Brexit consequences

[Spinflight]

Can't find the old one, despite a search. Hence a year on...

I started it to compare the doom and gloom predictions from people who should know better, especially the treasury, to actual observable facts.

Thus far the treasury predicted our borrowing costs would soar by over 130 points. In fact they're down about 100.

No trade deals possible before (I forget the date they said, was far in the future though) compared to actual negotiations beginning with the USA later this month with the president firmly behind them. Canada, New Zealand, Australia, India, South Korea and several others I've forgotten have shown a great desire for a deal quickly.

Ftse 100 and 250 are well up, just shy of 7500.

Best of all from a macro economic perspective is inflation touching 3%. When you are £1800 billion in debt rating that away with inflation is far preferable to actually paying it off.

Growth has dropped a bit, though nowhere near the instant recession that was predicted. Bit early to say though this is likely due to the referendum.

External investment is actually nicely up, with several major companies announcing various large commitments.

Things could be rosier, though it would be a struggle to describe them generally as bad, quite contrary to 'informed' opinions. Even the oecd recently ate their pre referendum words.

By leaving I feel it will lessen the rules on business and allow them more freedom to do more things that will allow them to sell more outside the EU

This is completely muddled thinking. There are no EU rules stopping UK businesses from trading with non-EU countries. Which businesses do you think are going to sell more, and what? Is this the innovative jams argument again?

math as well as pharmaceuticals, Ireland is also a large manufacturer of medical devices - some of the big US companies have plants there.

Ireland neither manufactured nor exported (obv) pharmaceuticals.

My point exactly about Brexit we can do this too, find a product manufacture it and sell it on to a market outside of the UK, So please you can see what I mean about starting something that goes on to be a success.

find a product manufacture it and sell it on to a market outside of the UK

Can you explain what exactly is stopping us from doing this now?

How does this make a point about Brexit?

The whole point about Ireland's incredible GDP growth, the development of industry, the massive rise in the standard of living was that joining the EEC, which turned into the even bigger EU, gave Ireland (a) funds, (b) a regulatory framework, and (c) a huge, ready-made market for products.

You don't have to reinvent the wheel, you know. There is a perfectly good wheel right next door, to the east.

Here is a multinational Irish company that had small beginnings as a few agricultural co-operatives in the days before the EEC:
www.glanbianutritionals.com/en/who-we-are/locations
The product is basically food.

German products sell worldwide too .

"The whole point about Ireland's incredible GDP growth, the development of industry, the massive rise in the standard of living was that joining the EEC, which turned into the even bigger EU, gave Ireland (a) funds, (b) a regulatory framework, and (c) a huge, ready-made market for products."

Now I am a great fan of Ireland's economy, but wan't the 'access' to all those funds and interest rates as low as Germay's, the cause of one of the worst individual country financial crashed - even though they they bounced back quite quickly, as government 'cuts' were not called 'austerity' and your low Corporate Tax helped - but the bulldozing ofnew/partially built homes to help property market prices, was hardly their finest moment.

As for this "huge ready made market", didn't Ireland have boats, just being planes and telephones, before they joined the EEC?

And wasn’t it back then when the EU, with strong voices from Germany and France, insisted that as part of the conditions for an EU financial bailout, was that Dublin government hiked up their very low Corporate Tax in line with the GLOOP of Europe – and were told to feck-off?

How does this make a point about Brexit?

That post Brexit if you find the right product you can become a world leader in sales of it.

This is not a this can only happen in the EU, it shows success on a large scale is still possible in the world as a whole.

The UK will still have funds to use in this way, as the Ireland funds count as part of the offset on the Billions we pay in each year. Which as said we will be able to reallocate.

Should be further above "As for this "huge ready made market", didn't Ireland have boats, planes and telephones, before they joined the EEC?"

Ireland joined in the 1970's and was very much tied to a UK with high interest rates/inflation/wage cycles, penal taxes, an IMF financial bailout in 1976, overmanned industry, millions of UK work days lost through often 'wildcat' walk outs - in other words the seeds of decline.

