Please can someone explain? Will we pay if we leave EU without a deal?

[HappydaysArehere]

With all this talk of billions of pounds which we are supposed to owe if we leave and talk of continuing to pay after we leave, I am in the dark. If we walk away with no deal will we pay anything like the amounts talked about? If we are able to do that surely the EU will be big losers as well as us! I am at a loss. Grateful for your input as I am bewildered. I voted to remain but must say the shenanigans being played by the EU are showing them as more like the Mafia than a democratic institution.

EU isn’t an investors club either. It was meant to be a trading bloc. The uk is different. We agreed to unite as one.

I don’t understand what you mean about a United States of Europe? What does being a trade club vs a federal country really have to do with anything? In any town, city, region, country, or indeed group of countries belonging to one trade bloc, with any form of shared budget, some areas will end up as net contributiors and some net recipients. You’ll get a similar graph for London boroughs, uk counties, countries of the uk, states of the US or Germany etc.

My point is that we did not agree to todays EU. We joined a trade bloc. Trading. Not funding vast endless projects. Just, you know, trading.

You trade best if you have money. Investment often means countries become more affluent and then trade more. More trade is good. We want to encourage trading. Investment helps trading.

We help developing countries in the same way.

I get the idea mousse, but, if I were to be business minded about it, why should I help (let’s say) Greece to get its economy up to par, when I could just trade with a country who’s economy is already up to profitable trading?

And, I know I keep on about it......we didn’t join a charitable club to create an idealistic state of Europe, it was a trade bloc.

It is a trading block and UK trade benefits from access to the free trade area. Not just in terms of export (44% of the UK's exports go to the EU, I think in monetary terms it's around £250bn) but also in terms of attracting investments from companies originating outside the EU for access to the Single Market. Like Toyota. Not to mention the entry ports for goods from outside the EU, the ease of procuring just in time components going back and forth to support manufacturing, both domestic and international. Finally, a not inconsiderable proportion of services rely on EU membership/access.

The contribution is like a Netflix subscription. You pay a fixed amount and get to see loads of films

But then by the same yardstick, once those Eastern European countries are up to par, there will be increased demand from those countries so you'd have an expanded export market and thus a return on your investment, which will outlast the years of investment with no return.

It’s not charity to keep other economies strong. It’s logic. You can’t have a strong capitalist economy if you don’t have anyone to trade with. That’s why the USA spent billions of dollars trying to halt the spread off communism during the Cold War. They didn’t do it out of charity. The strengthening of other European economies is good for us, other European countries falling into recession is bad for us for all sorts of complex reasons. When the Icelandic banking system collapsed (a country with a population about the size of that of Barnet) it had knock on impacts in many other countries. Letting big European economies fail is not good for the UK.

Or what Dumbledore said, much more clearly and succinctly than me. Must be off to bed, early start in the morning.

I see that if you are restricted in who you are allowed to trade with, then keeping your trade partners lucrative is logical. But, once we leave, we can cherry pick our trade partners.
Thanks for posting so nicely too! Feel like I should take you all to the brexit arms for a pint 😉

Olivia, I cant tell you how disappointed I am by your response. Disappointed on two fronts. 1/ That youve never heard of MTOs, given your claimed credentials and 2/ Im now going to have to waste my time explaining them to you.

Actually, I really cant be arsed.
(One assumes Peter North the Bristol bedroom blogger, hasnt addressed this either, but perhaps you could mail him and ask)

So heres a link instead.

ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/stability-and-growth-pact/preventive-arm/medium-term-budgetary-objectives-mtos_en

You did say this didnt you? "I worked in Greece as an economic adviser to the Troika ... And in Spain: same role." I do hope that wasnt at the time 24 member states in the EU were under SDPs. (Including Italy)

and then did you not say this?

"Well, I was an adviser after the onset of the financial crisis."

It begs a question, what on earth were you advising on?

So in the absence of any previous knowledge of MTOs, asking you about their fiscal sustainability (or lack of) or even the impact of the EUs fiscal policy imposed on member states is utterly wasted?

But lets have a look at one. How about your clearly sterling professional opinion.

Romania is currently the only EU member state with an active SDP at the moment. I know! Isnt that great. All other members are currently doing so well economically, no one else needs one. Awesome.

Heres the Commissions surveillance report, hot off the press, released this week, that forms part of their SDP.

ec.europa.eu/info/sites/info/files/economy-finance/com2017629_final.pdf

Let me ask about one specific statement in this report. Page 3.

"The authorities plan to shift social contributions entirely onto employees, in order to cushion the fiscal impact of the Unified Wage Law. The intention is to increase the social contributions rate paid by employees on their gross wages. The government plans to accompany that shift with a cut of the overall social contributions rate, from the current 22.75% for employers and 16.5% for employees to 36% for employees, and to cut the Personal Income Tax rate from 16% to either 12% or 10%. The government is also seeking a legal solution that would ensure that private sector employers increase the gross wages of their employees so that their net wages do not bear the cost of the social contributions shift. "

Would you share your professional view about this with us? If its good enough for the Troika, Im sure its good enough for us.

Could you please keep it as simple as possible, that say a Romanian would understand, as I seem to remember that a chart was passed around in remainerland, demonstrating how intelligence is relative to income, and with our Romanian only earning 450eu a month (average, and still without a bathroom), well.....

I didnt underline..... its a format blip, again. Apols.

