Therefore you can't blame Juncker stating the fact that the marriage between GB and the rest of the EU was a somewhat cold love.
The very fact that risking (domino-effect) the future of the EU via this referendum just for some political self-interest (internal power struggle Conservative Party ) illustrates this use-at-will mentality.
I read the British press closely and am astonished by the amount of classlessness many people have regarding this issue. It is in the interest of Europe to not let the trade block crumble. GB knew this was at stake with a brexit.
Now the EU needs to (even if it wouldn't want to) give GB the finger just to make sure this will not become a precedent for many other countries (eg. NL, FR). GB has to pay, even if no one wouldn't want to harm GB.
The risk of a collapsing EU market with investments and trade drying up will have severe consequences world wide.
From a purely rational perspective this was the most stupid action for GB.
The EU is too reliant on exports to the UK to play hardball.
That's the calculation the British public made. The UK pays more in than it gets out. It imports more from the EU than it exports to it.
The EU needs the UK more than the UK needs the EU.
Just look at the immediate aftermath in the markets. FTSE 100 closed 3.15% down, whereas almost all EU indices saw losses 2-3x as much.
The EU is too reliant on exports to the UK to play hardball.
I think you and the UK public are mistaken. The cost of another country leaving the EU far exceeds the cost of punishing [1] GB.
Think about it. What if GB gets nice deals for nothing? I assure you that within two years the EU is over. There are many countries with a large fraction of people that are anti-EU. I think the EU will rather loosen sanctions on Russia than giving the UK a good deal. Im wondering how the US government is thinking at this very moment.
One lesson we can draw is that the EU should advertise their benefits in a better manner. And "wir schaffen das" is a sure way to blow up the continent.
1. actually punishing does mean nothing more than to give no special benefits to the UK. They had it, they will loose it.
I'm not sure what you mean by "special benefits". Yes, the UK negotiated the rebate and certain special conditions of membership, but fundamentally it was a net contributor to the EU.
I think the current EU is toast either way, so the argument of what deal the UK negotiates with it may end up being moot.
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The cost of another country leaving may indeed be higher, but the EU simply can't afford to punish the UK, even as a deterrent.
You keep mentioning the EU can't afford it, but why do you think it can afford to let the EU explode?
I'm not sure what you mean by "special benefits". Yes, the UK negotiated the rebate and certain special conditions of membership, but fundamentally it was a net contributor to the EU.
That is not relevant. Access to the market will have to be paid for, so they still need to be a net contributor. Maybe even more than they did so previously.
Wrong. What can be sold in what condition is regulated by law. Countries have different preferences of what is allowed and what not. This law requires the governments to sit together, argue and come up with regulations. The single rule for all they decided upon is what makes the single market.
The UK has to at least implement everything the EU decides. Without a say in its proces. Big win.
Im sorry to tell you that you are overly optimistic. Trade deals are a very hairy topic. Look at TTIP, it will likely fail.
You know that the Norwegians pay for access to the common market?
It is, fundamentally, a political construct. It has gained legitimacy and law-making powers across its member states, but it could cease to exist tomorrow and its member states would continue to exist.
There is absolutely no comparison between TTIP negotiations and the UK becoming a member of the EEA. The latter is extremely simple to implement. It is effectively the status quo.
There are two important differences between Norway and the UK:
1. Norway is a net exporter to the EU; the UK is a net importer. Norway is effectively paying for the right to sell its goods and services into the EU. By the same logic, the EU should pay the UK to join the EEA;
2. Norway is a much smaller economy than the UK, and the EU could probably cut ties with Norway without destabilising the union. It cannot do so with the UK.
Noted that UK companies selling into the EU would still be subject to EU regulations. I don't see that as an issue.
You are suggesting the EU member states would be willing to sacrifice their economies (by punishing the UK) to save the union. I believe the opposite to be the case.
Why would access to the single market need to be paid for? All things being equal, the UK would buy more from the market than it would sell into it.
If anything, the EU should be paying the UK to join the single market.
Such is the absurdity of EU officials pretending they can punish the UK.
Have you seen any of the interviews with the British public who voted leave? Not many were doing that sort of calculating.
http://www.dailymail.co.uk/news/article-3658563/Meet-Bregret...
More than 17 million people voted to leave.
If the EU is really that unstable why blame the British for it?
And if the British were holding back the EU, maybe we should be happy that they finally got off the fence.
Where do you see that mentioned?
EU industry is not going to stand for punishment tariffs against the UK.
Not to mention that while indisputably the UK currently is a net payer into EU funds, if they don't pay money anymore they will get less benefits out of the deal too.
It would be delusional to assume that they will keep all the benefits while ridding themselves of most of the obligations.
That's just not going to happen, something will have to give.
Another point is that the EU has all the incentives to not give the UK a sweet deal, because that would otherwise encourage other countries to exit as well.
In trade terms, the EU faces a prisoner's dilemma. It may be beneficial for them as a whole to play hardball with the UK, but major exporters to the UK (e.g. German car manufacturers) won't accept it. There'll be some diplomatic bravado, some tense negotiations, and the UK will be granted access to the common market.
I think a consequence might be that trade with Russia will be reopened. The US influence in Europe has been lessened with the departure of the UK.
Also, did you think about the buying power of the UK? The mortgages stand, but the prices will going down as the pound looses it value. In periods of uncertainty trade will fall as will investments. Those we can afford quality goods from EU might still want to buy it (eg. luxurious cars from Germany).
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If the pound loses value in the medium-run, foreign investment in the UK will increase.
Brexit, if negotiations are acrimonious, will be worse for the EU than it will be for the UK, so I don't expect much of a long-term shift in the GBP-EUR exchange rate.
Outside the EU, the UK can make itself an even more attractive place to do business, no longer hampered by EU laws and regulations.
In any case, I think Brexit will be curtains for the current incarnation of the EU. It will either have to reinvent itself significantly, or collapse and be replaced by a new union.