Euro-View: Brooks Tigner on Brexit
BRUSSELS – A year ago in May 2016 – one month before the UK’s ill-calculated 23 June referendum on “Brexit” – I made a list of 10 predictions about what would happen if the British voted in favour of leaving the EU.
How many of these happened, how many are coming true, and how many did I get wrong? Let’s go through the list.
1) Prediction: the EU’s financial sector will be the first to suffer. Jobs in The City will be gutted.
Result: correct. Back-room operations of City institutions have been sliding, discreetly, to the continent for months. Worse: the European Commission announced in early May 2017 it reserves the right to relocate London’s trillion euro-clearing business to within the EU for purposes of stability and control. Estimated direct job losses in the City if it does: 75,000 and counting. (Moreover, the transfer of two major EU agencies from London to elsewhere will see thousands more jobs lost.)
2) Prediction: trade barriers will make Britain’s other sectors dependent on direct foreign investment (DFI) – real estate, mining, transport, manufacturing, nuclear energy – uncompetitive, with foreign investors likely to pull their money to re-invest in a far larger EU market.
Result: unclear. No major announcements of transfers yet. But DFI into the UK has slowed significantly due to investor uncertainty about the UK’s future trade relationship with Europe.
3) Prediction: EU subsidies to UK farmers will be withdrawn, and the UK’s Conservative government will have to step in with the same level of subsidies for Wales and Northern Ireland. And pigs fly.
Result: pigs still fly.
4) Prediction: EU to UK: “You want our trade, you play by our rules of the game.”
Result: correct. Growing panic in London as the Conservatives’ hoped-for divide-and-confuse tactic against the “continent” failed (not to mention their recent disastrous snap election). Whitehall now faces a united front of 27 EU nations for post-Brexit trade negotiations. London has no aces to play.
5) Prediction: Visas will be mandatory for all UK citizens travelling to the continent, increasing the cost and hassle of holidays while imposing new administrative burdens on the UK’s exporters and business travellers.
Result: yes, by inverse implication. A major focus of Brexit talks will be the visa, residency, work permit and other rights of EU citizens in the UK. How those are assured will determine the same for UK citizens travelling to or located in the EU.
6) Prediction: the positive legacy of EU green legislation will weaken in the UK, with unpredictable consequences for its environment.
Result: uncertain. British Green groups and scientists, however, are openly worried about a decline in environmental standards if the UK no longer has to abide by EU rules – or rulings from the EU Court of Justice.
7) Prediction: London will no longer share the benefits of 28 countries negotiating trade deals as a bloc with China, the USA, India or other regional powerhouses.
Result: probably so. It depends wholly on whether London chooses a “soft” Brexit, with close ties to the EU’s single market, or bounces wholly out of it with a “hard Brexit, finding itself forced to negotiate new bilateral trade accords across the globe.
8) Prediction: politics follows money. Washington junks its “special relationship” with London (which has always been more precious for the latter than the former) by focusing on the EU’s far larger market.
Result: who knows? It now hinges on the hingeable US President Donald Trump – a man who UK Prime Minister Theresa May toxically cosied up to right after his election. And if Donald, when/if he goes to London, doesn’t get his ride in a gilded horse-drawn coach or tea with Mrs. Majesty (as May seems to have promised), then he might well flit over to a twig in Brussels.
9) Prediction: Scotland will declare independence and apply for EU membership, possibly prompting Wales to do the same.
Result: I got that one dead wrong. Scotland’s nationalists were thumped by the UK’s snap election earlier this month. But I stand by the prediction they will roar back – and execute their plan – if London opts for the “wrong” kind of Brexit.
10) Prediction: With no easy access to the EU’s market (and jittery foreign investors), England will descend 20-30 years from now into an economic backwater, with unemployment far higher than it is today.
Result: hold onto your seat; the curtain hasn’t come down on that one yet. But the signs are (un)promising.
Oh, and one final note on an auxiliary “mini-prediction” I made: housing prices in southeast London will decline accordingly.