A helpful discussion of Brexit negotiations

This is one of the better discussions of Brexit that I've heard. It's from Falter Radio, a podcast from the Austrian weekly Falter. But except for the first 2 1/2 minutes, the discussion is in English. The participants are Matthew Goodwin of the University of Kent and Angus Robertson of the Scottish National Party (SNP), moderated by Bettina Prendergast of the Austrian public news agency ORF. Sackgasse Brexit 07/27/2018:

This is especially good on emphasizing how important the Northern Ireland issue is in Brexit. It even explains the "backstop" in straightforward terms, which in my limited experience is pretty rare. Usually it winds up sounding like some obscure esoteric teaching.

Just in the last few months, I've noticed a shift in the terminology used in the press for people who criticize some aspect of the currently dominant policies in the EU. For years, the term "euroskeptic" has been used mainly to refer to people who are opposed to their country being part of the EU. Most of them are on the far right of the current political spectrum, though a fraction of them are on the left. "Eurocritic" was used to describe people who were in favor of their countries being in the EU but expressed urgent criticisms of major problems like the structure of the euro currency and the lack of any adequate EU refugee policy.

But just lately, I've heard "euroskeptic" used to cover both perspectives. Political terms evolve. But it does seem like a rhetorical win for the everything-is-basically-all-right-with-the-EU view because it lumps together pro-EU gruops and positions with rightwing nationalist anti-EU ones.

One thing that's not so clear in this discussion is that both sides in the Brexit negotiations, Britain on one side and the EU on the other, have a large incentive to stall until near the final deadline on coming to agreement. Just like happens in labor negotiations. But given the divisions in British politics and the fanaticism of the Brexit hardliners, the prospects of blundering into a "hard Brexit" are not negligible.

Matthew Goodwin's webpage describes him as "an outward-facing researcher who believes that social science should be as much about contributing to wider society as to social science." It also notes that he was "co-editor of the Routledge book series on Extremism and Democracy" and an "academic member of the UK government's working group on anti-Muslim hatred (2011-2015)."

Angus Robertson is former Member of Parliament and former Deputy Director of the SNP.

A shaky Brexit hope from a major Labour donor and euroskeptic

Frances Coppola has a number of interesting observations in a column criticizing the ideas advocated by "businessman and self-styled economist John Mills," who she identifies as being on the left politically. Mills is a major donor to the Labour Party. (Louise Armitstead, Rich, private school, Oxford. Meet John Mills, Labour's biggest donor Telegraph 09/15/2013.

Coppola writes:

John Mills is also a long-standing supporter of Brexit. Like many left-wing Brexiters, Mills thinks that leaving the EU will create an opportunity to rebalance Britain’s economy away from finance and other service industries and towards manufacturing. Britain’s manufacturing decline long pre-dates the Brexit vote: business investment has been low by comparison with other countries for decades, manufacturing productivity started to fall long before the 2008 financial crisis, and Britain has run a persistent trade deficit since the early 2000s.

For Mills, that trade deficit is the UK’s biggest problem. “We have a major problem in our financial relationship with the other EU countries,” he says, laying out a table showing the UK’s trade position. Indeed, it does look bad: his figures (from the Office of National Statistics, 2016) show the UK running a total trade deficit (goods and services) of £37bn, of which £71bn is with the EU. No, that is not a typo: the UK runs a trade surplus of £34bn with the rest of the world, mainly because of its dominance in services. [emphasis in original]

Mills argues that Britain could benefit greatly from devaluing the pound sterling. Coppoola describes his argument; " artificially depressing sterling's exchange rate would create a big export boom and encourage manufacturing." But, she notes, devaluing the currency for boosting exports is prohibited by the rules of the IMF, of which Britain is very much a member:

Nor can the UK afford to ignore the IMF's rules. John Mills's assertion that sterling is not a reserve currency is very wrong. It is not only a major international reserve currency, it is one of only five currencies currently in the IMF's SDR basket. Countries with international reserve currencies all benefit to some extent from "exorbitant privilege" - namely, the ability to borrow externally long-term in their own currency at low interest rates. Giving up this privilege would be costly.

