The costly Brexit from EU

Daily Trust - - SPORT -

Thanks to the union of sev­eral tiny coun­tries in the is­land of Bri­tain — Scot­land, Wales, North­ern Ire­land, led by Eng­land —giv­ing up their sovereignty to form the Great Bri­tain, the United King­dom, en­joy­ing large pop­u­la­tion and mar­ket, grad­u­ally be­came the economic and mil­i­tary pow­er­house of Europe. And also thanks to cen­turies-long sta­bil­ity and peace the union brought to Bri­tain, economic de­vel­op­ment — and the first in­dus­trial rev­o­lu­tion — blos­somed with lit­tle or no opposition.

It was this un­matched Bri­tish im­pe­rial dom­i­nance that kept France and Ger­many so en­vi­ous that they did ev­ery­thing pos­si­ble to dis­man­tle the Bri­tish Em­pire at all costs. Lit­tle won­der, dur­ing the 100 years of Bri­tish hege­mony, Europe was per­pet­u­ally at war, in­clud­ing dev­as­tat­ing Napoleonic Wars. But as Europe, led by France and Ger­many, end­less ly fought Bri­tain, the United States, tak­ing ad­van­tage of the economic de­struc­tion caused by these wars, was able to keep ris­ing. Lit­tle won­der, to ex­press its anger to the rest of Europe, par­tic­u­larly France and Ger­many for the role they played in mak­ing sure that the Great Bri­tain was re­placed by the US in 1945 as the economic and mil­i­tary su­per­power, the UK has continued to do ev­ery­thing pos­si­ble to un­der­mine any form of Euro­pean dom­i­nance. And that was why it wasn’t one of the first five na­tions that started the uni­fi­ca­tion of Europe in 1957.

When it even­tu­ally joined on Jan­uary 1, 1973 along with Den­mark and Ire­land, it did so with im­mense re­luc­tance. But an­other rea­son the UK was Euroscep­tic had to do with its unan­nounced treaty with the US where Bri­tain helped the for­mer in keep­ing Europe di­vided; in re­turn, Lon­don en­joys pref­er­en­tial treat­ment from Wash­ing­ton. So, rather than be­ing a fan of the EU, Bri­tain has al­ways se­cretly done ev­ery­thing to un­der­mine the EU. And it is be­cause of Lon­don’s anti-Euro­pean Union stance that led to Bri­tain al­ways keep­ing one foot in and one foot out. That’s also why while Lon­don grudg­ingly ac­cepted the EU’s cus­tom union, which it saw more ben­e­fi­cial than oth­er­wise, Lon­don was fiercely op­posed to a com­mon cur­rency – the euro.

It also re­fused to join Schen­gen Area visa pol­icy by the EU. Had Lon­don ac­cepted euro, not only would that mean the end of Bri­tain’s glo­ri­ous im­pe­rial past which the pounds with the Queen’s head rep­re­sented. In fact, Bri­tain’s spe­cial re­la­tion­ship with Amer­ica, which has been the rea­son why Lon­don, and not Frank­furt, is the world’s sec­ond fi­nan­cial cap­i­tal next to New York’s Wall Street and why Eurodol­lar (which is the largest con­cen­tra­tion of dol­lars out­side the US) is domi­ciled in Lon­don. Not­with­stand­ing Lon­don’s opposition to the euro, the en­tire EU pre­ferred Lon­don to Frank­furt as Europe’s fi­nan­cial cap­i­tal. For this spe­cial re­la­tion­ship be­tween Wash­ing­ton and Lon­don, un­der­stand­ably, the rest of Europe — par­tic­u­larly the two big and pow­er­ful Euro­pean coun­tries of Ger­many and France — have al­ways seen Bri­tain as Amer­ica’s mole in Europe, and as a re­sult has been do­ing ev­ery­thing to make sure that there is no Euro­pean unity that could stand in the way of Amer­ica’s hege­mony in the world. So, keep­ing Europe frag­mented has al­ways been in the in­ter­est of both Wash­ing­ton and Lon­don.

The EU’s hun­dreds of bil­lions of dol­lar in­vest­ments in Bri­tain are now threat­ened. As the pounds plum­met, so is the un­prece­dented exit of the cur­rency, since ev­ery in­vestor knows that the col­lapse in value of the pounds is only start­ing. Across the EU,pound-de­nom­i­nated cards are un­der­stand­ably be­ing re­jected, caus­ing fear among Bri­tish peo­ple liv­ing and work­ing in the EU. As if not enough, the First Min­is­ter of Scot­land is spit­ing fire, in­sist­ing that the Scot Parliament will meet not only to turn down the out­come of the ref­er­en­dum but be­gin the process of or­ga­niz­ing an­other ref­er­en­dum with the goal of ex­it­ing the United King­dom and then join the EU.

Should that hap­pen, Bri­tain can a few years from now be re­duced to a tiny state of Eng­land, which it used to be be­fore May 1, 1707, when the United King­dom was cre­ated. The UK’s loss of in­flu­ence in the world would mean los­ing Lon­don’s Euro­pean fi­nan­cial cap­i­tal to Frank­furt. And with this, comes the chal­lenge of the City of Lon­don’s role as the world’s sec­ond fi­nan­cial cap­i­tal after New York’s Wall Street.

