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As other comments have noted, the point is that the EU will not want to give the UK a good deal on leaving, because the EU does not want to give any encourageme

As other comments have noted, the point is that the EU will not want to give the UK a good deal on leaving, because the EU does not want to give any encouragement to the other countries which want to leave the EU (some of which want to leave more strongly than the UK do - apparently). Secondly, why would the UK end up with a Norway or Switzerland deal, when the UK is the 5th largest economy in the world? This is unprecedented. This isn't some one sided negotiation. The EU needs the UK. If you sift through the garbage press, you'll see that the BDI in Germany - "The Voice of German Industry" - says that trade curbs against the UK would be "foolish". Of course they would be! Do you know how many German cars are sold in the UK each year? "About a fifth of all cars produced in Germany last year, or around 820,000 vehicles, were exported to the UK, making it the single biggest destination by volume." Source: FT.com "The UK is the fourth-biggest export market for German engineering companies, with sales of €6.8bn last year." Source: FT.com The scaremongering goes on even after the vote has been called...

ganwar 10y ago
The unnecessary scaremongering goes on even after the vote has been called...
badloginagain 10y ago
The scaremongering has just begun. A successful UK exit is going to be powerful ammunition for any nationalist politician in any EU country.
- beninvalencia 10y ago
  This is also a very astute comment I think. The EU and those with interests that are similar will need to increase scaremongering even more to try and prevent other countries from leaving the EU. I wonder what will happen at Greece's next bailout/imposed conditions breaking point...
  - danielmorozoff 10y ago
    This is precisely the case. The integrity of the entire block is now in question as any trade with the U.K. Will now jeopardize some interests internal to the eu. Nationalism is inevitable. Let's hope this does not culminate in war.
    - ZenoArrow 10y ago
      War? Steady on there fella, NATO isn't under threat. People seem to forget that it's NATO that represents our military alliance, not the EU.
      - danielmorozoff 10y ago
        pre-WWI / WWII had its fair share of military alliances. None of those alliances were threatened and we know how that turned out. Imho I think the threat of greater force does not prevent nations from taking drastic actions when pushed against a wall. Civil unrest is caused by large unemployment especially of the young, which in turn leads to nationalistic and isolationist policies breeding bigotry and violence that are seized upon by demagogues. These are warning signs of something to come. The weird thing is they seem to be popping up all over both in eastern and western europe over the course of the last decade. The US election in turn I think will definitely tilt the balance. From what i have seen it is not looking good on this side of the pond either.
        ZenoArrow 10y ago
        I agree with you that high unemployment leads to civil unrest, and you can only hope that trustworthy individuals can fill the power vacuum that leads to. It's not a completely hopeless situation, you've got groups like Podemos in Spain pushing forward, and I think the likes of Corbyn in the UK and Sanders in the US represent the interests of the working class and middle class of their respective countries (even if Sanders doesn't get elected, he seems to be inspiring more people to get involved in the political process to push for the things that benefit the majority). As for isolationism leading to war, I think this I think has been blown out of proportion. Of course in extreme examples it can happen, but I'd suggest at most we'd be looking at Australian-style economic protectionism rather than North Korean-style isolationism.
- rmc 10y ago
  Which is why the establishment in other EU countries want to ensure it's not successful...
  - Qantourisc 10y ago
    This is what you would call an unprofessional/childish behaviour helping nobody and inspire fear (maybe just a bit themself though). And such d* moves will certainly not help them get back anyone where in the near foreseeable future because of bridge-burning.
    - emptyfile 10y ago
      This isn't a game. It will do exactly that because it will show how bad of an idea it is to quit from the EU even for the richest country in Europe. The comments on this thread are ridiculously naive, I expected better from HN.
- bayesian_horse 10y ago
  Fat chance of a "successful exit" ... so no worries!
Aelinsaar 10y ago
The largest importer of champange in the world? UK. Not per capita either... just the largest, in front of the US. The UK has a ton of money for luxuries and all kinds of things that the healthier economies of the EU desperately want access to.
- vidarh 10y ago
  Well, we now already have a lot less, given how far the pound has tumbled.
  - beninvalencia 10y ago
    That may be so, but - at the risk of sounding like a 'Brexiter' - at least the UK has its own currency! It can be devalued. The UK has that control and can be competitive. What would happen to one of the EU countries if it voted leave but had the Euro?
    - johnchristopher 10y ago
      From what I gathered they'd just issue a new currency (that would be instantly devalued everywhere though).
    - semi-extrinsic 10y ago
      Sweden also has it's own currency. Sweden is in a similar situation as Britain, and their closest neighbor (Norway) has never been in the EU. I'm not saying "Swexit" is imminent, but of the northern/western EU countries it is perhaps the most likely.
    - pmontra 10y ago
      They would start printing their own currency. Impossible to keep having the same currency at the same exchange rate if you leave. It's going to end up like Argentina when they wanted to keep a fixed rate with the USD. To be seen who's going to be Argentina and who the USA in that case. By the way, this is the very problem with the Euro. If you want to have the same currency of (let's say) Germany, you should perform like Germany, or better. If you are less efficient, in any way, you're going the way of Argentina, even if not as quickly. This is why the EU should have one real central government, maybe USA style, and local governments should be like the governments of the US states.
cisstrd 10y ago
It's not completely one-sided, it's rarely black and white. But you can't seriously say that they are on equal footing when trying to do trade agreements. The GBP has taken a nosedive already...
dmichulke 10y ago
The EU will not want to (give the UK a good deal) but for each trade area there will be a member state suffering if they won't. The negotiations themselves may prove a good catalyst for further disarray.
- cm2187 10y ago
  But that's because all european politicians at that time completely discounted the fact that the vote could go that way. If only they had looked at polls then they would have realised this was a very serious risk.
  - phreeza 10y ago
    What could european politicians have done differently at that point? Also polls in the UK are notoriously unreliable.
    - cm2187 10y ago
      Polls are generally unreliable, they are only recognised as such in the UK. They would have given him a better a deal on immigration, which they thought was an absolute non starter, and was the main grief against the EU. I think it would have made a difference.
      - tonyedgecombe 10y ago
        They still could, there is no reason we couldn't have another referendum.
    - ptaipale 10y ago
      Primarily, they could have called off the project for political union and concentration of political power in Brussels (including the ridiculous monthly ride to Strasbourg). Concentrate on enabling free trade, not building a federal superstate. Also, quit bashing "unpleasant" euro-sceptic elected politicians (by unelected EU officials). (As an example of the EU gravy train, the former prime minister in my own country, Jyrki Katainen, first screwed up things home and then landed on a nice job in Brussels - because he kept saying nice things about the European project. This is one more little thing that has turned me suspicious of the whole project, a project I didn't vote for when I voted for EU membership 22 years ago.) Simply: admit out loud that they got it wrong and they have to change direction. But that would have meant a loss of face.
smegel 10y ago
The UK will also still carry a lot of influence over Europe through NATO.
