The future of the EU without the UK

RDM_83 again

This may be redundant* considering the other Brexit threads.

But can we have a discussion focused on the future of the EU, every Brexit discussion I've seen seems to be nearly exclusively about the impact on Britain however I see Brexit having a major impact on the wider EU too.

-UK is a major contributor
-Counter balanced France/Germany
-Good relations with the ascension states
-Different philosophy on the economy
-Provided a safety valve to a partial extent to many younger Europeans who could find employment there.
-Major source of capitol and financial funding
-Major involvement in European security and force projection

In short I see loosing the UK as being a major blow to the EU the impact of which isn't being considered by many because its always answered by "well the UK will be worse"


My personal opinion is that if a hard Brexit is initiated there is substantial risks to the delicate economies such as Italy, on the political side I see the absence of the UK signaling an opportunity to EU federalists to further their goals, however I see this as putting the EU as it currently exists at risk considering the european populations general hostility to this goal and the governmental tensions involving Poland, Hungary and to a lesser extent the Czech Republic


Anyway thoughts?

*self reported so you can close if this is too much duplication

jimmycrackcorm

Great thread angle topic.

I like to make analogies. Liverpool suffered when they lost Suarez, but I still love them and they aren't doing badly. On the other hand, the U.K. isn't the superstar that Suarez is.

I think the Dutch election has settled a lot of nerves, it will probably be much business as usual once the dust settles. There is still the underlying fear going back to WWII about the divisions between countries and the resumption of the effects of that. However these have largely been superseded by the negative perception of terrorism and Islamic immigration.

There are still a lot of countries in a union gaining the benefits and I think the above football analogy is a good comparison if it were more accurate to say that Gerard leaving was the UK. Germany is probably the Suarez.

KyussBeeshop

Things like Brexit are a true wildcard, which nobody can confidently know the outcome of - it may lube the way for other countries that may consider leaving the EU, but the main stickler there, is that most countries participate in the Euro - and a divorce from the Euro is damaging to both the exiting country and the EU, on the scale of at least a couple orders of magnitude more, than Brexit - it's completely different.

TLDR - nobody knows, we can't make any confident claims one way or the other, about this - we have to wait and see.

Jimmy Garlic

jimmycrackcorm wrote: »

There are still a lot of countries in a union gaining the benefits and I think the above football analogy is a good comparison if it were more accurate to say that Gerard leaving was the UK. Germany is probably the Suarez.

Once unions, empires etc stop expanding they start imploding. Happened to the British Empire, the Roman Empire, the Soviet union. Only a matter of time before some other country tells the EU to shove it. France, Greece, Italy, Poland, Hungary are all prime candidates. When, not if that happens the writing will be on the wall for the centralised, inflated, corrupt, bureaucratic money pit that is the EU.

RDM_83 again

KyussBeeshop wrote: »

TLDR - nobody knows, we can't make any confident claims one way or the other, about this - we have to wait and see.

True but we do know that the EU is loosing one of its net largest contributors, this will have an impact particularly if at the same time countries that are receiving less structural funds are expected to chip in to help relieve the migrant crisis.

http://english.eu.dk/en/faq/faq/net_contribution

The same situation also applies to Brexit about the uncertainty but it hasn't stopped all the assumptions that it will be a massive failure.
Basically my worry is the EU might fail the stress test of Brexit.
Politically I also think their absence will really swing the balance of power in Europe

Jimmy Garlic

RDM_83 again wrote: »

Politically I also think their absence will really swing the balance of power in Europe

Yeah, towards Pax Germanica, an EU that will be even more tailored to suit the Fatherland. I don't think Europe will stomach that foul serving in the long term, even the most spineless sidekicks will grow weary.

Depending on what sort of new trade deals (exchange of goods & services) are made between the two, fiscally it mightn't be anything major overall after many years of haggling.

The other part however: 'the free movement/exchange of people' is different. There will be a lessening in the importance of the use of English language and perhaps even it's culture.

Franco-Germanic could dominate. Italy is joint fav (along with Greece) to be the next to leave, and I believe they will, as the Mediterranean summer crossing increase year on year. Mind you France isn't far behind those two also, which would be very dramatic, to say the least.

As a side note, Scotland's population of 8.3% and it's 32% of land mass leaving the UK could be even more devastating to the UK, than leaving Europe. Add in instability in the North, and who knows even perhaps Wales opting out in another decade...

