Friday, 1 July 2016

The EU Wasn't Working For Us

I can't watch or listen to the BBC News at the moment. If you weren't aware of what really happened you would believe that the world has actually ended, and that Britain has single handedly broken western civilisation. Its actually pathetic that they can't accept that a fair vote took place and reflect the wishes of the majority.

Latests BBC headline 'The UK has had its credit rating outlook cut to "negative" by the ratings agency Moody's after the country voted to leave the EU.' ... read the story though, and suddenly you discover that the overall Moody's rating of "Aa1" remains unchanged ... so a non story and non headline. This is the tone of the current coverage. The BBC is acting like Chicken-licken and running around with its skirts up, screaming that "the sky has fallen in."

BBC Acting Like Chicken-licken ... The Sky Hasn't Fallen In.

Now don't get me wrong, I am as shocked as anyone else that the remain camp lost, what with all the advantages they had. But lose they did, and it was a democratic vote ... perhaps the most democratic vote ever held in the current United Kingdom. When the results came through it felt like one of those moments in life when you wonder if you have done the right thing and want to turn back the clock to have another think about it .... like changing your job, or splitting with a partner with whom you have been rowing, or making too many concessions to keep the peace.

A deep panic about whether you have done the right thing sets in .... but later, you realise that it wasn't so bad, and that you can't really understand why you were so upset at the time. The EU is currently acting like the other partner in a separation, who has seen someone they didn't love but whom they thought loved them, walk out. EU head Jean-Claude Juncker said it was "not an amicable divorce", but it was "not a deep love affair anyway".

They are angry and vengeful right now, especially the architects of an 'ever closer union' as they are aware that this has shaken that idea, perhaps irreparably ..... but when they calm down and negotiate rationally, they will probably think this was all for the best, and may even realise that some of their habits are upsetting to many of the partners ... Federalism and Centralisation are but two of them.

Self interest will kick in, after all they are running a massive trade surplus with the UK ... in fact in the three months up to March 2016, Britain’s trade deficit with other European Union countries was running at a record high level of £23.9bn. This deficit in trade is the gap between exports and imports. This figure is out of a total UK trade deficit of £34.7bn in the trade of goods. So the deficit with the EU accounted for more than two thirds of the shortfall, with the deficit with non-EU countries standing at £10.8bn.

UK Balance Of Trade With EU and Rest Of The World ...

They can't afford to give that trade a balance up, without putting the whole EU area into recession ... so ignore Juncker or Tusk ... it will be the main finance ministers who will set the terms of the UK's trade with the EU (Probably via the mechanism of us becoming a EEA~ European Economic Area ~ member). The other point to bear in mind is that the UK has been trading less and less with the EU.

The eurozone has been imploding with millions of people unemployed and Europe’s economies are massively underperforming. That means that European countries are buying less from us than ever before, and that we are now trading more with the rest of the world.

The Office of National Statistics (ONS) and from where all these figure come, have confirmed that Europe has gradually become a less important destination for UK companies. In 2000 for example, 60% of our exports went to other EU countries, but by 2005 the percentage had fallen to 58%, then  54% in 2010 and down to 47% in 2015. Over the same period, our imports from the EU remained constant, accounting for 54% of our trade in both 2000 and 2015 ..... The EU just wasn't working for us.

Ironically of course the EU may even enact the political and social policy reforms that David Cameron asked for, and that would have stopped a Brexit in the first place. It can be a very strange world ....   

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