This really is a key point. The UK contributed a net of something like 140m pounds a week or so to the EU, that's about 7b pounds on a 1.8 trillion pound economy, or a small (0.3%) fraction or so of the GDP. For that they got 10% or so of the votes in all European affairs, and access to a market (50% of UK exports are to the EU) under favourable trade agreements, which are easily worth 0.3% of GDP in and of itself.
Now the UK will not contribute 0.3% of its GDP, lose some of its favourable deals that far exceed 0.3% of GDP, and lose the 10% vote in EU affairs, yet will be subjected to those affairs as part of the inevitable effort of negotiating to keep many (though impossibly all) of the benefits the UK now has as a member.
That's not independence, really. That's losing 10% influence in a union which you'll still be trading and working with, and who will still be subjecting you to lots of requirements under this new partnership, which you'll have a reduced say in.
Unless the UK actually wants to be independent in the semantic sense of isolationism, i.e. not deal with the EU at all anymore. Yes, then you'd have independence, and you'd also have a country that'll be completely wrecked, for the same principles that a broad boycott (e.g. Cuba for many decades, North Korea, Iraq during some of its harshest years etc) is so devastating, because interconnectedness is extremely valuable. That interconnectedness will still be sought for by the UK, but now it can't vote and is at the mercy of the largest economy in the world. Obviously the UK's economy and power will play a significant role in negotiations, no doubt, but the UK outside of the EU needs the EU more than vice versa.
So the independence argument I agree, is quite flimsy.
I think you have fundementally mixed things up here. The UK is (was) the second-largest economy in the EU. If you want to talk about percentage contribution to the EU budget the UK was a net contributor of 8.5 billion pounds (after "rebate") more than it received from that same EU budget that totals around 125 billion pounds. So they put in about 7% of the budget and get about 10% of the votes. Definitely a deal that favors the UK, but let's please stick to reality and facts here.
[Expat in the UK who could not vote but followed this all quite closely... All of the numbers I quoted can be found in wikipedia if you want to go digging.]
Why say you're sticking to the facts and then repeat pretty much the facts I stated with a different perspective?
8.5b (I think I had it at 7b, it depends on various valuations but ultimately it doesn't matter much as it's roughly the same) on the British economy (roughly 1.9 trillion pounds) is a fraction of a percent, I stated about 0.3%, you're stating around 0.45%, again, it's not much different, they're all figures in the same ballpark.
This 0.45% I cite because it's British GDP. I'm talking from the perspective of Britain having to give up part of its GDP as a contribution to the EU. That contribution is 0.45% of its economy, in return, you got 10% of the EU vote. That's reality and facts, no?
That's a tiny price to pay. Imagine you could pay 7b a year for 10% of the vote in the US, or in China, or hell imagine China or the US could purchase a 10% vote in the EU for 7b, it's a ridiculously silly small amount of money.
I'll take your word on those numbers as they sound reasonable.
However I do believe you've neglected the other points of the post which were about the value of access to the European market place and that 10% say in how said market is run. Those are costs / benefits which are not so easily counted before the painful divorce is complete.
But it's unlikely for EU nations to significantly damage trading relationships with the UK. Germany, for example, exports a huge volume of cars to the UK and it comprises a significant portion of German GDP. Yes, there's volatility around exactly how such a trade deal will get worked out, but it's unrealistic to lump "access to European markets" into one big ball and assume that Brexit means that whole topic will be impacted negatively.
In reality, most significant European trading partners with UK just want to keep on trading with them mostly as they have been, and will work out deals that allow such trading to mostly continue. There doesn't seem to be much reason to think such trade deals will be radically changed in a way that damages anyone for the long term.
Some key UK export sectors - especially finance - have a very low probability of being able to carry on as normal.
The German car industry accounts for around 3% of GDP. Sales to the UK are less than 1% of German GDP.
The UK financial industry accounts for around 10% of GDP. Sales to the EU are around 4% of UK GDP.
As a rough guess estimate, post-Brexit disruption is going to lose 1-2% of that, and could lose more - because there's very little London can do for Europe that can't be done just as easily in Frankfurt.
The UK has a lot more to lose than Germany does.
But the EU traditionally plays hardball with negotiations. Ask Greece.
So there is no chance at all the UK isn't going to have to make significant - expensive - sacrifices to keep trading.