Of course, Mills might argue that losing "exorbitant privilege" would be worth it for a better export performance. [my emphasis]

She explains why the idea that exchange rates determine the trade deficit/surplus is a historical, with arguments like this:

The long fall of sterling from its 1981 height was due to the U.S. dollar, which soared due to the combination of very high interest rates with enormous fiscal stimulus. In 1985, there was an international agreement (known as the Plaza Accord, because it was made at the Plaza Hotel in New York) that central banks would act in concert to dampen the US dollar. Because of the dollar’s dominance in the sterling trade weighted index at this time, the Bank of England’s participation in the Plaza scheme forced sterling’s exchange rate to rise significantly. ...

These charts demonstrate a serious problem with the "strong sterling causes trade deficits" idea. 1981 was the peak of the trade surplus. But it was also peak sterling. So the UK not only recovered from a sudden stop in 1975, but delivered its best ever trade performance while sterling was rising to a post-war high. And when sterling fell back in the early 1980s, the UK’s trade surplus shrank. If the exchange rate was determining the balance of trade, as Mills asserts, we would expect the reverse. [my emphasis]

And she calls attention to the effect of the current economic-globalization regime:

There is also another possible explanation for the UK’s rising trade deficit in goods since 1999, and that is the entry of China to the World Trade Organisation (WTO) and the general opening up of Asian countries to trade. In the US, China’s accession to the WTO is blamed by many for the loss of manufacturing jobs. There is little evidence that UK manufacturing jobs significantly went to Europe – but they have without doubt gone to the Far East. When manufacturers offshore production, the contribution of their goods to the trade balance switches sign. So, for example, ever since James Dyson moved manufacturing to Malaysia, his goods have shown in the UK's trade balance as imports, not exports. His decision, like that of other manufacturers, to move production to cheaper locations, thus contributes to the UK's trade deficit in goods.

In theory, a large depreciation of sterling could improve export competitiveness enough to encourage the likes of Sir James Dyson to bring manufacturing back to the UK. In practice, though, it is not that simple. Dyson now has extensive supply chains in the Far East. Relocating to the UK would be disruptive and costly, not least because unless those supply chains were also relocated to the UK, Dyson's input costs would rise as a direct result of the devaluation of sterling. There are two sides to exchange rate changes, after all: what benefits exporters is harmful to importers, and vice versa. In the UK, most manufacturers import raw materials and components, and all manufacturers are dependent on imported energy (since the UK is not self-sufficient in energy). Sterling devaluation may not benefit manufacturing nearly as much as Mills thinks.  [my emphasis]

Coppola also points out that his won export business creates an incentive for Mills to view currency manipulation as a desirable national policy: "Mills is a major UK exporter. No wonder he wants a better exchange rate. But I fear that in his desire to benefit his own business he has failed to take into account the terrible political risks associated with using the exchange rate as a source of competitive advantage. The IMF's articles of agreement prohibit exchange rate manipulation precisely because of the risk of tit-for-tat retaliation."

Immigration and austerity, Brexit version

Simon Wren-Lewis takes on the ever-vexing question of class-vs.-identity politics, which is a lively one at the moment in Europea as well as the Democratic Party in the US, Links between austerity and immigration, and the power of information Mainly Macro 11/01/2017.

Wren-Lewis looks the role of xenophobia in rightwing nationalist politics in Britain, and argues that:

... it is a mistake to imagine it is all about economics, or even ‘culture’. One of the unfortunate consequences of the culture vs economics debate over populism is the implication that one way or another views are deterministic, and the only issue is what kind of determinism. The reason I go on about the media so much is that information matters a lot too. Although people may be anti-immigration because they have xenophobic tendencies which are reinforced when times are bad, they can also be anti-immigration because they have poor information, or worse still have been fed deliberately misleading facts. [my emphasis]

Political motivations are overdetermined, in other words. A good formulation of it, and that's important. "Operationalizing" it in practical politics is considerably more complicated.