- gkop 10y ago
  The UK itself may fracture - Scotland and/or Northern Ireland may peel off for the EU - putting NATO at risk.
  - nerfhammer 10y ago
    The Scottish nationalists currently want to remain in NATO: https://en.wikipedia.org/wiki/NATO_debate_in_the_Scottish_National_Party https://en.wikipedia.org/wiki/NATO_debate_in_the_Scottish_Na...
    - Lio 10y ago
      The SNP also want to close down the UK's nuclear submarine base at Faslane.
  - arethuza 10y ago
    Looks like we might up with a "United Ireland" referendum and a Scots "Indy Ref 2" - both NI and Scotland voted pretty strongly to stay in.
  - LoSboccacc 10y ago
    Also the many countries that get shitty deals like production quota or migrant restriction under Diblin III will hope for renegotiation.
- sverige 10y ago
  NATO's time has come and gone. Europe needs to defend itself against Russia. It's not like they lack the resources; the only thing they lack is the will. No one wants a strong German military because that has always led to catastrophe in the past, but maybe it's time for them to re-arm. I mean, what are the odds that they'll produce another megalomaniac?
kps 10y ago
“The EU” is not the same as the people of the EU. The French and Dutch people voted against the Maastricht Treaty when given the chance.
- Scarblac 10y ago
  ...through stupid yes/no referenda. No voters included people opposed to the whole idea, people disagreeing with some small part and also people who thought it didn't go far enough, but mainly people who wanted to protest the national government at the time, as usual. The Netherlands has unfortunately become much more Eurosceptic since, but let's not conclude too much from those referenda.
  - Qantourisc 10y ago
    Maybe we don't need referenda but polls. Figure out WHAT is bothering people about the EU. If it's based on fiction, start up the PR machine. And repeat this AT LEAST every decade. If it's based on fact, fix the EU, or start up the PR machine explaining this cannot be fixed for the EU to work. (depending on the fact)
    - Scarblac 10y ago
      It's based on fiction, but the problem is that the fiction is created by politicians (who want to get credit for good news and blame the EU for bad news) and by the media (to get views, you need simple concepts and play on emotions). They are the PR machine. Education is the only thing that can work against it, pray that your people value it over other things.
      - Qantourisc 10y ago
        With PR machine, I mean the EU itself organizing ways to teach the people. Simple suggestion: iirc a lot of people think the EU costs a lot of money. Well you could post an add in each country with a pie diagram of the countries spendings. "your people"? You mean that from the perspective of the politicians ? Or from my perspective ?
conistonwater 10y ago
> This isn't some one sided negotiation. This is pretty reckless risk management on Britain's part: to place so much weight on a question of just how a future, unclear negotiation, subject to who knows what bureaucracy and other countries' own interests, will turn out. It's very vague to just say "well we're trading a lot, so surely we're very important" without any supporting evidence or precedent: it makes all sorts of unjustified assumptions.
mrb 10y ago
"The EU needs the UK" Not true. It is the reverse because the UK runs a gigantic trade deficit: in 2014 they exported 472 billion USD, but imported 663 billion USD¹. In fact the UK is the second country in the world with the largest trade deficit (behind the US). A huge portions of UK's export go to Europe, therefore the EU has definitely more say when it comes to negotiating trade deals with the UK. I would be very worried for my economic future if I were a UK citizen... ¹ http://atlas.media.mit.edu/en/profile/country/gbr/ http://atlas.media.mit.edu/en/profile/country/gbr/
- x0x0 10y ago
  That cuts both ways. Germany has used the EU to run a giant trade surplus, and if that arrangement blows up, so does their economy. http://www.tradingeconomics.com/germany/balance-of-trade http://www.tradingeconomics.com/germany/balance-of-trade
  - dharma1 10y ago
    Germany would have a large trade surplus even without EU. They just make a lot of stuff other countries want
    - bontoJR 10y ago
      True, but... other countries around the world are producing the very same things, even cheaper, but they are taxed in the EU. China has no major deal with the EU for this reason. UK leaving would open to that possibility that Switzerland decided to open in 2010, balancing what comes in and what goes out and both countries got a major boost in respective goods. Swiss got access to the manufacturing in China for Swiss high tech companies and China got access to the major luxury good produced here, plus bank services, med techs and collaborations with universities like ETHZ.
    - cmdkeen 10y ago
      Specifically the Euro (rather than the EU) stops the German currency from appreciating massively and making their exports more expensive. That has been a massive boost to the German economy over the years.
randomsearch 10y ago
Are you trying to imply things won't change? Then why have EU membership at all? It will, of course, be a compromise, but one that likely results in the UK being much worse off.
paganel 10y ago
> The scaremongering goes on even after the vote has been called... The terms are simple: You can't have free movement of goods without the equally free movement of people. As long as people in the UK are ok with the free movement of people (even though the fight against it was a big part of the "Leave" campaign) then I would see no reason why us, the rest of the EU people, should impede the UK products' access to the European market. You can't have your lunch and eat it too, meaning you can't be against free movement of people (against "immigration") and then expect us to accept your economic products. It's not "scaremongering", this are the true, hard facts.
- sverige 10y ago
  But most of the immigrants are coming from outside the EU. There's the rub.
  - evgen 10y ago
    From what I recall of the most recent stats, which were unfortunately released just a short while ago and may have pushed some votes to Leave, there has been more net migration into the UK over the past few years from EU nationals than from those coming from outside the EU.
    - dharma1 10y ago
      Roughly just over a half is immigration from within the EU
      - bipson 10y ago
        Does any of the three of you above care to share your sources? That would help
        dharma1 10y ago
        http://www.bbc.co.uk/news/uk-politics-eu-referendum-36382199 http://www.bbc.co.uk/news/uk-politics-eu-referendum-36382199
ThePhysicist 10y ago
This is exactly the kind of lose-win or lose-lose discussion that everyone (well 49 % of people) wanted to avoid. Asking who will profit from this or who will be on top is not relevant probably, because each side will lose now (at least in the short term) the question is just how big the losses will be. Also, bear in mind that the UK will not only have to rearrange its terms with the EU, but with more than 50 non-EU countries as well. Leaving the economic impact aside, the societal and demographic implications are just as important (for me) and a very hard to predict. Great Britain might very well fall apart over this, as Scottish politicians already announced that they will push for a leave if the UK leaves the EU. For me, this thing is just the biggest and most catastrophically failed political gamble of the century. Times are strange indeed.
- _Understated_ 10y ago
  My biggest fear is another Scottish referendum... the last one was bitter and polarizing. I have just spent the last 20 minutes drafting letters to my MP and MSP basically telling them I do not want another referendum.
  - elygre 10y ago
    Considering that the english just voted Scotland out of EU, it makes perfect sense for the Scottish to reclaim their own future.
    - threeseed 10y ago
      Yep 60% of Scotland and 75% of Glasgow from reports voted to Remain. Northern Ireland is also going to be one to watch.
      - MLR 10y ago
        Scotland maybe, though if people have any sense they'll make sure the business is all done first and tell them to cool their heels. Northern Ireland has absolutely no chance of seceding, they can't go it alone as a separate country, and there's absolutely no appetite for unification from either side.
Scarblac 10y ago
The UK had a good deal. They had what Norway has, plus actual influence as a full member, plus many opt-outs. They've rejected it. What kind of good deal would they even be looking for?
