Explain the impact of Brexit to a clueless American

[OneFootInTheGrave]

Here is a good take from AEP

Angry reproaches are flying in all directions, but let us not forget that the root cause of this unhappy divorce is the conduct of the EU elites themselves. It is they who have pushed Utopian ventures, and mismanaged the consequences disastrously. It is they who have laid siege to the historic nation states, and who fatally crossed the line of democratic legitimacy with the Lisbon Treaty. This was bound to come to a head, and now it has.

The wild moves in stocks, bonds, and currencies this morning were unavoidable, given the positioning of major players in the market, and given that the Treasury, the International Monetary Fund, and the Davos brotherhood have been deliberately – in some cases recklessly – stirring up a mood of generalized fear.
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Yet the same voices of authority that so frightened us before the vote are now bathing us with words of soothing calm. Everything will be alright after all, said the Bank of England’s Mark Carney. British banks are stress-tested for Armageddon.

Capital buffers are ten times higher than before the Lehman crisis. Banks have raised £130bn of equity, and are sitting on £600bn of high-grade liquid assets. Mr Carney is ready with £250bn of liquidity, and foreign currency on demand. The ECB, the Fed, and the central banking fraternity are joining forces to douse the fire, as we all knew they would have to do.

The pro-Remain group TheCityUK already has a plan to limit the damage, insisting that the City can prosper outside the EU, provided the post-Brexit government launches a bonfire of red-tape, keeps the door open to foreign talent, and takes the lead in the G20, the IMF, the global Financial Stability Board and the Basel Committee.

They want unfettered access to the EU single market and passporting rights for the City, and this means either pushing for the Norway option of the European Economic Area (EEA), or a hybrid variant.

This safe-exit is a compromise, and an olive-branch to the EU since we would continue paying into the EU budget and accepting the EU Acquis. It would last until we have negotiated our bilateral trade deals with the rest of the world. It also means accepting the free flow of EU migrants for a while.
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Some in Europe accuse the British people of strategic nihilism, of setting in motion the disintegration of the EU. It is true that French, Dutch, Italian, and Swedish eurosceptics are now agitating even more loudly for their own referenda, but voters are rising up across the EU in defence of national self-government and cultural ‘terroir’ for parallel reasons.

Brexit is not the cause and this is not contagion. The latest PEW survey shows that anger with Brussels is just as great in most of Northwest Europe as it is Britain, and in France it is higher at 61pc.

This referendum was never a fight between Britain and Europe, as so widely depicted. It was the first episode of a pan-Europe uprising against the Caesaropapism of the EU Project and its technocrat priesthood. It will not be the last.

exactly & it is time to say - Thank you Britain!

[OneFootInTheGrave]

also here is another summary on the state of EU with regards to Brexit, for the few people here who can be bothered to read a long article

[Kidlicious]

also here is another summary on the state of EU with regards to Brexit, for the few people here who can be bothered to read a long article

Summary?

[OneFootInTheGrave]

Well, yes - the actual topic is rather extensive.

[Bereta_Eder]

A version of economics – call it neoliberalism – is now written in constitutional stone in the EU treaties

I've been saying that since day one

[Kidlicious]

You ever hear of the Corn Laws?

[BeBMan]

also here is another summary on the state of EU with regards to Brexit, for the few people here who can be bothered to read a long article

I took the time to read it, but I don't think it was worth it.

Let's be clear here: This is a agenda-driven piece, from a certain leftwing POV. There is absolutely nothing wrong with that, after all competition of various views/ideas (left, centre, right) is what the political arena is for. But don't tell me that it is some kind of "objective" depiction.

One point the article makes is that against the "neoliberal" EU.

A version of economics – call it neoliberalism – is now written in constitutional stone in the EU treaties.

As a growing chorus of voices on both left and right are warning, this is a severe threat to democratic choice in general while posing a near-insurmountable difficulty for any Member State government wishing to pursue an economic programme in conflict with such central tenets of neoliberal ideology as the superiority of markets, the need for competition, and the rejection of most forms of public ownership and economic planning.