This vote is literally the most staggeringly stupid and self-destructive act I've seen in my lifetime.
Take away the jingoism and the flag-waving and the blatant lies about immigration and sovereignty, and you have a country which relies on a huge captive market voting to - at best - change the terms of access to that market in ways that cannot possibly be more advantageous than they are now.
Some trade will continue, but the overall effect on the UK is going to be very negative indeed.
It's clear that the City will be impacted by this, but bear in mind that for the last five years the UK has been fighting to maintain it's place vs Paris and Frankfurt. The EU needs to implement a single fiscal authority to manage the Euro, that will not be based in London, there was never any prospect of that given London is not part of the Eurozone and the UK joining the Euro would destabilise the Euro, the UK economy and the wider european economy. London is inflated like a balloon at the moment, housing is utterly unaffordable and the transport system is totally disfunctional; I've been unable to get in for half of this week due to "floods" normally I can get a train into London with a travel time of 1hr 30min... my record time was/is 9hrs (all trains cancelled, hours waiting for busses, hours on buses, one of my colleagues got home less than an hour before having to leave to go back to work!)
In terms of positives here is a list.
1) People have woken up to the disastrous gap between rich and poor, realizing, I hope, that there is no communication between the provenances and the technocrats and that while you can bully and marginalize the poor you are simply unable to ignore them without resorting to repression. A vote like this is much better than a ring of estates where law breaks down and people are condemned to hopeless disassociation from the society that funds them. Now, will the UK's elite front up and start helping our fellow countryfolk? I doubt it, but that's the test on the table - create meaningful engagement in life and society for the bottom 25% rather than just hoping that they shut up and go away.
2) The EU can now reform its financial and governance arrangements to fit the needs of the Euro, if the EU doesn't do this the Euro is going to collapse, so I hope it does. This will make the EU more prosperous than it would otherwise be. Guesses please - the European state's GDP post a Euro collapse vs. the EU's GDP with a reformed and functioning single currency?
3. The UK will break up enabling Scotland to further develop its distinctive and hopefully very successful economy and national identity, in particular it will be interesting to see if this results in Edinburgh rebuilding itself as a financial centre as opposed to Frankfurt, Paris and London. If I were the SNP I would be planning a bloody great hub airport and some other very shiny infrastructure (high speed rail to Newcastle, Leeds and Manchester? Cross rail for Edinburgh/Glasgow?)
> there's very little London can do for Europe that can't be done just as easily in Frankfurt
The real winners here are probably going to be Hong Kong and Singapore. Those are top of mind alternatives when finance strategically places organizations in London, and with low tax and compatible legal systems (from what I understand Hong Kong's is pretty much a carbon copy of the UK) they basically got one competing city of the game.
> the blatant lies about immigration and sovereignty
The immigration nonsense disturbs me. Even if the UK leaves the EU, surely the freedom of movement will remain just as with the other non-EU European countries. Leaving won't make a difference. Plus with the commonwealth and all, the country is basically built on migrants. I hope that it influenced the vote only for a minority of people, and that the outside media image that this was important is just that, a stupid media image.
No, you don't. You remember reading about it on the equivalent of Fox news.
There were no mass rapes, gropings, etc.
Would you believe the papers if they said Jews were out in force, drinking the blood of your Christian babies?
Edit: Oh forgive me for pointing out the blood libel. What could ever go wrong from framing an entire ethnicity for stealing our jobs and raping our women?
I have no idea what your original comment is referring to, but from my perspective you just lost the game of "let's not appear completely insane in front of strangers."
That's an ineffective way of communicating your point.
The original poster is referring to an incident that happened in Cologne around new years; supposedly there was a "mass raping" (as some newspapers put it) which was soon blamed on the large amount of "fresh" immigrants in Cologne.
As it turned out the "fresh" immigrants had, almost, nothing to do with it and most of the perpetrators were people who had stayed in Germany for an extended period of time already.
Although i get why the person above is frustrated with people spouting lies about immigrants their reaction is indeed not favourable to a healthy discussion :S
There were about 2k incidents in total all across Germany, and 5 reported rapes. That's 0.25%.
That's 5 too many rapes, and 2k assaults (groping etc) too many, I've been molested before and it's obviously unacceptable. But it's also a far cry from rape, usually, like in my case.
Yet the media at times reported on this as if there were thousands of women getting raped in the streets. Those were blatant lies.
