The complicated consequences of Brexit

Dr. Declan Hayes, British economist and geopolitical analyst, explains the outcome of the British referendum on EU membership

A Complicated picture

Well, the people who argued, from the beginning, have, as what they see, the problem with the “democracy” in the EU. We must go back to the times when the European community was set up in the first place with a “Treaty of Rome”. After the Soviet Union defeated Germany in 1945, France and the FRG decided that they had to work together, otherwise they would have no big voice in the world. The bomb dropped in Nagasaki was a warning to the Soviet Union; this had nothing to do with Japan. The USA was telling the Soviet Union that the US had nailed the big “boys”. Therefore, the history of Western Europe was France against Germany and Britain was deciding whichever was the weaker. Germany was strong and went with France, and France went with Germany. President De Gaulle did not want Britain in the European community. He thought it would be only trouble. When Britain and Northern Ireland joined the European community, the British wanted a loose economic federation, not a close political and military federation. Moreover, obviously, the USA had its own interests in all of this as well. So, it’s not a kind of black and white situation. In Britain itself, there are so-called left and right elements - some of them favor political and economic union with Britain, others of them don’t. It is a complicated picture.

As regards economics…well, why does Germany want this EU super-state? Obviously, it is to extend German markets. It is not because they loved the Greeks. If we look to what happened to Greece – no mercy was shown to them. In Ireland - we had to vote again and again until our masters in Brussels got the results they wanted. The European project is a project of big business, essentially French and German business. What Britain contributes is an economic contribution to the world. In the old days, it was a major industrial power, but that has been gone for a long time. Now the City of London is important essentially for invisibles like tourism, insurance, football – that is what Britain produces. There are no factories left and all British brand names like “Burberry” are made in China. We have this conflict of interests in Britain and in Europe. We came up with an isolation. Who won? Again, the situation is too complicated. In the old days, if we look at the financial market, things like oil were a very good signifier, as was gold. In 1979, the Soviet army went into Afghanistan, and gold and oil prices skyrocketed. Because that was a very big event. Now, with Brexit, the pound is up and the London Stock Market is up. If we interpret things as in the past, we would say that Brexit is good for Britain, and bad for Germany and France. But now, with all the violence happening in Ukraine and Syria, these indicators are not as clear as they once were. Oil and gold prices should be very high, but that is not what is happening. It is a complicated situation.

The City will Withstand any Crisis

The City of London is separated. Is actually has a separate governmental system from the rest of Britain. American experts predicts an economic crisis after Brexit. People are talk about crisis. We have always in a crisis with the Americans since 1911. There are many things that happened with Ukraine that should be called crisis, but Americans don’t say this is a crisis. Because it suits their agenda. France and Germany are hope to pick up business in the financial services sector. The City of London has an advantage there. It’s not going to go away. If Americans want to create a huge crisis, they can be the victims as well.

The international financial services center, which is headquartered in London, does not want that type of crazy risk. The Americans have the technology, the Japanese and Chinese now have the money, but the deals are done in London. That is not going to change. The City of London depends on money, and is separated from the rest of the country no matter what currency they are dealing in.

 Brexit is a public protest

As regards threats to the British from the EU, the greatest problem is that the leaders of EU are unelected and conquer mercilessly. The Americans like to talk about the lack of democracy everywhere except in America, but all the ordinary person can do is go to vote. So, the ordinary British person has only one way of protest, which was to vote for Brexit. When you have a lot of money, like the US, you can bribe a lot of people. There are many ordinary people, who are out of benefit. For example, the fishermen – their industry is more or less gone. Our seas are fished out. For people in Brussels, that means nothing. Our politicians are the second high-paid politicians in the world. There is obviously a big difference between them and ordinary people.

Labor had Nothing to do with Voters

Why was Labor against Brexit? The problem is that the big politicians are too separated from the ordinary politicians. Let us concentrate on the referendum. Jeremy Corbyn is painted as the Antichrist. Over 80% of the members of parliament from Labor rebelled against him after Brexit. What is behind that? Jeremy Corbyn did not lose the Brexit vote. The Brexit vote was lost or won depending on Labor’s places in England. Ordinary English people voted for Brexit because their leaders had nothing to do with them. 

If you are a rich Labor person on the inside and you get a safe seat, you will win. Because people will vote Labor while there is no other alternative. The referendum gave them an alternative. They expressed their protest by voting for Brexit.

The EU will Punish Britain for Brexit

The EU will be very slow to leave Britain. They made everybody vote two or three times, and they will try to punish Britain just as they punished Greece. But there are some things in Britain that they cannot punish, like the financial service center. A lot of leaders are populists, not real politicians. That is the problem.

American Domination

On the issue of the transatlantic partnership agreement, the Americans do not do partnerships. They do what they want to do. First, we had the Monroe Doctrine in Latin America. Then we got the war with Nazi Germany. The Americans gave the least and got the most out of it. Britain gave the most and got the least. After the war, only America was allowed to occupy Japan because America had plans to dominate the world. Sanctions became a weapon only after the collapse of the Soviet Union. The EU is one of the big losers there, but they are doing this, because their boss, America, tells them what to do. The USA has this huge power. There is no such thing as partnership. Since the Second World War, Western Europe has never been number one. Look at G7 – why is Canada there? Because it helps American exercise control. Everywhere, except Russia, America has control. So there is no partnership here besides the “partnership” between boss and servant.