12 ms·

Sometimes I wonder if this incident didn't happen, would the UK had entered the Euro and Brexit wouldn't be on the horizon today.

by elmar 7y ago

gumby 7y ago
They fellout of the EMS because their economy wasn not as tightly coupled to the rest of what became the Eurozone (whether that level of coupling is good or bad is a matter of disagreement). So if this incident hadn't happened it's likely they would have had a touch time under the Euro. For a weak economy IMHO the Euro is worth the disadvantages (and I happen not to consider the inability to do competitive devaluations a disadvantage). These can be small (GR) or large (IT) economies. For a pretty solid (sometimes strong, sometimes less strong, but never "weak") economy (DE, NL, FR, etc) it's definitely good; the small amount you lose in freedom of action is far overshadowed by the benefits (who did better from the greek financial crisis: Greece or Germany?). But for a middling economy which I consider the UK to be, despite its large size, being coupled to the eurozone would give them the worst of both worlds. BTW I don't think this is an argument for the UK getting out of the EU; I think they should fix their shit (which goes back decades) instead.
- jamiegreen 7y ago
  We should leave the EU because it was voted for by the majority
  - devtul 7y ago
    No, we should do a second vote, maybe even a third vote in case the second vote result is wrong again as the first one. Sometimes democracy doesn't work you know, so we have to try harder.
    - skissane 7y ago
      A majority of people voted to leave the EU. They didn't (at the ballot box) express any opinion on how to leave the EU – deal or no-deal, hard Brexit or soft Brexit, etc. If having an initial referendum on whether to leave was the right thing to do, why would not a further referendum to decide how to leave be equally right? It could take the form of an up-down vote on Johnson's deal; or, it could take the form of preferential (1, 2, 3, etc – as in instant run-off) voting on options – e.g. leave with May's original deal, leave with Johnson's new deal, leave with no deal, withdraw article 50, ask for another extension to negotiate further. Some will argue that the coming general election is an up-down vote on Johnson's deal. However, it isn't in that it is a first-past-the-post contest between different parties in each constituency – a majority of the vote might be received by parties opposed to Johnson's deal, yet the Tory candidate might still be returned due to the majority against them being split. A referendum on the deal itself wouldn't be faced with that issue.
      - Zenst 7y ago
        Yes the whole aspect that a democratic result done upon proportional representation could be overturned by split votes and more so a voting system that is regional. Does make you wonder. Since the referendum we have had a GE a EuroMP election and now...another GE. With only the referendum and the EuroMP being done on the proportional representation system. Sad thing is, had David Cameron got the EU to agree to reform, things would of been much different. Which is ironic as Mr Macron is keen to see reform, with even Donald Tusk not long after the referendum saying that the EU needed reform. Ironic as that reform is on hold, until the UK leaves. That's sad as in all this time, the EU could of outlined some reforms and the whole reason to have a revote upon the leave/stay would of been more palatable as things had/was changing. Bit like saying your going to quit a game due to some imbalance that has gone on for ages that you don't like, and before you quit, they say they are going to address the issue. So you may well change your mind. However you look at it though - a lot of people got way more politically educated over the past two years. Be interesting how that pans out over time.
      - raxxorrax 7y ago
        Even other countries had a lot of votes against further integrating the Union. Since the last 30 years of policy were in the exact opposite direction with limited success, I think it would indeed be time to at least explore other options.
    - lanevorockz 7y ago
      And a third and a fourth because it’s only right when the rich people say so
  - willyt 7y ago
    ...consisting of ~1/4 of the population. Parliament represents the interests of all 65 million of us.
    - Jamwinner 7y ago
      I understand its unpopular, but throwing out democracy because your side chose not to vote is asinine.
    - Zenst 7y ago
      The UK does not have compulsory voting, maybe it should.
    - OJFord 7y ago
      ..consisting of the majority (over 72%) of eligible voters. That's a high turnout. (FWIW I don't think a referendum should have been held in the first place, and an un-referended decision either way would have been better.)
    - raxxorrax 7y ago
      A decade ago the EU promised more grassroots democracy. That was a time when people were convinced of it. Currently the EU is just a complete embarrasment. And that is also due positions like this. Not the Russian is the problem, you are with your position. Why would anybody want to form a union with you?
  - diffeomorphism 7y ago
    And now for years the UK can't figure out how it wants to leave, which people had no vote on. - Do you want to have a border in Ireland? - Do you want a border between Ireland and the rest of the UK? - Do you want to lose money for the NHS even though we had a bus saying the opposite? - Are you just going to say "no" to everything, but not have an idea what to do instead? Then maybe, just maybe it would a good idea to ask voters to choose again between leave this way, that way, another way or "who knew this could be so complicated, let's not do that".
    - jamiegreen 7y ago
      Well given we have a deal with the EU that has addressed the first two points, I think we do know how we want to leave. Having another vote just because politicians didn't like the way the first one went is not democratic. We can have another vote, but lets leave first.
