Corruption:
The sun is rising as I write this. So, I guess I'll read of another
case of massive fraud in today's papers. They go together.
Yesterday's report was of massive tax evasion by 73 companies
involved in the provision of meat nationwide. Click here for details.
Is it any wonder that the overloaded (and perennially inefficient)
courts can't cope?
Spanish
(non)Government: The attempts by the main left-wing parties, PSOE and Podemos, to form a coalition appear to be
foundering on the rocks of a naked power grab by the latter. For whom
relative success appears to have gone to their (pony-tailed) heads.
Essentially, they've demanded control of those ministries which would
allow them to drive the country in the direction of their far-left
vision. Or dream. The chances of a government being formed in March
seem to be reducing. Roll on the June elections that the right-wing (ex)PP
President, Sr Rajoy, is counting on for his return to power.
British
Government: A senior British Minister – Mr Gove – says that
he finds he's circumscribed from doing his job by EU laws. Why then
do British taxpayers pay for him? Why is he there at all? Along with
all his superfluous colleagues. Occasionally, one hears that Spanish
Ministers wonder whether the country really needs the regional level
of government. Perhaps they should be asking whether they
themselves are necessary, since their jobs are effectively done in
Brussels.
Talking
of the EU . . The Brexit: Mr Cameron insists that what he
achieved last week was an 'international treaty'. But he would say
that, wouldn't he, having promised 'treaty change' in favour of the
UK? Strangely, all the other EU leaders say there wasn't and won't be
an 'EU treaty change' in favour of Britain. So, who's lying? Or at
least dealing in a half-truth. Which my contract law lecturer
insisted was, at times, far more misleading than an outright lie. Mr
Cameron also insists he's achieved a "special status" for
Britain. This is actually closer to an outright lie, since the UK
already had this. Despite this high-level chicanery, it might well be right that staying in
is the least evil option for the UK. Even though it's true that, as
some commentator observed: The only way to secure meaningful
change in our relationship with the EU is to leave it.
Brexit
Questions: In the interest of impartiality, I cite an article at
the end of this post which poses serious issues which Brexit
supporters should at least try to answer. I suspect that few readers
will proceed to this and that many of these will fall asleep before
they get to the end of it. Ah, well.
Banks: What a business. I see I paid 4.5% on cash
withdrawals when in Holland. And that commissions at similar levels
have been re-introduced by Spanish banks, depending on which card you
have and which ATM you use. Since there's no marginal cost associated
with these electronic transactions, this is all pure profit. It
should help the banks to get out of the mess they got themselves
into, at the expense of their own customers. Maybe the Islamic model
should be looked at.
Finally . . . Billar: Here's a foto of a some kids playing this game, alongside our Alameda. It involves players hitting a small stick with bigger stick, trying to get the latter close to a tall vertical stick around 5 metres away. No fotos or info on the web, it seems.
Finally . . . Billar: Here's a foto of a some kids playing this game, alongside our Alameda. It involves players hitting a small stick with bigger stick, trying to get the latter close to a tall vertical stick around 5 metres away. No fotos or info on the web, it seems.
BREXIT
ISSUES
Twelve
things you need to know about Brexit
What
would really happen if Britain left the European Union?
by
John Springford , Prospect Magazine
The
referendum on whether the UK will leave the European Union is likely
to turn, in the end, on whether its interest in free trade with the
continent will outweigh public hostility to unimpeded immigration
from there. It may be a close call.
Britain’s
political elite has long prided itself on its embrace of
globalisation, but that consensus is fraying. The Conservatives
remain rhetorically committed to free trade, but the party is
increasingly hostile to the EU for overriding British law. Many
Labour politicians—especially the current leadership—are
suspicious of free trade, thinking rules are written for the benefit
of global corporations and at the expense of workers’ rights,
public services and the environment. Both parties seek to soothe
hostility to immigration by promising to restrict flows of people or
curbing access to welfare, but the rise of immigration from eastern
Europe, the surge of refugees across the EU’s borders and the
eurozone’s manifest failings all combine to make Brexit a real
possibility.
Yet
even if these are the strongest impulses within the “yes” and
“no” camps, the arguments will—and should—turn as well on the
impact that withdrawal will have on many different aspects of life in
the UK. Very little is yet spelled out about some of these. Here, we
set out 12 things that voters in the UK really need to know about
Brexit before the day of the vote.
1—How
much money would Britain save?