I would not argue that there was some advantages for the Republic joining the EU back then, but similar to the UK, it seemed many thought that all our domestic problems (when we were know as 'the sick man of Europe')', would all disappear without domestic reforms, which of course happened from 1979.

The UK, the Republic and Ireland, and of course the EU, have all changed politically and economically from those 1970's some call 'the good old days'.

Having seen your thoughts on Ireland, I am now 100% certain that you are completely clueless.

Didn't Ireland have planes, boats, etc? Eh?

Ireland trades with the rest of the world. As I mentioned, Glanbia's growth occurred largely after Ireland joined the EU. There are numerous other examples of Irish companies making money around the world - Aer Rianta (airport duty free management) managed airport shops in Moscow and the newly renamed St Petersburg airports decades ago.

Ireland trades with the rest of the EU, including the UK. Ireland trades with Hungary and Germany and Poland on the same terms as with the UK, and the UK has similar opportunities both within and outside the EU.

Ireland has a system of technical universities set up in the late 60s and early 70s that equipped students for STEM and tech careers even before there were STEM and tech jobs widely available in Ireland - it was an overwhelmingly agricultural economy up til relatively recently. How did the UK equip its youth for a post industrial economy?

Ireland used EU funds to develop infrastructure, and has decentralised several government departments. As noted, a pharma and tech sector has been built from scratch...

Mummy are you thinking of artisanal jam?

As for this "huge ready made market", didn't Ireland have boats, just being planes and telephones, before they joined the EEC?

For various political reasons, Ireland pursued an economic policy of protectionism from the 1920s to the 1960s, in the misplaced hope that self sufficiency would result in a growing economy, jobs in Ireland for Irish people, and a thriving agricultural sector.

The reality of protectionism was that until joining the EEC, Ireland was pretty much stuck with exporting live bullocks and butter to the UK. Cattle were driven through the streets of Dublin to the docks and loaded on ships bound for Liverpool's Princes jetty. 81% of Irish exports went to the UK in 1956*. 66% were to the UK in 1966. 400,000 people left Ireland in the 50s. By 1961 the population had dropped to 2.8 million, down 5% from the level at independence (1922).

Officials in European capitals had serious doubts about how Ireland could pull her weight financially - it was no secret that Ireland needed the EEC a lot more than the EEC needed Ireland. After all, a rural electrification scheme that brought electrical power to huge areas of the country only wound up operations in the 1970s, with some outlying islands finally electrified in the early 2000s, and as for telephones - many areas had no telecommunications infrastructure until almost the 1980s.

In short, I don't think you have any conception of how poor Ireland was, or any conception of how much of an opportunity the single market looked from the perspective of Dublin in 1957.

I am also pondering whether you believe all that is necessary for successful foreign trade is boats, planes, phones?

*Livestock go further afield now:
www.agriland.ie/farming-news/boat-loads-of-young-bulls-to-set-sale-for-turkey-from-late-april/#

Mummy
www.agriland.ie/farming-news/the-middle-east-is-a-key-route-to-market-for-irish-dairy/?utm_source=Agriland&utm_medium=also_read_section&utm_campaign=also_read_section
Ornua exports Irish dairy products to over 110 countries. The last two years has seen Ornua invest in acquisitions and significant infrastructure development in Africa, China, Germany, Ireland, Spain, the UK, and the US.
Maybe they would buy jam in Saudi Arabia too?

Or maybe they'll be happy with arms sales.

Do you know someone on TV said it best.
Remainers lost, and so attack everyone rather than suggesting ways forwards because they just can't deal with the fact they lost..

By 'attack everyone' do you mean present you with the fact that membership of the EU has not stopped Ireland trading in whatever products or services come to hand, both inside and outside the EU?

What way forward do you suggest? What completely untapped product can you suggest that the UK will be able to produce, develop a market for, set up distribution networks for and sell worldwide?
So far, a government minister has suggested lovingly handcrafted jam. What idea do you have?