Which begs the question what kind of economy they are calling for. The whole eastern block had tried a non-market, non-competitive approach with largely state-owned stuff and failed. Also I'm not sure it's true that EU member states can't pursue different "economic programmes" or that the EU makes them de-facto illegal. France has a much bigger share of state-owned companies - whether this works well is another question.

You might point to Greece, to which the article says:

The Greek crisis could have been easily resolved financially, well within the capacity of Germany and the other big Eurozone players.

I don't think it has been handled well over the past years. But "within the capacity of Germany and the other big Eurozone players" reads essentially like "countries should do economy-stuff as they like, with the rest of the EU paying for it if needed". This won't work, not economically in the long run, but it also will not go down well with the public elsewhere in Europe.



As for the whole "democratisation of the institutions and decision-making procedures of the EU" - yes that's overall a legitimate point. But the picture often painted of unelected Eurocrats somehow usurping powers to whack nation states over the head is rather simplified.

But even when we leave that aside because yes, as said above concern about a lack of democratic mechanisms remains a legitimate point: There is a fundamental problem in this debate when the EU is labeled "undemocratic" on the one hand, but on the other there is not much will (for good reasons sometimes) to really give souvereignty away from the members. If all important EU matters would be decided by europe-wide referenda or elections it would automatically mean less impact of national parliaments/governments. It would also mean states with bigger electorates would win further influence. I don't see really much appetite for this anywhere, rather a tendency to go back to a more national approach.

[Bereta_Eder]

Which begs the question what kind of economy they are calling for.

a flexible economy based on the needs of the people and that includes state aids, governmental inteference, protection of labor, redistribution of wealth...

[Bereta_Eder]

Let's get one thing straight.

The EU has devolved into a lender - borrowrer relationship through its inner strucutral problems.

Syriza managed to somehow slow down the "bailout programs" which are designed to strip nation assets, impoverish the population destroy public structures.

And that's fine for some african countries that have no other choice.


But people don't like it here and they're not dinner fascists

[Bereta_Eder]

EU is a social democrat project.
Neoliberalism condemned it to be a social democratic area with no social democrats!

The impoverishment of the people (unless you're greek englightened) are food for the fascists.

Neoliberalism creates poverty which creates fascists which destroy the EU, the main vehicle for globilization nihilism.

Can it be reformed? Who knows

A german EU is good for germany, not for the rest of the world.

Brits obviously decided that it can't be reformed but there are attempts to draw them back in.

Will they succeed? And will britain only think of itself again or proceed in a wider coalition with many disgruntled but democratic forces europe wide and ****ing change this thing?

Or if it can't be changed abolish it, peacefully

[OneFootInTheGrave]

I took the time to read it, but I don't think it was worth it.

Let's be clear here: This is a agenda-driven piece, from a certain leftwing POV. There is absolutely nothing wrong with that, after all competition of various views/ideas (left, centre, right) is what the political arena is for. But don't tell me that it is some kind of "objective" depiction.

One point the article makes is that against the "neoliberal" EU.



Which begs the question what kind of economy they are calling for. The whole eastern block had tried a non-market, non-competitive approach with largely state-owned stuff and failed. Also I'm not sure it's true that EU member states can't pursue different "economic programmes" or that the EU makes them de-facto illegal. France has a much bigger share of state-owned companies - whether this works well is another question.

You might point to Greece, to which the article says:

I don't think it has been handled well over the past years. But "within the capacity of Germany and the other big Eurozone players" reads essentially like "countries should do economy-stuff as they like, with the rest of the EU paying for it if needed". This won't work, not economically in the long run, but it also will not go down well with the public elsewhere in Europe.

As for the whole "democratisation of the institutions and decision-making procedures of the EU" - yes that's overall a legitimate point. But the picture often painted of unelected Eurocrats somehow usurping powers to whack nation states over the head is rather simplified.

But even when we leave that aside because yes, as said above concern about a lack of democratic mechanisms remains a legitimate point: There is a fundamental problem in this debate when the EU is labeled "undemocratic" on the one hand, but on the other there is not much will (for good reasons sometimes) to really give souvereignty away from the members. If all important EU matters would be decided by europe-wide referenda or elections it would automatically mean less impact of national parliaments/governments. It would also mean states with bigger electorates would win further influence. I don't see really much appetite for this anywhere, rather a tendency to go back to a more national approach.

