Frankfurt Is the Big Winner in Battle for Brexit Bankers
bloomberg.com
bloomberg.com
If you want to live in beautiful luxury, you are also at the right spot! The Taunus mountains north-west of the city house a myriad of bankers and CEOs in beautiful and expensive villas, combine perfect schools with healthy nature and nice views on the city. You'll have to buy something more sporty than a Porsche to get some looks, as Porsche is the standard family car there (or High-End BMWs or Mercedes)... If, besides work, you want to enjoy culture, this city serves you plenty. Museums, Opera, Theaters, Rock concerts: here, you have them all.
So to those you wonder if Frankfurt is really the place to go, I say: I love the world, I like many other places, but if I could, I would take my Frankfurt anywhere I go.
As a German, who moved to Frankfurt, I second that notion. I feel very much at home here. I think you can never truely become a Münchner, you will always be foreign. And in Berlin it is kind of a meme, that you have to start hating the newly arriving Schwaben, as soon as you have been living there for more than 3 months.
Everyone knows about local traditions in cities like Cologne and you think about these things, when moving there, while Frankfurt seems much more approachable. Guests visiting me are often amazed that there are actually quite a few cultural features specific to the region.
Sounding like you come from Frankfurt (on a beginner level) is super easy, too. You just become lazier and stop pronouncing word-endings and use softer consonants.
See OP …
The interesting thing about this is, that Frankfurt is actually doing very much to avoid it. There a mixed-use skyscrapers being built, a whole new district has been created (Europaviertel) recently and a new one is already planned in the North-West.
I think part of the problem is, that Frankfurt is tiny by night and a city of a million people by day. I guess you could build houses for hundreds of thousands of people, prices would sink and people would move in.
You'll have to move away about 30 kilometers to really see lower prices.
Berlin feels more modern and liberal, while Frankfurt feels like... I don't know.. the Bronx ;)
(Rant: Seriously, people get upset when you point out that Brexit is a dumb idea. But that doesn't stop it being a really, really, dumb idea that's going to ruin my country.)
How is it going to ruin our country?
Let's be realistic. Will there be an economic downturn? Signs point to yes. However, businesses do not pass up the opportunity to make money for long.
Case in point, the financial sector move the article is referring to. Just because a bank is based in one country, doesn't mean it doesn't do business elsewhere. If an investment opportunity exists, deals will still be made regardless. The idea that a company like Goldman Sachs would turn down an opportunity to make money just because their headquarters is elsewhere is almost laughable.
Imports and exports will be affected whilst markets adjust, and hopefully there'll be a soft Brexit to make this adjustment period quicker, but even with hard Brexit the economy will stabilise and grow in time. Products intended for domestic markets may end up becoming more attractive for investors in the short term whilst this period of uncertainty plays out. There are always ways to make money, and those who keep their cool are much more likely to spot those opportunities than those who panic.
The problem is that you're implicitly assuming that Britain will be no worse off and then concluding that businesses will spot that so that we're no worse off.
Let's be realistic: the pound is worth 80% (give or take) what it was before the referendum. That isn't felt in your pocket immediately, but the effects works their way through the economy. Sure, purchasing power parity and the economy rebalancing will ameliorate that, but it's in no ways going to eliminate it.
Now, there's a problem with this analysis, which is that Brexit hasn't happened yet. This cuts both ways: the final state hasn't been reached, but also the economy's a lot more resilient inside the EU than outside, because the lack of tariff and non-tariff barriers helps with the rebalancing you describe.
So, for the future, a good question is: how are our preparations going? Well, the NAO says that they're barely going at all, the repeal bill says we're basically going to have to put up with direct monarchial rule to survive and to date we seem to be capitulating on every point of contention. What's worse is the points we're not capitulating on, because we're an 1/8th of the way through the process and haven't even got the status of EU citizens sorted out.
Even if the negotiations go well, we're talking about ripping up 40 years of settled U.K. law and replacing it with... well, ministers haven't decided yet, but they don't want parliament to have a vote when they do.
So, as I see it there's basically two possible outcomes here: 1) the EU retains most of the benefits of U.K. membership 2) hard Brexit. Die-hard Leavers have long argued that the EU is too complex, and the EU shows no inclination to make it more complex to suit Britain. Either way, we will be worse placed to trade with the rest of the world.
You're right, even in the case of hard Brexit the economy would eventually grow again. Would it grow as fast as it would within the EU? There's no reason to believe so. So we're looking at a huge one off hit and permanent reduced growth.