The only way forward is to crawl back.

You can't get back into the womb once born, however you can grown and live and see what comes over the hill and face it. Like an adult.

Mathsanxiety

"By 'attack everyone' do you mean present you with the fact that membership of the EU has not stopped Ireland trading in whatever products or services come to hand, both inside and outside the EU?"

Excellent, you are coming to the conclusion on your own way that countries, including Ireland, do not NEED to be in the EU to trade with other nations, even with the countries within EU.

The U.S. and China are the two biggest exporters to the EU, are they in the precious ‘Single Market’, or do they just follow the trade rules that allows them to sell to the EU?

Membership of the EU is not just accepting trade rules, its accepting many more rules and edicts from Brussels how to run the country, and for a country like the UK where less than 15% of our GDP is directly attributed to exporting to the EU – there is clearly so much more of our economy being run by, and no doubt held back, being in an EU so preoccupied with itself.

Mathsanxiety

And god knows the point of the Irish history lesson of what life was like way back when, as I mentioned earlier, the UK in 1970 was also a basket case - when we saw manufacturing fall from around 30% of our economy to around 21% by 1979 - and here is a representative picture of what life was life here in the UK.

It was not being part of the EU that solved our problems of the 1970's.

Ireland may have had soft loans, may benefit from the subsidies of a Common Agricultural Policy sucking in so many EU resources that relies on the net contributions of others, but the EU has to ask itself how financially sustainable is that policy in the future.

Clearly the EU is a very different entity to the Common Market 1970's when there were 6 members, and is currently going in an entirely different Federal direction (without the power of veto) which may suit the Dublin government, but would not suit the UK.

Over the past 70 odd years you are looking at, it isn't just Ireland that changed, look at all those economies of the Far East that have not just emerged, they became powerhouses - without belonging to a European or any other trade club.

Organisations like the Word bank, Asian Development Bank and others used their AAA rating to borrow from a capital markets that has grown over the past 40-years, and lend to countries with a plan, to help themselves.

In Europe there was the European Investment Bank (the UK contributes around 16% of its capital in order to lend) the European Bank for Reconstruction and Development - but lets remember the majority of Europe has now 'emerged' and there is an overbearing Brussels price now and going forward, that will hold back nations.

Too much time has been wasted since the Euro organising itself, and on the current plans of greater integration, that will continue.

The EU isn't a womb. It is a huge market for goods and services. The UK proposes to address this market as a third party without any of the advantages that the US or China bring to the table - comparing the UK's ability to trade internationally with that of either of those behemoths is ludicrous. Furthermore, it proposes to trade with this market potentially without any of the advantages in terms of preferred access that it previously enjoyed.

Without the EU Ireland would not survive, economically, and Irish voters are not insane enough to support a proposal that would cut them off from the market where 50% of exports are sold. Additionally, without the EU there would not have been peace in NI for the last two decades, and Irish voters are painfully conscious of the potential blow to peace (the GFA) that Brexit represents.

the Common Market 1970's when there were 6 members, and is currently going in an entirely different Federal direction
Au contraire, the hope of closer political union was always known. It was not a secret, or a development out of the blue, or a bait and switch. In the late 50s and early 1960s when Ireland sought to get its act together to present an acceptable application for membership, one of the sticking points was Irish neutrality. The Taoiseach of the time, Sean Lemass, had to bend over backwards to reassure the six that neutrality was not a stumbling block either to political unity or to membership of a future European defense force. He answered direct queries on this point from the governments of the six EEC states in various speeches around Ireland, in Brussels, and in Dail Eireann. The permanent secretaries of the core Irish government departments worked long and hard to come up with a formula that danced around the politically sensitive question of neutrality but would also satisfy the EEC.

The economies of east Asia have developed thanks to an endless supply of cheap labour, complete disregard for the environment, and advantageous access to raw materials. China and the US have large populations, large land masses, natural resources, and can take advantage of economies of scale. China in particular has been able to take advantage of political goodwill in the US when transforming its communist economy into a more consumer-oriented one. It has also been able to take advantage of political friendliness and primary exports from neighbouring Russia.

