Dark forces and Brexit.

With each day that passes and the ramifications of Brexit  become evermore entwined.  leaving aside the damage that is being done to the UK’s economic and political reputation, we now see the stirrings, deliberate and calculated, of a pot of debate on a putative Irexit, an Irish exit from the European union. Like it or not this debate will continue, and to ignore it is neither politic nor possible. That it is ridiculous and risible is obvious to even a casual analysis, but we have seen with Trump and Brexit that mere foolishness does not deter a polity from a course of action.

So lets look at the economics and politics of Irexit.

First, the politics. Irexit is a policy which is pushed, domestically, by few.  88% of people, in the last poll, were in favor of remaining in the EU.  We are even the most optimistic about the future of the EU, from the latest Eurobarometer. So, no, no Irexit swell of opinion there.

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There is an Irexit group, but they are as credible as a ice fireguard, unable to even keep their website alive. Most all of these pushing Irexit are older white males. This is a reality. It is also a reality that given such two facts follow.

First, the deleterious effects of any Irexit would happen long after they are no longer liable to suffer from same. They are superannuated, in every sense of the word.  Second, ageing western white male baby boomers (such as , technically, myself) are perhaps the single most insulated group on the planet when it comes to economic and political dislocation. Little skin in the game renders it a parlour game, an intellectual exercise, a gadfly exercise in what-iffery.  The most recent contribution to the debate was from Ray Bassett, ex Irish Ambassador to Canada (with whom we have via the EU a common market, and with whom we would not have were we to exit) who wrote a position paper for the UK ginger group Policy Exchange.

Nigel Lawson in 1985More interestingly the UK proponents of Irexit make for a startling insight into the psych of the Brexit pushers. Some are out and out revanchists, such as Nigel Lawson, ex chancellor of the Exchequer, who have suggested that Ireland should, post Brexit, rejoin the UK. Others such as Melanie Phillips, a Times

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columnist , have previously doubted the legitimacy of the Irish state and now suggests that Ireland should leave the EU to form a free tradearea with the UK. Others, such as the DUP’s Ian Paisley Jr seem to think that because Brexit will be so wonderful we should join. Ian also famously urged his DUP supporters to take out an Irish passport, presumably because Brexit will be so wonderful.  Back to Policy Exchange, which published Ray Bassett’s opinion. Policy Exchange is rated as the lowest of all UK think tanks for transparency. It is absolutely opaque as to who funds it. When someone is suggesting a fundamental change in my national political system, I like to know who the are.  All this is reminiscent of the angst in the UK about migration, which exploded post EU enlargement despite the majority of migration coming from ex UK colonies. The UK right seems to be able to draw fine distinctions between “our” migrants (ex colonies) and others,  Poles and Romanians and whatnot from far off countries of whom they know little. Commonwealth migrants good, non commonwealth bad. The data from the UK Office of National Statistics shows clearly that in every single years since 1991 inward migration from non-EU, overwhelmingly from UK ex colonies, exceeded comfortably that of EU. But the reality is that the toxic sludge of debate has focused on the EU migrants. A curious xenophobia.

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Then we have the economics of Irexit. Since 1992 especially, with the single market which Irexit would sever us from, we have seen a remarkable shift from dependence on the UK to a much more global focus. This is evident in both imports and exports, in both goods and services. Leaving aside concerns, real and substantial, as to the nature of some of the flows around services, the trend is undeniable and longterm – we have moved from an economic appendage of the UK to a small but integrated cog in the global economic system.  Does anyone think that tax alone would keep the large MNC sector located here? The reality is that large swathes of our exports in services and in goods are dominated by MNC’s. These MNC’s use the combination of factors, including the membership of the Single Market, to justify Ireland as a base. Leaving the single market would sever this.

An exception is the agribusiness market which is both domestic owned and generally small scale as well as facing disproportional exposure to the UK. The reality is that a UK outside the customs union and single market will be harder to crack. But we export more in education services than in beverages ; we  exportthree times or more manufactured goods than food; we export six times more in chemicals and related; value added by industry or by distribution and transport is more than 10 times that of agriculture.  Seeking Irexit on the basis that it would be good for agribusiness is seeking to amputate a hand for a broken finger. the department of finance have done excellent work on sectoral exposure to Brexit. It makes for sobering reading for some

The EU have made it clear, as they have to, that there will be no frictionless borders between the union and the UK. Brexit will be dislocative.  As smaller irish companies start to go to the wall post Brexit expect the calls for “something to be done” to stat to include Irexit. But this way madness lies. Irish SME’s need to and need to be helped to reorientate from any dependence on the UK to the wider world – we have signed trade deals with the Canadians and the Japanese, and thus have access to the widest pool of high income consumers. This is our challenge and our opportunity.

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2 thoughts on “Dark forces and Brexit.

  1. JohnB

    I’d be a general supporter of disbanding the Euro, in all EU countries – primarily because I believe it is being used to trap all Eurozone members, into an economically unbalanced EU that favours Germany’s long-term economic future above all others, and where the same country will block fiscal union until they have extreme economic/political advantage a number of decades from now.

    Disbanding the Euro requires exiting the EU though – and so it requires jumping off a cliff economically (there I agree with you, completely) – it would be economically disastrous for us, and we would lose an enormous amount of benefits that we get from being in the EU – but there are no solutions for fixing the inherent problems within the EU/Euro, and I do not believe there will ever be any solutions other than destruction of the Euro.

    Given that, I just want to see it over and done with, so we can begin to dust ourselves off and start over – I’d rather it have been done 10 years ago. I’m 30, not a baby boomer or older.

    The EU could be fantastic if it didn’t require the Euro. I believe the Euro will lead to the gradual and near-complete elimination of democratic control over our economic policy in the future – and that because of that, it’s simply not worth the cost – that we should never trade that away for anything, as I view it as vital to having true democratic control of the country (and I don’t trust the democratic credentials of EU economic policy – minus a fiscal union with an actual central government – not that I think that would necessarily be a good thing either…).

    Reply
  2. KeepThemmunsOut

    LOL that people still come out with this stuff about the euro being a big bad German conspiracy given that it was originally a French conception and the Germans were very reluctant to give up the D-Mark

    Reply

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