The
UK handed over £19.2bn to the EU last year. But with the EU’s
payments to British farmers, regional development funding and the
British rebate, its net contribution to the EU budget was £9.8bn,
equivalent to around 0.6 per cent of GDP, and hence a little less
than the foreign aid budget (which is now 0.7 per cent of GDP).
If
Britain were to quit the EU entirely, and settled for the same access
to EU markets as, say, the United States, it would save 0.6 per cent
of its GDP. But the EU would demand budget contributions if Britain
wanted more than that. For example, if the UK were to withdraw to the
European Economic Area (EEA) and pay into the EU budget on the same
basis as Norway, it would reduce its net contribution by around a
tenth. If it succeeded in negotiating a series of bilateral
agreements with the EU similar to Switzerland’s, Britain’s budget
contribution would fall by a little over a half. In short, the more
unimpeded its access to the single market, the more the UK would have
to pay.
2—How
would Britain trade with the EU?
One
option would be EEA membership—the so-called Norway option—which
would give Britain trade with the EU almost as unfettered as it has
now, but with next to no say over EU regulation. Another might be a
more limited set of bilateral agreements, like those agreed between
Switzerland and the EU. The Swiss goods trade is unimpeded with the
EU, in exchange for signing up to the relevant EU rules, but it has
more limited access to those areas of the single market whose rules
it cannot stomach, such as financial services—which would pose a
threat to the City of London. But the Swiss can negotiate their own
trade agreements, unlike EU members—or, in fact, Turkey, which has
a customs union with the EU. Such an arrangement would give the UK
access to the EU’s goods markets, but not those in services, in
return for signing up to all of the relevant rules and abiding by EU
trade policies with non-EU countries.
A
fourth option would be a free trade agreement such as those that the
EU has with South Korea or South Africa. Most trade with the EU would
be tariff-free, but the big barriers to trade caused by “behind the
scenes” protectionism—discrimination against foreign companies’
bids for public contracts, for example—would go largely untackled.
Britain would be free to determine its own trade policies with
non-European countries. But the more comprehensive the trade
agreement, the more EU regulation the UK would have to abide by.
And
finally, the UK could trade with the EU under World Trade
Organisation (WTO) rules in order to regain as much sovereignty as
possible. But our exporters would face EU tariffs, and would have to
comply with EU product standards if they wanted to sell their wares
on the continent.
In
short, if Britain leaves the EU, it will face a difficult choice:
access to the single market, but less influence over the rules that
govern it; or freedom from the rules, but loss of access to the
market.
3—Would
Britain curb immigration?
The
impact of Brexit on immigration would depend on the trade arrangement
Britain negotiated with the EU. EEA membership would require Britain
to remain open to immigrants from the EU, as would a Swiss-type
agreement. As a big reason for leaving the EU would be to curb
immigration, it seems unlikely that Britain would opt for either
of these two arrangements. The Swiss and Turks have similar
market access—in goods, but not services—but Turks are not
automatically allowed to work in the EU, while Switzerland, a rich
country, must comply with free movement rules. Therefore the EU would
probably insist that a customs union with Britain came at the price
of continued free movement. (And it is unlikely that Britain would
want such a customs union in any case, since it would have to abide
by the “acquis
communautaire,”
the accumulated legislation that makes up the body of European law,
and would want the freedom to negotiate its own trade deals with
non-EU countries.) If Britain were to opt for a free trade agreement
it might have some scope to control immigration from the EU. But the
more comprehensive the free trade deal, the less scope the UK would
have to cap migrant numbers.
The
only situation in which Britain would certainly be free to limit
immigration is if it opted to trade under WTO rules, which would
maximise economically damaging trade barriers with the EU. Britain
would face an invidious choice: damage its economy by leaving the
single market entirely, or allow free movement to continue.
4—Would
Britain be freer to trade with the rest of the world?
Assuming
it rejected the EEA or a customs union, the UK would be free to
negotiate trade agreements with countries outside the EU. But it
would not inherit the EU’s existing bilateral trade deals: it would
have to negotiate new ones. And it is far from clear that the UK
would find it easy to forge new deals, let alone on as good terms.
True, it would not have to compromise with 27 other member states,
which have varying degrees of enthusiasm for free trade. But
Britain’s economy is far smaller than the EU’s—and would be
less of a priority for the US or China. What’s more, Britain is
already very open to imports and inward investment, so it would have
little to offer in return for its demand that other countries reduce
tariffs and other trade barriers. It is hard to believe that the UK
would have more success prising open India’s services market, for
example, on its own than as part of the EU.
