Chicken or Egg? Brexit & the End of the EU

Patrick Young
Patrick L Young is CEO of niche crowdfunding platform HanzaTrade and an advisor to fund managers throughout the world. Born in Ireland, he is an active investor in the “New Europe” amongst other emerging markets and is an active Co Founder of grassroots startup group "Mission ToRun." Home Page: http://patricklyoung.net Twitter: @FrontierFinance
Reuters / Neil Hall
Britain is demanding reform and the EU risks its own demise if it doesn’t listen.

Viewed without Brussels’ standard issue rose tinted glasses, the EU looks to be in a shambles. An increasingly defeatist oligarchy is managing decline and ceding opportunity overseas. The EU is becoming uncompetitive with a southern fringe of bankrupt governments on life support so Germany can sell more BMWs. Germany leverages eurozone benefits while Brussels appears powerless to stop Berlin’s systematic trade surpluses, which ultimately threaten the euro as much as Mediterranean weakness. Europe continues to think and act like independent states, even the student generation enjoying Erasmus exchanges return home clearly appreciating separate national identity. Without the flawed notion of a single European identity, the Europhile dream has already failed.

Whatever happens, the Euro-oligarchy advocates “more Europe,” while a bewildering surfeit of 1,200 new annual rules strangles enterprise. The beggaring of Greece is an example of doctrinaire vandalism following EU corporate socialist dogma. Brussels is stuck in the 1950s, advocating protectionist industrial policy for antediluvian multinationals at the expense of the new - a reactionary analogue misfit in a globally competitive digital world. Government and big business rules despite the future belonging to flexible innovation. The more Europe tweaks its social pledges, the poorer and less competitive the continent becomes. The hubristic euro currency binds together economically incompatible nations like a cheap PVC corset slims an overweight wrestler. The corset is bursting at the seams...

EU foreign affairs are a fiasco. Corrupt mismanagement is apparently rife: EU accounts have failed audits for two decades! Nobody admits responsibility for multilateral chaos, which resembles an absolutist and wasteful monarchy. Brussels remains crassly aloof from everyday people. The Brussels Supreme Soviet is living on borrowed time just as the Warsaw Pact could not maintain its agitprop facade against economic reality.

On the western fringes, Britain remains a semi-detached participant in many continental shenanigans. Meanwhile, many British voters are concerned about the substantial influx of economic migrants. Relative economic success means Britain is subsidizing inefficient governments from Lisbon to Bucharest. (Despite the immigration flood, British unemployment is half the eurozone average).

The sculpture displaying a giant Euro sign is seen in front of the European Central Bank (ECB) headquarters (Reuters)

Conservative electoral victory means renegotiation and referendum for the second largest EU economy, constituting some 15 percent of the entire 28 nations (Greece is, by comparison a minnow at 1.3 percent). As a net importer of EU goods, the continent has much more to lose than Britain from protectionism - a simple truth ignored by disingenuous Europhile arguments. Brexit does not mean tariffs: UK/EU Free trade would continue as it already does for every European non-member from Andorra to Macedonia.

The UK is tiring of an EU which runs contrary to Britain’s international mercantile traditions and instead endorses protectionism in everything from farming and fishing to digital products. Withdrawal may benefit Britain significantly more than the annual 50 billion dollars EU membership wasted on red tape alone. Multinational corporate threats to quit Britain will prove as false as they did when Britain didn’t join the euro and thrived compared to the festering single currency area.

Europhile David Cameron risks a ‘false’ referendum based on fig leaves of reform. Thus Britain may avoid Brexit but the EU itself needs radical reform to survive. Real expansion stalled a decade back. Dollops of cash for eastern nations mask the fact the EU has already essentially abandoned expansion to Turkey and Ukraine, amongst others. Meaningful economic growth remains absent, leaving many citizens impoverished while Europe is a foreign policy irrelevance. It has a few nice tourist spots, though...albeit there is frequently much better value (and service) to be had elsewhere.

From the high water mark where the EU could demand referendum reruns to ensure the voters got the answer right, the last decade has revealed the ugly truth of decay. Past experiments have shown currency unions without political union don’t work. The eurozone is in tatters. Loudly trumpeted and false dawns have seen dizzying debt increases without desperately needed reform.

The UK faces a simple dilemma - bet on a losing horse, or choose a free trading dynamic response to the digital world where economic power is moving east.

How much longer can the EU survive after a lost decade broadly mired in depression/recession, punctuated by the consistently inaccurate prognosis that recovery is looming? (Alas, it may be years but collapse is increasingly looking inevitable). Whether the UK leaves now is only a footnote in this sorry tale.

The EU must respond to the strongest British calls for reform, or risk its own demise.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.