He links to an article by Roger Scully, I spent a year researching why working-class Welsh people in the Valleys voted for Brexit, and this is what I found Independent 10/26/2017. Scully reports on the findings of a Cardiff University study that analyzed the Brexit vote in the Wales Valleys, a longtime Labour stronghold that voted Leave, despite the Labour Party's pro-EU position. Scully notes that elections in June 2017 showed that Labour still remains strong in voter preferences. The study found that immigration stood out as a key issue in the Leave voters expressed motivations for their vote:

Focus group participants in Merthyr and the Rhondda were notably unhappy at the increase in the Polish communities in those places. This was not articulated simply as xenophobia: a specifically working-class objection to immigration advanced to us was that, by making the jobs market much more competitive, the wages of locals were driven downwards. Thus, immigration was viewed as working much more to the benefit of managers and companies than for ordinary working people. Immigrants willing to work for low wages were also seen as contributing to the decline in some town centres, and in particular leading to the growth of charity and low-value shops catering to the needs of a low-wage economy.

Scully also wrote about the findings of the study in New research shows deep divisions persisting on Brexit Welsh Brexit Blog 10/26/2017:

• There remains substantial hostility among many of these voters towards immigration, with specific problems cited being immigrants taking jobs from locals and driving down wages – to the benefit of employers rather than ordinary workers;
• The statement that Wales is a net beneficiary from the EU budget was treated with significant scepticism by focus group participants. And much EU spending in the valleys was viewed as wasteful ‘vanity projects’.
• Many Leave voters expect that Brexit may cause short-term problems, but they expect it to be worth it in the longer-term.

Wren-Lewis uses the findings to discuss how austerity economics interacts with fear about immigration:

Why might attitudes to immigration change? I strongly suspect that anti-immigration attitudes, along with suspicion about benefit claimants, become stronger in bad times. When real wages are rising it is difficult to fire people up with arguments that they would have risen even faster in the absence of immigration. But when real wages are falling, as they have been in the UK in an unprecedented way over the last decade, it is much easier to blame outsiders. Equally when public services deteriorate it is easy to blame newcomers.

It is wrong to think that this only happens among working class, left behind communities. Catalonia is a relatively rich part of Spain, and there has always been resentment about this area ‘subsidising’ the rest of the country. But it is very noticeable how support for pro-independence parties increased sharply as Spain turned to austerity, although that could also be a reaction to corruption scandals. [my emphasis]

The dominance of neoliberal economic policies and their endorsement by the Labour Party for many years also meant in practice slow in real wage growth and a decline in public services, both key parts of the neoliberal gospel.

Wren-Lewis emphasizes the pro-immigration politicians can't just cower in fear of xenophobic propaganda and sentiments, they need to make the case for the benefits of immigration:

Of course most people want to stop immigrants coming here and claiming unemployment benefit. This is why newspapers keep playing the trick of talking about the large number of migrants ‘who are not employed’, conveniently forgetting to mention that this includes people like mothers looking after children. In reality unemployment among EU immigrants is below that among the native population. In addition, we can already deport EU immigrants that remain unemployed under EU law if the government could be bothered to do so.

For politicians who do want to start making the case for immigration, the place I would start is public services. Few economists would dispute that immigrants pay more in tax than they take out in using public services. Yet most of the public believe the opposite. [my emphasis]

Britain in the Great Depression and post-Brexit

Barry Eichengreen recounts an important piece of the history of the Great Depression in Brexit and the Pound in Your Pocket Project Syndicate 09/13/2016:

In 1931, when the UK abandoned the gold standard, sterling plummeted by 30%. Like now, the country relied heavily on exports of services – not just banking services but also shipping and insurance. And the external environment was even more unfavorable than it is now.

Yet, despite these headwinds, the merchandise trade deficit fell by a quarter between 1931 and 1932. By 1933, the services balance was strengthening as well. At this point, the economy was on the road to recovery.

Three circumstances made this possible. First, excess capacity enabled companies to ramp up production. Second, Britain was able quickly to put in place a set of favorable trade deals, negotiated with Commonwealth countries at the Ottawa Conference in 1932. Third, political uncertainty fell sharply, as the Labour government, widely blamed for the 1931 crisis, was replaced by a Conservative-dominated cabinet with broad popular support.

He goes on to say with reference to Britain's current economic situation that currency flexibility - which members of the eurozone do not have - can be helpful. But it can't in itself restore full economic health.