This is a proper response, so I will take time to be long too

On "how to democratize":

Giving away more national sovereignty is not really a method on how you could create more "democratic EU", rather it is just a proposal to give more power to the bureaucrats who already sit in Brussels. At the moment the only voter elected body is EU parliament, which has less power among EU institutions than a traditional "national" parliament.

For one, most power should be moved from EU council (heads of state body) to the parliament and the commission, the council should have only veto power not much more as it is the current setup. Council of Europe (ministerial body) dissolved and its power back to the parliament.

European commission should be elected by the parliament as well (the composition can stay the same), the parliament gets to decide on who are the individual members of the commission by state, as well as the president. So you get some traction in the discussion where Europe decides, but the people on board are still responsible to the national governments.

Next "Europgroup" should be removed, as it is in no treaties at all, and it really acts as the "government" of the EU, that power should go back to the EU commission, which should be fully elected by the parliament, with unelected members removed. (thus in the process removing ECB and IMF from direct EU governance)

Those are just the first "obvious" steps, not so hard, right? (in theory , it is a suggestion, but the final setup could be different, yet fully democratized). All without moving more power to Brussels, but making current power more accountable to the people. Suddenly you would also see more participation in EU elections across the continent. There is also practically noone in European political sphere fighting for democratization either, which is ultimately why the whole project is doomed to failure. Lack of democracy is there, obvious to the participants, but they (any politician willing to change it, and there are some) know that "assaulting" current setup just dooms their political careers to failure, so nothing is even attempted.

Spoiler:

In the end the setup should be a representative democratic one (IMO off course, or a variation) so that people you vote for actually make the decisions on your behalf, not only have "some" influence on where it will go, while the important decisions (ie how to treat Greece, TTIP negotiations, net neutrality, etc) are made by some unelected body and just imposed, where the parliament at best can only veto them. (and even that only if it is given a chance, at the moment there is really no full requirement, as in the case of Greece).

Furthermore as the next step, the parliament could be made to be supernational, ie everyone gets to vote for everyone, so you get a genuine EU election, so you can vote for who you like, again without transferring more power into the EU.

The problem is that the media "form" the discussion as it is about only "more central power or less" while in the reality the discussion should be about "how are we governed" in the EU? It's a bit like Iraq war in the US - in the end 60% of the people were for it, but they had not idea why (or at least most, who later changed their minds). Media framing the topics for those who fund it. Not so unusual after all.

The fact is that we are governed very poorly, and there is neither democratic input, or transparency for that matter, and the EU center would only want more power, but no democratic accountability. This was clear from the start, but it is also clear after 2008 that no matter how large a crisis, they are not willing to give an inch to be held accountable by the people, but only consolidate the power in their hands further.

When I say "their" this is the people represented by the council president, EU commissionaire, and the whole lobbyist structure that stands behind them, representing mainly private industry interests who want as much power for themselves while they "take away" the power from national governments which are elected, thus accountable to the voters, and in effect making the people of Europe have less and less say in how they are governed, in the process.

The effects of such "status quo" are then responded through voting for far right parties, which "correctly" (sad but true) are the only one on the political spectrum willing to do anything about the "status quo". For sure in destructive manner, and covered with ridiculous, often racist ideology, but overall they do address the main issue as well, and are the only ones who do, so people who are disgusted by their xenophobia, also vote for them from practical interests.

On Greece:

There was a really long thread on it, but in summary - even though a member state is acting irresponsibly (or in Greek case, like a third world country given 1st world credit rating, which is what really happened), this is no excuse to turn it into a desert, or in a better case a "national park" (Greece is beautiful, so more on a way to an EU national park ) .

This is the "neoliberal" fallacy that "there is no other way. Even in the US, not a bastion of socialism , in case a state goes bankrupt, the federal government would step in to manage it, and help recover. EU is also "managing it", but in a completely punitive "debt slavery" type of way, without interest in the actual economic recovery.