- ZenoArrow 10y ago
  With regards to trade tariffs, nobody expects the deal to be as good as the ones the UK had in the EU. However, in order for EU members to protect their own economies, you would expect some form of trade deal between the EU and the UK to be hammered out. The Eurozone isn't exactly in great health right now, even before Brexit, you'd expect politicians to want to perform some form of deal, even if it's only for the sake of damage limitation. The EU may want to make an example of the UK and drag these talks out, but I expect economics will win over political maneuvering in the end.
  - Scarblac 10y ago
    An example of a good deal would be: UK companies get access to the entire EU market if they follow EU regulations and UK citizens get freedom to move in the EU, and in return the UK also implements those regulations and gives EU companies free access, and gives EU citizens freedom to move in the UK. That's worse than what the UK had, because they wouldn't be part of the EU decision making process anymore and they'd still have as much immigration as now, and that's supposed to be the sore point. So I presume they wouldn't go for such a deal, but it's also hard to see the EU going for a deal this good.
    - ZenoArrow 10y ago
      I doubt the UK would go for that deal either, so it's debatable whether it's a 'good' deal if neither group (on the whole) is likely to be interested in it. I'd suggest the deals made will be based on trade tariffs and product standards. Deals that required dealing with EU regulation or free movement of labour aren't likely to be popular in the UK. If the EU drags its heels, the UK will probably use it's position as a member of the British Commonwealth to push for increased trade between Commonwealth countries whilst it waits for EU trade deals to get ironed out.
kaftoy 10y ago
"Do you know how many German cars are sold in the UK each year?" So what you are saying is that brits will stop buying German/EU cars? Where are they going to buy their cars from? It's not like UK has some meaningfull car making industry, they moved all factories away. Not everyone can buy an Aston Martin. I think that as long as the price for an EU car will be just below the price for importing an equivalent car from US or Asia, brits will have no other choice but to buy from Germans, even with new taxes added.
- throwaway049 10y ago
  BMW will become a slightly more premium option if there are higher taxes. Meanwhile asian-made cars (like mine) will likely occupy the same market position they did before. Depends on the strength of Sterling as well of course.
  - junto 10y ago
    That's unlikely. The current trade deal with countries like Japan, is direct with the EU powerhouse, not one single country like the UK. The size of the EU has a much stronger bargaining power than the UK can ever hope to achieve. More importantly, your UK purchased Japanese car is most likely fabricated in a UK or EU factory. The UK factories exist simply because Japanese manufacturers then have direct access the the EU market without tariffs, and take advantage of the EU subsidies in order to set up and operate. Those subsidies and tariff benefits just evaporated. The EU market for their vehicles is much larger than the UK. It now makes sense for them to move their final manufacturing inside the EU zone and out of the UK. Bye bye jobs. The only benefit is that the GBP devaluation buys more Euros, so if you still have a job in the UK after this, you can buy your Japanese European made car cheaper as an import from the EU. http://www.wsj.com/articles/asian-company-shares-reeling-after-brexit-vote-1466747214 http://www.wsj.com/articles/asian-company-shares-reeling-aft...
    - throwaway049 10y ago
      I mostly agree but I think you have it backwards when you say a devalued GBP buys more euros. A weak pound makes it more expensive for me to buy an imported car.
bayesian_horse 10y ago
"Trade curbs" are not within the discussion. But without EU regulations applying to Britain, you can't simply continue international trade without additional costs. Even without additional taxes, there is a lot of added cost in bureaucracy and handling.
wyclif 10y ago
$4 trillion a day changes hands on the foreign exchange market, and half of that is in London. England is going to be OK, people. Project Fear has been voted down, after all.
- sfifs 10y ago
  This happens primarily because the city of London has a lot of exceptions provided to it by the EU and becomes an attractive place for the Americans, Chinese and Japanese institutions to funnel money into EU markets. It is really in a role similar Hong Kong vis a vis China. With Brexit, EU every reason to promote places like Luxembourg and other financial centers as the financial hub and end exceptions that make City of London competitive. Banks being banks will simply close offices and move business across the water.
  - wyclif 10y ago
    There's no evidence the banking business will offshore whatsoever, though. You're just speculating.
    - sfifs 10y ago
      Well so is the parent comment which is arguing essentially that things are fine today and so they will continue be fine in the future. I'm simply suggesting that may not be the case since EU is now likely incentivized to disrupt the current status if only to set an example. Rather than disrupt physical trade that is linked to export oriented mainland jobs, financial sector may be a riper target as barriers to moving these jobs are low (essentially no capital investment), disrupting it can be used to create jobs on the mainland and can create a punitive effect on UK.
    - Xylakant 10y ago
      Multiple banking houses have at least indicated that they're willing to migrate. Even more important, a lot of financial products in the banking/insurance sector rely on passporting, that is if they're accepted in one EU country, they can be sold anywhere in the EU. That country used to be England up to now. Given that nobody knows if/when the real separation will happen, I fully expect banks and insurances to hedge their bets and start moving that to other countries.
AnonymousPlanet 10y ago
I wonder, how many of these cars are assembled in Britain? And how much of the supply chain is inside Britain? Will it still be economical to import parts from the EU and assemble in Britain? Maybe the supply chain will be built inside Britain, maybe assembly will shift away from Britain. This is relevant for German as well as Japanese cars. And it's not only cars. Whatever bilateral deals will be made post brexit, there will be a lot of shifting going on.
- grey-area 10y ago
  Britain has very little manufacturing left. The financial industry on the other hand will be hard hit as power and influence moves to Frankfurt/Berlin.
  - Lio 10y ago
    > Britain has very little manufacturing left. 44% of UK exports are manufacturing. http://www.themanufacturer.com/uk-manufacturing-statistics/ http://www.themanufacturer.com/uk-manufacturing-statistics/
    - grey-area 10y ago
      10% of GDP
- rodgerd 10y ago
  > I wonder, how many of these cars are assembled in Britain? Over 450,000 Nissans are built every year in Sunderland; when it opened the plant was considered the great hope of the area, which had been devastated by the decline of British manufacturing in the 80s, and Thatcherism in the 80s. 80% of those cars are exported within the EU. An overwhelming majority of Sunderland voted to leave.
  - AnonymousPlanet 10y ago
    Let's hope Nissan is not going to pull out in the coming years (supply lines, export issues). But should that that happen, what would those people who voted for leave in Sunderland make of it? Would cognitive dissonance kick in and the blame again be placed on the EU or are they going to call for the head of Boris Johnson and Farage?
DominikR 10y ago
Of course the EU will continue to threaten the UK to "reconsider" its decision. But the fact remains that countries like Switzerland and Norway are much better off in economic terms by not having joined the EU in the first place. Citizens of the UK have to ask themselves if they are going to allow the EU to threaten them into submission. I am now 100% sure that the EU is done, this is it. Le Pen will win the next elections in France and then they'll leave too. Same goes for the Dutch.
- bayesian_horse 10y ago
  Switzerland and Norway are better off by agreeing to terms which the Leave campaign explicitly does not want. They also have significant strategic advantages which the UK is just lacking, and their economies are rather small. The UK can't get a better deal even if the EU wanted to give it to them. Which they don't by the way!