Outside of China, and India, there are the ASEAN countries.
ASEAN is a regional intergovernmental organisation comprising ten Southeast Asian states which promotes Pan-Asianism, intergovernmental cooperation and facilitates economic, political, military, educational and cultural integration amongst its members and Asian states. Since its formation on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand,[11] the organisation's membership has expanded to include Brunei, Cambodia, Laos, Myanmar, and Vietnam. Its principal aims include accelerating economic growth, social progress, and sociocultural evolution among its members, alongside the protection of regional stability and the provision of a mechanism for member countries to resolve differences peacefully.[12][13] ASEAN is an official United Nations Observer.[14][15] Communication by members across nations takes place in English...

...As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:

<span class="italic">To accelerate economic growth, social progress, and cultural development in the region.</span>
<span class="italic">To promote regional peace and stability.</span>
<span class="italic">To promote collaboration and mutual assistance on matters of common interest.</span>
<span class="italic">To provide assistance to each other in the form of training and research facilities.</span>
<span class="italic">To collaborate for the better utilisation of agriculture and industry to raise the living standards of the people.</span>
<span class="italic">To promote Southeast Asian studies.</span>
<span class="italic">To maintain close, beneficial co-operation with existing international organisations with similar aims and purposes</span>

en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nations
Does any of that sound familiar?
Take a look at the Wiki link and examine the GDP figures for ASEAN states.

While the rest of the world groups itself together, just over half of the UK's voters, seething about the shape of bananas and seduced by lies on the side of a bus, decided to boldly go where no sane state in recent history has gone, alone. As the song goes, 'Freedom's just another word for nothing left to lose'.

Wrt Membership of the EU is not just accepting trade rules, its accepting many more rules and edicts from Brussels how to run the country, and for a country like the UK where less than 15% of our GDP is directly attributed to exporting to the EU – there is clearly so much more of our economy being run by, and no doubt held back, being in an EU so preoccupied with itself.

...and no doubt held back
Got figures to back that assertion?
Do you have any evidence for that or are you just nostalgic for the heady days when British industry swallowed farmland, blighted the countryside, when mines employed small children, and mills were staffed by women and girls, spinning cotton harvested by slaves in the US and workers paid a pittance in Egypt and India? Do you miss the smogs of the 50s? Take a holiday to China and experience the headlong rush to global dominance that once was the UK's, warts and all.

The EIB is still up and running, but it has recently curtailed lending for important UK infrastructure projects, in light of Brexit.
While the bank also lends to non-EU nations, 90% of loans go to member states. Consideration is being given to the prospect of allowing the UK to remain a member after Brexit, but that would require a change to the bank’s constitution.

The bank has made loans of more than £52bn in the past decade to UK-based projects, including £5.5bn last year supporting schemes such as schools, universities and new hospitals.

The decision of the management board will have an impact on both funding for infrastructure projects and lending by the European Investment Fund, a public-private partnership of which the EIB is a majority shareholder. The EIF accounts for more than a third of investment in UK-based venture capital funds, whose clients include entrepreneurs and creative startups.

A source close to the EIB said: “The decision that was taken by the management board was to continue engagement in the UK, but look carefully to make sure of our long-term investments both on the infrastructure side and equity side, where lending agreed now will continue after the withdrawal date.
www.theguardian.com/politics/2017/may/15/uk-infrastructure-projects-could-be-hit-by-european-investment-bank-concerns

Can you explain why the UK sells so relatively little to the EU? What is holding the UK back?
...............
www.theguardian.com/business/2017/may/15/jp-morgan-landmark-office-dublin-brexit
And would you look at that...

Can you explain why the UK sells so relatively little to the EU? What is holding the UK back?