Sorry, this is quite long and probably not as clear as I'd hoped. I've also probably missed a fair number of important points. I haven't even touched on the _non_economic problems with leaving the EU. But I think it's clear that, while there are always ways to make money, Brexit is likely to be a negative sum game.
> "The problem is that you're implicitly assuming that Britain will be no worse off and then concluding that businesses will spot that so that we're no worse off.
Let's be realistic: the pound is worth 80% (give or take) what it was before the referendum. That isn't felt in your pocket immediately, but the effects works their way through the economy. Sure, purchasing power parity and the economy rebalancing will ameliorate that, but it's in no ways going to eliminate it."
The following distinctions are slightly crude, but hopefully they serve a purpose. There's a difference between the productive economy and the speculative economy. The productive economy is based around changes in the material world. The speculative economy is based around opinions. Stock markets are effectively opinion poll trackers (opinions either baked into mathematical models or in the heads of traders).
It's no surprise that the pound dropped after the Brexit result, because we're looking at a period of uncertainty, which makes predictions harder and traders more risk averse.
However, in the productive economy in the same time period, there hasn't been an 80% drop in the output of the real economy. The jobs market is still strong, people still produce roughly the same level of goods and services as they did a year ago, etc...
What I predict will happen after the period of uncertainty ends is that opinions will catch up to reality and traders will realise their models of economic output were out, leading to a readjustment in the stock markets.
The problem is, as people have gotten so hysterical about Brexit, the period of uncertainty will probably last longer than it should, and this loss of confidence can have an impact on the productive economy over time. That's my main concern over Brexit, that it'll be the reaction to it that causes a longer economic downturn than is necessary. My only hope with this is linked to more people becoming adept at seeing through the mechanisms of the UK's toxic media institutions.
I'm not sure how the fact that business can find opportunity even in times of great adversity (including times of war) supports in any way your argument that Brexit is not bringing about adversity. It is very much a self-inflicted wrench in the spanner that the (thus-far booming) UK economy could have done without.
It's stating the obvious to say that things stabilise and life goes on "in time" (that is, over 30-50 years cycles).
That absolutely doesn't demonstrate that there won't have have been much unnecessary suffering, from economic downturn to war in the meantime.
Yeah, I'm Theresa May, ask me anything. ;-)
> "I'm not sure how the fact that business can find opportunity even in times of great adversity (including times of war) supports in any way your argument that Brexit is not bringing about adversity. It is very much a self-inflicted wrench in the spanner that the (thus-far booming) UK economy could have done without."
If the only consideration was the economy I'd agree with you, but there's more at play here than just the economy.
> "It's stating the obvious to say that things stabilise and life goes on "in time" (that is, over 30-50 years cycles).
That absolutely doesn't demonstrate that there won't have have been much unnecessary suffering, from economic downturn to war in the meantime."
Again, the main arguments against the EU were not about the economy. Clearly you're mostly pro-EU, but do you see any flaws with the current EU?
I am very much pro EU. I also see flaws with the current EU, but to me they can only be solved by more EU not by stepping back. More democracy, less state-involvement to solve legitimacy problems, more financial responsibilities to solve Euro and Southern economic problems.
To me the benefits (stance in the world, peace, freedom of movement) outweigh the costs and problems by such a huge margin. I was born after the cold war and to me the integrity of states or peace always seemed like a solved issue, but as you can see in Ukraine it is not at all.
Compare problems of that scale to working out some bugs in a monetary union, which btw. is even working pretty well, considering that something like this has never worked before.
It is a monumental and exciting project. Some sort of peaceful empire, where every nation and people actually benefits and nobody is forced to participate. We are basically writing history. To me "Then Asia, but Europe lived happy and peaceful ever after.", seems like a perfect ending of the current chapter.
That's an interesting mix. It sounds like you're pro-democracy and also pro-centralisation, would you say that's a fair statement?
> ""Then Asia, but Europe lived happy and peaceful ever after.""
Are you implying that Asia is on the path to peace ahead of Europe?
I am pro-centralisation in the sense, that I see areas where the benefits are obvious: everything regarding unified market, freedom and access for people, military, foreign policy, environmental issues. I also see areas where you have to be careful: privacy, data protection, lack of transparency, lack of control.