- roel_v 10y ago
  "Same goes for the Dutch." Eh, no. 58% wants to remain, 26% leave (numbers as of two weeks ago). The Dutch realize much more than the Brits how much we depend on tight integration with others (as a small country, as a heavy trader, but also as less inward-looking as the Brits).
  - sievebrain 10y ago
    Those are very close to the polling figures at the start of the UK referendum process. Voting intentions changed significantly during the campaigns.
    - nightcracker 10y ago
      [citation needed] I can't find those numbers, in fact the numbers that I did find are literally all over the place (for both Leave/Remain).
      - sievebrain 10y ago
jpfr 10y ago
You're talking cars. The EU is talking survival. The UK will get indeed a bad deal. And the rest of the EU will stick together even closer. I hear "fiscal harmonization", e.g. common taxation is the new big thing.
- akerro 10y ago
  Common taxation will be a good argument for countries of communistic block to leave. Good luck with that.
  - te_chris 10y ago
    That's an irony. If done properly they should be the main beneficiaries, as they're poor. One of the big fuckups with the Eurozone is that there's no redistribution between states, something that helps the USA work as a currency union of states.
Zelmor 10y ago
Keep in mind, if Scotland leaves the UK in favour of the EU, England is in deep shit regarding natural resources. REmember why those English mine towns were closed? Not much money to be made there.
kaid 10y ago
what is stopping them from doing trade after uk leaves eu? seems most comments around is expecting each side to loose their market on the other side.
rmc 10y ago
> The scaremongering goes on even after the vote has been called... The markets are already reacting. And they aren't confident./
bayesian_horse 10y ago
You think the "scaremongering" is "going on"? I don't think it has even fully started yet ... Reality will be a lot scarier.
- mrweasel 10y ago
  >Reality will be a lot scarier. Reality is boring most of the time. It will be fine in the end. The UK isn't going to sink into the sea or become the North Korea of Europe. The EU won't fall apart, it might need a little adjustment, and one or two additional countries will consider leaving, depending on the kind of deals that the UK can get. I don't expect anything fantastically interesting to happen. The rest of 2016 will be a little bumping as everyone adjusts and then that's it.
  - bayesian_horse 10y ago
    So the pound falling to the lowest point in decades is just unfounded panic? There is a whole lot of uncertainty going around, and the Leave campaign was full of optimistic assumptions about the EUs good will.
    - mrweasel 10y ago
      > So the pound falling to the lowest point in decades is just unfounded panic? At this point yes, no one has any real idea of the out come. Investors are just dumping pounds and British investments because they have no clue as to what is going to happen. But, just in case it's bad, money is moved to investments that is perceived to be safer. The UK isn't even out of the EU yet, and it won't be for years. I'm not saying it's not going to be bumpy, or that the British aren't going to become a little poorer. It's just not going to be the end of British economy. It won't devolve into a third world economy, and certainly not over night.
ewood 10y ago
I find the '5th largest economy' argument vacuous. When the UK joined the EU in 1973 it was the world's 5th largest economy and represented a much larger portion of European GDP. In spite of that they were forced to accept the terms of the EEC and the terms of the French President Pompidou. Why would being the '5th largest economy' have a bearing this time?
tikumo 10y ago
I wonder if it's possible for example the Netherlands or Germany to make a seperate trade agreement with England. But i think that in the long run some company's will act as proxy's to deliver goods and workers, so nothing will change, just some other way's of looking at it..
return0 10y ago
> because the EU does not want to give any encouragement to the other countries which want to leave the EU That's not the only reason. UK is taking advantage of its position as a global financial hub in the EU. It's in the EUs interest to make the UK less attractive for foreign investment.
- restalis 10y ago
  "UK is taking advantage of its position as a global financial hub in the EU." I imagine EU courting Switzerland for assuming this role from now on.
  - NetStrikeForce 10y ago
    No, because Switzerland is not part of the EU - What would be the point of that? The new economic hub will be Frankfurt.
_ph_ 10y ago
> Secondly, why would the UK end up with a Norway or Switzerland deal, when the UK is the 5th largest economy in the world? As of now, France is the 5th largest economy of the world. The Pound collapsing has already bumped the UK down. Yes, eventually there will be a relatively free trade agreement in place. But still the UK will have to abide to any European regulation, if they want to trade. Just that they do no longer get a vote on those regulations.
- mattmanser 10y ago
  For just the exports to the EU. I've seen this view several times in the thread, but never acknowledging that it's a small part of the economy that will have to do that.
  - _ph_ 10y ago
    Even the biggest economy of the world, the USA, is currently trying to negotiate a free trade agreement with the EU. Because they think everyone gains long term from such an agreement. It would be peculiar if England could do easily without one.
frankmcsherry 10y ago
> Secondly, why would the UK end up with a Norway or Switzerland deal, when the UK is the 5th largest economy in the world? Well, 6th now. Sorry about that. France said "bonjour" as you passed.
- mikeokner 10y ago
  According to April 2016 data, France is behind both the UK and California: https://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/Comparison_between_U.S._states... Edit: presumably you're referring to reports based on today's Pound Sterling crash, but those are incorrect as well: http://www.independent.co.uk/news/business/news/eu-referendum-result-has-the-french-economy-really-overtaken-the-uk-in-size-since-last-night-a7101361.html http://www.independent.co.uk/news/business/news/eu-referendu...
tkyjonathan 10y ago
The EU doesnt need to punish the UK.. The markets are doing that already.
thenomad 10y ago
I wrote a lengthy article on this when James Dyson made the same arguments. In short, I'm very unconvinced. In negotiation, the person who cares less wins. Individual EU countries - who would have to vote on any deal - care a lot less about their exports to the UK, because they're a small percentage of their economy, than the UK cares about its exports to the EU, which are just under half of all our exports. https://medium.com/im-trying-to-fact-check-brexit/fact-check-james-dysons-claims-about-brexit-bb6f3785ccfe#.qa5pc4jqj https://medium.com/im-trying-to-fact-check-brexit/fact-check...
junto 10y ago
You've forgot to look at the other side of the coin. Due to the EU trade tariffs with Asian and US countries, many non-EU manufacturers took advantage of the "final fabrication" loop-hole and the huge EU subsidies aimed at helping poor economic areas of the UK gain jobs, and set up fabrication plants in the UK. Asian car manufacturing were and are heavy investors in the UK, in order to produce vehicles for the UK and EU markets [1]. Those perks have just evaporated, along with the jobs. The blue collar workers that heavily backed a Brexit, have shot themselves in the foot. It makes financial sense for Toyota who sell 90% of their UK produced vehicles to move away from the UK and back into the EU zone. They have just lost their EU trade tariff benefits and been hit by the GBP/EUR drop, making their cars 8.5% more expensive to 90% of their customers. Those firms would be hit hard by a Brexit, losing preferential tariff and customs treatment in Europe. Toyota, for example, exports 90% of its U.K.- built cars. If you haven't got a job, you can't buy German cars anyway. The argument is mute. This vote is going to have a huge impact on jobs, since being part of the Eurozone was more than just British imports. http://www.wsj.com/articles/asian-company-shares-reeling-after-brexit-vote-1466747214 http://www.wsj.com/articles/asian-company-shares-reeling-aft...
Keyframe 10y ago
UK to EU exports 45% of all exports. EU to UK 6%. EU will be just fine. It's not as if import/exports will cease to be either. UK will be hurt, EU not so very much.