Some viewers and some sections of the (social) media, particularly online, also interpreted these alleged mass rapes as some kind of savagery that only a foreigner could engage in. Uncivilised barbarism only a muslim refugee could engage in. Yet every single year at Octoberfest, about 10 women report getting raped, and cases of sexual assault by drunk partygoers is orders of magnitude larger. Even outside of large festivities, about 20 women in Germany are raped every day, again, minorities have no monopoly on these criminal acts. Hell, for a brief example of the same city, Cologne, only a few months ago a reporter was sexually assaulted by white Germans who groped her, kissed her and made sexual remarks.
That's the point the guy was trying to make. Obviously none of this is acceptable, but immigrants or foreigners have no monopoly on criminal, unacceptable acts. The one or the other group may be overrepresented in crime figures, the data shows that, too. But the same data shows in study after study that when you control for things like age (young people commit more crimes), socioeconomic status (poor, unemployed people commit more crimes), gender (obvious) etc etc, ethnicity plays no role in crime. i.e. there's nothing inherent about an ethnicity or religion that programs people to such savage acts.
And this is obvious, we don't say these things about jews for example. But we used to, that's where the comment on jews drinking blood of babies comes from, because that's the silly rhetoric we used to spread, which led to widespread prosecution against them. Today we see, particularly on less sophisticated but all too popular social media, mistaken narratives about immigrants or foreigners or muslims or various other minorities, coming here to rape our women. That's a narrative we should reject because it's not true. It wasn't too long ago we somehow had a story of a 13 year old girl getting gang-raped by arabs for 30 hours, in the daily mail. Obviously that's a shitty paper, but it's also very well read. Turns out it was a complete fabrication, but who remembers that? But it's that exact narrative that leads people to unreasonable fear (there's enough of actual issues to be scared for, no need for unreasonable fears on top), fear that inspires things like this leave vote.
So did more than 1k women get assaulted? Yes, undoubtedly. Were there mass rapes? No. Are rapes and assaults by Germans a daily phenomenon, just like it is in every other place on the planet where people's rights are never 100% fully respected? Yes.
In short, it was horrible, but sometimes also blown out of proportion with bs rhetoric and blatant lies we don't need to have.
I won't even comment on the former, it's akin to a silly stereotype of the feminist movement you see on 4Chan.
Mobs assaulting women is not blowing things out of proportion, in and of itself. All of that deserves attention, none of that is acceptable, and I welcome these facts being presented.
But groping a woman and raping a woman are two different things, and you simply shouldn't report the former as the latter. If you do, you blow it out of proportion, there's nothing strange about this. Similarly there's a difference between punching a man and shooting a man, between stealing a pair of shoes and stealing a car. Just stick to the facts. 0.25% of incidents involving rape, is not mass rape. 5 reported rapes on NYE, while more than 20 are reported daily in Germany, and twice as much happen every year during Octoberfest, is not some new level of mass rape. If you don't report that honestly and blatantly lie about that (and other things, like e.g. a 13 year old getting gang-raped for 30 hours which never happened, but incited fear and hatred, which have led to increased hate crimes in the past year) then yes, you are blowing things out of proportion. That isn't a mixed signal.
>"fresh" immigrants had, almost, nothing to do with it and most of the perpetrators were people who had stayed in Germany for an extended period of time already.
Yeah, it looks like the potential political consequences to the EU are far more important than the trade ones. The possibility of more countries exiting just got a lot more realistic now.
1% of GDP tied to a single trading partner and a single industry is a pretty big deal. Likewise, 4% of GDP in finance commerce to Germany is a big deal.
Seems like good evidence that the parties will want to ensure trading continues mostly the same as it has been. A big question is whether the rest of the EU would be able to block such arrangements. I don't think they will either want to or be able to.
But the stickiness of geography for finance and autos are very different. Replicating a segment of London's financial sector in Frankfurt is easier than replicating BMW/VW to UK.
Cars are ultimate commodity - you can buy Lexus or BMW and they are mostly equivalent. I am sure Toyota or Honda will be happy to sell cars in UK. Import to UK from EU is almost 1.5x higher than reverse. Tariffs will cost EU more than UK.
"In reality, most significant European trading partners with UK just want to keep on trading with them mostly as they have been, and will work out deals that allow such trading to mostly continue."