Brexit Updates

The Real News has the following video reports on the aftermath of Brexit.

Brexit sends Europe into Political and Economic Crises (1/2) 06/28/2016:

Brexit sends Europe into Political and Economic Crises (2/2):

The Corbyn No-Confidence Vote and the Bleeding of the Labor Party 06/28/2016:

Neoliberalism and Brexit

I'm trying to be cautious about making assumptions on the relationship between economic conditions and the rising xenophobia and nationalism we're seeing in European politics. And US politics, unfortunately.

This is why studies like the classic studies organized by Frankfurt School exiles in the US, The Authoritarian Peronality (1950), are so valuable in reminding us of the complexity of the interaction between social conditions, family structure and other dynamics.

The economic and political theories have been dominant in the North Atlantic world and beyond for decades. It first became dominant during the Reagan Administration in the US and the Thatcher government in Britain. The Maastricht Treaty on European Union of 1993 represents a key turning point for the ascendance of neoliberalism in Europe. A key aspect of neoliberal hegemony in both the US and Europe has been the adoption of that outlook by the dominant center-left parties, social-democratic in Europe and the Democrats in the United States.

The neoliberalism of the 1990s up until today didn't create nationalism, xenophobia or racism, obviously. But in politics, quantity and intensity matter. A lot. And there are distinct social changes that have affected economies from Germany to Britain to the United States as a result of the dominance of such policies and theories of government.

Servaas Storm takes a shot at framing the problem in How the Brexit Tragedy Challenges Economics New Economic Thinking 06/26/2016:

It would be a tragic mistake to read this resentment against the E.U. as only anti-migrant, racist or bigoted, because the racism and bigotry have grown in conditions of economic austerity, artificial job scarcity and crisis, rising unemployment, rising job insecurity, and exploding inequalities as social protection for workers, pensioners and families have been scaled down in favour of an expanded social safety net for TBTF [too big to fail] banks and corporations. Almost everywhere in the E.U. — as in Britain — there is a polarization of the income distribution into a large number of low-income households and a much smaller number of very rich, while the middle classes have shrunk. There is a segmentation of employment into low-wage, unprotected and precarious jobs, mostly in low-tech services, and high-wage and protected jobs in high-tech manufacturing, finance, legal services and government.

Labour market reforms are turning European countries into “dual economies” — a trend fuelled by robotization and technological progress. The real message therefore is one of utter macroeconomic mismanagement in response to the global crisis and on-going rapid technological change, which – unfortunately not for the first time in recent history – has created the conditions for political instability, upheaval and social chaos. The massive social protests in France against the modernization of labour laws — newspeak for a reduction in the strength of French job-protection laws and social security in general — by the “socialist” Hollande government illustrate the point: The systemic dismantling of worker protection in the name of cutting wage costs and improving unit-labour cost competitiveness will certainly increase job insecurity, employment precariousness, and inequality without any further macroeconomic benefits. Despite uncountable attempts to do so, no robust relationship has been found between job-protection, on the one hand, and unemployment, economic performance and productivity growth on the other hand. [my emphasis]

Negotiating over negotiating Brexit

Anything can happen with Brexit. But it sounds unlikely to me that it's going to be a smooth process.

European Parliament President Martin Schulz is from the German SPD. But he's a shameless Angiebot, not that this makes him any different than most other SPD leaders, a related but different story. He demanded that Britain make their Article 50 application by this Tuesday! Probably not going to happen. In theory, the SPD (Angie's junior coalition partner) is pressing for a rapid British exit while Angie and her CDU/CSU are being more cautious.

But there's no way Schulz made that kind of statement without Merkel's approval. If Merkel is going to preserve her current EU, she has to punish the defiant, like she punished Greece. I'm convinced that Merkel sees the EU as a neoliberal version of the Warsaw Pact; that's a big reason I call her East Germany's Last Revenge on the West. Since Britain is not a part of the euro, she has more flexibility to make concessions to Britain and did make some prior to the Brexit vote. But punishment and intimidation is how she rolls in these things, with the full support of the SPD.