It is the same principle as when you unified Germany - you helped the east develop, you did not burn it to the ground, as you are currently doing to Greece. Not to mention that "burning Greece" to the ground is directly due to Germany/France saving it's own banking due to reckless lending during the "good times", so the current "remedy" action is even more sinister in principle.

As this is a really long discussion, let's skip it and come to the final point, which is also the cause of this type of behaviour towards Greece, ie "neoliberal" EU setup.

"Neoliberal" EU:

What does it even mean, right? Let's use wiki "Currently, neoliberalism is most commonly used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers", and reducing state influence on the economy, especially through privatization and austerity."

It may be another long argument, but the way current economic consensus works has largely failed as demonstrated in 2008, and this may be called "neoliberalism" however the policies still continue unabated.

In case of the EU, in effect the institution serves to slowly but surely deconstruct any national input in the economy and let the "market forces" do the work. Which is precisely what is happening. Strong state presence in France, or even strong unions in Germany are "legacy" institutions which under current EU setup will be weakened by every passing year in the "desire" to reach competitiveness, while in reality their removal has not much to do with the countries recovering, when the primary reasons for their permanent recession is coded in the way EU has been setup.

Spoiler:

Main issue is that currently in the EU there is no surplus recycling mechanism, so there is no way for the surplus counties € to flow back to the deficit countries. Until 2007 this was done via unsustainable loans, and after that there is the "austerity" solution supported by excess "liquidity". This is ultimately bad policy (another long topic), and the worst part of it that it cannot be challenged at all, given that the governance of the EU is very far from the people the policies are affecting (also that the current situation suits the financial sector just fine). Therefore without proper surplus recycling mechanism in place the market forces are slowly, but surely tearing the EU apart while we are all happily watching (or less so for those without a job).

On top of it all some of the main pillars of EU are applied unevenly.

"EU Commission monitors the application of EU law and can launch infringement proceedings against EU countries that do not comply." in practice EU only threatens to use it against offenders who have some other agenda issue, other than being in breach of the pact, as more than half of EU is in breach of the growth and stability pact right now, and virtually everyone including Germany was in breach at one time or another.

In the end you get various transgressions of the central EU bureaucracy vs member states in a way that the states cannot challenge it, and have to implement or face "punishment" while at the same time other states just get of free, which really only demonstrates the balance of power at that time in the unelected institutions (as those really matter).

Examples of such instances:
* Growth and stability pact violations by France and Germany were never sanctioned, while they started with Portugal and Greece
* Recent EU looking into sanctioning Hungary for "state aid" for nuclear plant renewal (supported by Russia), while nothing into UK nuclear plant renewal (supported by France)
* EU going after Poland, ie review on how it's setting up internal institutions (while the action may seem sensible, the way it's working out, is an undemoratic centre is presiding over the will of the people - even though in this particular case I may side with EU centre, as much as I know about the situation, regardless the action is ultimately a power grabbing precedent). EU did not go after countries previously changing their constitution
* whole Greek debacle

Let's not even go into the Euro itself and the monetary policy being set for the Germans (until last year) vs the rest, so if you economy was in sync with Germany - all is well, and the rest can go an fvck themselves. (which is mostly what happened)

In the end, you get an institution which is non-democratic, even authoritarian, no effective checks and balances, applying the rules unequally among the member states, which was always going to happen, but which wants to amass more power and not give it back to the citizens so that it's policies can be voted on.

In the end there is really no name for it, but I guess it falls under the slogan of "neoliberalism" as those are some of the most prominent socio-economic policies that the institution stands behind, even though really those are applied poorly and unevenly, so in the end even if those policies were socialist in nature, they would also fail. In my view it is a problem of governance, more so than a problem of "philosophy" (which may be discussed at a later stage, but if the democratic deficit was addressed, the philosophical side would start going toward "resolution", or at least a sense of being able to direct where EU is going which would give it more legitimacy).

Sum total, this is not sustainable long term and UK did well to get out on time.

[Bereta_Eder]

On Greece:

There was a really long thread on it, but in summary - even though a member state is acting irresponsibly (or in Greek case, like a third world country given 1st world credit rating, which is what really happened), this is no excuse to turn it into a desert, or in a better case a "national park" (Greece is beautiful, so more on a way to an EU national park ) .

