The British Bombshell
Posted on June 26th, 2016
By Dr Upul Wijayawardhana Courtesy The Island
For once, a nation has stood for its pride and honour defying bullying pundits and politicians. It said enough is enough; the worm has turned; on June 23, United Kingdom voted to get out of the European Union, rather unexpectedly, dropping a bombshell on world markets. If as some ill-informed critics claim, it is the end of Great Britain and the beginning of a Little England, then why should markets around the globe worry? True, having once being the largest empire the world has ever seen, Britain is a shadow of what it oncewas but, still, it is a force to reckon with, being the fifth largest economy in the world and has always batted far beyond its’ size.
Like all empires, the British Empire also would have come to an end but the decline was hastened by a war it fought to end the Nazi terror. At the end of the Second World War, it was bankrupt but still went ahead with far reaching social changes like the introduction of the National Health Service which, in spite of the problems it faces at the moment, is the envy of the world. Belated American support, no doubt, helped end the war but UK, in the process, got indebted to USA and the final instalment of that debt was paid during Tony Blair’s time.
European Union
European integration was considered an antidote to the extreme nationalism which led to the devastation of the continent during the Second World War. With this in mind, the European Coal and Steel Community was formed in 1952, which was thought to be “a first step in the federation of Europe.” In 1957, Belgium, France, Italy, Luxembourg, the Netherlands and West Germany signed the Treaty of Rome creating the European Economic Community (EEC). Britain tried to join the EEC in 1963 and 1967 but French President De Gaulle vetoed both times, perhaps forgetting the key role Britain played in liberating France from Nazi German occupation. After De Gaulle’s departure, Edward Heath was able to negotiate British entry to EEC in 1973, which was approved by the British voter in a referendum held in June 1975 during Harold Wilson’s premiership. The European Union was formed with the signing of the Maastricht treaty in November 1993 which gradually enlarged to 28 countries, a number of them being former Soviet Republics.
EURO
Germany and France were keen on a monetary union and as a prelude an Exchange Rate Mechanism was established, to which UK joined in October 1990. However, on 16 September 1992, the so-called ‘Black Wednesday’, UK was forced to withdraw due to pressure on the British Pound by currency speculators like George Soros. The Bank of England spent 6 billion Pounds to stabilize the currency and George Soros is supposed to have made a profit of one billion, earning him the title “the man who broke the Bank of England.
When the common currency, Euro, was finally launched in 1999, UK did not join in spite of grave warnings by all international financial institutions including IMF that UK will lose heavily by this move; well, they were all proved wrong and the UK economy thrived with the British Pound. Further, fortunately, Britain did not have to shoulder the bail-out created by the Euro quagmire of the union of disparate economies.
Political Union
The next stage of the union, for enthusiasts, was political, ultimately leading to a United States of Europe. Though this may be the logical conclusion, if true economic union is to be achieved, this was a step too far for the Brits. Thus, in the eyes of most EU members, UK has always been a reluctant partner.
Free movement of labour and threat of mass immigration
With the joining of East European countries like Poland in 2004 and vast numbers of their citizens exercising the right of free movement meant UK had a flood of immigrants. Partly due to bad handling by the central government, not providing support for local bodies to provide school places etc., it was natural that resentment grew. Most towns changed character, East-European mini-supermarkets cropping, not one but many, while local shops were closing due to the ripple-effect of the 2008 banking crisis.
EU was hell bent on expanding further. Turkey had been keen on entry for a long time and though the EU and British Government policy is to facilitate entry, there was increasing concern in the public minds because of Turkey’s shift from a secular state, which was the stated aim of the founder Kemal Ataturk, to an Islamic state under the present president.
Angela Merkel’s open invitation to refugees, though not all were genuine, made a bad situation even worse. Though she got plaudits from some quarters there was increasing hostility to immigrants in Germany. Quickly, she had to back-track and called it an EU problem!
Referendum
UK Independence Party, more right wing than the right-wing of the Conservative Party was demanding exit from EU and the Conservative Party was heavily divided, forcing Cameron to make the Referendum one of the pledges in the last election manifesto. Again, rather unexpectedly, he won and had no choice but to go for the referendum, which was not a necessity.
He led the ‘Remain’ campaign and fellow Conservatives Boris Johnson, former Mayor of London, and Michael Gove, Justice Secretary, led the ‘Brexit’ campaign. Both campaigns used fear as the main tactic; ‘Remain’ predicting economic disaster on exit and ‘Brexit’ predicting mass-migration if UK remained in EU.
Cameron’s supporters
IMF and all national and international financial institutions lined behind Cameron, more on speculation than facts; after all, they got it badly wrong about the Euro. In the Queen’s Birthday-honours list all who supported him got their due, in advance, but now it turns out to be rewards for failure!
He used the biggest gun, Obama, who went to the extent of saying that if UK decided to leave the EU, it cannot expect any favours and, for any trade deals, will have go to the back of the queue, not ‘line’ as an American would say raising speculation that the script was written by Downing Street. The very same Obama, the day after the referendum, said whatever relationship UK does not have, the special relationship with US will always be there. What hypocrisy!
Sri Lanka sent a contingent including the ‘great converter’ to covert SL ex-pats and wonder who footed the bill for a failed venture. Have we started meddling in UK affairs because UK is meddling (or allowed to meddle) in ours!
Result
Apparently, Cameron expected to win by 10 points. In fact, just after polls closed Nigel Farage, leader of UKIP, conceded that ‘Remain’ is likely to win but as results poured in, it showed the unexpected and unpredicted. Perhaps, pollsters got it wrong, again, because voters feared they would be branded racist had they stated they would vote to leave.The majority of Brits did not mind facing even an economic downturn to safeguard their sovereignty. That is the greatness of Great Britain!