I'm very sure Angie doesn't give a flying flip that a majority of British voters elected to leave. At his first meeting with Yanis Varoufakis as Finance Minister of Greece when the Syriza government took power in 2015 with a clear electoral mandate to end the Herbert Hoover austerity programs, Angie's Finance Minister and fellow CDU leader Wolfgang Schäuble told Varoufakis, “Elections cannot be allowed to change an economic programme of a member state!” (Why we must save the EU Guardian 04/05/2016)

Angie's close ally and Defense Minister Ursula von der Leyen is saying, "No one will have to chance to play for time. The economy will demand quick clarity. Investors will hold back until they know what's going on now: in or out." ("Es wird niemand die Chance haben, auf Zeit zu spielen. Die Wirtschaft wird schnelle Klarheit einfordern. Investoren werden sich zurückhalten, bis sie wissen, was jetzt gilt: drinnen oder draußen."; Schulz fordert Austrittsantrag der Briten bis Dienstag Spiegel Online 25.06.2016)

The negotiating over negotiating is already well underway (Jon Henley et al, European leaders rule out informal Brexit talks before article 50 is triggered Guardian 06/27/2016):

On the eve of a crunch summit in Brussels, the German chancellor, Angela Merkel, said she, president François Hollande of France and Italy’s prime minister, Matteo Renzi, had agreed at their meeting in Berlin that “there will be no formal or informal talks about Britain’s exit” until the UK has triggered article 50, the untested procedure that governs a member state leaving.

Hollande urged Britain to “not waste time” in launching the leaving process. “Being responsible means not wasting time in engaging with the question of Britain’s departure and setting this new impulse we want to lend the new European Union,” he said, adding that “nothing is worse than uncertainty – and Britain has already had painful experience of this”.

France and Italy, not surprisingly, are on board with Merkel's approach. The German SPD, which still passes for a center-left party and serves as Merkel's junior coalition partner, is playing its part by publicly insisting on a hard line with Britain:

The president of the European parliament, Martin Schulz, warned this weekend that a period of limbo would “lead to even more insecurity” and said the Brussels summit was the right time to begin formal exit proceedings.

There was pressure, too, from within Merkel’s own government: the head of her Social Democrat coalition partners, Sigmar Gabriel, called for “decisive action instead of indecision”.

More Brexit

Brexit will get a lot of attention in the American press, at least for a few days. It affected the stock market, so the news will pay attention.

This is probably a nonviolent instance of the famous cynical comment commonly attributed to Ambrose Beirce, " "War is God's way of teaching Americans geography, "War is God's way of teaching Americans geography."

Australian economist Bill Mitchell gives some historical perspective of the internal British politics of European unity in Britain should exit the European Union Billy Blog 06/22/2016.

Paul Krugman isn't too worried over the economic consequences (Brexit: The Morning After 06/24/2016):

Yes, Brexit will make Britain poorer. It’s hard to put a number on the trade effects of leaving the EU, but it will be substantial. True, normal WTO tariffs (the tariffs members of the World Trade Organization, like Britain, the US, and the EU levy on each others’ exports) are low and other traditional restraints on trade relatively mild. But everything we’ve seen in both Europe and North America suggests that the assurance of market access has a big effect in encouraging long-term investments aimed at selling across borders; revoking that assurance will, over time, erode trade even if there isn’t any kind of trade war. And Britain will become less productive as a result.

But right now all the talk is about financial repercussions – plunging markets, recession in Britain and maybe around the world, and so on. I still don’t see it.

But he rightly focuses on the significance of political decisions to follow:

It seems clear that the European project – the whole effort to promote peace and growing political union through economic integration – is in deep, deep trouble. Brexit is probably just the beginning, as populist/separatist/xenophobic movements gain influence across the continent. Add to this the underlying weakness of the European economy, which is a prime candidate for “secular stagnation” – persistent low-grade depression driven by things like demographic decline that deters investment. Lots of people are now very pessimistic about Europe’s future, and I share their worries.

But those worries wouldn’t have gone away even if Remain had won. The big mistakes were the adoption of the euro without careful thought about how a single currency would work without a unified government; the disastrous framing of the euro crisis as a morality play brought on by irresponsible southerners; the establishment of free labor mobility among culturally diverse countries with very different income levels, without careful thought about how that would work. Brexit is mainly a symptom of those problems, and the loss of official credibility that came with them. (That credibility loss is why the euro disaster played a role in Brexit even though Britain itself had the good sense to stay out.)

