Monday, 10 October 2016

Fixit means Fixit

It seems to me that Britain being in the European Union was a good deal for Britain. Britain avoided the unpalatable bits, like joining what turned out to be a disastrously badly-designed Euro and accepting functionally open borders (personally, I'd have been quite happy if we'd joined Schengen, but this wasn't to the majority of British peoples' tastes). Britain also got most of of the good stuff: the ability to attract inward investors (like Nissan in Sunderland) with the promise of access to a continental-sized market, access to a massive market on our doorstep,* the negotiation power of being part of a huge trade bloc, visa-free travel and access to continent-wide work and educational opportunities.

The EU was far from perfect, but it didn't need to be perfect for a Remain vote to make sense, just better than the alternatives.  And, as far as I can see, the EU status quo was better than the alternative scenarios the Leave campaign came up with - either soft Brexit, with single market access but no voice in making the rules Britain would be forced to obey, or the hard fantasy version, where Britain just throws its existing trade arrangements and negotiating leverage away and then loudly demands that the club it just flounced out of and everybody else in the world gives Britain preferential treatment, while the rest of the world rolls its eyes and says "can you believe these guys?"

But, like I say, the EU is far from perfect, with the design and execution of the Eurozone occupying its maximal distance from perfection. Brits wanting to get out of the EU makes no sense to me, but you've only got to look at the way the Euro is destroying growth, whole economies in southern Europe and the European social model, to see why taking back control from this European project might make sense to some Europeans. Never mind Brexit - some people are looking at the Euro and deciding it might be time to Fixit:
The advantages of leaving the euro could outweigh the disadvantages, concludes an interim report published yesterday by Euro Think Tank, a working group of economists from Finland.

The authors of the report argue that the ability to rapidly adapt to external shocks and mitigate their adverse side-effects is the greatest advantage of having a flexible exchange rate instead of a fixed one – especially for small open economies such as Finland.
Helsinki Times

*I never bought the argument that Europe would become unimportant in trade terms, because other regions of the world are growing faster. The European market is important because it's so close - literally a footstep away in the case of the land border with the Irish Republic. Nothing, short of physically moving Europe half way around the world, is going to change the brute facts of geography.