3 ms·

Speaking personally now, I'm in two minds about a lot of this. It seems clear that the inability of different EU member states to operate their own fiscal poli

Speaking personally now, I'm in two minds about a lot of this. It seems clear that the inability of different EU member states to operate their own fiscal policies while tied to the same currency has caused harm (albeit of very different kinds) in recent years to both Greece at one end of the scale and Germany at the other, and to a lesser extent to various other member states. If the EU was a fully federal system, with combined political/legislative leadership to go with the combined economic/currency ties, maybe that wouldn't have happened. However, I doubt we'll see that level of integration any time soon, because it brings too much other baggage. That being the case, while I don't have the knowledge or experience to judge the odds myself, I can see why some economists might be wary of the same effects that caused so much trouble a few years ago doing so again in the future. As for the EU not being pleased about the UK leaving, that seems inevitable, but I'm hoping that cooler heads will prevail. Poisoning the well won't help either side, and clearly we're still going to be trading and collaborating in many other ways post-Brexit. We can dig in with red lines about this or that, but NI is still going to suffer economically just like Ireland if they mess the border arrangements up. They can make a fuss about blocking City financial services all they like, but it's their own big businesses using those services and they have no credible alternative based within the EU27, and those businesses weren't just spending all that money on those financial services out of charity. For myself, it saddens me that the whole affair seems to be characterised more by divisive rhetoric and mistrust now than by a constructive, amicable approach. I take the view that if we're going to have Brexit then obviously the UK-EU relationship will change, but it's still in our mutual interests to collaborate in numerous ways, and I think there were also numerous ways that these negotiations could have gone better if most of the political leadership on both sides hadn't been weak and hostile from day one.