KyussBeeshop

RDM_83 again wrote: »

True but we do know that the EU is loosing one of its net largest contributors, this will have an impact particularly if at the same time countries that are receiving less structural funds are expected to chip in to help relieve the migrant crisis.

http://english.eu.dk/en/faq/faq/net_contribution

The same situation also applies to Brexit about the uncertainty but it hasn't stopped all the assumptions that it will be a massive failure.
Basically my worry is the EU might fail the stress test of Brexit.
Politically I also think their absence will really swing the balance of power in Europe

Pretty small financial impact compared to the austerity and privatization policies built-in to the EU really.

The EU has proven to be unexpectedly resilient to major stress so far (i.e. the people worst affected by all the crises, seem to be willing to take a huge disproportionate beating, without piping up enough to actually put the EU at threat) - and this isn't even a Euro country leaving, so is (in my view) not going to be much of a stress test for the EU.

Germany already pretty much has hegemonic control over the EU as it is, largely due to how the Euro limits countries policy options in response to crisis - don't think Britain leaving will change that much.


The main way this might threaten the EU, in my view, is in paving the way for other countries who may want to leave, by setting a precedent in how part of the exit process will happen, and the subsequent trade renegotiation - which might make it more tempting for a Euro country to exit (yet, losing the Euro in a disorderly way would, short/medium term, be incredibly more damaging to an exiting country, than something like Brexit), which would then be a real threat/danger to the EU (which, when it happens, we may find out the EU/Euro is yet still more resilient than we thought).

Tayschren

Should we now learn german or french?

oscarBravo

KyussBeeshop wrote: »

Pretty small financial impact compared to the austerity and privatization policies built-in to the EU really.

Can you point to the austerity and privatisation policies in the EU Treaties? I can't find them.

KyussBeeshop

I could, but the debate (and predictable impasse) that would ensue over e.g. the definition of austerity, and whether parts of those treaties really do represent something that builds-in austerity, would almost certainly drive the thread off topic - so, since it's an opinion that isn't core to the thread, I won't.

murphaph

Sick of this rubbish about Germany controlling the EU.

jimmycrackcorm

murphaph wrote:

Sick of this rubbish about Germany controlling the EU.

ECB monetary policy is effectively German policy.

emmet02

jimmycrackcorm wrote: »

ECB monetary policy is effectively German policy.

strange.
https://www.ft.com/content/d2384ec6-eb89-11e6-930f-061b01e23655

Rightwing

murphaph wrote: »

Sick of this rubbish about Germany controlling the EU.

Just because you are sick of something doesn't make it rubbish.

Germany is pushing important matters such as migration and fiscal prudence on countries in the EU, we only need ask Greece how both of these are working out for the locals.

murphaph

Rightwing wrote: »

Just because you are sick of something doesn't make it rubbish.

Germany is pushing important matters such as migration and fiscal prudence on countries in the EU, we only need ask Greece how both of these are working out for the locals.

It is rubbish. Germany could throw its weight around considerably more than it does in reality, given the size of its economy within the EU.

It is actually incredibly restrained for a country that has the biggest economy and population in the EU.

Merkel messed up to some extent with the Syrian refugee crisis but ultimately we do need to ask ourselves if we are as bad as Saudi Arabia or are we going to offer asylum to gassed kids and their families or just say "why can't they go somewhere else?".

As for "pushing fiscal prudence", is that really supposed to be a bad thing? To blame Germany for the state Greece is in is a bit of a stretch. Greece might like to first look to address the rampant corruption and tax evasion that goes on there before blaming the Germans for all their ills.

Germany doesn't get everything right but it does not control the EU.

Rightwing

murphaph wrote: »

It is rubbish. Germany could throw its weight around considerably more than it does in reality, given the size of its economy within the EU.

It is actually incredibly restrained for a country that has the biggest economy and population in the EU.

Merkel messed up to some extent with the Syrian refugee crisis but ultimately we do need to ask ourselves if we are as bad as Saudi Arabia or are we going to offer asylum to gassed kids and their families or just say "why can't they go somewhere else?".

As for "pushing fiscal prudence", is that really supposed to be a bad thing? To blame Germany for the state Greece is in is a bit of a stretch. Greece might like to first look to address the rampant corruption and tax evasion that goes on there before blaming the Germans for all their ills.

Germany doesn't get everything right but it does not control the EU.

Well where all these refugees landing, you got it, Greece. And the problems are mounting.
http://www.reuters.com/article/us-europe-migrants-greece-oecd-idUSKCN0WC1BC
Refugee crisis creating 'significant problems' for Greek economy: OECD

I don't think it's a bad thing that Germany controls EU, as they are the best run in the EU. But important factors like inflation are really only a concern if Germany is impacted. We can expect interest rates to rise if German inflation continues to rise. Other countries inflation = not important.

murphaph

Rightwing wrote: »

Well where all these refugees landing, you got it, Greece. And the problems are mounting.
http://www.reuters.com/article/us-europe-migrants-greece-oecd-idUSKCN0WC1BC
Refugee crisis creating 'significant problems' for Greek economy: OECD

I don't think it's a bad thing that Germany controls EU, as they are the best run in the EU. But important factors like inflation are really only a concern if Germany is impacted. We can expect interest rates to rise if German inflation continues to rise. Other countries inflation = not important.