Do you know what you're talking about? That's a sincere question. My understanding is that the UK's significant trading partners are members of the EU, and that it's the EU, not the individual partners, who will have to decide on any new trade deals with the UK. As others have said, what sort of precedent would the EU be setting if they gave a withdrawing member the same benefits it had as an actual member? The EU does not want more members withdrawing.
Logically, it doesn't make sense for the EU to impose harsh restriction on trade with the UK. The reason the UK is allowed to leave is that the EU is a voluntary association. By and large, the EU is an association of individual countries, not a federal nation state with its own army. So the countries in the EU have a lot of freedom. If they misbehave you can only kick them out.
What countries would want to leave the EU? I'm not aware of any of the poorer countries wanting to leave. And it would not affect the EU much. For the richer countries, the EU is an enormous benefit, so leaving would be rather silly.
The UK is the only country that has been questioning its EU membership for many decades. But it seems to be unique in the position.
So for normal trade in goods and services, it doesn't make sense for the EU to impose too many barriers.
The financial sector is an exception. It does make sense for the EU to grab more power there.
The big issue however, is that many countries have significant parts of their population that are against the EU. So there is a real risk that the UK will be hit with sanctions, not because it makes sense for the EU, but because it makes political senses in some of the EU member countries.
That would be sad, but that's the world we live in.
But a hit to german trading to the UK is a small price to pay instead of the hit it would take by setting precedent that you can just willy-nilly leave with all the perks. And I can tell you, the german-language media is already full of "priority number one if to stop a cascading copycat effect".
As a snarky side remark, what will the UK do in the future instead of continuing to import cars, regardless of terms? Rely on its domestic automotive industry?
> As a snarky side remark, what will the UK do in the future instead of continuing to import cars, regardless of terms? Rely on its domestic automotive industry?
One of the more credible arguments for leaving the EU is so the UK can negotiate their own international trade deals, as they feel the EU has been slow in negotiation. Opening up free trade to the US and Japan would probably be a priority.
Obama said that. Probably just to help the Remain campaign as a favor to Cameron. Trump has said the opposite, Hillary has said nothing aside from repeating how "close our ties are".
Different priorities. For instance, the UK doesn't have an automotive industry to protect like Germany does. So they could get a trade deal that's more tailor-made to them.
Obviously it's a huge risk as well since they're a smaller economy.
The biggest hit is not in goods trade but in financial flows. With the UK part of the EU, major financial institutions could base in London to serve the entire EU. Once the UK exits the EU, they can't, at least not without a lot of extra costs and paperwork.
London, one of the 3 financial capitals of the globe, will lose its status in favor (probably) of a more diverse mix of European cities.
This will have downstream effects on other trade flows in and out of the UK.
I don't know why people are crying about the financial sector. They have fucked over ordinary people time and time and time again and for once they get the short end of the stick. They're extractive parasitic economic actors who drive up costs and don't produce anything of value.
I don't think many UK citizens see big financial flows as being to their advantage. For 90%+ of them, I think that assessment is correct. Globalization has been dealt a serious blow here, and if you're pro-equality, that should be a good thing.
Take an obvious and very direct example. Cleaning staff. Not having to compete with EU illegal immigrants will improve their labor conditions. Building workers and Polish guest workers who send all money back home and live in extremely poor conditions, same. Yes that probably means the next time you need your toilet repaired, you'll pay more, but you'll pay more so the plumber can have a better life.
Even for tech startups, this may be an improvement. I know over 4 London-based startups that don't directly sell to customers. They "consult" for a foreign entity (a US company in 50% of the cases, other 2 use Asian proxies), which then sells to EU customers because selling digital products to EU customers from outside of the EU is far cheaper and simpler than doing it from inside the EU.
One thing I absolutely do not get is why socialists and even those left-inclined are so massively pro globalization. That just makes no sense whatsoever. There are constant complaints about globalization here. How Monsanto/Big finance/Suez/... convinced congress/EU/ECB/... that X is going to happen/be legal which means state/city/even small town Y gets shafted in Y way. For once, that becomes a little harder.
But yes, it's probably the wrong thing for center London tech and finance workers and managers.
The EU is reacting, imho, in the worst possible way. The press in France, Netherlands and Belgium is full of articles on how it was stupid, boneheaded, evil, weak for Cameron to allow the vote in the first place. It's generally all being blamed on Cameron, and his mistake is allowing people to vote in the first place. Very EU, being so overtly anti-democratic.
