The land of industrial
revolution, the founders of democracy and the propounders of globalization,
many names but a single address – Britain, U.K.
The ‘’ leave supporters ‘’ call
it the revolution that will propel the country on the path of prosperity and
give the locals a chance and no wonder have the leaders become the faces of the
middle class resurgence. All in a referendum’s play, irony lies in Britain
waking up the next day to search what could be the potential impact of leaving EU
after the result, so much in this age of information.
Yes, the markets have shed blood,
the pound has hit its lowest in 31 years, investors are moving to Gold and
Dollar, throwing the emerging economies currencies in a tailspin – Economically yes the
impact has been felt. Now that the referendum has passed, purists across the EU
member states have regained their voices to leave in what they call an enforced
bureaucracy with no control, with one fact very clear – balkanisation of the EU
is slowly gaining ground and a reality not too far fetched!
The planks are the same –
Protectionism, need for more monetary and fiscal control and the fanned middle
class angst, a revolution it is perhaps but with a bag of worms and mindless
rhetoric.
The immigration to the U.K has no
doubt doubled, but how can we forget the number of jobs created and the
acceleration in GDP these very immigrants have pushed. But is the plank of immigration
checks as a way to deal with the un-employment efficient – Well the answer has
been a resounding NO, more focus on education perhaps, Boris says HELL NO!
Added source of worry is the
export basket of Britain, with more than 50% of exports to the EU the hit is
going to be massive, now with double set of laws in place. The Lisbon treaty
does allow a 2 year period to negotiate, but looking at the movement of
sentiments, its highly unlikely that Britain can expect an FTA or any sweeping sweet agreement for that matter without making major compromises. This in addition to
firms having to deal with the double set of laws, new procedures and maybe
restricted access to geography.
More independence over the
finances, down goes the austerity – point taken. IMF and sections within the
European Central Bank have slowly conceded ground on the in-effectiveness of
the Austerity Measures. If one extreme is bad, the other is dangerous.
Countries and their love for monetary easing and fiscal imprudence have often
landed themselves in a soup which they themselves admit to at a later stage, what
with economists worldwide despising the Keynesian way of dealing with slowing
growth especially in a service dominated economy, with monetary easing only going to increase income disparity!
The advantage of collective bargaining
Britain gained as a result of the EU block at multilateral forums is something
that stares at it right in the face and with many service oriented business
specifically financial services threatening to shift shop if the new set of laws
are not EU compliant has threatened to bring the economy to a grinding halt.
Last but not the least the
sometimes mindless rhetoric has found some ground in the fact that Countries
which have adopted the Euro haven’t recovered completely from recession and are
facing sever un-employment. But has Britain adopted it, NO! The 3.5 Million
asking for a referendum will now have some soul searching and convincing to do.
Till then Article 50 & Article 49 can grab headlines and all we can hope is
the masters of democracy and initiators of economic prosperity and globalization ace the very lessons they taught the world.