pasabagi 9y ago
I have a similar feeling. On the one hand, I feel like Brexit happened for all the wrong reasons. I don't remember england being a nationalistic nation when I grew up. I found it profoundly alienating to find myself in a country that had voted for Brexit, more or less, because they don't like immigrants. On the other, what happened to Greece was appalling, and confirmed everybody's worst fears about the EU being an instrument of Capital in overrunning democratic norms. I don't think it would be so terrible, in any case, if the EU blocked UK financial services (or if the financial services went under anyway, since I think being in the EU was part of the raison-d'etre). The imbalance of the english economy created by an overweight financial sector that employs basically no-one, and has antithetical legislative needs to all the other sectors, is a lot of what's wrong with the UK as a country. We used to make things. Now all we do is flip houses on the back of one bubble or another. The financial sector has created a weird double-country, with a super-rich capital, and basically impoverished provinces. But this really comes back to what I see as the heart of English dysfunction - and it's English, since the Welsh and Scottish don't seem to share it. The politics are awful. Recruiting half your leadership from one elite boarding school just doesn't work. There's no way you can find enough smart, talented people that way. That's why everything the english state does is always so screwed up. And it's a problem that only gets worse as more power is concentrated in the financial sector.
- pjc50 9y ago
  > But this really comes back to what I see as the heart of English dysfunction - and it's English, since the Welsh and Scottish don't seem to share it. The politics are awful. Recruiting half your leadership from one elite boarding school just doesn't work This is exactly it. To my mind it's the last retreat of the Empire, inwards and inwards. The idea of having a country operating on a fundamentally equitable basis is just not acceptable to these people. So the UK gets set up almost as a set of internal colonies run from Westminster. > We used to make things. We still do - with a lot fewer people. Manufacturing is still big economically, it's just a high-value-add industry that employs a smaller number of white collar workers and robots. It also has terrible press coverage because it's not in London, and the papers are unwilling to dispatch foreign correspondents to the Midlands to find it.
  - Silhouette 9y ago
    To my mind it's the last retreat of the Empire, inwards and inwards. The idea of having a country operating on a fundamentally equitable basis is just not acceptable to these people. Our current political leadership do seem to have a very odd view of the world sometimes, possibly due to most of them (a) being rich and (b) never having worked a normal job outside the politics/media/finance bubble. It's very frustrating that they seem to have gone into this whole business with such an adversarial stance, particularly when even now they don't really seem to have a clear, consistent vision for what they are trying to achieve. To be fair, several of the key figures on the EU side haven't been any better.
pjc50 9y ago
> They can make a fuss about blocking City financial services all they like, but it's their own big businesses using those services and they have no credible alternative based within the EU27, and those businesses weren't just spending all that money on those financial services out of charity. I think this is extremely complacent. Financial services aren't an immovable object like a steel press or a coal mine, they're a bunch of people in an office. A lot of financial companies already have all sorts of European presences (either for tax reasons or through acquisitions), and they're already gearing up to move to Europe. E.g. https://www.telegraph.co.uk/business/2018/01/11/payment-transfer-giant-moneygram-move-eu-offices-london/ https://www.telegraph.co.uk/business/2018/01/11/payment-tran... So much of the UK argument seems to be "once we're out of the EU, the rules that apply to countries that are not in the EU won't apply to us because we're special". This is not convincing. The whole thing reminds me of Greece: "it would be a disaster for our country if the EU followed its pre-agreed rules, so they won't". This was not a convincing reason to bend the rules.
- Silhouette 9y ago
  Financial services aren't an immovable object like a steel press or a coal mine, they're a bunch of people in an office. This is the standard argument, but I don't think it's a very strong one. You can't pick up and move a steel press, but you can build a new one in a new country. Assuming it's a welcome development, that is mostly just a matter of investment money and building time. Hiring local staff to run it is probably relatively straightforward. Financial services, as you point out yourself, are all about the people. It's an industry built on experience and knowledge. Obviously today many of those people work in the City and live within range of the City. There is also an ecosystem built around the City to support that work. As far as I can see, nowhere else within the EU currently has anywhere close to that level of capability and established supporting infrastructure. There are only two ways that is going to change: either large numbers of existing staff from the City or maybe other global financial hubs are convinced to relocate to other member states where the new facilities are being set up, or a new generation of staff is developed locally. Clearly either of those is possible, as is some sort of hybrid. However, I find the most common argument -- that large numbers of City workers will just transplant their entire lives to a whole different country to keep a job -- unlikely. People talk about emigration to the EU a lot since Brexit became an issue, but the reality is that few people have actually done it while we're an EU member state and it is relatively easy, and it could become a much more significant and permanent change after Brexit. That leaves the alternative of building up a local workforce in some new location, but that also means building a new financial centre to challenge the City. At best that is going to take many years, during which presumably access to big finance across the EU27 would be significantly worse than today, and even then it would be a risky endeavour that might never provide the alternative that people were hoping for. As I said elsewhere, I hope cooler heads will prevail. The alternative to this is that the EU and UK negotiators grow up and realise that continuing relations in this area is hugely in both parties' best interest. If some deal is reached on financial services then the UK financial sector doesn't take a significant hit, and EU27 businesses and governments can continue to rely on the financial services they need with relatively little change or risk. It's hard to see how any plausible alternative isn't much worse than this in the short and probably medium term.

pasabagi 9y ago

I have a similar feeling. On the one hand, I feel like Brexit happened for all the wrong reasons. I don't remember england being a nationalistic nation when I grew up. I found it profoundly alienating to find myself in a country that had voted for Brexit, more or less, because they don't like immigrants. On the other, what happened to Greece was appalling, and confirmed everybody's worst fears about the EU being an instrument of Capital in overrunning democratic norms. I don't think it would be so terrible, in any case, if the EU blocked UK financial services (or if the financial services went under anyway, since I think being in the EU was part of the raison-d'etre). The imbalance of the english economy created by an overweight financial sector that employs basically no-one, and has antithetical legislative needs to all the other sectors, is a lot of what's wrong with the UK as a country. We used to make things. Now all we do is flip houses on the back of one bubble or another. The financial sector has created a weird double-country, with a super-rich capital, and basically impoverished provinces. But this really comes back to what I see as the heart of English dysfunction - and it's English, since the Welsh and Scottish don't seem to share it. The politics are awful. Recruiting half your leadership from one elite boarding school just doesn't work. There's no way you can find enough smart, talented people that way. That's why everything the english state does is always so screwed up. And it's a problem that only gets worse as more power is concentrated in the financial sector.

