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'All pain for no gain': Reality of post-Brexit trading conditions bites
(www.thelondoneconomic.com)
this post was submitted on 04 Aug 2023
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I was looking for someone with your view to ask. Why is holding on to the Pound such a big hurdle? Which would you rather accept: the Euro and Schengen zone, or the continued decline of your country through post-Brexit policies and outcomes?
GBP is the fourth global reserve currency and financial services hover around 9% of our GDP so a move to a unified currency could have real material damage to our economy. Also as a nation that sees itself as a close ally of the US (regardless of what the US thinks) having independence on monetary policy is core to how we operate as a global power.
I can see a time when the Euro and full Schengen (although being an island nation that will always be hard) membership is desirable but that will come after we cease being what we currently are on the global stage - I hope it doesn’t get that far.
The post-Brexit decline we’re facing isn’t endless, eventually a new normal will be established but it will be far below the economic standard we could have had and will hurt us scientifically, culturally, and medically as well as economically. Having to also chuck out what is currently our only big industry to start to grow again is a big ask. Membership on closer terms but without an obligation to the Euro is probably what we will ask for when we eventually do, but there is no guarantee the EU will want us. Especially if we start to steal the finance jobs back from Frankfurt.
A lot of in-country resistance comes from the “EU Army” fallacy but that doesn’t worry me, closer integration is a good thing in my mind.
I find it fascinating that Britain still aspires to be a global power, when the dominating vuew on the european mainland is it being just another western european country, with the carcass of its former empire still losely attached.
In terms of military projection, global alignment and influence the UK seems to be just as much following the US like most western european countries do, being far away from a global power.
I also dont think it to be a good idea to hold on to that pound as a means of power projection. The power projection make the currency powerful not the other way round. If there is no relevance to the trade with the UK and the currency anymore, it just withers away. The EU in the meantime is a single market with half a billion people. That is not so easy to go around economically and gives the Euro a certain power, even without further aspirations attached to it.
Your reply also shows that even pro EU brits are still too proud to share a future in a more federalized EU. If you are not willing to give up your currency, you are not willing to go for it completely. That's not what the EU needs.
How? He clearly explained that there are genuine reasons to keep the currency and how it is a big ask to give it up.
I don't think that's a pride thing, it's a valid concern to have.
I feel that calling this a pride thing only serves to further alienate anyone that could be pro-EU, instead of attempting to address concerns they would have about rejoining.
They are genuine reasons if you see the future of your financial system separate from the financial system of the EU. A future member should show that it's willing to put all efforts to improve the financial situation of the common system and not just for itself. They just want to profit from the market, but if the financial system has problems, they would just act to their benefit - even if it would be harmful to the european financial system.
The EU is an economic union – a unified economic policy is kinda the point. The individual members needs are to be adressed in EU-internal politics, not the foreign policy
You could have the world's second largest reserve currency, the Euro. But I'm sorry but from the outside looking in you're not much of a global power anymore. The only thing keeping you relevant are seemingly your armed forces. And on that front France gives you a run for your money.
I'd also bet money the EU would want you back, remember they weren't the ones pushing for a no deal brexit. However terms will be less favorable than last time.
Sorry for being harsh. As a Swiss I get the wish for being independent and having your own currency and freedoms. But let's face it... My gov. Also overestimates our importance and the leverage we have.
what are you, currently, on the global stage?
I'm of the same mindset, at least for now. It's a combination of 2 things.
Pride/ego is a big one for a lot of people.
The second one is the economic hit of the transfer. There will be 2 big jolts. Bringing our economic cycle fully into line with Europe, and the greedflation that will occur with the price changes.
Right now, we are in a bit of a crisis. The rich have pumped too much money up and out. The lower working class are right on the cliff edge economically. The jolt will be felt worst by them. Right now, I wouldn't be surprised if it could completely crash our economy.
Don't get me wrong, for the benefits of the EU, I'd personally swallow my pride on the matter. The economic effect would be scary, particularly with the current caliber of MP at the helm.
IIRC adopting the Euro (and changing the currency oc a country in general) costs a huge amount of money. Additionally the brits probably out a lot of pride in their currency, so the leap from "we're so great we don't need the EU and even are better off ourselves" to "we not only need the EU but the Euro as well" is even farther as just adopting a new currency or just reentering.
Welp, look where pride got them now
If small Eastern European nations can shoulder the cost of adopting the Euro, mighty Britannia should be able to do it, too.