So even you think that being in the EU isn't a great cure all.
What is holding the UK back, is the EU and the cheap labour which France is worried about, Poland is upset over lots of things as it seems to be taking the cream of the top of the EU, but not willing to do the slightly more unpleasant things, they seem to have been able to gain money in the budget, and from other countries being more profitable for their countrymen.

Can you explain why the UK sells so relatively little to the EU? What is holding the UK back?

The UK sales ‘problems’ to the EU or anywhere else is historic, partly our fault, partly the EU’s IMO.

Few countries saw such an industrial decline as the UK saw in the 1970’s, when large UK manufacturing names either disappeared, or were fatally wounded.

Fast forward to the 2000’s, the UK manufacturing base of our economy halved from around 21% of our economy in 1997, to around 11% in 2010 as 2 million manufacturing jobs were lost, with 1million jobs lost by 2005 a few years before the crash even began – as UK government became far larger.

Maybe there is an abject EU lesson (or Brussels more like) on what happens when government is too preoccupied with its ideological fat state ‘visions’ and the financial resources needed to go into it, than the private sector commerce that PAYS for it all.

“The cost of quango Britain hits £170bn - a seven-fold rise since Labour came to power”

Maybe that Brussels government ‘model’ is already broken, with protections on trade, and protections for workers (causing high unemployment) the reason why the European Central Bank has from 2015 had to inject Euros 2 trillion into the Eurozone economy directly, and penalise Eurozone banks for putting money on deposit with them to grow their economies – a rather extreme measure at this point of the economic cycle to FORCE them to lend, when they obviously didn’t want to.

So as far as the EU market place for the UK is concerned, clearly the lack of growth of the EU as our ‘too many eggs in our EU basket’ combined with domestic policies is why we sell ‘relatively little’ to the EU.

Clearly a Europhile who thinks ‘the EU can only ever poop roses’ won’t take all that in, but here is arch-Federalist Juncker’s melancholy words on the future of the EU and ITS market share of the world back in 2015 – possibly after a few glasses of brandy, but before the ECB’s monetary stimulus began to work for Eurozone growth this year.

”Europe's glory days at an end, warns Juncker”

”The European Union faces an age of comparative economic decline, while the 'love' affair' of integration is at risk, says Jean-Claude Juncker”

”The EU’s share of global output is falling and will soon represent just 15% of worldwide gross domestic product, while 80% of growth is emerging from countries outside the European Union, he said.”

”With an ageing population, Europe’s share of the world’s population has fallen from 20% a century ago to 7% now, and could be just 4% by the end of this century when the world reaches ten billion people. “We are demographically weakened, and will remain so,” added Mr Juncker, the former Prime Minister of Luxembourg.”

”The warning over Europe’s comparative decline closely mirrors that of pro-Brexit campaigners who argue the UK should build ties with emerging economies rather than be “shackled to a corpse”.

Further EU integration back in the days when there were several MATURE western European economies as members was a possibility, but once the EU became in membership whatever it was before the Euro, the 28 countries now (with around 5-accession states in the wings including Bosnia) practically, that model is BROKEN – yet the Brussels and large member states Federalists, looking at their EU project (before the ECB had to inject Euro trillions into the economy) are clinging on to greater integration as their LAST hope of the EU as is, survival.

So even you think that being in the EU isn't a great cure all. (Mummy)

No, that is not implied there in my question.

I want to know why the UK has failed so spectacularly to take advantage of the huge market on the doorstep.

Is is piss poor management practices?
Education system?
Government policy?
The decline of industry and lack of replacement?

The problems are all internal UK ones.

"The problems are all internal UK ones."

The political record shows the majority of those UK failings are of a socialist government, relying on a 'socialist' EU to make up for domestic policy failings - by importing EU food, white goods and bright young Europeans. The irony is there.

When after Brexit the UK electorate realises that the governments they elect need to have a sustainable economic vision, never mind encourage a private sector that already needs to pay for for nearly £800 bil of annual government and local authority spending - this ideological clap trap that the State can be bigger than the private sector that supports it - might be over for the next decade plus.