ganwar 10y ago

The unnecessary scaremongering goes on even after the vote has been called...

badloginagain 10y ago

The scaremongering has just begun. A successful UK exit is going to be powerful ammunition for any nationalist politician in any EU country.

beninvalencia 10y ago
This is also a very astute comment I think. The EU and those with interests that are similar will need to increase scaremongering even more to try and prevent other countries from leaving the EU. I wonder what will happen at Greece's next bailout/imposed conditions breaking point...
- danielmorozoff 10y ago
  This is precisely the case. The integrity of the entire block is now in question as any trade with the U.K. Will now jeopardize some interests internal to the eu. Nationalism is inevitable. Let's hope this does not culminate in war.
  - ZenoArrow 10y ago
    War? Steady on there fella, NATO isn't under threat. People seem to forget that it's NATO that represents our military alliance, not the EU.
    - danielmorozoff 10y ago
      pre-WWI / WWII had its fair share of military alliances. None of those alliances were threatened and we know how that turned out. Imho I think the threat of greater force does not prevent nations from taking drastic actions when pushed against a wall. Civil unrest is caused by large unemployment especially of the young, which in turn leads to nationalistic and isolationist policies breeding bigotry and violence that are seized upon by demagogues. These are warning signs of something to come. The weird thing is they seem to be popping up all over both in eastern and western europe over the course of the last decade. The US election in turn I think will definitely tilt the balance. From what i have seen it is not looking good on this side of the pond either.
      - ZenoArrow 10y ago
        I agree with you that high unemployment leads to civil unrest, and you can only hope that trustworthy individuals can fill the power vacuum that leads to. It's not a completely hopeless situation, you've got groups like Podemos in Spain pushing forward, and I think the likes of Corbyn in the UK and Sanders in the US represent the interests of the working class and middle class of their respective countries (even if Sanders doesn't get elected, he seems to be inspiring more people to get involved in the political process to push for the things that benefit the majority). As for isolationism leading to war, I think this I think has been blown out of proportion. Of course in extreme examples it can happen, but I'd suggest at most we'd be looking at Australian-style economic protectionism rather than North Korean-style isolationism.
rmc 10y ago
Which is why the establishment in other EU countries want to ensure it's not successful...
- Qantourisc 10y ago
  This is what you would call an unprofessional/childish behaviour helping nobody and inspire fear (maybe just a bit themself though). And such d* moves will certainly not help them get back anyone where in the near foreseeable future because of bridge-burning.
  - emptyfile 10y ago
    This isn't a game. It will do exactly that because it will show how bad of an idea it is to quit from the EU even for the richest country in Europe. The comments on this thread are ridiculously naive, I expected better from HN.
bayesian_horse 10y ago
Fat chance of a "successful exit" ... so no worries!

Aelinsaar 10y ago

The largest importer of champange in the world? UK. Not per capita either... just the largest, in front of the US. The UK has a ton of money for luxuries and all kinds of things that the healthier economies of the EU desperately want access to.

vidarh 10y ago
Well, we now already have a lot less, given how far the pound has tumbled.
- beninvalencia 10y ago
  That may be so, but - at the risk of sounding like a 'Brexiter' - at least the UK has its own currency! It can be devalued. The UK has that control and can be competitive. What would happen to one of the EU countries if it voted leave but had the Euro?
  - johnchristopher 10y ago
    From what I gathered they'd just issue a new currency (that would be instantly devalued everywhere though).
  - semi-extrinsic 10y ago
    Sweden also has it's own currency. Sweden is in a similar situation as Britain, and their closest neighbor (Norway) has never been in the EU. I'm not saying "Swexit" is imminent, but of the northern/western EU countries it is perhaps the most likely.
  - pmontra 10y ago
    They would start printing their own currency. Impossible to keep having the same currency at the same exchange rate if you leave. It's going to end up like Argentina when they wanted to keep a fixed rate with the USD. To be seen who's going to be Argentina and who the USA in that case. By the way, this is the very problem with the Euro. If you want to have the same currency of (let's say) Germany, you should perform like Germany, or better. If you are less efficient, in any way, you're going the way of Argentina, even if not as quickly. This is why the EU should have one real central government, maybe USA style, and local governments should be like the governments of the US states.

cisstrd 10y ago

It's not completely one-sided, it's rarely black and white. But you can't seriously say that they are on equal footing when trying to do trade agreements. The GBP has taken a nosedive already...

dmichulke 10y ago

The EU will not want to (give the UK a good deal) but for each trade area there will be a member state suffering if they won't. The negotiations themselves may prove a good catalyst for further disarray.

cm2187 10y ago
But that's because all european politicians at that time completely discounted the fact that the vote could go that way. If only they had looked at polls then they would have realised this was a very serious risk.
- phreeza 10y ago
  What could european politicians have done differently at that point? Also polls in the UK are notoriously unreliable.
  - cm2187 10y ago
    Polls are generally unreliable, they are only recognised as such in the UK. They would have given him a better a deal on immigration, which they thought was an absolute non starter, and was the main grief against the EU. I think it would have made a difference.
    - tonyedgecombe 10y ago
      They still could, there is no reason we couldn't have another referendum.
  - ptaipale 10y ago
    Primarily, they could have called off the project for political union and concentration of political power in Brussels (including the ridiculous monthly ride to Strasbourg). Concentrate on enabling free trade, not building a federal superstate. Also, quit bashing "unpleasant" euro-sceptic elected politicians (by unelected EU officials). (As an example of the EU gravy train, the former prime minister in my own country, Jyrki Katainen, first screwed up things home and then landed on a nice job in Brussels - because he kept saying nice things about the European project. This is one more little thing that has turned me suspicious of the whole project, a project I didn't vote for when I voted for EU membership 22 years ago.) Simply: admit out loud that they got it wrong and they have to change direction. But that would have meant a loss of face.

smegel 10y ago

The UK will also still carry a lot of influence over Europe through NATO.

gkop 10y ago
The UK itself may fracture - Scotland and/or Northern Ireland may peel off for the EU - putting NATO at risk.
- nerfhammer 10y ago
  The Scottish nationalists currently want to remain in NATO: https://en.wikipedia.org/wiki/NATO_debate_in_the_Scottish_National_Party https://en.wikipedia.org/wiki/NATO_debate_in_the_Scottish_Na...
  - Lio 10y ago
    The SNP also want to close down the UK's nuclear submarine base at Faslane.
- arethuza 10y ago
  Looks like we might up with a "United Ireland" referendum and a Scots "Indy Ref 2" - both NI and Scotland voted pretty strongly to stay in.
- LoSboccacc 10y ago
  Also the many countries that get shitty deals like production quota or migrant restriction under Diblin III will hope for renegotiation.
sverige 10y ago
NATO's time has come and gone. Europe needs to defend itself against Russia. It's not like they lack the resources; the only thing they lack is the will. No one wants a strong German military because that has always led to catastrophe in the past, but maybe it's time for them to re-arm. I mean, what are the odds that they'll produce another megalomaniac?

kps 10y ago

“The EU” is not the same as the people of the EU. The French and Dutch people voted against the Maastricht Treaty when given the chance.