What I do have is a mindset, of paying it forward a bit and not having to get instant compensation. I am for example generally okay with the EU building infrastructure in poorer countries. We will get that value back, but it will take its time and it will come in different, hard to be measured forms. That's why I think you should not be to pedantic when measuring your own benefit. It evens out, while the overall value steadily increases the more countries work together. It is not only about whether your piece of the cake is a tiny bit bigger, but also the overall size of the cake increases.
I do see, how such thoughts are harder to have, when you are living in one of the paying countries and personally feeling left behind.
> Are you implying that Asia is on the path to peace ahead of Europe?
No, not at all. I am just saying that Asia is on its way to the top and that the EU cannot count on the US staying world leader. Countries like Germany, France or Great Britain will have no say in world politics whatsoever, while the EU as a whole can be a stable local power big enough to be heard in the world and pursue its interest and have some influence.
So your argument is Goldman Sachs, Merrill Lynch, etc will continue to do business in Britain because it'll be profitable to do so? Yes that's probably true. On the other hand they are bending to regulation that requires them to conduct EU-related business in an EU member state.
And as you have stated businesses will not turn down potential profit. Therefore they have no choice but to move the jobs to where the majority of the business is and that's no longer Britain.
There's no element of panic here, just the fact that brexit means certain jobs have to move in order to continue conducting business with the EU.
The EU are already positioning to move Euro clearing out of London as well. See https://www.theguardian.com/business/2017/feb/07/brexit-uk-f...
The majority of business wasn't in Britain before Brexit either, but we still had businesses based here. If some companies leave, they're just opening up new opportunities for their competitors. I don't like thinking of people as 'workers' and 'consumers', but let's use those labels for a second. Are you trying to tell me in a nation of over 60 million consumers, with a high volume of skilled and hard working workers, that there aren't business opportunities to be had, regardless of a slow down in exports?
In short brexit with regards to employment in the finance industry is a foot shooting exercise of epic proportions.
Two points:
1. I see over-reliance on any one industry as a weakness. The idea would be to find constructive uses for the talents of those in the financial industry elsewhere. There are a diverse range of industries that could benefit from numerically literate people. To give one example, energy management is going to be a growing field as we move towards renewables, both in terms of planning new installations and in balancing the demands on the grid. Is that going to soak up all of the lost jobs? No, but I wouldn't want it to, otherwise we'd have another 'too big to fail' industry, the idea is to spread the talent around.
2. You point at lost tax revenues, but the financial services industry appears to be the worst offender when it comes to tax avoidance. I'd much rather people were employed in jobs where they paid tax, even if their nominal salaries may be lower.
To give some idea of how bad tax avoidance in the UK financial sector is, and how much other companies depend on UK-based financial institutions for their tax avoidance, take a look at the following links:
http://www.theweek.co.uk/62461/benefit-fraud-v-tax-evasion-w...
http://www.taxjustice.net/topics/finance-sector/enablers-and...
https://www.youtube.com/watch?v=Hom07yGhg0Q
Also, to nip the whole 'membership of the EU helps clamp down on tax avoidance' line in the bud, the EU have known about schemes like the 'Dutch Sandwich with a Double Irish' for years and haven't put a stop to it, so their record isn't exactly stellar:
https://www.irishtimes.com/business/technology/google-used-d...
Unless you are from Eastern Germany or overall from Eastern Europe. The stories I hear from friends how welcome they feel in Frankfurt once they mention their origin. All top people US companies are fighting for...
I get it, they are a necessary ungood thing for the economies, but should the hoi polloi cry for them?
But that's Bloomberg caring about the capitalists who would arbitrage your job in a heartbeat.
Either the society has to decide it wants classical music as a protected cultural good (and e.g. put it in government grants and subsidies) or the masses should (and e.g. pay for concerts and stuff).
Apart from those things, I don't see it as any great tragedy for something that's neither of them to lose its bank-derived financing.
No, in my logic there are two distinct things: the public paying for concerts (and the public not caring) vs the public caring and supporting them itself.
In the first case, it's just the banks buying some prestige by playing to supposed upper middle class preferences, and get some free publicity plus some tax exceptions for those sponsorships.
>The dimension you are missing is spatial, in that this would now happen elsewhere from London, and the "externality" of non-banker Londerners being able to experience this, is the negative effect referred to by the OP.
So? If the Londoners didn't care for those events enough to support them themselves in the first place, why would they have a problem now that foreigners, and not themselves, will get to "experience" those?
Maybe rent prices at least drop a bit to compensate. Or Britain&The EU find a way out of this misery once the consequences sink in.