With­out be­ing the fi­nan­cial gate­way to Europe, Eu­robond and Eurodol­lar dom­i­nated by Lon­don will cease to be the case. As anti-Bri­tain grows across Europe,the real es­tate mar­ket and tourism in­dus­try in Bri­tain, which is a ma­jor driver of the UK econ­omy, will se­verely suf­fer, with most Euro­peans avoid­ing to vis­i­tor live in Bri­tain es­pe­cially as a re­sult of hav­ing to ob­tain visa to travel to Bri­tain.

Also, Bri­tish uni­ver­si­ties and English Lan­guage schools, which have been en­joy­ing pa­tron­age from Euro­pean stu­dents who school­ing in Bri­tain will no longer guarantee them some post­e­d­u­ca­tion jobs will no longer be the case. Over four mil­lion non-Bri­tish Euro­peans liv­ing and work­ing in the UK, in­clud­ing many in­ter­na­tional footballers will have to leave Bri­tain be­cause of dif­fi­culty of get­ting Bri­tain’s work per­mits. This ex­o­dus of highly skilled work­force would be a big blow to the Bri­tish econ­omy which is more of a ser­vice econ­omy than an in­dus­trial econ­omy.

But to be fair to Bri­tain, the ques­tions are: How come ma­jor EU po­lit­i­cal and economic in­sti­tu­tions were shared among only three coun­tries—Bel­gium, France and Ger­many with­out con­sid­er­ing lo­cat­ing one of these in­sti­tu­tions in Bri­tain? Also, why such an in­flux of un­skilled EU la­bor to Bri­tain, in­clud­ing those who had to re­lo­cate to Bri­tain sim­ply to claim un­em­ploy­ment ben­e­fits, a cost borne by Bri­tish tax­pay­ers? Forced out of Euro zone customs union,Bri­tish goods will en­counter fierce tar­iff walls in the EU, which too could trigger new global economic re­arrange­ments, and pos­si­bly the aban­don­ment of free trade agree­ments pro­moted by World Trade Or­ga­ni­za­tion.

With the ab­sence of glob­al­iza­tion that trig­gers a new re­course to economic na­tion­al­ism and pro­tec­tion­ism, African coun­tries, par­tic­u­larly Nige­ria, will no longer al­low them­selves as the dump­ing grounds of cheaper and bet­ter for­eign made gods that have de­stroyed their in­dus­trial and manufacturing economies. Be­sides ma­jor mil­i­tary hard­ware and soft­ware EU busi­ness en­joyed by Bri­tain’s Royal Mil­i­tary In­dus­trial Com­plex,Air­bus, which be­sides us­ing most of Rolls Royce en­gines and Bri­tish nav­i­ga­tional tech­nolo­gies, thou­sands of Bri­tish en­gi­neers will have to be forced out of the Air­bus.

De­nied free and eas­ier ac­cess to the EU mar­ket, most Bri­tish com­pa­nies, par­tic­u­larly auto mak­ers such as Range Rover and in­ter­na­tional oil com­pa­nies such as Shell that have their ma­jor mar­kets in the EU would think of re­lo­cat­ing from Bri­tain to Euro­zone econ­omy since that is the only way they could con­tinue to en­joy un­re­stricted ac­cess to the EU’s large con­sumer mar­ket. While NATO will still re­main the ma­jor mil­i­tary power in­volv­ing the US and Europe, the ab­sence of the UK as a ma­jor player in the EU mil­i­tary and se­cu­rity de­ci­sion-mak­ing, and as a re­sult will no longer push for US mil­i­tary hege­mony in EU, will ad­versely af­fect the US mil­i­tary in­flu­ence in EU. With such ab­sence of a pow­er­ful UK in in­flu­enc­ing im­por­tant mil­i­tary and se­cu­rity de­ci­sions, since in in­ter­na­tional diplo­macy where there are no per­ma­nent friends or en­e­mies but per­ma­nent in­ter­ests, it is cer­tain that the US will be­gin to make the UK less im­por­tant in its EU strate­gic economic and mil­i­tary in­ter­ests. With UK ir­rel­e­vance, the US will be­gin to de­velop closer mil­i­tary and se­cu­rity ties with France and Ger­man. En­joy­ing such a breath­ing space,Nige­ria will not hes­i­tate to roll out some dra­co­nian tar­iff poli­cies in an effort to pro­tect its in­fant in­dus­tries from strong and pow­er­ful for­eign made goods that have forced most of the coun­try’s small busi­nesses into pre­ma­ture bank­rupt­cies. Also, as the pound falls along with one of the most priced real es­tate mar­kets in the world, most Nige­ri­ans who kept their sav­ings or their stolen money in Bri­tain would like to exit the pounds and sell off their col­laps­ing real es­tate as­sets. Here, they will meet their Water­loo since the UK anti-graft and antmoney laun­dry au­thor­i­ties will refuse, threat­en­ing to hand them over to their coun­ter­parts in Nige­ria. This is good for Nige­ria. An­other ben­e­fit to Nige­ria is that as Bri­tain is kicked out of the EU, it has to rene­go­ti­ate its trade agree­ments with vir­tu­ally other coun­tries in­clud­ing Nige­ria, which it does on weaker terms. As the pound plunges, Bri­tish goods, in­clud­ing in­dus­trial prod­ucts such as plants and equip­ment, will be­come cheaper in coun­tries like Nige­ria.

With the ab­sence of the EU, Bri­tish in­vestors will have no op­tion but to be­gin to in­vest in coun­tries like Nige­ria; this could mean re­lo­cat­ing many fac­to­ries from the EU to Nige­ria.

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