Scarblac 10y ago
...through stupid yes/no referenda. No voters included people opposed to the whole idea, people disagreeing with some small part and also people who thought it didn't go far enough, but mainly people who wanted to protest the national government at the time, as usual. The Netherlands has unfortunately become much more Eurosceptic since, but let's not conclude too much from those referenda.
- Qantourisc 10y ago
  Maybe we don't need referenda but polls. Figure out WHAT is bothering people about the EU. If it's based on fiction, start up the PR machine. And repeat this AT LEAST every decade. If it's based on fact, fix the EU, or start up the PR machine explaining this cannot be fixed for the EU to work. (depending on the fact)
  - Scarblac 10y ago
    It's based on fiction, but the problem is that the fiction is created by politicians (who want to get credit for good news and blame the EU for bad news) and by the media (to get views, you need simple concepts and play on emotions). They are the PR machine. Education is the only thing that can work against it, pray that your people value it over other things.
    - Qantourisc 10y ago
      With PR machine, I mean the EU itself organizing ways to teach the people. Simple suggestion: iirc a lot of people think the EU costs a lot of money. Well you could post an add in each country with a pie diagram of the countries spendings. "your people"? You mean that from the perspective of the politicians ? Or from my perspective ?

conistonwater 10y ago

> This isn't some one sided negotiation. This is pretty reckless risk management on Britain's part: to place so much weight on a question of just how a future, unclear negotiation, subject to who knows what bureaucracy and other countries' own interests, will turn out. It's very vague to just say "well we're trading a lot, so surely we're very important" without any supporting evidence or precedent: it makes all sorts of unjustified assumptions.

mrb 10y ago

"The EU needs the UK" Not true. It is the reverse because the UK runs a gigantic trade deficit: in 2014 they exported 472 billion USD, but imported 663 billion USD¹. In fact the UK is the second country in the world with the largest trade deficit (behind the US). A huge portions of UK's export go to Europe, therefore the EU has definitely more say when it comes to negotiating trade deals with the UK. I would be very worried for my economic future if I were a UK citizen... ¹ http://atlas.media.mit.edu/en/profile/country/gbr/ http://atlas.media.mit.edu/en/profile/country/gbr/

x0x0 10y ago
That cuts both ways. Germany has used the EU to run a giant trade surplus, and if that arrangement blows up, so does their economy. http://www.tradingeconomics.com/germany/balance-of-trade http://www.tradingeconomics.com/germany/balance-of-trade
- dharma1 10y ago
  Germany would have a large trade surplus even without EU. They just make a lot of stuff other countries want
  - bontoJR 10y ago
    True, but... other countries around the world are producing the very same things, even cheaper, but they are taxed in the EU. China has no major deal with the EU for this reason. UK leaving would open to that possibility that Switzerland decided to open in 2010, balancing what comes in and what goes out and both countries got a major boost in respective goods. Swiss got access to the manufacturing in China for Swiss high tech companies and China got access to the major luxury good produced here, plus bank services, med techs and collaborations with universities like ETHZ.
  - cmdkeen 10y ago
    Specifically the Euro (rather than the EU) stops the German currency from appreciating massively and making their exports more expensive. That has been a massive boost to the German economy over the years.

randomsearch 10y ago

Are you trying to imply things won't change? Then why have EU membership at all? It will, of course, be a compromise, but one that likely results in the UK being much worse off.

paganel 10y ago

> The scaremongering goes on even after the vote has been called... The terms are simple: You can't have free movement of goods without the equally free movement of people. As long as people in the UK are ok with the free movement of people (even though the fight against it was a big part of the "Leave" campaign) then I would see no reason why us, the rest of the EU people, should impede the UK products' access to the European market. You can't have your lunch and eat it too, meaning you can't be against free movement of people (against "immigration") and then expect us to accept your economic products. It's not "scaremongering", this are the true, hard facts.

sverige 10y ago
But most of the immigrants are coming from outside the EU. There's the rub.
- evgen 10y ago
  From what I recall of the most recent stats, which were unfortunately released just a short while ago and may have pushed some votes to Leave, there has been more net migration into the UK over the past few years from EU nationals than from those coming from outside the EU.
  - dharma1 10y ago
    Roughly just over a half is immigration from within the EU
    - bipson 10y ago
      Does any of the three of you above care to share your sources? That would help
      - dharma1 10y ago
        http://www.bbc.co.uk/news/uk-politics-eu-referendum-36382199 http://www.bbc.co.uk/news/uk-politics-eu-referendum-36382199

ThePhysicist 10y ago

This is exactly the kind of lose-win or lose-lose discussion that everyone (well 49 % of people) wanted to avoid. Asking who will profit from this or who will be on top is not relevant probably, because each side will lose now (at least in the short term) the question is just how big the losses will be. Also, bear in mind that the UK will not only have to rearrange its terms with the EU, but with more than 50 non-EU countries as well. Leaving the economic impact aside, the societal and demographic implications are just as important (for me) and a very hard to predict. Great Britain might very well fall apart over this, as Scottish politicians already announced that they will push for a leave if the UK leaves the EU. For me, this thing is just the biggest and most catastrophically failed political gamble of the century. Times are strange indeed.

_Understated_ 10y ago
My biggest fear is another Scottish referendum... the last one was bitter and polarizing. I have just spent the last 20 minutes drafting letters to my MP and MSP basically telling them I do not want another referendum.
- elygre 10y ago
  Considering that the english just voted Scotland out of EU, it makes perfect sense for the Scottish to reclaim their own future.
  - threeseed 10y ago
    Yep 60% of Scotland and 75% of Glasgow from reports voted to Remain. Northern Ireland is also going to be one to watch.
    - MLR 10y ago
      Scotland maybe, though if people have any sense they'll make sure the business is all done first and tell them to cool their heels. Northern Ireland has absolutely no chance of seceding, they can't go it alone as a separate country, and there's absolutely no appetite for unification from either side.

Scarblac 10y ago

The UK had a good deal. They had what Norway has, plus actual influence as a full member, plus many opt-outs. They've rejected it. What kind of good deal would they even be looking for?