5—Would
global companies invest elsewhere?
Britain
is by far the EU’s largest recipient of foreign investment. A large
proportion of inward investment into the EU comes from the US, and
the UK is its principal host. And other EU countries now account for
half of the stock of foreign investment in Britain, up from 30 per
cent 20 years ago.
Some
Eurosceptics argue that Brexit would enhance Britain’s
attractiveness to foreign investors, because it would be freed from
cumbersome EU regulation. However, despite its EU membership,
Britain’s markets are freer of red tape than anywhere else in the
rich world bar the Netherlands, according to the Organisation for
Economic Co-operation and Development (OECD). Regulation of Britain’s
labour market is also far closer to the Anglo-Saxon norm than the
Continental norm.
Leaving
the EU would probably reduce Britain’s attractiveness. After all,
many firms from outside the EU are seeking a European base to avoid
the barriers they face when exporting from their home markets.
Investors face similar issues: without unimpeded access to the EU’s
single market, they might expand operations in other countries.
6—Would
the City of London suffer?
Advocates
of Brexit believe that even outside the EU, the City’s deep and
liquid capital markets, legal regime, time zone, language and
historic trading ties would give it a formidable advantage. This is
probably true, at least in the short-term. Much of the City’s
business is global, rather than merely regional. For example, it is
the world’s largest centre for foreign exchange trading. And, like
New York and Tokyo, London is a hub for trade in securities for firms
from all over the world.
On
leaving, the UK could try to bolster the competitiveness of the City
by lightening regulation on the financial services sector. However,
if it did, banks might move to Paris or Frankfurt. The EU insists
that, in exchange for access to EU markets, countries outside the
club must have regulation and supervision of their financial sectors
equivalent to the EU.
7—Would
farmers suffer?
The
EU’s Common Agricultural Policy (CAP), despite recent reforms, is
still a wasteful anachronism. The wine lakes and wheat mountains have
gone, but Europe’s farmers still shelter behind tariff walls and
receive cash handouts, which amount to two-fifths of the EU’s
budget. If Britain left the EU, it could get rid of agricultural
tariffs and cut subsidies, and the 99 per cent of Britons who do not
work the land would benefit from lower supermarket bills (in 2008,
the OECD estimated that the CAP raised European agricultural prices
by 13 per cent). This would be welcome. Supermarkets could import
more food from productive farms overseas, and some poorer countries
would be free to sell more produce to Britain. Outside the EU,
Britain could abandon the EU’s wrongheaded ban on most genetically
modified crops, which would shrink the farm land needed by raising
yields, and reduce environmental damage from pesticides. More of the
British countryside could be turned into national parks.
But
there are good reasons to question whether this would happen.
Britain’s farmers hold sway over Westminster, through powerful
lobbies like the National Farmers’ Union, and would aggressively
campaign to retain tariffs and subsidies.
8—Which
regions might lose out?
Around
40 per cent of the EU’s budget is spent on developing the
infrastructure and industries of the Union’s poorer regions. Most
of this money is now spent in central and eastern Europe, but some
still flows to Britain. Wales receives the most per head—£83 per
year (£254m per year in total)—while Northern Ireland receives
£30. Together with agricultural subsidies, this is enough to make
these regions net beneficiaries of the EU’s budget, while England
is a big net contributor; Scotland pays in pretty much what it gets
out. These regions would probably demand more Westminster spending to
make up the shortfall after Brexit.
But
some regions have more to lose from Brexit than others. For example,
thanks to Nissan, 15 per cent of private sector sales in the
northeast of England are exports to the EU. If Britain leaves the EU
and fails to agree a free trade deal in goods, the northeast and
other manufacturing regions will face EU tariffs, weakening their
economies. Meanwhile, if Britain makes a deal on goods trade with the
EU but no services agreement is struck, London would be more badly
hit, because 8 per cent of London’s private sector activity
comprises export of services, largely financial, to the EU.
9—Universities
and science: does Brexit matter?
Britain’s
universities receive a disproportionate share of European research
funds (20 per cent, or £1bn per year, while Britain contributes 11
per cent of the EU’s budget), but after withdrawal Westminster
could simply distribute some of the savings from its EU budget
contributions to academic research. It could, that is—but it might
not. Or the UK might continue to participate in EU research
programmes; Norway and Israel do so despite being outside the club.
The
biggest risk from Brexit to British universities is not financial.