      - diffeomorphism 7y ago
        For some definition of "have". > Having another vote just because politicians didn't like the way the first one went is not democratic. Sure, which is why nobody is proposing that.
        jamiegreen 7y ago
        > For some definition of "have The regular definition of two parties that have agreed something > Sure, which is why nobody is proposing that. Apart from the Labour party and the so called Peoples Vote campaign. But apart from them nobody is I suppose
        diffeomorphism 7y ago
        > https://en.wikipedia.org/wiki/Brexit https://en.wikipedia.org/wiki/Brexit Parliament passed the second reading of the new agreement allowing it to move to the committee stage for further scrutiny, but they rejected plans to pass it into law before the 31 October deadline, and forced the government (through the 'Benn Act') to ask for a third Brexit delay. This was followed, on the last day of October, by an act providing for an early general election on 12 December. "Have", kinda but not quite. They are also not proposing that. If you have to misrepresent other groups instead of arguing against what they are actually saying then you are not discussing but just talking to yourself.
- atmosx 7y ago
  There is not an economist I know of, left or right wing, who believes that joining the EUR was beneficial for weak economies. Especially for Italy, proved to be catastrophic. Greece was always a basket case but Italy was doing pretty well before joining. Joining the EUR means literally giving up sovereignty. The Iron Lady explained that very concisely in her last speech as a PM in the House of Commons: “He who controls the interest rates in Europe, controls Europe”. Couldn’t be more “spot-on”. Regarding the topic. The UK never considered itself part of “Europe”. There historical and cultural facts and the events of the 20th century that IMO played a major role in keeping their own currency.
  - bleuedejapan 7y ago
    Italy's problem was never the Euro. Italy is the largest political mess of Europe, and the amount of structural problems is staggering. Its industries kept it running, and China's growth as a manufacturing centre, together with the accession of countries with less structural problems have taken a toll on the Italian industry. If there was no Euro, Italy would still be ruined anyway.
  - barrkel 7y ago
    It's a two way street, the sovereignty argument. A bigger entity has different sovereignty to multiple smaller entities. The British pound is worth about half what it was when I first moved to the UK - that's not the kind of sovereignty that's kind to my pocket. A bigger currency is a more stable store of value for citizens. That's not worthless, independent of the lack of friction in international transactions - not a major friction online, but really nifty when you cross a land border every day.
    - raxxorrax 7y ago
      And yet, the argument here is that a weak currency is advantageous for an economy. Advanteageous relative to countries also having the Euro burden perhaps. But even just from a marcoeconomic perspective there seem to be distinct contradictions everywhere.
      - 7y ago
Despegar 7y ago
The Eurozone is fatally flawed because they share a currency but have no transfer payments between rich and poor members. So you have countries like Germany that are effectively subsidized by poorer countries. It's been a great setup for 20 years if you've been in the German capital class, not so great for anyone else.
- PeterisP 7y ago
  The majority of EU budget consists of programs such as the common agricultural policy, ERDF and other infrastructure funding which are de facto transfer payments to improve and sustain poorer areas.
  - Despegar 7y ago
    Until German taxpayers are financing universal healthcare and pensions for Greeks and Italians, those things are marginal at best.
  - richardknop 7y ago
    Correct me if I’m wrong but isn’t majority of agricultural funding going to France, Germany etc, the wealthy members?
    - PeterisP 7y ago
      Well, they're both the largest recipients and the largest contributors because they're the largest and most populous countries. However, France and Germany contribute significantly more than they receive, and poorer regions receive significantly more than they contribute, so that's effectively a transfer mechanism.
- skokage 7y ago
  >So you have countries like Germany that are effectively subsidized by poorer countries. Could you explain this comment further, or have links to stories that go in depth on how that works? Not saying you are wrong, but I don't understand how germany, which is an economic powerhouse and exports a lot of goods, are being subsidized by poorer countries.
mcintyre1994 7y ago
That would be pretty ironic: https://www.politico.eu/article/second-brexit-referendum-george-soros-campaign-about-to-start/ https://www.politico.eu/article/second-brexit-referendum-geo... - he backs Best for Britain who have been campaigning for a second referendum.
TMWNN 7y ago
Other way around. The Guardian speculated in 2013 http://www.theguardian.com/business/economics-blog/2013/jun/02/britain-euro-what-if-joined http://www.theguardian.com/business/economics-blog/2013/jun/... that if Britain had joined the Euro: * The mid-2000s British housing bubble, and its collapse in 2007, would have been even bigger. * Britain would have had to ask the IMF, ECB, and EU for loans. * The Tories would in 2010 have promised a referendum to leave the Euro and won a majority. Labour would have won fewer than 100 seats, and UKIP would have "made spectacular gains". * The anti-Euro side would have won the referendum, and the currency would have collapsed. * "after a deep and painful recession economic recovery began". * "Britain would have destroyed the euro on departure, and would now be on the point of leaving the EU altogether. The idea that Farage might be the next prime minister would be quite credible."