ZenoArrow 10y ago
With regards to trade tariffs, nobody expects the deal to be as good as the ones the UK had in the EU. However, in order for EU members to protect their own economies, you would expect some form of trade deal between the EU and the UK to be hammered out. The Eurozone isn't exactly in great health right now, even before Brexit, you'd expect politicians to want to perform some form of deal, even if it's only for the sake of damage limitation. The EU may want to make an example of the UK and drag these talks out, but I expect economics will win over political maneuvering in the end.
- Scarblac 10y ago
  An example of a good deal would be: UK companies get access to the entire EU market if they follow EU regulations and UK citizens get freedom to move in the EU, and in return the UK also implements those regulations and gives EU companies free access, and gives EU citizens freedom to move in the UK. That's worse than what the UK had, because they wouldn't be part of the EU decision making process anymore and they'd still have as much immigration as now, and that's supposed to be the sore point. So I presume they wouldn't go for such a deal, but it's also hard to see the EU going for a deal this good.
  - ZenoArrow 10y ago
    I doubt the UK would go for that deal either, so it's debatable whether it's a 'good' deal if neither group (on the whole) is likely to be interested in it. I'd suggest the deals made will be based on trade tariffs and product standards. Deals that required dealing with EU regulation or free movement of labour aren't likely to be popular in the UK. If the EU drags its heels, the UK will probably use it's position as a member of the British Commonwealth to push for increased trade between Commonwealth countries whilst it waits for EU trade deals to get ironed out.

kaftoy 10y ago

"Do you know how many German cars are sold in the UK each year?" So what you are saying is that brits will stop buying German/EU cars? Where are they going to buy their cars from? It's not like UK has some meaningfull car making industry, they moved all factories away. Not everyone can buy an Aston Martin. I think that as long as the price for an EU car will be just below the price for importing an equivalent car from US or Asia, brits will have no other choice but to buy from Germans, even with new taxes added.

throwaway049 10y ago
BMW will become a slightly more premium option if there are higher taxes. Meanwhile asian-made cars (like mine) will likely occupy the same market position they did before. Depends on the strength of Sterling as well of course.
- junto 10y ago
  That's unlikely. The current trade deal with countries like Japan, is direct with the EU powerhouse, not one single country like the UK. The size of the EU has a much stronger bargaining power than the UK can ever hope to achieve. More importantly, your UK purchased Japanese car is most likely fabricated in a UK or EU factory. The UK factories exist simply because Japanese manufacturers then have direct access the the EU market without tariffs, and take advantage of the EU subsidies in order to set up and operate. Those subsidies and tariff benefits just evaporated. The EU market for their vehicles is much larger than the UK. It now makes sense for them to move their final manufacturing inside the EU zone and out of the UK. Bye bye jobs. The only benefit is that the GBP devaluation buys more Euros, so if you still have a job in the UK after this, you can buy your Japanese European made car cheaper as an import from the EU. http://www.wsj.com/articles/asian-company-shares-reeling-after-brexit-vote-1466747214 http://www.wsj.com/articles/asian-company-shares-reeling-aft...
  - throwaway049 10y ago
    I mostly agree but I think you have it backwards when you say a devalued GBP buys more euros. A weak pound makes it more expensive for me to buy an imported car.

bayesian_horse 10y ago

"Trade curbs" are not within the discussion. But without EU regulations applying to Britain, you can't simply continue international trade without additional costs. Even without additional taxes, there is a lot of added cost in bureaucracy and handling.

wyclif 10y ago

$4 trillion a day changes hands on the foreign exchange market, and half of that is in London. England is going to be OK, people. Project Fear has been voted down, after all.

sfifs 10y ago
This happens primarily because the city of London has a lot of exceptions provided to it by the EU and becomes an attractive place for the Americans, Chinese and Japanese institutions to funnel money into EU markets. It is really in a role similar Hong Kong vis a vis China. With Brexit, EU every reason to promote places like Luxembourg and other financial centers as the financial hub and end exceptions that make City of London competitive. Banks being banks will simply close offices and move business across the water.
- wyclif 10y ago
  There's no evidence the banking business will offshore whatsoever, though. You're just speculating.
  - sfifs 10y ago
    Well so is the parent comment which is arguing essentially that things are fine today and so they will continue be fine in the future. I'm simply suggesting that may not be the case since EU is now likely incentivized to disrupt the current status if only to set an example. Rather than disrupt physical trade that is linked to export oriented mainland jobs, financial sector may be a riper target as barriers to moving these jobs are low (essentially no capital investment), disrupting it can be used to create jobs on the mainland and can create a punitive effect on UK.
  - Xylakant 10y ago
    Multiple banking houses have at least indicated that they're willing to migrate. Even more important, a lot of financial products in the banking/insurance sector rely on passporting, that is if they're accepted in one EU country, they can be sold anywhere in the EU. That country used to be England up to now. Given that nobody knows if/when the real separation will happen, I fully expect banks and insurances to hedge their bets and start moving that to other countries.

AnonymousPlanet 10y ago

I wonder, how many of these cars are assembled in Britain? And how much of the supply chain is inside Britain? Will it still be economical to import parts from the EU and assemble in Britain? Maybe the supply chain will be built inside Britain, maybe assembly will shift away from Britain. This is relevant for German as well as Japanese cars. And it's not only cars. Whatever bilateral deals will be made post brexit, there will be a lot of shifting going on.

grey-area 10y ago
Britain has very little manufacturing left. The financial industry on the other hand will be hard hit as power and influence moves to Frankfurt/Berlin.
- Lio 10y ago
  > Britain has very little manufacturing left. 44% of UK exports are manufacturing. http://www.themanufacturer.com/uk-manufacturing-statistics/ http://www.themanufacturer.com/uk-manufacturing-statistics/
  - grey-area 10y ago
    10% of GDP
rodgerd 10y ago
> I wonder, how many of these cars are assembled in Britain? Over 450,000 Nissans are built every year in Sunderland; when it opened the plant was considered the great hope of the area, which had been devastated by the decline of British manufacturing in the 80s, and Thatcherism in the 80s. 80% of those cars are exported within the EU. An overwhelming majority of Sunderland voted to leave.
- AnonymousPlanet 10y ago
  Let's hope Nissan is not going to pull out in the coming years (supply lines, export issues). But should that that happen, what would those people who voted for leave in Sunderland make of it? Would cognitive dissonance kick in and the blame again be placed on the EU or are they going to call for the head of Boris Johnson and Farage?

DominikR 10y ago

Of course the EU will continue to threaten the UK to "reconsider" its decision. But the fact remains that countries like Switzerland and Norway are much better off in economic terms by not having joined the EU in the first place. Citizens of the UK have to ask themselves if they are going to allow the EU to threaten them into submission. I am now 100% sure that the EU is done, this is it. Le Pen will win the next elections in France and then they'll leave too. Same goes for the Dutch.

bayesian_horse 10y ago
Switzerland and Norway are better off by agreeing to terms which the Leave campaign explicitly does not want. They also have significant strategic advantages which the UK is just lacking, and their economies are rather small. The UK can't get a better deal even if the EU wanted to give it to them. Which they don't by the way!
roel_v 10y ago
"Same goes for the Dutch." Eh, no. 58% wants to remain, 26% leave (numbers as of two weeks ago). The Dutch realize much more than the Brits how much we depend on tight integration with others (as a small country, as a heavy trader, but also as less inward-looking as the Brits).
- sievebrain 10y ago
  Those are very close to the polling figures at the start of the UK referendum process. Voting intentions changed significantly during the campaigns.
  - nightcracker 10y ago
    [citation needed] I can't find those numbers, in fact the numbers that I did find are literally all over the place (for both Leave/Remain).
    - sievebrain 10y ago

jpfr 10y ago

You're talking cars. The EU is talking survival. The UK will get indeed a bad deal. And the rest of the EU will stick together even closer. I hear "fiscal harmonization", e.g. common taxation is the new big thing.

akerro 10y ago
Common taxation will be a good argument for countries of communistic block to leave. Good luck with that.
- te_chris 10y ago
  That's an irony. If done properly they should be the main beneficiaries, as they're poor. One of the big fuckups with the Eurozone is that there's no redistribution between states, something that helps the USA work as a currency union of states.