Academics now participate in a global labour market—and migration
is crucial to the sector’s success. Italy’s universities have
fallen down the world rankings in part because of discrimination
against foreign academics. Theresa May, Home Secretary, has tightened
immigration rules for dons and students from outside Europe—the
latter now must have over £11,000 in their bank account to get a
visa—in pursuit of a net immigration target of less than 100,000
per year. Universities are complaining that it is hard to recruit the
most able people. If Britain leaves the EU and refuses to allow free
movement to continue, tighter restrictions on European students and
academics can be expected, to universities’ detriment.
10—Would
Britain emit more carbon?
The
EU has already met its 2020 target to reduce greenhouse gas emissions
by 20 per cent. But this is largely down to economic slump and
deindustrialisation, with carbon emissions being outsourced to China
and other emerging economies that make carbon-intensive goods for
export to Europe. In recent years, the US has been reducing carbon
emissions more quickly than the EU—admittedly from a higher
level—by switching from coal to gas made cheaper by the fracking
boom. Meanwhile, Germany and other EU countries have been burning
more coal as nuclear power plants are decommissioned and industry
protests against high energy prices, partly caused by subsidies for
renewables.
Outside
the EU, however, it seems unlikely that Britain’s energy policy
would change much. The reason is that the EU’s policies lack teeth,
and so energy policy is still largely set by national governments.
Britain is likely to miss its EU renewable energy target of 15 per
cent of the energy mix by 2020, and the Conservatives will end
subsidies for onshore wind farms next year—a sop to the party’s
rural voters.
Electricity
from coal is on the rise, as it is in Germany. And, while the
European Court of Justice might hand out a fine, the likelihood that
the EU would punish Britain for missing its renewables target is
small.
11—Would
Britain be less secure?
Simple
theory tells us that when states’ interests are aligned,
co-operation will ensue. This should lead one to hope that Brexit
would not have a major impact on justice, security and foreign policy
co-operation with the EU. Norway and Iceland, for example, have
agreed to arrest and extradite suspects to EU member-states—they
are members of the “European arrest warrant” system in all but
name. Norway, Iceland and Switzerland also use the EU’s criminal
databases—although, as members of the Schengen passport-free zone,
they are more closely involved with the EU’s justice and migration
policies than Britain.
And foreign policy remains largely in the
hands of the member-states: a European army remains a federalist
dream.
However,
Brexit poses some risks to Britain’s foreign and security
interests. The EU’s main foreign policy weapon is sanctions. The UK
has been a driving force behind sanctions against Iran, and, at least
behind the scenes, Russia—as well as two former British colonies,
Zimbabwe and Burma, whose behaviour the EU may have ignored without
British pressure. And the EU’s economic size means that its
sanctions inflict more pain than unilateral action by Britain.
Outside
the EU, the UK could join in with EU foreign policy missions, which
include military training in Somalia, and police and army reform in
Ukraine. But other non-EU countries that do so are excluded from EU
decision-making about missions’ aims and operations.
12—Would
Brexit lead to Scoxit?
The
biggest Brexit unknown is over the future of the British Isles.
Nicola Sturgeon, the SNP leader, has promised another referendum if
Britain votes to leave the EU against the wishes of Scots. But would
Scots really want an EU border with their largest trade partner,
England? Would they be willing to join the euro, which might be the
EU’s condition for membership—and so leave a stable currency
union for one which is beset by problems?
Meanwhile,
Brexit might further strain the triangular relationship between
Northern Ireland, Britain and the Irish Republic. An EU border
between the Republic and Northern Ireland may not do as much economic
damage as is commonly supposed, because both do much more trade with
Britain than they do with each other. But Sinn Fein might argue that
such a border would invalidate the British-Irish Agreement Act which
established devolved government at Stormont, and renew its campaign
for a United Ireland.
After
four decades of EU membership, Britain’s formal relationships with
the rest of Europe are governed by a tangle of treaties, institutions
and laws. The reach of the EU into British life is so far-reaching
that Brexit would require a renegotiation of most of Britain’s
international obligations. A new trade agreement would have to be
signed with the EU—and more than 50 with other countries outside
Europe, to make up for those annulled by Brexit. Customs officials,
border guards and trade negotiators would have to be hired to
regulate and police trade and migration flows. New laws would have to
be passed to replace EU regulations. Treaties between Britain and
Ireland might have to be rewritten. And Scotland might—probably
against its economic interest—leave the UK, which would lead to
another round of political and economic turmoil.
Given Brexit’s
lack of obvious economic benefits, all this might prompt Britons to
ask whether it is worth the bother.
No comments:
Post a Comment