Friday 29 September 2017

Juncker tells it like it is: the EU 27 will not be divided.

Theresa May is in Tallinn, David Davis touring Benelux. There is a terrible failure in the ranks of possibly the worst British government in history to believe that secretly the other European nations believe the same as they do: that the EU is an awkward joke and that nation-states are really all that matters. It is as if the UK has had its eyes closed for more than 40 years and its Europhobic press have been allowed to rant on about 'dictatorship' which in their eyes, and those of the politicians, seems to mean anything they can't totally control.

The rumour that Davis thought it would be possible, the day after the referendum, to fly to Berlin and do a 'deal' with Germany, if true, only reveals how little rudimentary understanding he had of the European ideal. Obviously he never had any sympathy.

The idea that 'they need us more than we need them' was always based on the concept of British exceptionalism, which suggested that other countries in the end always recognise that 'Britain is right', even when it's wrong.

Its greatest manifestation was in the frequent Brexiteer mantra 'the Germans will still want to sell us their cars'. They will, But the cutting point is that the British will still want to buy them, and will buy them. Nobody is talking about trade sanctions. The difference is that they will be a lot more expensive. I remember bringing a VW Golf from the factory at Wolfsburg in 1985, pleased with the price until the WTO tariff of 10% cut in a year later. Then, as usual, the £ collapsed against what was then the DM, and at the prospect of future cheap cars vanished. But I still bought them.

The Single Market ended all that, and if Britain had had the gumption and bravery to join the € we would have had price stability even today. Brexiteers will be rolling their eyeballs and prattling on about Greece and Spain. But Greece has learnt a lesson from the €: you can't spend money you don't have. A lot of the British public, neck high in hock to their credit card issuers and banks, would do well to learn the same. Yes, it hurts, but if you get it right in the end, the pain was worth it.

Meanwhile Spanish GDP is soaring, and unemployment is falling (at last, admittedly). To my deep regret, I fear Britain is incapable of learning any lessons from Europe, because the belief that it knows best is built into the national psyche. The hope that the USA, which has for decades regarded the UK as little more than a pawn to be kept in the back pocket in case reinforcements in a war were needed, has already proved otherwise with Donald Trump's economic warfare against Bombardier, which could yet have unimaginable results in damaging the economy in Northern Ireland, where a lot more is at stake.... but that is a topic for another day.

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