Zelmor 10y ago

Keep in mind, if Scotland leaves the UK in favour of the EU, England is in deep shit regarding natural resources. REmember why those English mine towns were closed? Not much money to be made there.

kaid 10y ago

what is stopping them from doing trade after uk leaves eu? seems most comments around is expecting each side to loose their market on the other side.

rmc 10y ago

> The scaremongering goes on even after the vote has been called... The markets are already reacting. And they aren't confident./

bayesian_horse 10y ago

You think the "scaremongering" is "going on"? I don't think it has even fully started yet ... Reality will be a lot scarier.

mrweasel 10y ago
>Reality will be a lot scarier. Reality is boring most of the time. It will be fine in the end. The UK isn't going to sink into the sea or become the North Korea of Europe. The EU won't fall apart, it might need a little adjustment, and one or two additional countries will consider leaving, depending on the kind of deals that the UK can get. I don't expect anything fantastically interesting to happen. The rest of 2016 will be a little bumping as everyone adjusts and then that's it.
- bayesian_horse 10y ago
  So the pound falling to the lowest point in decades is just unfounded panic? There is a whole lot of uncertainty going around, and the Leave campaign was full of optimistic assumptions about the EUs good will.
  - mrweasel 10y ago
    > So the pound falling to the lowest point in decades is just unfounded panic? At this point yes, no one has any real idea of the out come. Investors are just dumping pounds and British investments because they have no clue as to what is going to happen. But, just in case it's bad, money is moved to investments that is perceived to be safer. The UK isn't even out of the EU yet, and it won't be for years. I'm not saying it's not going to be bumpy, or that the British aren't going to become a little poorer. It's just not going to be the end of British economy. It won't devolve into a third world economy, and certainly not over night.

ewood 10y ago

I find the '5th largest economy' argument vacuous. When the UK joined the EU in 1973 it was the world's 5th largest economy and represented a much larger portion of European GDP. In spite of that they were forced to accept the terms of the EEC and the terms of the French President Pompidou. Why would being the '5th largest economy' have a bearing this time?

tikumo 10y ago

I wonder if it's possible for example the Netherlands or Germany to make a seperate trade agreement with England. But i think that in the long run some company's will act as proxy's to deliver goods and workers, so nothing will change, just some other way's of looking at it..

return0 10y ago

> because the EU does not want to give any encouragement to the other countries which want to leave the EU That's not the only reason. UK is taking advantage of its position as a global financial hub in the EU. It's in the EUs interest to make the UK less attractive for foreign investment.

restalis 10y ago
"UK is taking advantage of its position as a global financial hub in the EU." I imagine EU courting Switzerland for assuming this role from now on.
- NetStrikeForce 10y ago
  No, because Switzerland is not part of the EU - What would be the point of that? The new economic hub will be Frankfurt.

_ph_ 10y ago

> Secondly, why would the UK end up with a Norway or Switzerland deal, when the UK is the 5th largest economy in the world? As of now, France is the 5th largest economy of the world. The Pound collapsing has already bumped the UK down. Yes, eventually there will be a relatively free trade agreement in place. But still the UK will have to abide to any European regulation, if they want to trade. Just that they do no longer get a vote on those regulations.

mattmanser 10y ago
For just the exports to the EU. I've seen this view several times in the thread, but never acknowledging that it's a small part of the economy that will have to do that.
- _ph_ 10y ago
  Even the biggest economy of the world, the USA, is currently trying to negotiate a free trade agreement with the EU. Because they think everyone gains long term from such an agreement. It would be peculiar if England could do easily without one.

frankmcsherry 10y ago

> Secondly, why would the UK end up with a Norway or Switzerland deal, when the UK is the 5th largest economy in the world? Well, 6th now. Sorry about that. France said "bonjour" as you passed.

mikeokner 10y ago
According to April 2016 data, France is behind both the UK and California: https://en.wikipedia.org/wiki/Comparison_between_U.S._states_and_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/Comparison_between_U.S._states... Edit: presumably you're referring to reports based on today's Pound Sterling crash, but those are incorrect as well: http://www.independent.co.uk/news/business/news/eu-referendum-result-has-the-french-economy-really-overtaken-the-uk-in-size-since-last-night-a7101361.html http://www.independent.co.uk/news/business/news/eu-referendu...

tkyjonathan 10y ago

The EU doesnt need to punish the UK.. The markets are doing that already.

thenomad 10y ago

I wrote a lengthy article on this when James Dyson made the same arguments. In short, I'm very unconvinced. In negotiation, the person who cares less wins. Individual EU countries - who would have to vote on any deal - care a lot less about their exports to the UK, because they're a small percentage of their economy, than the UK cares about its exports to the EU, which are just under half of all our exports. https://medium.com/im-trying-to-fact-check-brexit/fact-check-james-dysons-claims-about-brexit-bb6f3785ccfe#.qa5pc4jqj https://medium.com/im-trying-to-fact-check-brexit/fact-check...

junto 10y ago

You've forgot to look at the other side of the coin. Due to the EU trade tariffs with Asian and US countries, many non-EU manufacturers took advantage of the "final fabrication" loop-hole and the huge EU subsidies aimed at helping poor economic areas of the UK gain jobs, and set up fabrication plants in the UK. Asian car manufacturing were and are heavy investors in the UK, in order to produce vehicles for the UK and EU markets [1]. Those perks have just evaporated, along with the jobs. The blue collar workers that heavily backed a Brexit, have shot themselves in the foot. It makes financial sense for Toyota who sell 90% of their UK produced vehicles to move away from the UK and back into the EU zone. They have just lost their EU trade tariff benefits and been hit by the GBP/EUR drop, making their cars 8.5% more expensive to 90% of their customers. Those firms would be hit hard by a Brexit, losing preferential tariff and customs treatment in Europe. Toyota, for example, exports 90% of its U.K.- built cars. If you haven't got a job, you can't buy German cars anyway. The argument is mute. This vote is going to have a huge impact on jobs, since being part of the Eurozone was more than just British imports. http://www.wsj.com/articles/asian-company-shares-reeling-after-brexit-vote-1466747214 http://www.wsj.com/articles/asian-company-shares-reeling-aft...

Keyframe 10y ago

UK to EU exports 45% of all exports. EU to UK 6%. EU will be just fine. It's not as if import/exports will cease to be either. UK will be hurt, EU not so very much.