Sometimes I wonder if this incident didn't happen, would the UK had entered the Euro and Brexit wouldn't be on the horizon today.

by elmar 7y ago

Sometimes I wonder if this incident didn't happen, would the UK had entered the Euro and Brexit wouldn't be on the horizon today.

gumby 7y ago

They fellout of the EMS because their economy wasn not as tightly coupled to the rest of what became the Eurozone (whether that level of coupling is good or bad is a matter of disagreement). So if this incident hadn't happened it's likely they would have had a touch time under the Euro. For a weak economy IMHO the Euro is worth the disadvantages (and I happen not to consider the inability to do competitive devaluations a disadvantage). These can be small (GR) or large (IT) economies. For a pretty solid (sometimes strong, sometimes less strong, but never "weak") economy (DE, NL, FR, etc) it's definitely good; the small amount you lose in freedom of action is far overshadowed by the benefits (who did better from the greek financial crisis: Greece or Germany?). But for a middling economy which I consider the UK to be, despite its large size, being coupled to the eurozone would give them the worst of both worlds. BTW I don't think this is an argument for the UK getting out of the EU; I think they should fix their shit (which goes back decades) instead.

jamiegreen 7y ago
We should leave the EU because it was voted for by the majority
- devtul 7y ago
  No, we should do a second vote, maybe even a third vote in case the second vote result is wrong again as the first one. Sometimes democracy doesn't work you know, so we have to try harder.
  - skissane 7y ago
    A majority of people voted to leave the EU. They didn't (at the ballot box) express any opinion on how to leave the EU – deal or no-deal, hard Brexit or soft Brexit, etc. If having an initial referendum on whether to leave was the right thing to do, why would not a further referendum to decide how to leave be equally right? It could take the form of an up-down vote on Johnson's deal; or, it could take the form of preferential (1, 2, 3, etc – as in instant run-off) voting on options – e.g. leave with May's original deal, leave with Johnson's new deal, leave with no deal, withdraw article 50, ask for another extension to negotiate further. Some will argue that the coming general election is an up-down vote on Johnson's deal. However, it isn't in that it is a first-past-the-post contest between different parties in each constituency – a majority of the vote might be received by parties opposed to Johnson's deal, yet the Tory candidate might still be returned due to the majority against them being split. A referendum on the deal itself wouldn't be faced with that issue.
    - Zenst 7y ago
      Yes the whole aspect that a democratic result done upon proportional representation could be overturned by split votes and more so a voting system that is regional. Does make you wonder. Since the referendum we have had a GE a EuroMP election and now...another GE. With only the referendum and the EuroMP being done on the proportional representation system. Sad thing is, had David Cameron got the EU to agree to reform, things would of been much different. Which is ironic as Mr Macron is keen to see reform, with even Donald Tusk not long after the referendum saying that the EU needed reform. Ironic as that reform is on hold, until the UK leaves. That's sad as in all this time, the EU could of outlined some reforms and the whole reason to have a revote upon the leave/stay would of been more palatable as things had/was changing. Bit like saying your going to quit a game due to some imbalance that has gone on for ages that you don't like, and before you quit, they say they are going to address the issue. So you may well change your mind. However you look at it though - a lot of people got way more politically educated over the past two years. Be interesting how that pans out over time.
    - raxxorrax 7y ago
      Even other countries had a lot of votes against further integrating the Union. Since the last 30 years of policy were in the exact opposite direction with limited success, I think it would indeed be time to at least explore other options.
  - lanevorockz 7y ago
    And a third and a fourth because it’s only right when the rich people say so
- willyt 7y ago
  ...consisting of ~1/4 of the population. Parliament represents the interests of all 65 million of us.
  - Jamwinner 7y ago
    I understand its unpopular, but throwing out democracy because your side chose not to vote is asinine.
  - Zenst 7y ago
    The UK does not have compulsory voting, maybe it should.