The ECB is also not controlled by Germans. We also have a vote there.

Euro area countries are divided into groups according to the size of their economies and their financial sectors. To determine which national central bank Governor belongs to which group, a ranking was established. The Governors from countries ranked first to fifth – currently, Germany, France, Italy, Spain and the Netherlands – share four voting rights. All others (14 since Lithuania joined on 1 January 2015) share 11 voting rights. The Governors take turns using the rights on a monthly rotation.

https://www.ecb.europa.eu/explainers/tell-me-more/html/voting-rotation.en.html

Rightwing

murphaph wrote: »

The ECB is also not controlled by Germans. We also have a vote there.



https://www.ecb.europa.eu/explainers/tell-me-more/html/voting-rotation.en.html

No one said it was, but we all know once Germany experiences inflation, that's it.
A bit like back in 00's when Germany was breaking the deficit rules, that was ok, now that they are no longer breaking the rules, it's no longer ok.

http://www.bbc.com/news/world-europe-16761087

Did Germany sow the seeds of the eurozone debt crisis?

RDM_83 again

If Euro clearing leaves London as seems possible, it does seem like Germany (Frankfurt) and Paris will be the main beneficiaries, another factor in pushing the balance of power even more in favour of those countries

View

Rightwing wrote: »

murphaph wrote: »

The ECB is also not controlled by Germans. We also have a vote there.



https://www.ecb.europa.eu/explainers/tell-me-more/html/voting-rotation.en.html

No one said it was, but we all know once Germany experiences inflation, that's it.
A bit like back in 00's when Germany was breaking the deficit rules, that was ok, now that they are no longer breaking the rules, it's no longer ok.

http://www.bbc.com/news/world-europe-16761087

Did Germany sow the seeds of the eurozone debt crisis?

Germany didn't break the deficit rules.

The rules are written so that member states CORRECT any deficit problems they have.

Were it otherwise then the EU would have been issuing fines to every member state back in 08-11 which would have been both pointless and utterly unhelpful in the midst of the worst economic crisis for decades.

Rightwing

View wrote: »

Germany didn't break the deficit rules.

The rules are written so that member states CORRECT any deficit problems they have.

Were it otherwise then the EU would have been issuing fines to every member state back in 08-11 which would have been both pointless and utterly unhelpful in the midst of the worst economic crisis for decades.

That's not what it says on the tin:


In 2003, France and Germany had both overspent, and their budget deficits had exceeded the 3% of GDP limit to which they were legally bound.
The Commission - then led by the former Italian Prime Minister Romano Prodi - had the power to fine them.

But the finance ministers of what was then the 15 eurozone member countries gathered in Brussels and voted the Commission down.
Romano Prodi says he was prevented from fining France and Germany for breaking euro rules They voted to let France and Germany off.
They voted not to enforce the rules they had signed-up to and which were designed to protect the stability of the single currency.

View

Rightwing wrote: »

View wrote: »

Germany didn't break the deficit rules.

The rules are written so that member states CORRECT any deficit problems they have.

Were it otherwise then the EU would have been issuing fines to every member state back in 08-11 which would have been both pointless and utterly unhelpful in the midst of the worst economic crisis for decades.

That's not what it says on the tin:


In 2003, France and Germany had both overspent, and their budget deficits had exceeded the 3% of GDP limit to which they were legally bound.
The Commission - then led by the former Italian Prime Minister Romano Prodi - had the power to fine them.

But the finance ministers of what was then the 15 eurozone member countries gathered in Brussels and voted the Commission down.
Romano Prodi says he was prevented from fining France and Germany for breaking euro rules They voted to let France and Germany off.
They voted not to enforce the rules they had signed-up to and which were designed to protect the stability of the single currency.

The article is incorrect.

The Commission does not have the powers decide to fine a member state as the article states.

The Treaties are written to ensure that a member state corrects its deficit.

It is only if a member state either refuses to correct its deficit or fails to do so within an agreed timeframe that the issue of fines arises.

As I pointed out it would have been utterly pointless to have fined Ireland while we were trying to correct our deficit during the recent crisis. I believe that we hold the world record for worst deficit so you can imagine what the fines would have been for us if the fines were issued on a "speeding camera" basis!

murphaph

The ironic thing about the Germany bashing is that if Germany left the EU it would manage far better than Ireland. Germany needs the EU a lot less than we do because much of our economy is generic and based on being part of the EU.