Here I will disagree with two points.

Greece borrowed a lot, Goldman sachs helped her hide her deficits, the EU knew.


But why did it borrow a lot?

The EU resulted in a loss of industry and the quality of life had to be preserved.
The competition gaps with Germany were too big and german banks were all too happy to fill the gap with cheap money ad nauseum.

Everyone was happy and the poliitical parties were buying off social consent with the money of future generations.

That's ok so far?

Now, this happened europe wide.

Now, I don't believe that germany has some intricate feeling in "destroying greece" or running it to the ground.

On the contrary I think it wants a stable powerful Greece standing on its two feet.

But the way the treaties are formed makes the way it goes about it, very counterproductive.

It fills me with hope that the people can change to a degree the course of history and events.

It's also abundandtly clear that while Greece was the canari on the mines, it was just the start.

[OneFootInTheGrave]

Anyhow - to add on the article itself. The article takes current EU "neoliberal" setup as a done deal, which I agree with (not as a main problem of EU for me however). I also agree that as it stands "changing the EU from within" is practically impossible, and as a result it is better for UK to set it's destiny outside of it.

I guess you have the main issue as "neolibaral" does not mean bad, and more state involvement in the economy is generally worse. This is a separate argument, but the choice if you want one or the other should be down to the people of a given land, not some unelected bureaucrats. Not to mention that this is just a single "choice", one which is very often taken as a "champion" cause, however there are, and will be, thousands of other topics and choices where people should have a say and within EU this is not, nor looks likely to be possible in the near or far future.

As a result, the EU will eventually disintegrate.

Brits are out in time. They are also are giving us, and the "elites" in the EU a warning that we better mend our ways while there is still time, a warning that will not be taken seriously as it looks like. Mainly due to the EU being "correctly" setup by those who are the main supporters of the structure - private interests and their army of lobbyists stemming from the origins of EU as the European coal and steel cartel. Making EU democratic is against their interests, as suddenly the precise situation they wanted to avoid (voters having a say in setting of the policy), will be the main driving force of the agenda again.

[Bereta_Eder]

here I will add that there is a cultural gap that is very wide.

the north, is filled with guilt and punicement. It is uncivilized.
It was the source of colonialism, ww2, capitalism.

The south IS civilized. It has the thirst of life, the exuberance of youth, the recklessness of well being.

In the german vocabulary debt is synonymous with guilt.
In greek debt is something that you have to fulfill, like an obligation.

I have a debt to society doesn't mean I feel guilty, it means I have a mission to fufill.

That's all good and fine. Noone expects people to be alike eachother, noone wants to.

The way southern countries achieved social consent, peace and prosperity was through a cycle of borrowing, followed by a midle depreciation of the currency and slight asuterity measures.

Now that's no longer possible but it seems there is no other way to make it work

[Bereta_Eder]

I will go a bit further.

Let's say Greece had its debt erased (it happened once, 110 billions were given as a gift - big money, true).

It will happen AGAIN!

Not only with Greece. The whole continent is dissatisfied.
Who voted for brexit?

The working class.

What did they get?

Probably the tories who think that the NHS for example shouldn't even exist!

It's called going for hair and leaving with a haircut!

What must be done?

Onefoot says this is the fault of eurocrats.

I'm not so sure.

I think this is the fault of globilization of the ritualistic retreat of the political power in the face of the economic one.
Unfortunately the EU treaties HAVE written in stone, one and only one way of doing business.
And Germany had to endure a 10 year adjustment plan, found itself in a privileged position and said, now I'm going to **** you all because that's what the treaties say.

Make no mistake.

Germany follows this route because that's what's best for Germany.

(I will leave aside the historical shortcomings and estimates of that country and where they led to).


Suddendly Greeks and the south were a bunch of undisciplined lazy bastards that had to be punished!!!

Are you serious?

Are you serious???!!!!

Oh well.


I don't know how this will play out but unless Europe gets back to a sustainable social democratic redestribution system that can guarantee a minimum quality of life for its citizens then yes it will be destroyed.

Like yugoslavia probably. With war