  - OJFord 7y ago
    ..consisting of the majority (over 72%) of eligible voters. That's a high turnout. (FWIW I don't think a referendum should have been held in the first place, and an un-referended decision either way would have been better.)
  - raxxorrax 7y ago
    A decade ago the EU promised more grassroots democracy. That was a time when people were convinced of it. Currently the EU is just a complete embarrasment. And that is also due positions like this. Not the Russian is the problem, you are with your position. Why would anybody want to form a union with you?
- diffeomorphism 7y ago
  And now for years the UK can't figure out how it wants to leave, which people had no vote on. - Do you want to have a border in Ireland? - Do you want a border between Ireland and the rest of the UK? - Do you want to lose money for the NHS even though we had a bus saying the opposite? - Are you just going to say "no" to everything, but not have an idea what to do instead? Then maybe, just maybe it would a good idea to ask voters to choose again between leave this way, that way, another way or "who knew this could be so complicated, let's not do that".
  - jamiegreen 7y ago
    Well given we have a deal with the EU that has addressed the first two points, I think we do know how we want to leave. Having another vote just because politicians didn't like the way the first one went is not democratic. We can have another vote, but lets leave first.
    - diffeomorphism 7y ago
      For some definition of "have". > Having another vote just because politicians didn't like the way the first one went is not democratic. Sure, which is why nobody is proposing that.
      - jamiegreen 7y ago
        > For some definition of "have The regular definition of two parties that have agreed something > Sure, which is why nobody is proposing that. Apart from the Labour party and the so called Peoples Vote campaign. But apart from them nobody is I suppose
        diffeomorphism 7y ago
        > https://en.wikipedia.org/wiki/Brexit https://en.wikipedia.org/wiki/Brexit Parliament passed the second reading of the new agreement allowing it to move to the committee stage for further scrutiny, but they rejected plans to pass it into law before the 31 October deadline, and forced the government (through the 'Benn Act') to ask for a third Brexit delay. This was followed, on the last day of October, by an act providing for an early general election on 12 December. "Have", kinda but not quite. They are also not proposing that. If you have to misrepresent other groups instead of arguing against what they are actually saying then you are not discussing but just talking to yourself.
atmosx 7y ago
There is not an economist I know of, left or right wing, who believes that joining the EUR was beneficial for weak economies. Especially for Italy, proved to be catastrophic. Greece was always a basket case but Italy was doing pretty well before joining. Joining the EUR means literally giving up sovereignty. The Iron Lady explained that very concisely in her last speech as a PM in the House of Commons: “He who controls the interest rates in Europe, controls Europe”. Couldn’t be more “spot-on”. Regarding the topic. The UK never considered itself part of “Europe”. There historical and cultural facts and the events of the 20th century that IMO played a major role in keeping their own currency.
- bleuedejapan 7y ago
  Italy's problem was never the Euro. Italy is the largest political mess of Europe, and the amount of structural problems is staggering. Its industries kept it running, and China's growth as a manufacturing centre, together with the accession of countries with less structural problems have taken a toll on the Italian industry. If there was no Euro, Italy would still be ruined anyway.
- barrkel 7y ago
  It's a two way street, the sovereignty argument. A bigger entity has different sovereignty to multiple smaller entities. The British pound is worth about half what it was when I first moved to the UK - that's not the kind of sovereignty that's kind to my pocket. A bigger currency is a more stable store of value for citizens. That's not worthless, independent of the lack of friction in international transactions - not a major friction online, but really nifty when you cross a land border every day.
  - raxxorrax 7y ago
    And yet, the argument here is that a weak currency is advantageous for an economy. Advanteageous relative to countries also having the Euro burden perhaps. But even just from a marcoeconomic perspective there seem to be distinct contradictions everywhere.
    - 7y ago