German companies (like my employer for example) make unique products for consumption all around the world. The EU makes things easier but mark my words, the UK will continue buying German made machinery and whatnot even after Brexit. Will Germany keep buying British financial services that can easily be replicated by other EU states?

Germany is in the EU predominantly for ideological reasons, not financial ones.

Rightwing

murphaph wrote: »

The ironic thing about the Germany bashing is that if Germany left the EU it would manage far better than Ireland. Germany needs the EU a lot less than we do because much of our economy is generic and based on being part of the EU.

German companies (like my employer for example) make unique products for consumption all around the world. The EU makes things easier but mark my words, the UK will continue buying German made machinery and whatnot even after Brexit. Will Germany keep buying British financial services that can easily be replicated by other EU states?

Germany is in the EU predominantly for ideological reasons, not financial ones.

First thing that would happen is the value of the DM would increase dramatically. The price of a lot of their goods would become very expensive.

It will all depend on what trade deal is done.

Rightwing

View wrote: »

The article is incorrect.

The Commission does not have the powers decide to fine a member state as the article states.

The Treaties are written to ensure that a member state corrects its deficit.

It is only if a member state either refuses to correct its deficit or fails to do so within an agreed timeframe that the issue of fines arises.

As I pointed out it would have been utterly pointless to have fined Ireland while we were trying to correct our deficit during the recent crisis. I believe that we hold the world record for worst deficit so you can imagine what the fines would have been for us if the fines were issued on a "speeding camera" basis!

Our deficit isn't bad at all, well below the threshold required. Other countries are in a far worse position.

Imposing fines now is simply a non runner. Back in 2003 was the time to do it, and they failed miserably.
Prevention is better than cure. Taking corrective action is a joke. Any country can pretend they are doing that. Apart from Germany, how many of them are taking corrective action to bring debt:gdp to 60% ?

View

Rightwing wrote: »

Our deficit isn't bad at all, well below the threshold required. Other countries are in a far worse position.

I used "hold the record" in the sense of "set a record which continues to hold" much like an athlete can continue to hold a record years after setting it.

Rightwing wrote: »

Imposing fines now is simply a non runner. Back in 2003 was the time to do it, and they failed miserably.
Prevention is better than cure.

And who exactly should have been fined back in 2003? Are you saying that Ireland should have been fined back then when our finances were within limits but we were making serious mistakes?

If so, prevention would definitely have been better than cure but I suspect most people would have wondered what we were being fined for.

Rightwing wrote: »

Taking corrective action is a joke. Any country can pretend they are doing that.

I am not sure why you believe corrective action is a joke. All countries should try to correct their finances when they start to go off the rails.

Rightwing wrote: »

Apart from Germany, how many of them are taking corrective action to bring debt:gdp to 60% ?

Last time I checked it was a majority (including us). That is starting from a high level though as, given the huge severity of the 08 crisis, most countries - be they EU or non-ones - clocked up massive amounts of debt at the time.

Rightwing

View wrote: »

I used "hold the record" in the sense of "set a record which continues to hold" much like an athlete can continue to hold a record years after setting it.



And who exactly should have been fined back in 2003? Are you saying that Ireland should have been fined back then when our finances were within limits but we were making serious mistakes?

If so, prevention would definitely have been better than cure but I suspect most people would have wondered what we were being fined for.



I am not sure why you believe corrective action is a joke. All countries should try to correct their finances when they start to go off the rails.



Last time I checked it was a majority (including us). That is starting from a high level though as, given the huge severity of the 08 crisis, most countries - be they EU or non-ones - clocked up massive amounts of debt at the time.

Greece has a far better record than us in terms of deficits. Spain too.
Germany should have been fined in 2003, that's what started the rot. When they weren't fined, the PIIGS went to town.

emmet02

Rightwing wrote: »

Greece has a far better record than us in terms of deficits. Spain too.
Germany should have been fined in 2003, that's what started the rot. When they weren't fined, the PIIGS went to town.

Rightwing

emmet02 wrote: »

As in 'holding the record for deficits'. Greece has a far better record for 'holding record deficits' than we do, your graph came in useful.

murphaph

Rightwing wrote: »

First thing that would happen is the value of the DM would increase dramatically. The price of a lot of their goods would become very expensive.

It will all depend on what trade deal is done.

The DM was strong for most of its history and Germany still managed to export stuff people wanted to buy. That's why they are less dependent on the EU than us and most of the other members.