England isn't a global superpower, it doesn't have colonies, it doesn't have the population to compete with superpowers, its overseas territories are a money drain, and there's nothing of value being made in the UK that isn't being made in the US, China or the EU.
The recession will be hard. It was a stupid decision made by stupid people.
Hopefully things will normalize in 4 decades.
You can't really stop history, but people like you would rather be ignorant of it, it seems.
I'm tired of all the "England this, England that". Yes, there's an amazing history, but you can't repeat it. Look at the world today for God's sake.
And with people like May, with their imbecilic policies and ideas, leading it? Please...
Furthermore, I like the idea of a united Europe, and I'd hate if the UK would allocate resources to undermine that (if Russia can, the UK certainly can).
I like the idea of greater cooperation across Europe, but I'm not willing to unite under the EU, at least not in its current form. Unity is not universally good, it's important to know what you're uniting under.
With that in mind, what do you want to gain from a united Europe?
Addressing inherently regional/global issues like environmental ones at the appropriate level ?
Having the clout of a 300 million people market in trade negotiations with China/India/the US ?
Gigantic economies of scale through common legislative work and a single set of consumer/safety regulations for companies to follow across a huge addressable market ?
"greater (bilateral) cooperation" just won't give you that. Creating a higher entity is the only way that makes sense past a certain level of complexity.
The "not in its current form" argument in EU discussions is a classic one (a similar rhetorical device to "I'm not racist but..")
The truth is that while no organisation is perfect (is Westminster perfect?), and with the assumption (a difficult one to make these days) that you are actually aware of how the EU works, there are a very few other forms than the current one the EU could have ended up in.
A problem solved by NATO and the OSCE. The EU is far from the only organisation with widespread European membership. Here are three of the most important non-EU organisations that affect policy in Europe:
https://en.m.wikipedia.org/wiki/Council_of_Europe
https://en.m.wikipedia.org/wiki/Organization_for_Security_an...
https://en.m.wikipedia.org/wiki/NATO
It's worth remembering that the EU only really found it's current form in 1992. There were earlier agreements that formed the basis of the EU, but it changed considerably after the Maastricht Treaty.
https://en.m.wikipedia.org/wiki/Maastricht_Treaty
> "The "not in its current form" argument in EU discussions is a classic one (a similar rhetorical device to "I'm not racist but..")"
Only for the lazy. I simply don't agree with how the EU is run. I'd much rather stay as a member of the Council of Europe than any group that dictates fiscal policy. You can see how well that's worked out for the Greeks, burdened with debts they can't pay for the benefit of European bankers (the bailouts were a bait and switch move, the Greeks got a small percentage of the total funds). The EU will become increasingly focused around the Eurozone, and policies that suit the Eurozone. We may lose some financial benefits from leaving the EU now, but it'd be far harder to leave as time went on, and more power was centralised in Brussels.
Council of Europe with Ukraine and Russia in it. Are you joking? Ask someone from Ukraine or the Baltics, how they feel about the safety of territorial integrity.
I would say, better be safe than sorry in this case.
"A problem solved by NATO and the OSCE."
Did I mention the Council of Europe in relation to war? No I did not.
One could also argue fear of Ukraine joining the EU made the Ukrainian war happen in the first place.
https://en.wikipedia.org/wiki/Ukraine%E2%80%93European_Union...
https://en.wikipedia.org/wiki/Ukraine%E2%80%93European_Union...
"Russian President Vladimir Putin warned that members of the Customs Union of Belarus, Kazakhstan and Russia may impose what he called protective measures in the event of trade liberalization between Ukraine and the EU. The EU condemned Russia's threats, calling them unacceptable. Ukrainian Prime Minister Mykola Azarov urged Russia "to accept the reality of Ukraine signing the EU agreement" and condemned any artificial barriers as pointless."
"After the economic part of the Ukraine–European Union Association Agreement was signed on 27 June 2014 (by the new President Petro Poroshenko) Russian President Vladimir Putin stated that making Ukraine choose between Russia and the EU would split the country in two."
Note that the military action taken by Russia started only a few months later, in November 2014:
https://en.wikipedia.org/wiki/Russian_military_intervention_...
England/UK won't become the superpower they were before, just like Spain won't either. Yes, they'll be okay, they have survived through worse, but that's it.
Plenty of sources, but first ones to come were "Global Top 4 Aircraft Engine Manufacturers - Strategic Factor Analysis Summary (SFAS) Framework Analysis - 2015 Pratt & Whitney, GE Aviation, Rolls-Royce, Safran".
