today about their country’s position in or out the European Union, in a referendum that Prime Minister David Cameron was forced by his party’s ultra-Eurosceptics in January 2013 to promise to conduct it, should the Conservative Party win a majority in the 2015 legislative election. This promise was then thought it could secure a clear Tory victory and an absolute majority in the general elections of May 2015.

The absolute majority was actually achieved and Cameron won an electoral triumph, but still it’s not clear if the promise was needed. This kind of debate will surely follow whatever the outcome of today’s vote. As things stand now, the referendum will decide if Europe will continue united or Britain follows a separate way. There is more to it though.

Counting the cost

The cost of a Brexit may vary from a short run shrinking plus a long term recession of the British economy, to a global ‘Black Friday’ in the capital and money markets. Such a prospect can easily trigger a new financial black out, with the banks stopping to lend each other, until it becomes clear who is exposed to what risks. In this way, the western financial system may freeze for quite some time, with unpredictable repercussions to the real economy, an actual Armageddon, just like the 2008-2010 crash. It was like that in 2008, when Lehman Brothers went bust. Apparently, the heated discussion about who is to blame for a Brexit will encompass all the costly effects of such an unfavorable possibility.

That is why the whole world issued advice for Britain to stay in the EU, while many authoritative entities aired threats should the Britons choose ‘leave’. From the IMF, the OECD, the Bank of England, the Fed, the western banking conglomerates to the Washington, Berlin and Paris administrations, all stated how dangerous it is to try reshaping the world, after Britain chooses to sail alone in the open seas.

Reshaping the world

Unquestionably, Britain is a global player. Consequently, its repositioning in relation with the EU would have upshots spanning from a possible financial black out, to geostrategic reordering, none of which would be a smooth or peaceful process. In view of the cost of a possible Brexit, David Cameron decided to lead the ‘remain’ campaign. Quite understandably, he pondered all the dangers his country will be exposed to, if his 2013 promise turns sour. All along the past few months he fought to the best of his abilities for the ‘remain’ vote. He even went as far as to state that his government has not drafted a fully fledged contingency plan for the ‘leave’ eventuality.

George Osborn, the Chancellor of the Exchequer when asked last Monday, if he would think about stopping the transactions in the London Stock Exchange, if the market goes wild on Friday after a possible ‘leave’ vote on Thursday, he said “The Bank of England Governor Mark Carney and myself, have, of course, discussed contingency plans, but the sensible thing is to keep those secret and make sure you are well prepared for whatever happens.” He clarified though that “the government did not have a wider contingency plan for the UK beyond the immediate impact of a Leave vote” and solemnly added, “such plans can’t protect people from the shock” that would follow.

The cost of ‘leave’

In short, the London government told the Britons that there is no way to protect them from what is to follow, if they decide to ‘leave’. This was a very farfetched statement tantamount to an ultimate menace. Given that Osborn couldn’t utter such a threat without Cameron’s OK, it’s obvious that the British Prime Minister has used all the possible and even impossible means, to convince his compatriots to vote ‘stay’ and save him from the ordeal which may follow. Obviously, he dreads the ultimate consequences of his 2013 ‘promise’, which gave him an unexpected electoral victory, but may now drive his country to the rocks.

In many respects, the blame game in a possible ‘leave’ outcome, has already begun. The leader of the Labour Party, Jeremy Corbyn, has triggered it. He was never an EU ‘lover’ as he has repeatedly said, but clearly he supported the ‘remain’ side, although in a lukewarm political way. In this respect then his statement that he “wouldn’t take the blame of a possible ‘leave’ result” has de facto started this discussion.

The ‘remain’ also costs

As for the ‘remain’ probable result in today’s vote there is not much to say. Britain has got what Cameron asked for a few months ago. He negotiated that with the German Chancellor Angela Merkel and the French President Francois Hollande, when the three traded the terms for Cameron to assume the leadership of the ‘remain’ campaign. This was mainly a four years block of social benefit payments to immigrants from other EU countries, working in Britain. There would be nothing more for Britain, if the country decides to stay in the EU.

However there is more to Wolfgang Schäuble’s threat that “it’s either in or out”. He obviously meant that Britain in case of a ‘leave’ outcome won’t get a free trade agreement like Swiss or Norway. This was two weeks ago. Last Monday though, Schäuble left it to be understood that even a ‘stay’ outcome won’t be without repercussions for Britain. According to Brussels sources, Cameron’s decision to ‘promise’ in 2013 this in-out the EU referendum in order to win a general election, is not forgotten. A lot of people in Berlin, Paris, Rome and Brussels are furious about the easiness of the Brits to keep constantly ‘rethinking’ their participation in the EU.

Problems for Britain even if it ‘remains’

This British attitude is not without cost to the EU as a whole. Even a ‘remain’ outcome won’t completely cure the trauma inflicted to EU’s status by the UK challenge. So there would be problems even in the ‘remain’ event. In the future, the British demands for ‘special treatment’ will be briefly denied and London will have difficulties in the day to day business with Brussels.

Undoubtedly, there is a lot in this line, especially given the way the London financial markets and the banks work, as if the country was a real off shore state. If the Brussels bureaucracy, with only 4% Britons, decides to create problems to Britain, the sky will be the limit.

More in the British path?

