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Posts Tagged ‘Eurozone’

Some popular media outlets have hyped the BREXIT as either the end of western civilization or the dawn of the golden age for the UK.

But that’s how the media operates. The more sensational the spin, the greater the following.

What counts is how it all plays out in the long-run.

No one is disputing the turbulence in the short-run: what happens to trade agreements, ease of travel among the 28 member states, immigration policies. It is no different from a divorce. Life goes on, only differently, with some friendships extinguished and new ones formed. Some will always remain unchanged. And like a divorce, there will be alimony – but flowing in two directions, in various forms. It will be difficult to project who will pay more.

Even with the UK as a member, the EU has an Achilles Heel owing to the sovereignty and nationalistic bent of its member nations, combined with a common monetary unit used by the nineteen members who comprise the Eurozone. The propping up of weaker economies in the union by the healthier ones, without the power to effectively influence legislation in the former, is like supporting your ne’re-do-well cousin Eddy.

Unemployment is pervasive: 8.9% in the EU and 10.3% in the Eurozone.

Overall, the EU is not only an unhappy family, but a somewhat dysfunctional one.

So one cannot blame the UK for wanting to leave, especially since it has been on its own for over a thousand years.

The patriotic lyrics of “There Will Always be an England” come to mind.

Well, there might only be England. Scotland and Northern Ireland voted heavily against BREXIT and could consider secession. The Jacobites might finally get their wish! Mel Gibson may apply blue paint to his face once more.

But they should be careful what they wish for. Just as the UK is taking a risk by bailing, Scotland and Northern Ireland would be well-advised to consider the health of the EU. In the next few years, other major players may part company with the EU. The remaining members, aside from Germany, will not be powerhouses. The EU could become a German-centric body. Maybe the Fourth Reich? A German hegemony is what some Europeans have suggested is developing, with or without the UK, certainly more likely without the UK and France.

Despite the urge by BREXIT’s most ardent supporters to break as quickly as possible, it will not be that easy. 52% support for the measure is not exactly a mandate. There will be a donnybrook in Parliament that will make our Congressional battles look like spats.

In the end, we need to respect the UK’s process.

Regardless, there will always be a Europe.

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