A couple of readers asked why I don’t comment on current European affairs and BREXIT. It’s a valid question – right now, I’m waiting to see how things shape up in the next few months before trying to make any predictions. A hard BREXIT is likely to be more painful – and have nastier unintended consequences – than a soft BREXIT. Are politicians in Brussels (and Berlin, Paris, etc) prepared to be rational? Are British politicians any better?
I tend to think of it as a divorce. Some separations are reasonably amiable, where the couple put the good of their children (and themselves) ahead of anything else. Others are nasty, with partners lashing out at their former lovers with all the accuracy of someone who knows just where to land the nastiest barbs. Such relationships leave bad feelings that linger for years, casting a doleful shadow over the children and anyone else forced to choose sides. Which one will Europe choose?
There is a strong incentive for both parties to try to reach an acceptable settlement. The EU can cause problems for Britain – that is indisputable. On the other hand, Britain can cause problems for the EU too. A flat refusal to share banking information alone would cause a capital flight from the EU, as wealthy Europeans look for a place to hide their money; Britain could also meddle in EU affairs, particularly as President Trump grows into his role and other anti-EU parties rise across the continent. While a strong and independent Britain may turn into a role model for Poland, Greece and the other smaller states, a weaker and embittered Britain may have other – dangerously unpredictable – effects.
Best case – the UK/EU economies wobble a little, but remain fairly stable. Middle case – the economies take a dive, but either level out or start to return to pre-BREXIT levels. Worst case – the mutual economies collapse completely.
It’s difficult to say what will happen. Britain leaving the EU will probably lower the EU’s funding for a decade, depending on which set of figures you use. (The alternate reading is that Britain will no longer be a drain on the EU’s finances, but I don’t think anyone could make that argument stand up in court.) If handled properly – with a sensible audit and a careful look at just where the money is going – the EU might actually survive BREXIT and come out ahead. But, if handled badly, the yawning black hole within the EU’s banking sector might well tear the EU apart.
The crux of the problem is two-fold. First, Europeans are not Americans. The beer-swilling Texan redneck and the cappuccino-sipping New York liberal might detest one another with the passion of a million white-hot burning suns, but they would both acknowledge that the other is American too. This is not true of Europe. Frenchmen are not Germans, Germans are not Poles, Poles are not Greeks … etc, etc. Nor, for that matter, are immigrants to Europe automatically considered European. Relatively few immigrants are granted such inclusiveness (a problem made worse by their tendency to cluster.) In short, Europe is still an immensely tribal society … and the tribes feel no particular incentive to assist other tribes.
Second, trust in government and society has declined sharply. On one hand, the EU is isolated from the people – the bureaucrats don’t understand what drives their populations, while the elites push policies that look good instead of being good. Their lack of concern for the civilians – when they’re not showing outright contempt – is easy to see. On the other hand, the EU is simply incapable of governing well. It is very much a ‘one size fits all’ system – and in Europe, one size does not fit all. There is very little loyalty to the EU within Europe, outside those who benefit from its existence.
In a sense, you can take everything said about the RNC and the DNC in 2016 and apply it to the EU. Out of touch? Check. Manipulation of the nomination process to try to produce the desired result? Check. Losing the race to outsiders because the elite nominees are not appealing? Check. Etc, etc.
The EU, in a sense, is rather akin to the Austro-Hungarian Empire and the Holy Roman Empire. It is composed of a number of states that are more than willing to put their own interests firsts, with leaders who have to account to their (voting) populations rather than the EU as a whole. (The cynic in me suspects that the bureaucrats consider that rather a disadvantage.) The tangled web of political, bureaucratic and financial obligations makes it difficult for a smaller country to assert itself, let alone allow for any sort of independent (and public) oversight. One can argue, quite reasonably, that Greece is both victim and victimiser: on one hand, the Greeks were bullied relentlessly by the EU; on the other, their government got them into an economic black hole by lying to the EU about their economic state, not bothering with any reforms until pushed and spending more money than they could possibly repay.
(The simple fact that the EU didn’t bother to do any due diligence, as I have mentioned before, is yet another reason to discard it into history’s waste bin.)
Right now, the EU is steadily fragmenting.
The optimist in me says that the EU will draw back from its attempt to become a super-state and evolve into a loose association of European nations, that it will change to become more responsive to the will of its populations. But even this sows the seeds of discontent and disintegration. The Germans, for example, will want the Greeks to pay back every Euro they borrowed (an impossible goal) while the Greeks will want debt forgiveness (another impossible goal.) They won’t be the only ones, either. Squaring this particular circle will be impossible.
The pessimist in me says that the EU has failed, that it has lost the trust of its populations completely (and thus needs to be discarded as quickly as possible.) This may not be wholly accurate, but there is a strong element of truth in it. Certain aspects of the bloc – free movement, for example – have caused significant problems, leading inevitable to a ‘baby and the bathwater’ situation, where the ‘good’ is thrown out with the ‘bad.’ The EU governments have not only sacrificed trust, they have also sacrificed credibility. This hampers their ability to come to terms with the ongoing crisis.
I don’t pretend to know how this will end. In many ways, we are gliding towards a situation comparable to 1914; in others, we are entering uncharted territory. Greece may still bail out of the EU (in some ways, they might be better off if they did), along with other states that owe incredible sums of money: Spain and Italy in particular. Economic stagnation will lead to a steady series of job losses, followed by more and more bitterness on the streets, accompanied by tax hikes that will see the rich fleeing in all directions. The prospect of ethnic conflict, too, cannot be understated. They too are tribes.
The avalanche has already started. It may be too late for the pebbles to vote.