UK Governments comprised of militant (public sector) Trade Union appointees, by definition can never be an economic success story, in or out of the EU.

But again, no focus on the problems within the other 27 nations and their Federal, integrated, direction of travel, no one knows what will happen, so creating huge uncertainty beyond Brexit - and we won't have to wait up to another 40-years, to vote via referendum on THAT EU direction.

EU Federalist quietly hate the UK because they know we will be an anti Federal voice for the 'satellite' countries outside a tighter, integrated Eurozone with its own army, President and parliament, but they NEED our economy and money. Bummer.

Too bad.

The UK economy had the lowest GDP growth rate in the EU for the first quarter of the year. Maybe the UK is the corpse that the rest of the EU should be happy to shrug off...

I take it from your repeated remarks about the big state that you are prepared to welcome the thousands of food banks that will be necessary to feed the hungry when food becomes unaffordable and benefits disappear when the bright new 'jam tomorrow' dawns.

You seem very enamoured of discredited austerity policies and you seem completely unaware of the corporate and farm welfare that prop up business and farming in, for instance, the US.

Your knee-jerk Labour bashing is quite a spectacle. Do you eat Tory manifestos for breakfast?

Oh and the pound is expected to tank for the foreseeable.

I tried to buy something from the USA today. The exchange rate and import duties / costs meant that the price doubled once I went to checkout. I cancelled the transaction.

I'm worried that is what we have to look forward to with European goods (buying and selling) once we leave the EU.

Mathsanxiety

"Oh and the pound is expected to tank for the foreseeable."

"The UK economy had the lowest GDP growth rate in the EU for the first quarter of the year. Maybe the UK is the corpse that the rest of the EU should be happy to shrug off..."

A weak Pound helps those like you concerned how much we export to the EU, and on competitive markets, makes the EU’s goods more expensive, and where consumers have choice, they buy British.

As for the strength of the Euro, for the European Central bank its like herding 19 economic sheep, as you never know what stuff will hit the fan, and a strong Euro could start to put pressure on the central banks ‘bought’ economic recovery, that could be affected when the ECB stops its Euro 60 bil QE every month, never mind taking BACK the Euro 2 trillion plus it printed – so markets can change at ANY TIME, even later today in Americas Jackson Hole, as explained below

”Draghi Has Reason to Temper the Drama in Jackson Hole Sequel”

”When Mario Draghi steps up to the podium at Jackson Hole on Friday, he could be forgiven for expressing some satisfaction.”

”It was during his previous appearance at the U.S. Federal Reserve’s symposium in Wyoming three years ago that the European Central Bank president went out on a limb to lay the groundwork for quantitative easing. Back then, the euro area faced the risk of deflation, with near-record unemployment and anemic economic growth. Now those concerns are largely gone and governors are preparing to discuss when they might wind down bond purchases.”

”But while traders are keyed up for any policy signals in this year’s speech, Draghi is unlikely to declare mission accomplished just yet. After more than 2 trillion euros ($2.4 trillion) of QE, inflation is still below target and officials are nervous that bullish comments might spark an unwarranted market tightening -- as the ECB chief found in June when his mention of “reflationary forces” sent the euro and bond yields soaring.”

You keep telling yourself that the ECB reversing of that Euro 2 trillion plus QE emergency measure, by selling back to the market those bought bonds (putting upward pressure on government bond interest rates) and taking that money out of the Euro economies, will have no affect on the EU economies. Bless.

"I take it from your repeated remarks about the big state that you are prepared to welcome the thousands of food banks that will be necessary to feed the hungry when food becomes unaffordable and benefits disappear when the bright new 'jam tomorrow' dawns."

What a dumb comment, the low wage increase 'thang' is also in America and Europe, as the jobs the Eurozone has manged to create since the ECB money printing, is in low paid service jobs, with pressure on wages.

"“Eurozone wage growth slows, a setback for ECB”

But of course you don't look at the poverty/food crisis in Italy, far worse than here, or Eurozone unemployment still twice our rate, because up your nose, the EU poops roses, right?