At the European level, in other words, I would argue that Brexit just brings to a head an abscess that would have burst fairly soon in any case. [my emphasis]

This is a good discussion featuring Ivo Daalder, Richard Haass and Margaret Warner of what Brexit implies for US foreign policy, Foreign policy experts anticipate Brexit’s global impact PBS Newshour 06/24/2016:

Britain is still a NATO member. And for ties to the US, that one that binds stronger than the EU. But ever since the Clinton 1 Administration - when the European Community had just become the European Union, Britain has been the US voice within the EU. The US policy has been to push to have the EU expand its membership as a way to incorporate eastern European nations into the West. But it also kept the EU weaker because the more countries they had, the harder it was in practice to achieve the famous "ever closer union." Because it's still American policy that the US should keep overwhelming dominance in all parts of the world and therefore forestall the rise of any potential "peer competitor," which the EU could have been before the 2008 crisis and Angela Merkel went to work on it. So from the current US policy viewpoint, it's a positive that the EU is now weakened and the "ever closer union" looks like it will be postponed indefinitely. But we also lost Britain the main advocate for American foreign policy in the EU.

Clinton I and Obama weren't quite as crass in the way they expressed it as Shrub Bush was. Actually, to the extent that Europeans have an interest in not having unending chaos in the Middle East that encourages terrorist attacks inside Europe and generates massive numbers of refugees that the EU is obviously failing to handle well, a more coherent EU foreign policy would be in practice a beneficial restraint on American Presidents doing dumb stuff in foreign policy. But with neoliberal economics the dominant economic policy approach in the EU, it's hard to see how they are ever going to achieve enough unity to actually solve the snowballing problems they have. But in Britain, their political leadership of both Labour and the Tories pretty much decided after the Suez Crisis of 1956 that they would never be on the opposite sides of the US on a major foreign policy issue. The pitiful Tony Blair was following that approach in facilitating Dick Cheney's invasion of Iraq. If the EU could ever develop a genuinely independent foreign policy in the foreseeable future, it would have to be without Britain. Or, as I guess we'll be calling it when Scotland and Wales declare independence, Little Britain.

Britain votes for Brexit

They did it. The British voters voted "Leave" on the EU referendum.

Oliver Wright reports in Farage's dream. Britain's nightmare? UK votes to leave EU as pound plunges to 31-year low Independent 06/24/2016:

The result will now trigger a process of British withdrawal from the European Union and quite possibly another referendum for an independent Scotland.

Labour said David Cameron should “seriously consider his position”. He is not expected to make a formal statement until after the official result is declared.

The Ukip leader Nigel Farage claimed victory, saying that “dawn was breaking on an independent United Kingdom”. Provocatively he said he hoped the vote would be a catalyst for the complete collapse of the European Union.

The polling expert Professor John Curtice said Labour supporters appeared to have defied pleas from their party to support Britain’s membership of the EU – tipping the scales in favour of Brexit.

John Judis had some interesting thoughts on Thursday about how Labour leader Jeremy Corbyn might be affected by his enthusiastic support for Remain (Will Corbyn's Unreserved Opposition to Brexit Doom the Labour Party? TPM 06/23/2016):

Now here's how the politics parses. Under Tony Blair, Labour had adopted a strategy similar to Bill Clinton in the United States of wooing the white-collar middle and upper-middle class. That kind of strategy can work if you still have the confidence of working class voters and if the opposition is the cranky rightwing. But it will fail absymally if you lose the confidence of working class voters and if the opposition moves to the center. That’s what happened in the last British election where Labour got drubbed.

I had thought Jeremy Corbyn’s mandate was to bring working class voters back into Labour after they deserted in the last election, but I was mistaken. Corbyn has repudiated Tony Blair’s foreign policy, but he has adopted something like his political strategy. The difference is that while Blair’s economic politics reflected high-tech professionals, Corbyn’s seems to reflect the Bohemian, far left segments of the professional classes who spurn any hint of nationalism in their outlook. That’s a recipe for political isolation and desolation. Labour can, of course, make a comeback. One can imagine that if “Leave” wins, there will be a split in the Conservative Party that might open the way for Labour. But if “Remain” wins, the Tories will emerge victorious and Labour will have further alienated the people it needs to win elections.