But let's face facts here: the EU will try to make this work the same way the other referendums worked [1][2]. When the votes turned against the EU, they canceled the rest of the voting ("postponed" the term used, but they never happened). And then they cheated (the referendum happened because the law said it should happen before the law was changed. The law was changed without referenda). So I'm giving the odds of a Brexit happening at best 30-40%. Granted, that's far better odds than I gave it yesterday, so maybe I'll be wrong again. But the EU has a long history of ignoring democratic votes.
The sky is not falling, this is not the worst thing to ever happen, and frankly, the market is wrong. This is a massive overreaction.
Can you elaborate on the structure the 4 london based startups use?
My understanding is that selling digital products within the EU to other EU countries is annoying. The main reason I hear is having to collect VAT for each B2B transaction at the rate of the country you're selling to.
When it comes time to settle the taxes it is handled in an aggregated manner with one filing under a VATMOSS scheme, which distributes the collected VAT to the member states in one go. This attempt at simplification seems to have backfired with many calling it 'VATMESS'.
However, from what I read online, US based companies selling into the EU technically have to charge this too (although they can aggregate it as well under a 'Non-Union' VATMOSS filing).
With the above in mind, is the structure you talk about in place for other reasons than VAT?
Passport requirements will change meaning that fake passports for countries other than the UK will not be accepted. Did you read about the rush for Irish passports?
> Germany, for example, exports a huge volume of cars to the UK and it comprises a significant portion of German GDP ... In reality, most significant European trading partners with UK just want to keep on trading with them mostly as they have been
Even if one accepts that existing trade will be accommodated through direct agreements, that only protects existing industries. What does it mean for future industries and how existing industries grow and change? When a new industry develops and wants to export, they are going to find they face trade barriers until such time as the EU and UK get around to negotiating a new (or modified) trade agreement. That's a huge disadvantage and will see a lot of investment, especially in tech companies go to the EU where previously it might have gone to the UK.
This sounds like a huge deal to me. Lets say you want to invest and built a presence in a new market. Until now if you wanted to go to Europe you could have picked UK as you main point of operation, now you have to decide, huge market with easy open trade or UK.
> But it's unlikely for EU nations to significantly damage trading relationships with the UK
Well, they can have the same deal that Norway or Switzerland have with the EU. The problem is that to have that deal they have to agree to be part of Shengen Area
1. Switzerland is not part of the EEA, they have their own agreements with EU.
2. It is quite possible to opt out of EU regulations while part of the EEA. But the Norwegian government do not have the balls to do so.
3. Norway had an older agreement with Denmark and Sweden about passport-free travel. It was not Shengen compatible. So either Norway had to join Shengen, or Norwegians had to get used to getting passports to visit said nations.
I run a business and I do not ship to Switzerland simply because the hassle is too big and there are hard to calculate risks involved. It is just not feasible. Dealing inside the EU is pretty much the same as it would be within borders.
You are right, in a way. But politics is not only about achieving or keeping long-term economical gains. Perhaps someone ar 10 Downing Str. sacrificed a large figure to gain certain strategic advantage in the future world that was planned in Watford in 2013, and we common folk just do not onow what it will look like. The war in Europe is now more possible.
Now the UK will not contribute 0.3% of its GDP, lose some of its favourable deals that far exceed 0.3% of GDP, and lose the 10% vote in EU affairs, yet will be subjected to those affairs as part of the inevitable effort of negotiating to keep many (though impossibly all) of the benefits the UK now has as a member.
That's not independence, really. That's losing 10% influence in a union which you'll still be trading and working with, and who will still be subjecting you to lots of requirements under this new partnership, which you'll have a reduced say in.
Unless the UK actually wants to be independent in the semantic sense of isolationism, i.e. not deal with the EU at all anymore. Yes, then you'd have independence, and you'd also have a country that'll be completely wrecked, for the same principles that a broad boycott (e.g. Cuba for many decades, North Korea, Iraq during some of its harshest years etc) is so devastating, because interconnectedness is extremely valuable. That interconnectedness will still be sought for by the UK, but now it can't vote and is at the mercy of the largest economy in the world. Obviously the UK's economy and power will play a significant role in negotiations, no doubt, but the UK outside of the EU needs the EU more than vice versa.
So the independence argument I agree, is quite flimsy.