Don't get me wrong, Uk is top notch there with Rolls Royce, and they're not a manufacturer aircraft maker would want to ignore being for price nor performance, but it's not something we would lose or need to rebuild if the UK were to suddenly fall into a vortex or something.
As for the article, speaking as someone from the UK, as far as I'm concerned the UK did a deal with the devil back in the 80s, focusing on the fake prosperity of the financial services industry (gambling on markets is ultimately a waste of effort) in place of growth in the productive economy (manufacturing industries were neglected for decades). If Brexit means the government is forced to diversify and not rely so heavily on financial services it could be a very good thing for the UK. There will certainly be challenges in changing the economy if we leave the European single market (I can't see hard Brexit happening anyway, there's very likely to be some form of compromise), but I'll not be crying over lost banker jobs, they can be someone else's problem now.
I think it's sad that people with a PhDs in physics/mathematics seem more likely to end up spending his/her time optimizing my car insurance premium than solving real problems.
It's all good and fun to say bankers jobs will be somebody else's problem, but you are offering to replace that money with what, exactly ?
The UK used to be the laughing stock and sick man of Europe in the late 70s, had IMF loans like Greece today. It really doesn't take that much more than a wound like Brexit to fall back again into misery over a couple of decades.
But that's the problem, over-reliance on a single industry.
The thing is, it wasn't seen as a weakness by politicians whilst the money was rolling in. However, many people outside London recognised it as a weakness as their industries were being neglected whilst the UK transitioned towards becoming a service economy.
I'm not suggesting their won't be a downturn from bankers leaving, but I am suggesting it's a necessary one to break the myth that the service economy approach is the only one worth pursuing. The UK will need to become more self-reliant to return to stability, and that will ultimately be a good thing.
ARM is owned by SoftBank, for what it's worth.
Only short term, and only if we just look at first order effects.
In fact, it's too early to tell. Let's check back in 10 years.
What makes you think the UK can "win" anything in 10 years if it goes down the Brexit path? or 20 years for that matter, feel free to move the goal posts around. I'm curious.
The last crisis was extended by the actions of the government. Quantative easing to boost the wealth of the private banking sector + austerity in the public sector.
You can't save your way out of a recession, but if you are going to spend your way out of it, the money should end up with people who are willing to spend it in productive ways.
As for Brexit, what's your main economic concern? Imports? Exports? The domestic market?
IT has the blue collars (cheap engineers, sales, support, it) in Ireland and they are staying no matter what (zero tax ftw) while all the expensive ppl who refuses Ireland relocation were in london.
but if London is not EU, now it makes everything too complicated. France already started to glob startups. Germany got two big fortune 500 and Switzerland another.
it's a matter of time until they all move. and take all the service cascade with them.
so if you're afraid of crisis getting worse by fleeing investment, there you have it.
That was the case before Brexit, was it not? Companies like Google and Facebook had their European headquarters in Ireland before the Brexit referendum was announced.
> "Germany got two big fortune 500 and Switzerland another."
Interesting that you bring up an example linked to Switzerland, which isn't in the EU (it's not even part of the EEA). Despite that, it does have access to the European single market, something that some European bureaucrats are classing as 'impossible' for the UK post-Brexit. Let's wait and see.
> "it's a matter of time until they all move."
That's what's known as hyperbole. The UK has a large skilled/educated workforce with a strong work ethic. If incentives are made to mitigate against downsides of being out of the EU then I don't see every company leaving, and the ones that do leave will leave behind employees that they helped to train, ready for a competitor to make the most of.
This is how Switzerland has access to the European single market :
- It pays into the EU budget
- It has freedom of movement for EU citizens
- It implements many EU regulations, without having a say in them.
http://blogs.lse.ac.uk/brexit/2016/07/20/how-much-do-non-eu-...
This has been hammered on and on during the campaign : the UK cannot possibly end up with a better deal than what it currently has as a full EU member (with a number of tailor-made opt-outs bordering on unfair to other members, to boot)
The issue is not with "some European bureaucrats", it is with some British people having difficulty coming to terms with reality at the moment.
- It pays into the EU budget
According to the article you linked to, Switzerland pays far less than the UK for access to the common market. Time will tell what agreements are reached here.
- It has freedom of movement for EU citizens
Which I have no problem with. Oh, did you think that people who voted for Brexit were racist? Surprise!
- It implements many EU regulations, without having a say in them.