On top of that, Cameron’s idea to risk the full EU membership of his country in order to just win an election may, and very probably will, open the appetite of certain political formations in Europe to do the same. That is to say, promising referendums about their country’s participation in the EU, in order to win an election. In Italy the Five Star Movement of Beppe Grillo, in France the National Front of Marine Le Pen, in Germany the AfD and other Eurosceptic extreme right, left or harlequin parties are surely getting similar ideas.

Then, it will be the end of the entire European edifice, and the national divisions will bring the Old Continent more than one hundred years back, to the era of the pre 1914 WWI period. Can the world stand it? Seemingly, Cameron didn’t think much about all that, when in January 2013 he ‘promised’ the in-out the EU referendum. A lot of elite people in Europe and elsewhere do not forget it.

As a result, not without reason, Cameron has avowed that he won’t contest a new term as Prime Minister and he will quit the leadership of his party before the next general election. His successors for the Tory leadership have started to compete. The ‘leave’ campaign helped Michael Gove, the No2 in the Tory leave camp, to challenge Boris Johnson, until recently the more probable successor of Cameron.

Finally, going back to today’s possible outcomes, a ‘remain’ result will be handled within known and well charted waters, while the ‘leave’ is to open Pandora’s Box, to say the least.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

European financial values on the rise

The EU tells the bare truth to the UK that there is no such thing as easy divorces

State aid: Commission invites comments on simplified rules for State aid combined with EU support

European markets itchy with short-term disturbances

JADE Spring Conference 2018 is on its way: Young entrepreneurs gather in Brussels to shape Europe

New UN book club helps children deal with global issues

EU and World Health Organisation team up to boost access to health services in developing countries

As inequality grows, the UN fights for a fairer world

“16+1” Cooperation injects new vigor into China-Europe cooperation

CO2 emissions on the rise for first time in four years, UN agency warns

ILO and EIB join forces for more and better quality employment

Yemen: ‘Living hell’ for all children, says UNICEF; Angelia Jolie calls for ‘lasting ceasefire’

This Netherlands football stadium creates its own energy and stores it in electric car batteries

Consumer protection: Commission welcomes political agreement by Council on the Representative Actions Directive

MEPs criticise “America first” policy

Ukraine: Temperatures plunge amid rising humanitarian needs

Alarming level of reprisals against activists, human rights defenders, and victims – new UN report

The EU Parliament endorses tax on financial transactions

UN rights expert calls for end to ‘purgatory’ of ‘international inaction’ facing Myanmar’s remaining Rohingya

Here’s a reason to feel cheerful – the world is full of Good Samaritans

Egypt urged to free prominent couple jailed arbitrarily since last June: UN rights office

70 years after the Universal Declaration of Human Rights, this is why we need dignity more than ever

EU Parliament: Deposit guarantee and trading platform transparency sought

Migrant workers sent more money to India than any other country last year

The European giant tourism sector in constant growth

As human caravan moves through Mexico, ‘full respect’ needed for national control of borders: UN chief

UN expert ‘shocked’ by Egyptian reprisals against human rights defenders she met

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

COP21 Breaking News_04 December: Launch of CREWS, climate risk & early warning systems

The Monetary Union drives Europe into dangerous paths, CoR demands an EMU of regional content

UN-backed intercultural dialogue forum urged to keep working to ‘bridge gap between the like-minded’

EU budget: Commission proposes most ambitious Research and Innovation programme yet

Violence on the rise in Darfur following Sudan military takeover, but UN-AU peacekeeping mission maintains ‘robust posture’

New Mozambique storm rips off roofs, brings lashing rain as aid response kicks in

U-turns on Global Compact ‘reflect poorly’ on countries concerned: senior UN migration official

Logo Mania: A call to action to our crisis of connection

UN chief reaffirms commitment to untying ‘Gordian knot’ of Middle East conflict and instability

MWC 2016 LIVE: EC adds Brazil to partner tally

World must avoid a new Cold War, UN chief tells economic forum in Russia

These European countries produce the most plastic waste per person

Trump goes ahead with plan to undo globalization; targets China and EU

New Zealand can improve well-being through better policymaking and reforms to housing and migration policy

Want to cut greenhouse gas emissions? Look to digital technologies

Water pollution is killing millions of Indians. Here’s how technology and reliable data can change that

Mergers: Commission clears Telia’s acquisition of Bonnier Broadcasting, subject to conditions

UN cooperation with League of Arab States ‘pivotal’, UN chief tells Security Council

It’s time for global businesses to accept local responsibility

EU ready to relinquish its internal tax havens

Mechanism to protect democracy in the EU needed more than ever, says the EP

Why cities hold the key to safe, orderly migration

UN chief of peace operations honours fallen Chadian ‘blue helmets’ serving in northern Mali

SDGs and the historical and economic impact on Brazilian health

Heard about deepfakes? Don’t panic. Prepare

Donald Trump’s victory is a great opening for global EU leadership on the sustainability agenda

Releasing trapped value is key to success in the digital world

ECB to people: Not responsible if you lose money on Bitcoin, your governments are

GSMA Announces Latest Event Updates for 2018 “Mobile World Congress Americas, in Partnership with CTIA”

Children paying a high price for inequality

Refugee crisis: Commission proposes a new plan urging EU countries to help Italy

Climate finance for developing countries reached USD 71 billion in 2017

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s