There will be endless postmortems for weeks, years, decades. Simon Wren-Lewis presents an important context for how the immigration issue played in the Brexis vote in this pre-vote piece, Why do people want less EU immigration? Mainly Macro 06/23/2016:

What people miss is that EU migrants pay tax, which could fund public services. Indeed EU migrants tend to be young, so they are likely to pay more tax in than they are likely to take out from using public services. It is why the OBR believes that restrictions on immigration would hurt the public finances.

Which means that in reality EU migration creates more resources that allows the government to spend more on the NHS and other public services. Not only do EU migrants pay for themselves in this respect, they also make access easier for natives. Add in the negative impact of making trade with the EU more difficult, and it is clear that Brexit would have a negative impact on public services. No wonder Dr Sarah Wollaston switched sides.

Yet this is an argument David Cameron was reluctant to make, because it raises an obvious question. If EU migration is not the reason why the NHS is in crisis, what is? The answer is that his government has chosen to shrink the share of national income going to the NHS, when there are good reasons why this share should be rising. In other words the government has taken the taxes EU migrants pay, and used them to cut taxes or cut the deficit. Because Cameron will not make the case for why EU migration helps the NHS, that case is not heard by voters. Instead they are told all the time that the NHS has been 'protected'. Hence the poll result.

The EU has real problems. Here is one of my fairly recent posts on it: Long-festering problems in the EU 12/27/2016.

A few other reports on Brexit:

Sinead Cruise and Lawrence White, Clouds over Britain's financial sector after Brexit vote Reuters 06/24/2016

Anushka Asthana et al, Britain votes for Brexit after dramatic night leaves nation divided Guardian 06/24/2016

Patrick Wintour, Britain has voted to leave the EU – what happens next? Guardian 06/24/2016: "On the assumption there is no turning back, or collective buyer’s remorse, Britain will live with the political, constitutional, diplomatic and economic consequences for a decade or more."

George Parker and Michael Mackenzie, UK votes for Brexit in EU referendum, triggering market shockwaves Financial Times 06/24/2016

Ian Wishart, Brexit’s First 100 Days Promise Chaos, Fear, Damage Limitation Bloomberg News 06/13/2016

Anoosh Chakelian, Britain votes to leave the European Union New Statesman 06/24/2016

Eric Reguly, Cameron gamble fails as Britain votes to leave EU Globe and Mail 06/23/2016

Frances Coppola on Britain and the EU

With the British referendum on leaving the European Union coming up this coming Thursday, Frances Coppola argues for what I would call a "British" version of the Union in The EU's greatest achievement Coppola Comment 06/12/2016. She argues that the achievement of her title was the incorporation of former Warsaw Pact nations into the EU:

After the creation of the Euro in 1999, many in Western Europe wanted deeper integration of the existing members around the single currency, rather than widening of the EU to admit (among others) former Iron Curtain countries. The UK at that time was under considerable pressure to join the Euro. But the UK never wanted a deeply integrated EU, and it did not want to join the Euro. So it fought for widening, not deepening, of the union.

Eventually, the EU agreed. Ten countries, most of them former Iron Curtain countries, joined the EU in 2004. Two more - Bulgaria and Romania - followed in 2007. The EU today encompasses almost the whole of Europe from the Atlantic Ocean to the border of the old Russian empire.* Even some countries (Ukraine, Moldova) that were historically part of the Russian empire have asked to join.

This, not the Euro, is the EU's greatest achievement. Admitting the former Iron Curtain countries to the EU has brought together the sundered parts of Europe and helped to heal the deep wounds left by the Cold War. The UK should be proud of its part in this remarkable example of cooperation for a far-reaching common good.

She also makes this anecdotal observation in making a larger point:

But why are people so angry, and so despairing? There are many reasons, but a common theme appears to be the feeling that Britain is losing control of its own affairs. "Take Control" is the slogan of the Leave campaign. It resonates with many.

