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Brexit: An Unnatural Disaster

di - 14 febbraio 2018
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Brexit looms over Britain today like an impending natural disaster – an approaching hurricane, the tremors before an earthquake, a smoking volcano. Yet it is not a natural disaster but one entirely man-made. The date has been fixed. That half of the British electorate which voted to leave will by March 2019 know the extent, though not yet the full extent, of what their vote means for the country they have ‘won back’. The half who voted remain certainly understand better the probable dimensions of that disaster, but their capacity to prepare for it is limited. That Britain stands on the brink of an unnatural disaster is without question. How the aftermath is coped with is another issue.
The problem still facing both sides after months of government negotiation and concealed preparation is the absence of any clear picture of what will happen in the period of transition after 2019 or what the final settlement will look like perhaps two to three years later. Given that the change is nothing less than fundamental in constitutional, legal, and economic terms, the absence of a clear agenda laid out for the British public is a travesty of that very democratic process the Brexit vote was supposed to represent. The British Parliament recently won by the narrowest of margins the right to vote on the terms of the final agreement. If this decision had gone the other way, then not even Parliament would have had the right to question what ought to be an open and democratic process.
Much of the debate in Britain has focused on the economic consequences of Brexit. The original campaign organized by those who wanted Britain to leave the EU suggested that there would now be generous surpluses available to help Britain’s failing health service, or that every household in Britain would be hundreds of pounds better off without having to pay taxes to support British membership of the single market. Both claims were entirely spurious. The costs of leaving the EU have now been estimated at no less than £60 billion. Households will find that taxes will not go down because the government will have to fill the gaps previously provided by generous European subsidies or regional investment programmes. With the prospect of rising inflation, already evident in the current upward trend, real costs per household of foodstuffs and other imported products will rise perhaps substantially. How the economy performs will depend very much on what kind of deal Theresa May can strike with her European partners, but there seems little prospect that leaving Europe will suddenly make British consumers better off.
The economic argument is, in the end, about more than the price of food or savings on Britain’s contribution to Europe.  Britain will have to reconfigure its trading and financial relationships with the wider world, and there is no reason to believe that this will be an automatic or easy process. Britain has been a part of Europe for so long that market and trading patterns have changed fundamentally in the outside world. Trading links with the United States have declined in the meantime and President Trump has already made it clear that there are no easy deals for Britain, or any other third party. The argument that markets hitherto limited or ignored by British exporters will suddenly open to British goods and services is simply an economic fantasy. Perhaps leaving the EU will suddenly spur British entrepreneurs to a new wave of innovation and marketing skills, but this is at best a speculation. The hard fact is that Britain will be a relatively small if rich economy on its own, facing a highly competitive global economic order in which Britain’s place will have to be argued for with skill and diplomacy.
The British economy too has altered fundamentally. Manufacturing industry provides only a small fraction of Britain’s national product – around 16 per cent – while services and other tertiary sector goods dominate. British agriculture is closely tied now to Europe with around four-fifths of exports going to partner economies across the EU. Agriculture will as a result of Brexit face exceptional challenges to survive (an irony given the fact that most rural areas returned a ‘leave’ majority). Manufactures will continue to be imported at rising cost; the prospect of a ‘re-industrialisation’ of Britain, which has been suggested as a consequence of Brexit, is entirely unconvincing. What remains is Britain’s large and currently prosperous service sector, but here too Britain has benefited by acting as a clearing-house between the wider world economy and the Eurozone. Take Britain out of the EU and global customers will inevitably look elsewhere in Europe for that entry-point. There is every chance that the sterling crisis of the 1990s will be repeated as speculators exploit the structural shifts that Brexit will produce. Modern economies are capable of coping with recession and crisis, but this is of a different order. Brexit means sudden rupture of established institutional and commercial links, with no certainty that a new and successful structure will evolve in the short term.
There also remains the problem of Britain’s current labour supply. For years now Britain has enjoyed lower levels of unemployment than elsewhere in Europe, and has expanded aggregate employment levels. That has meant growing reliance on European labour, in particular in the service industries, healthcare and construction. In London it is estimated that more than two-thirds of the construction workforce comes from EU partner states. The National Health Service relies heavily on non-British expertise for doctors, midwives and nursing staff. There is as yet no indication of whether or how the government will respect existing employment in Britain from other EU countries, but the flow is certain to dry up. Part of the Brexit argument, regularly claimed by the overwhelmingly pro-Brexit tabloid press, has been that ‘Europeans’ are taking jobs away from British workers. This has simply not been the case. Residual unemployment in Britain results from too many unskilled workers with neither training nor aptitude, nor appetite for work. There is no large pool of British workers who could replace the currently large numbers recruited from other EU countries. Those already working may get special status – there has been much talk of compelling them to carry identity cards, which British citizens are not required to do – but already tens of thousands are returning home, uncertain of what their future might be in a Brexit Britain.
Those uncertainties stem in part from the xenophobic character of the ‘leave’ campaign, which has traded on British habitual distrust of ‘foreigners’ and the unique nature of Britain’s constitutional and democratic heritage, which, so it is argued, sits uncomfortably with rule from Brussels. There is a harsher side to the xenophobia, exploited by small fringe groups of ultra-nationalists who are not reluctant to use intimidation and violence, as the murder of the Labour MP Jo Cox two years ago made clear. However, the emphasis on the distinctive nature of ‘Britishness’ is not confined to the British National Party and its ultranationalist allies. The intellectual support for Brexit from groups such as ‘Historians for Britain’ has also made much of Britain’s heritage and the need to protect it from a slow Europeanization. This argument clearly has its limits, since every member of the EU has its own historical legacy, distinct culture and sense of identity. These are not incompatible with membership of the EU, as the past fifty years has made evident. Even in the EU, Britain has been able to argue for a special position on a range of economic and social issues, and to reject both the euro and a passport-free frontier.

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