The Pound may drop, FTSE may drop but they will recover; they have already done so. Britain will enhance the traditional ties with China and India. Professionals from Commonwealth countries will have easier access to the UK, hitherto blocked by unqualified migrants from EU. Britain still has leading inventors like James Dyson and on population basis has more inventors than any other country. British business will find new ties. Even if there is a slump, in the long term, it will at least be what it is today. Other than Germany, UK was the only other net contributor (total contribution minus rebates and grants) to the EU budget. Therefore, the big question is what will happen to the EU?
June 26th, 2016 at 3:48 pm
A Good Lesson for Sri Lanka
England is located in the proximity of many economically backward countries that the British people legitimately thought that there is a high chance of people from these countries can be flooded into England causing great inconvenience to the locals in the fields of Education, Health Services and social benefits.
I have been living in London from 1974 even before UK entered to the European Union. I could see clearly problems we have faced since 1975. Since there was no other option in the horizon, people of UK had taken a somewhat a bold decision to vote for Brexit even though they have anticipated some economic instability for some time knowing well that it is the risk that worthwhile to take.
There are so many reasons that most of the English people were convinced to vote for Brexit. Among them the following are the most important.
1. British judiciary is considered to be the most independent justice system in the world. Yet under EU, British judiciary can be over ridden by EU regulations. A British judge said recently: “We must beware. It would be a sad day if the home of the common law lost its standing as a common law authority. “Are we becoming so focused on Strasbourg and the Convention [European Convention on Human Rights] that instead of incorporating Convention principles within and developing the common law accordingly as a single coherent unit, we are allowing the Convention to assume an unspoken priority over the common law?” What I respectfully suggest is that statute ensures that the final word does not rest with Strasbourg, but with our Supreme Court,”
2. Unhindered open Immigration from Eastern Europen EU countries causing loss of job opportunities and training facilities for the locals.
3. Contribution of £350million weekly from the UK taxpayers to the EU budget is considered to be too much contribution to support the poor members of EU while local facilities like national health, public transport and education are suffering from lack of funds.
4. With Unhindered open Immigration from Eastern European EU countries, criminals are free to move looking for easy targets. More than 13,000 foreign criminals are awaiting deportation from the UK, including thousands of European citizens, according to a report by MPs, which warns that the failure to remove a population “the size of a small town” could undermine public confidence in the UK’s EU membership. It was “deeply concerning” that 5,789 overseas criminals were free in the UK, more than any time since 2012, MPs said. The top three nationalities among the offenders were Polish, Irish and Romanian – all EU nations – they said. Petty thefts are so common these days, even your front garden flower pots are not safe in suburban houses in London.
5.(BBC Analysis)Brexit economic warnings backfired The CBI, the IMF, the OECD, the IFS – an alphabet soup of experts lined up to say economic growth would be hobbled, unemployment would go up, the pound would plummet and British business would be left in a no man’s land outside the EU. The Bank of England raised the prospect of a recession while The Treasury said it would be forced to put income tax up and slash spending on the NHS, schools and defence. If that wasn’t enough, President Obama suggested the UK would go to the “back of the queue” in terms of securing a trade deal with the US while top EU official Donald Tusk hinted at the end of Western political civilization. Some on the Remain side accepted this was overkill and that so-called “Project Fear” or “Mahinda Hora” type propaganda had got a bit out of hand while the Leave campaign was quick to dismiss the naysayers as wealthy, unaccountable elites with their own vested interests talking down Britain. But the fact the public discounted so readily the advice of experts points to something more than just a revolt against the establishment. It suggested far more people felt left behind and untouched by the economic benefits of five decades of EU involvement being trumpeted.
6.(BBC Analysis)The UK’s relationship with Europe has never been simple nor static.It took the country years to join what was then the European Community and, even then, when it was last put to the vote in 1975 many backed it grudgingly or for narrow economic reasons.Many of those have since changed their minds, with their earlier ambivalence turning into outright hostility. There have been decades of scepticism towards the EU among politicians and in large parts of the UK media.The younger generation were generally seen as pro-EU but it remains to be seen – once the details of the voting is looked into – how the result broke down by age.What appears clear from the campaign is that the vote to Leave was as much a statement about the country’s national identity, and all that involves, as it was about its economic and political future.
June 27th, 2016 at 5:29 am
I am not a fan, nor an admirer of UK, which is a bankrupted empire that can be blamed for all the current problems in the Middle East, Africa, and Asia.
Their legacy of divide and rule, during the hay day of their empire – which was built from the looted resources of the colonies – had caused so much misery for the local inhabitants in the colonies. They have partitioned countries, divided communities along the racial, religious and ethnic lines causing animosity among various communities, which still continues today in many parts of the world, including Sri Lanka.
I have no sympathy for these hypocritical western nations like UK, US, and other European nations, which have exploited, manipulated, and destroyed many developing nations in Asia, Africa, ME, and South America, in order to dominate the world.
In my opinion, the eminent decline of the west has already begun, and Brexit is a continuation of that long process which will go on causing social and economic havoc in these nations. What goes around comes around…!
June 27th, 2016 at 1:46 pm
Nihal,
The EU will do one of two things:
1. Go into denial, adopt even more barriers against the exit of more member countries, and hope that the remaining 27 members will not escape the pound.
2. Take the Brexit as an opportunity to revise and modify the policies and administration of the EU, to accommodate the strongest criticisms of the member nations, including its immigration policy, and then hope that it supresses the centrifugal forces.
Although many EU Chiefs, such a Juncker, give every impression they are circling the wagons to fight off the Indians, I think the EU will adapt and become looser and more tolerant of individual member nations demands, and in doing so will survive with a smaller number of memberd in the longer term.