"My understanding that the Leave clause was introduced as an afterthought and not much time spent on it because leaving the EU was not something anyone contemplated. "

Do you know how many contract and constitutional lawyers looked at Lisbon?! In all 27 states?! Those nations that then went to a referendum?! (or 2) and youre taking the remainer line that they got to the last chapter and said 'oh skip that bit its not that important'?

Your claim is a common claim in remainerland, Im staggered youre claiming it however.

The bottom legal line is, 2 years, and 2 years commitment to financial and treatised agreements. Not a day more, not a day less.

"Olivia was happy to pm me and explained the situation in a very easy to understand manner"

Rufus, has Olivia pm'd you from this thread? and specifically your question to her here.

"Why is olivia not worried about it"

Id definately like to know too. Olivia?

@Carolinesbeanies

Sorry to disappoint. Not my area so can't really contribute meaningfully.

The Troika (IMF, ECB and European Commission) was established to address the dislocation in eurozone economies. I ran a team that looked into inter alia the asset quality of the banks and their impact on the relevant macro-economy and vice versa - in some cases the banks messed things up (Ireland, Spain), in others the sovereign messed things up (Greece). So EU budgetary targets are not my thing.

But do I think - as a general matter - that a sovereign should be mindful of its budget deficit and external debt. Yes, I think both are generally good things, esp for eurozone countries given the euro is not the respective country's issuing currency.

First: But how would think such matters are of relevance to this thread and Brexit? Why do we care?

Second: you question that A50 was an afterthought. Your view diverges from Sir Ivan Rogers in his testimony to Parliament. I believe he was involved in the process. I don't question that lawyers would have reviewed it, but my guess is they didn't spend a whole lot of time on it. Not unusual in contractual discussions for certain items to take up a lot of bandwidth and other items to be virtually ignored - at least that's my experience.

Please do share your thoughts, though, as they relate to Brexit ...

Third: What commitment are you talking about? Have you read the Three Knights Opinion and what parts of it do you disagree with? I think it's pretty clear: a) A50 is an expression of an intention to leave b) we have not left until we have fulfilled our constitutional requirements to do so - ie posting notification is a necessary but not a sufficient condition c) as a continued EU Member, we continue to have all rights and obligations.

Fourth: re your last question, what is it you'd like to know @Carolinesbeanies?

Carolinesbeanies

Economics is far from my area of expertise so while you don't want to explain to some posters it would help others if you did. That really does depend if you articulating a point of view or trying to score points.

I do note that Olivia constantly answers points made. Pro Brexit posters frequently pose questions but fail to answer with specific points.

@Carolinesbeanies

PS I believe the graph you refer to is one that showed education and Remain vs Leave votes. Leave voters were on average less well educated than Remain voters.

Same as Trump voters. White, uneducated. Mostly male in the case of Trump.

Seems the Daily Mail has picked up on that too lately and appears appalled. Shock.

I would never state that education and intelligence are related. All you would need to do is look at this lot to disprove that statement:

Rees-Mogg
Fox
Davis
Redwood
Leadsom
Rudd
Heaton-Harris

Carolinesbeanies

OK I know what an MTO is now. Please explain how they impact on the debate.

@Moussemoose

Précisément !

I have never read such twaddle in my entire life Olivia. I cant even give you a point for effort in swerving.

Utter utter tosh.

PS If youd like a pointer on macro economics, you wont go far wrong starting with Patrick Minford. Now he was an economic advisor.

@Carolinesbeanies

Sigh. Typical Brexshitter response. Again.

All: I’m gonna restrain myself with the expletives and colourful language. For now.

Is there not one of you who can reply intelligently and factually to questions? I honestly had thought you were one who could.

PS If youd like a pointer on macro economics, you wont go far wrong starting with Patrick Minford. Now he was an economic advisor.

Patrick Minford has remained the only economist who thinks trading on WTO terms will be beneficial to the UK. Every other economist on the subject has spoken against it. Minford's report has also been discredited because it showed his modelling was based on a series of meaningless assumptions, eg they were based on the EU halving its external tariff due to unnamed "international pressures". There is no evidence anywhere that the EU is going to do this.

You will be hard pushed to find any other economist speaking in favour of any Brexit, let alone one in favour of WTO trading terms.

Carolinesbeanies

As I said previously I am not an economics expert. Please could you explain to me why Olivia's response was "twaddle".

She responded point by point. It would help us very much if you could do the same.

If you have time it would also help if you could explain why MTOs are relevant to the whole Brexit debate.

Remainers say Brexit supporters don't answer points with backed up points. Please prove them wrong, now is your chance.

@BowlingShoes

Agree. In addition to which, tariffs are virtually irrelevant as most are very low. So the analysis - if it relies mainly on a purported drop in tariffs is useless.

What is going to hurt the UK is anything Non-Tariff Barrier-like when we trade with the EU. If we are not in a customs union type of an arrangement we will be in deep smelly stuff. A CETA type arrangement we have with Canada via the EU (being discussed) would be deeply problematic.

Not to mention Northern Ireland - which will have to have a hard border - if you believe the risks to the peace there. I must admit I don't fully but take this as a major issue given there is widespread agreement.

@Carolinesbeanies: can I pls ask that you cease and desist? You have thus far contributed zero to this thread. There has been an attempt at diversion by introducing what appears to be an unrelated topic, presumably to show your creds. Please just stop or otherwise help us better understand Brexit by being a meaningful and factual contributor. I don't think this is being unreasonable.

caroline

Rufus, has Olivia pm'd you from this thread? and specifically your question to her here.

Yes from this thread, and i asked m4 the question not olivia