Again, from the article you linked to, it states that Switzerland has around 100 bilateral agreements with the EU in order to get access to the single market. Having a multitude of agreements allow a certain level of control over which EU policies to take on and which ones to avoid. Can read more about those agreements here:
http://ec.europa.eu/trade/policy/countries-and-regions/count...
I do recognise that the bi-lateral deals with Switzerland took years to get ironed out, and I'm not expecting a quicker turnaround for the UK. What I predict is that we'll go for some form of soft Brexit where the divorce from the EU can happen gradually, which would be better for both sides.
If you got 40 years to give away to some assholes who don't care about you, be my guest.
if that wasn't a middle finger to German (whose chancellor was in France visiting refugees, and wasn't even invited to the parade) I don't know what it is.
It was certainly an attempt to position France as the first port of call for the US in Europe, taking the opportunity of current German unease at dealing with Trump (can't blame them), and well, total political shambles in the UK.
however, if they all end up in one place, that would be a significant long-term threat
If I would not hold the German black belt in suppressing my emotions I would have laughed uncontrollably.
(Though compared to the trains in the U.K...)
I wouldn't be surprised if some kind of local government agency in Paris was helping expats with paperwork, but the idea that all French civil servants and forms will suddenly start speaking English seems outlandish :)
They just removed entirely the tax on standing capital (only real estate will remain taxed), and more could be following. To me, the government is taking Brexit very seriously and is intent on making the most out of it; including producing new legislation to attract businesses relocating out of London.
Bankers not only have Paris fighting to have them, but the whole government as well.
Companies in the same industry tend to gravitate around each other so they can cluster talent, lobby governments and "build synergies" (sorry for the buzzword), among other reasons. The City of London is that kind of cluster.
I work in software like most of us, software being absolutely electronic, but my company hasn't really embraced remote work either, so hence I'm in NYC.
Frankfurt may or may not be number one, Frankfurt still profits enormously by Brexit.
This. No matter how you voted, strategy on the UK side has been a complete clusterfuck.
The UK's sovereignty will need to be traded away to get any alternative free trade deals in any case, but UK politicians have been too cowardly to make that case to the public, so the fact that nothing is really going to change much on the red tape front hasn't sunk in yet. You can't trade without agreement on standards, and to get multiple parties to agree, you need one of those nasty globalist organisations involved.
The exit really is cutting off your nose to spite your face.
- The European Central Bank (may) insist on certain services only being offered by banks in their jurisdiction, to avoid becoming dependent on companies they can't regulate
- The EU's core principle are the "Four Freedoms": those of capital, services, products, and labour. They won't allow Britain to pick-and-choose only the first three.
So basically all the kinds of freedoms for commerce and employers, and none for the people ("freedom of labour" being an euphemism for "lesser job protections").
They say it, but which part of my comment made you think I don't believe what I say (which is the necessary condition for it being a "troll")? Not to mention, that whether you disagree or not, it is a very common criticism against EUs policies, driven by big capital?
>Likely the EU will have much higher labor protections that the UK.
Maybe, maybe not, can't speak for the UK.
What I do know for certain is that EU regulations have unmade decades old worker protections and labor rights in mine (and other) EU countries.
That said, here's what a UK person writes: http://www.newstatesman.com/politics/staggers/2016/06/eu-doe...
"This same economics is being inflicted on Britain – cuts and austerity. Living standards have fallen, wages reduced as a proportion of total economic output (GDP) and in real terms, and inequality and poverty increasing. " This actually may be true. And indeed. It could be partly be caused by the EU. Have a look at the UK's debt: http://i.dailymail.co.uk/i/pix/2013/07/19/article-0-1AE4486F...
The UK had serious problems. Then, under Thatcher, the UK rose again and had comparably low debt. Some say this is due to Thatcher. I would have said this at one point, now I say that it was because of oil found in the Northern Sea. The UK's debt exploded after 2007, also, because the UK had a huge, potential unhealthy financial sector.
So if you say that the EU is causing the problems in the UK this may be in fact true, since it allowed "The City" to live unreasonably from grains from the Financial Industry while some parts of the UK did very badly. I can not exclude the possibility that loosing a huge chunk of the financial industry and do a re-balancing may actually a good thing for the average Joe who does not live in "The City". London voted "stay" by the way.
