Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The bottom line is if UK goes into recession, unemployment goes up, incomes go down, inflation goes up, public services go down, and the £ - that symbol of national virility goes down - the government of the day will get it in the neck.  They can blame the EU if they want, but the EU does not owe them anything once they leave - especially if they leave with no deal and don't even pay their bill on leaving the restaurant.  After a while even the most dim-witted may get the idea...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 8th, 2019 at 07:00:21 PM EST
[ Parent ]
Except that recession is part of the business cycle, and affects the economy as a whole, more or less in sync, and hopefully is recovered from within a reasonable time.

A no-deal Brexit would be a more fundamental change to the economy than a recession. Banks and manufacturing moving out of a country are not easily reversible, temporary actions. The Irish backstop will still be in play, which will either be permanent or will be replaced by unification--also permanent. Major and permanent political realignment could happen when you have two parties that are both divided on the EU issue; maybe there won't be either a Conservative OR a Labour party. Trading relationships are not permanent, but they have a really long lifetime because they are so hard to negotiate. Getting back into the EU will be tough, and will be under different terms.

Seems to me that expecting the Brexit fallout to be of the scale and permanence of a recession might be misleading.

by asdf on Mon Apr 8th, 2019 at 07:24:09 PM EST
[ Parent ]
Brexiteers have made much of the UK being the 5th. largest economy in the world, and thus a major economy in its own right, and in a position to set its terms of trade with other economies to its own advantage. They claim it's historic and special relationships with the US and Commonwealth make it a world rather than just a European power in political, military and economic terms.

But what happens if the UK starts slipping down the global ranking list towards 10th. place? What happens if the chronic political instability and economic under-performance of the 1960's and 1970's returns? We're not talking short term recession here, but long term decline.

Economies have changed radically since the 1970's. The UK has de-industrialised and become more dependent on food imports. Financial services, capital movements, supply chains and cross-national just in time manufacturing processes have become much more complex and integrated.

Sometimes I think that national politics haven't caught up with these changed economic realities. I see the UK industrial base eroding further, financial services migrating abroad, intellectual properties being sold off, and the government's tax base disappearing down the toilet. But we won't know the extent of this for some years, and yes, the scapegoats will be many and varied. But it will be too late for that to matter. The damage will have been done.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Apr 8th, 2019 at 08:49:04 PM EST
[ Parent ]
By the time this is over we will be dreaming of being in 10th place.

The UK's economy is boosted by the global pre-eminence of The City. But leaving the EU will damage its usefulness, even if the City has already negotiated its own deal about access.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Mon Apr 8th, 2019 at 08:56:12 PM EST
[ Parent ]


Top Diaries

COVID19: Iceland

by gmoke - Apr 8

PM Johnson Taken to ICU

by Oui - Apr 6

Hurlers on the ditch

by Frank Schnittger - Apr 4

Bordering on madness

by Frank Schnittger - Mar 31

Occasional Series