pjc50 9y ago
> But this really comes back to what I see as the heart of English dysfunction - and it's English, since the Welsh and Scottish don't seem to share it. The politics are awful. Recruiting half your leadership from one elite boarding school just doesn't work This is exactly it. To my mind it's the last retreat of the Empire, inwards and inwards. The idea of having a country operating on a fundamentally equitable basis is just not acceptable to these people. So the UK gets set up almost as a set of internal colonies run from Westminster. > We used to make things. We still do - with a lot fewer people. Manufacturing is still big economically, it's just a high-value-add industry that employs a smaller number of white collar workers and robots. It also has terrible press coverage because it's not in London, and the papers are unwilling to dispatch foreign correspondents to the Midlands to find it.
- Silhouette 9y ago
  To my mind it's the last retreat of the Empire, inwards and inwards. The idea of having a country operating on a fundamentally equitable basis is just not acceptable to these people. Our current political leadership do seem to have a very odd view of the world sometimes, possibly due to most of them (a) being rich and (b) never having worked a normal job outside the politics/media/finance bubble. It's very frustrating that they seem to have gone into this whole business with such an adversarial stance, particularly when even now they don't really seem to have a clear, consistent vision for what they are trying to achieve. To be fair, several of the key figures on the EU side haven't been any better.

pjc50 9y ago

> They can make a fuss about blocking City financial services all they like, but it's their own big businesses using those services and they have no credible alternative based within the EU27, and those businesses weren't just spending all that money on those financial services out of charity. I think this is extremely complacent. Financial services aren't an immovable object like a steel press or a coal mine, they're a bunch of people in an office. A lot of financial companies already have all sorts of European presences (either for tax reasons or through acquisitions), and they're already gearing up to move to Europe. E.g. https://www.telegraph.co.uk/business/2018/01/11/payment-transfer-giant-moneygram-move-eu-offices-london/ https://www.telegraph.co.uk/business/2018/01/11/payment-tran... So much of the UK argument seems to be "once we're out of the EU, the rules that apply to countries that are not in the EU won't apply to us because we're special". This is not convincing. The whole thing reminds me of Greece: "it would be a disaster for our country if the EU followed its pre-agreed rules, so they won't". This was not a convincing reason to bend the rules.

Silhouette 9y ago
Financial services aren't an immovable object like a steel press or a coal mine, they're a bunch of people in an office. This is the standard argument, but I don't think it's a very strong one. You can't pick up and move a steel press, but you can build a new one in a new country. Assuming it's a welcome development, that is mostly just a matter of investment money and building time. Hiring local staff to run it is probably relatively straightforward. Financial services, as you point out yourself, are all about the people. It's an industry built on experience and knowledge. Obviously today many of those people work in the City and live within range of the City. There is also an ecosystem built around the City to support that work. As far as I can see, nowhere else within the EU currently has anywhere close to that level of capability and established supporting infrastructure. There are only two ways that is going to change: either large numbers of existing staff from the City or maybe other global financial hubs are convinced to relocate to other member states where the new facilities are being set up, or a new generation of staff is developed locally. Clearly either of those is possible, as is some sort of hybrid. However, I find the most common argument -- that large numbers of City workers will just transplant their entire lives to a whole different country to keep a job -- unlikely. People talk about emigration to the EU a lot since Brexit became an issue, but the reality is that few people have actually done it while we're an EU member state and it is relatively easy, and it could become a much more significant and permanent change after Brexit. That leaves the alternative of building up a local workforce in some new location, but that also means building a new financial centre to challenge the City. At best that is going to take many years, during which presumably access to big finance across the EU27 would be significantly worse than today, and even then it would be a risky endeavour that might never provide the alternative that people were hoping for. As I said elsewhere, I hope cooler heads will prevail. The alternative to this is that the EU and UK negotiators grow up and realise that continuing relations in this area is hugely in both parties' best interest. If some deal is reached on financial services then the UK financial sector doesn't take a significant hit, and EU27 businesses and governments can continue to rely on the financial services they need with relatively little change or risk. It's hard to see how any plausible alternative isn't much worse than this in the short and probably medium term.