My own father has been a lifelong supporter of the European Community. In 1975 he campaigned for the UK to remain in what was then known as the European Economic Community (EEC). But now, he intends to vote to leave.

I asked him why. "It's the Euro," he said. "Britain will never join the Euro. But unless we do, we will be sidelined in European policymaking. Our voice will not be heard, because the Eurozone will dominate. We will inevitably have policies imposed on us that we do not want. We have no choice but to leave if we wish to retain any real control of our own affairs."

I have heard this now from many people. A belief that democratic policymaking - flawed though it is - is being slowly replaced with decisions by an unelected, bureaucratic elite which is only interested in furthering the creation of a United States of Europe against the wishes of the common people. And a growing sense that the UK's voice in Europe is fading as the Eurozone becomes ever more important.

And yet, when I attended the European Summit last week, this was not what I heard. Much of the conversation at the summit was about Brexit, of course. The participants seemed genuinely bemused by it, and distressed that the UK might choose to leave.

The so-called democracy deficit in the EU is real. Some of the more nationalist opponents of the EU may not be too worried about a deficit of democracy, either in the EU or in their own countries. But it's a real problem and has certainly had a real effect in reducing the enthusiasm of the democratic-minded for the Union.

Britain's choice on exiting the EU ("Brexit")

Britain votes in 10 days (June 23) on a referendum on whether to remain in the European Union or to leave.

In the political jargon, Britain leaving is known as "Brexit" (BRitish EXIT).

The vote has been running close in the polls. A Leave decision is very possible. (Paul Waugh, CM Opinion Poll Gives Brexit ANOTHER Big Lead: 53%-47% Leave to Remain Huffington Politics UK 06/13/2016; Yahoo! Finance/Reuters 06/12/2016)

The issue is ideologically muddy in that it is the more nationalistic rightwing in British politics, particularly the UK Indpependence Party (UKIP) headed by Nigel Farage. (Brexit campaigner Farage says UK, Italy to launch EU's disintegration Yahoo! News/Reuters 06/11/2016; Elizabeth Piper, Brexit needed to stop 'Orlando-style atrocity', campaign group says Reuters 06/13/2016)

Dani Rodrik gives his own view of the issue in his eponymous blog Brexit and the Globalization Trilemma 06/13/2016.

I have not written much on Brexit because I do not have a strong or particularly well-informed view of it. My personal hope is that Britain will choose to remain in the EU – but that is as much because of a belief that without Britain the EU will likely become less democratic and more wrong-headed as it is because of the likely economic costs of Brexit.

Yes, I do think exit poses significant economic risk to Britain (and possibly to the world economy), though I believe there are very large margins of uncertainty around the quantitative prognostications presented by the U.K. Treasury and many British economists. But there are also serious questions posed about the nature of democracy and self-government in the EU as presently constituted.

The "globalization trilemma" of his title refers to the construct he explains in the post, which basically says that we can have two of three things: hyper-globalization, national sovereignty, and democracy. But we can't have all three.

In the context of the EU Rodrik argues that the current combination of retained national sovereignty and hyper-globalization has constricted democracy excessively: "it is clear that the EU rules needed to underpin a single European market have extended significantly beyond what can be supported by democratic legitimacy."

This has been widely discussed for years as the problem of the democratic deficit in the EU. But under Angela Merkel's domination and her shared commitment with the EU One Percent to neoliberal economic policies, the democratic deficit has only grown bigger. See, e.g.: Greece, 2015. Because neoliberal economic policies can't be easily sustained in a functioning democracy over longer periods of time. See, e.g.: most of Latin America, 1970-2001.

Rodrik says of Merkel's accomplishment:

The manner in which Germany and Angela Merkel, in particular, reacted to the crisis in Greece and other indebted countries buried any chance of a democratic Europe. She might have presented the crisis as one of interdependence (“we all contributed to it, and we are all in it together”), using it as an opportunity to make a leap towards greater political union. Instead, she treated it as a morality play, pitting responsible northerners against lazy, profligate southerners, and to be dealt with by European technocrats accountable to no one serving up disastrous economic remedies.