Despegar 7y ago

The Eurozone is fatally flawed because they share a currency but have no transfer payments between rich and poor members. So you have countries like Germany that are effectively subsidized by poorer countries. It's been a great setup for 20 years if you've been in the German capital class, not so great for anyone else.

PeterisP 7y ago
The majority of EU budget consists of programs such as the common agricultural policy, ERDF and other infrastructure funding which are de facto transfer payments to improve and sustain poorer areas.
- Despegar 7y ago
  Until German taxpayers are financing universal healthcare and pensions for Greeks and Italians, those things are marginal at best.
- richardknop 7y ago
  Correct me if I’m wrong but isn’t majority of agricultural funding going to France, Germany etc, the wealthy members?
  - PeterisP 7y ago
    Well, they're both the largest recipients and the largest contributors because they're the largest and most populous countries. However, France and Germany contribute significantly more than they receive, and poorer regions receive significantly more than they contribute, so that's effectively a transfer mechanism.
skokage 7y ago
>So you have countries like Germany that are effectively subsidized by poorer countries. Could you explain this comment further, or have links to stories that go in depth on how that works? Not saying you are wrong, but I don't understand how germany, which is an economic powerhouse and exports a lot of goods, are being subsidized by poorer countries.

mcintyre1994 7y ago

That would be pretty ironic: https://www.politico.eu/article/second-brexit-referendum-george-soros-campaign-about-to-start/ https://www.politico.eu/article/second-brexit-referendum-geo... - he backs Best for Britain who have been campaigning for a second referendum.

TMWNN 7y ago

Other way around. The Guardian speculated in 2013 http://www.theguardian.com/business/economics-blog/2013/jun/02/britain-euro-what-if-joined http://www.theguardian.com/business/economics-blog/2013/jun/... that if Britain had joined the Euro: * The mid-2000s British housing bubble, and its collapse in 2007, would have been even bigger. * Britain would have had to ask the IMF, ECB, and EU for loans. * The Tories would in 2010 have promised a referendum to leave the Euro and won a majority. Labour would have won fewer than 100 seats, and UKIP would have "made spectacular gains". * The anti-Euro side would have won the referendum, and the currency would have collapsed. * "after a deep and painful recession economic recovery began". * "Britain would have destroyed the euro on departure, and would now be on the point of leaving the EU altogether. The idea that Farage might be the next prime minister would be quite credible."