The same freedom of movement that SV companies celebrate when they bring in foreign IT workers with H1B Visas, and then pay them less.
https://www.theatlantic.com/business/archive/2016/12/fixing-...
http://www.huffingtonpost.com/entry/trump-h-1b_us_5890d86ce4...
or as in "if you manufacture abroad, let me compete with that with moving my talent somewhere else"
or as in "freedom to sell my labour anywhere in the EU"
or as in "you can bring factories to my poorer country, but I can move to your richer country and also benefit"
or as in "part of the 4 freedoms that actually balance each other - they're not a set of 4 freedoms because of identitarian reasons, they exist because they're practical and work well together"
I am a migrant working in the UK and it's quite offensive that you would suggest FoM only lowers wages (HINT: It doesn't, look up the LSE's study about it), suggesting I'm here because I'm cheaper.
Hint, besides a brief stint in the 60s-early 70s, the LSE has for many decades be an establishment institution. It's not going to rock any boats with its research. It's like expecting the bankers to be critical of the banking system. Using immigration to bring cheap labour in has been going on since at least the industrial revolution.
>suggesting I'm here because I'm cheaper
I'm not suggesting anything about you in particular. Well skilled professionals do migrate and command equal or bigger than local average wages too. In pointing out what is the case in general, not for outliers.
But forgive me in also indulging in the idea that a physical location can also bring a sense of atmosphere or prestige - belonging - that is important in any human activity, and can add a relevance which is not immediately obvious.
Which is not to say that such an atmosphere can't dissolve quite quickly.
can anyone explain why the EU is viewed as some sort of kind, progressive organisation, when in reality acts like a bitter, protectionist bully?
the UK Government wants to keep barriers to trade as low as possible, it is seeking a free trade agreement
the EU is currently ratifying the Canadian FTA, and last week announced agreement with Japan had been reached that would reduce barriers by 99%[1]... whilst simultaneously threatening the UK with increased barriers to trade
[1]: https://www.ft.com/content/c874d02a-60ba-11e7-91a7-502f7ee26...
> the UK Government wants to keep barriers to trade as low as possible, it is seeking a free trade agreement
UK electorate cannot have both
And what the UK wants is not a free trade agreement, they want the same acces that they have now.
the UK wants an "ambitious free trade agreement", not membership of the single market, if you don't believe me see https://www.gov.uk/government/speeches/the-governments-negot...
So we do not seek membership of the single market. Instead we seek the greatest possible access to it through a new, comprehensive, bold and ambitious free trade agreement."there way of punishing the UK" Look, If you are going to have a divorce and tell your wife: "Look, we are going to have a divorce but I don't want to pay alimony and we are going to stay fuck buddies and the cottage in Italy that you inherited from your parents, I am still going to use this."
Then all this sounds like an excellent idea but if your wife says "I pass" this does not mean that your wife is going to "punish you". She is just passing on the deal.
I gotta ask the opposite, why does the UK want such an FTA so much?
Could it be, gasp, that they realized they're actually fucked without one?
It's not like these consequences weren't mentioned before. And I won't bother repeating the arguments about Britain's existing financial obligations which you chose to pretend to be ignorant of.
There are things that I don't like about the EU. Especially:
* Bureaucracy
* They spent 40% of their budget for agriculture subsidies.
* Now we have open boarders for immigrants from very violent and tribal societies. (You can downvote me for this if you like).
But here are many positive things. Freedom of movement. You can work, retire or open a business in any EU country that you want. Open skies - very cheap airfares (which will hurt the UK a lot).
What happens just this year is mind blowing.
* Free trade agreement with Japan
* Potential free trade agreement with Mercosur countries
* No roaming charges for cell phones anymore
* PSD2 for Fintech (Banks have to grant access to bank accounts for fintechs)
* Money Wires are very cheap or free within the EU. They can still take a day or two. Starting November Banks must offer "instant EU money wires". I think the time is less than a minute. Less than a bitcoin transaction takes to process.
* Military Headquarter in the EU, beginning of an EU army
Don't write the EU off. Nobody knows the future but for me the Brexit seems like madness.
But since you mentioned Greece. What about Puerto Rico? Illinois?
Otherwise how do you replace, for example, 28 different national systems for classifying bananas with a single classification without a certain amount of bureaucracy? You either hive massive multilateral discussions among 28 national bureaucracies or you get rid of the individual national burocrats and delegate this function to Brussels.
I love the bananna thing btw - it's a long time favourite of EU haters as an example of EU overreach. Europhobic UK newspapers have milked it for years - out-of-control bureaucrats making up useles regulations and creating red-tape. But they never mention that it replaced was 28 individual national banana classifcations.
The result is that the content of the regulation have become the de-facto standard in the industry that everyone is following voluntarily.
It was even the other way round. Lobbyists of merchants wanted cheaper transport costs and solved it on a EU level.
And the UK is going to learn about it the hard way (if it goes ahead with Brexit, less likely by the day). The Euratom debacle is already showing that.
>threatening to institute trade barriers against the UK (unless it pays vast sums of money, and then it's only to begin talking about a free trade agreement
Like the kind of money that other EEA members are paying to access to common market?
The one leaving the EU is Uk. And you cannot have the cake and eat it.
Uk position until now is ditching all the obligations and keep the the benefits.
UE is not threateting to institute economic barriers, they are saying that if UK is not an EU member they should be treated like so
The UK decided to leave the EU which means leaving the single market. I'm guessing you do not appreciate the vast difference between being part of a single market and having a trade deal.
Regardless of the existence of NAFTA for example, a company based in Mexico city will not have all the same rights and access to the US market as one based in the US.
However being a member of the EU means, for example a Danish company can load up a van with its produce, drive to London and deliver them to a customer without any paperwork or customs checks along the way. It has all the rights of a company based in another UK city.
This can only work if there are shared standards across the EU and if there is an authority (ultimately the European Court of Justice) to ensure these rights are available to all. It also requires common standards for goods and services.
The UK simply cannot expect to maintain this level of access to the EU market unless it is willing to accept the ECJ and all the EU laws and regulations.
Btw, only someone with no historical perspective whatsoever would question the progressive credentials of the EU (given the recent history of some of its members: communist rule, military and fascist dictatorship, sectarian division) or accuse it of being protectionist (given that 17 of the 20 most globalised countries in the world in terms of trade are members).
I would challenge you to explain how the Common External Tariff combined with the Common Agricultural Policy are not protectionist (tariffs average 18%)!
outside of the CAP: there are plenty of other examples of heavy protectionism in the CET. sugar and coffee are two easy examples.
sugar has a heavy import tariff: to give the domestic EU sugar beet industry an huge advantage over the cane sugar business in the developing world
coffee is more insidious: processed coffee has a heavy import tariff, whilst unprocessed coffee has no tariff at all, this prevents producers in developing countries from developing the profitable part of the industry, forcing them to sell the raw produce at low prices to the EU
there are plenty of other examples, the net effect of being that if you are a developing nation: the EU is not an easy destination for your goods
CAP is a product of its time (sixties and seventies) but has been and continues to be reformed beyond recognition. All the export subsidies, quotas, price floors and other market distortions are gone or are in the process of being phased out.
As for sugar tariffs, it has been used as a tool for development policy with developing countries having zero-tariff access to EU markets. The processed Coffee tariff is not "heavy" - certainly less than 10% from what I recall.
yes, the CAP was a product of its time, but it's still there, it still makes up a huge 39% of the budget[1] (down from 79%, true), and the external tariffs on agriculture average out to a whopping 18%
if this isn't protectionism, what is?
[1]: https://ec.europa.eu/agriculture/sites/agriculture/files/cap...
The tricky aspect of free trade agreements is the non-tariff barriers [2]; those relate mostly to regulations, including labor protection, health, the environment, money laundering, and such.
They are very difficult to negotiate, because a lot of them are not about economics, but about things that people genuinely care about. For example, one of the major sticking points with TTIP was food quality (the chlorinated chicken debate). As a result, trade agreements that want to reduce regulatory barriers take years to negotiate.
Within the EU, this problem is addressed by having an actual, full-blown bicameral legislature and a court of justice to protect the interests of the member states and their citizens. But the UK doesn't even like the ECJ, so this is not going to be easy.
As far as the negotiations go, the British government has nobody but itself to blame. It doesn't even seem to be prepared for negotiations (and one has to wonder what it wasted the past year on); it has consistently and aggressively talked trash about the EU (in order to appeal to UKIP voters?), has issued threats (such as turning the UK into a European Singapore), and so forth. It should not be surprising that the reaction hasn't exactly been amicable.
[1] http://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS?vie...
[2] https://en.wikipedia.org/wiki/Non-tariff_barriers_to_trade
If tomorrow the UK says: "Fuck, we screwed up, let's stay in the EU" then the EU will put all their resources behind making that happen. No barriers at all: 4 freedoms and hopefully Schengen, too.
Where do you get the idea that is the EU the one leaving the UK for racist reasons, thus wanting to erect barriers against workers from other countries?