“Name five benefits of a Hard Brexit” someone asked recently, which conveniently forms the basis of a useful discussion. So then, let’s have it:
- The UK instantly saves £39 billion pounds.
- The UK will no longer need to pay a (net) £9 billion per year to the EU.
- The Northern Ireland border will resolve itself. Which means, ‘It’s on them.’
- The UK will leave fiascos like the Salzburg meeting and Brussels debacles behind.
- The UK can sign as many free trade deals as it wants following the official Brexit date.
There are plenty more benefits but in case some feel that’s an overstatement, let’s post five more:
- Billions of dollars, pounds, yen and rupees would flow to the UK due to newly signed trade deals.
- Rifts in the UK Conservative Party would heal and the party could again function as one political entity.
- A major Conservative promise (Brexit) kept — leading to a majority government at the next General Election.
- Cheaper foods and goods for UK consumers (due to the huge economies of scale of North American agriculture and marketplace)
- The EU would rightly be put in its place for trying to steal Northern Ireland from the UK using bureaucratic stealth.
Want five more? Easy!
- UK universities full and expanding due to higher enrollment from new free trade partner countries.
- UK tourism operators experience record year-after-year numbers as new trading partners boost UK tourism.
- UK exporters export unprecedented amounts of goods around the world due to new trade opportunities post-Brexit.
- UK hospitals earn billions in foreign income as patients from new trade partner countries travel to the UK for treatment.
- UK increases engagement with Commonwealth of Nations countries and dedicates its entire foreign aid budget to Commonwealth countries only, which ‘keeps the money in the family’ so to speak.
The UK is Missing Out Because Theresa May Wants a Polite Brexit
But it appears that for all her efforts she is getting nowhere with the EU.
It’s a waste of time to try reasoning with people who don’t want a solution — and the EU doesn’t want a solution because it doesn’t want lose the UK (the EU’s cash-cow) which is the 2nd-largest contributor to the EU budget.
That’s it in a nutshell, folks! Nothing more, nothing less.
Therefore, the EU tries to bully the British people into giving up the idea of Brexit and it resorts to various plots to try to suspend Brexit like trying to rally weak-willed Britons to support a 2nd referendum (and the EU used that ploy successfully to browbeat the Irish into joining the union in a 2nd referendum attempt) and employs other games and media influencers to further their BRINO Brexit dreams.
And why wouldn’t they try that option? When you’re the spendthrift EU and you’re facing a (net) loss of £9 billion funding per year anything is worth a try.
Still, future relations must count for something. Let’s hope EU leaders eventually see the value of preserving a long-term relationship with the saviour of Europe (twice since 1914) and a major purchaser of EU goods in the present-day.
But if not, let us be on our way…
In the European Union, it’s all about the money.
For if it isn’t the EU holding-up the UK for £40 billion to leave the EU, it’s the European Union wanting billions for a Customs Union deal that will benefit continental Europe moreso than it will benefit the United Kingdom.
- To be fair, there’s no word yet if there’s an up-front-payment component associated with the rumoured Customs Union deal.
- Let’s not forget that the £40 billion number was arranged to pay an estimated £9.15 billion in British expat pension and other legitimate liabilities that the UK will rightly owe to the EU over the next 50-years.
- Nobody in the UK disputes the £9.15 billion number (although everyone agrees it’s an approximate number as expat lifespans rise and other legitimate costs could increase in the future) but some wonder how £9.15 billion became £40 billion.
As much as UK citizens are tired of paying a (net) £8.6 billion annually to feed the EU’s budget, it looks like there will be a cost for a Customs Union deal with the EU. Still, few Britons would begrudge paying reasonable amounts (like Norway does) to be in a Customs Union (but not in a Political Union) with the EU.
Just make sure it costs less than £8.6 billion annually, Ms. Prime Minister…
For the record, let’s see how much the UK was projected to contribute to the EU budget
If you’re handy with a calculator, you’ll see that’s a net contribution of £71.6 billion over a span of 7-years and you’ll also note that the average net contribution will rise to £11.1 billion annually when averaged over the next 5-years. The £8.6 billion figure that we often hear came about from the average net contribution over the past 5-years.
Wow, that’s a lot of net contributing. Remember, the term “net” means you’re paying more in than you get back.
Time for the EU to Lower Their Spending or (better) Turn EU27 Nations into Net Contributors
Some blocs have ‘champagne taste and wildly varying contributions from member nations’ and the EU is surely that.
Once the UK leaves the union it will be primarily Germany propping-up the bloc as most of the EU27 are net ‘takers’ from the EU budget — and the few net ‘contributors’ are small countries that couldn’t float the EU budget no matter how hard they would try.
Sweden has a great economy for example, but with a population of 9-million people how could they afford to pay for the programme spending of 450 million EU citizens? To cover the EU budget you need two economic near-superpowers. Italy is still putting itself back together after the last recession and France’s economy is a break-even proposition — although the French live very good lives, and good for them. No wonder Germany enjoyed splitting the EU’s bills with the UK since 1993, but especially since 1998. Ultimately however, Germany got plenty of say in EU affairs while the UK was (basically) allowed to comment on EU affairs. But the UK knew that going in, so no complaining!
Let’s see how committed Germany remains to the EU project 5 or 10-years on when it is paying into the EU budget without Britain’s help. German taxpayers and German business might force the country’s politicians to pull out of the EU and amp-up the stature of the EuroZone into a full political and economic bloc. That might be a smart move for EuroZone countries, but it could result in disaster for some non-EuroZone nations.
In the meantime, let’s hope the EU manages to tame its spendthrift ways or that it finds ways to turn ‘taker’ member nations into ‘contributor’ member nations before the EU loses one of its best annual contributors.
That would also have the benefit of helping the keep the continent’s number one economy (Germany) flying high — which is uber-important because one of the things Germany’s robust economy is financing via their contributions to the EU budget is continued peace and prosperity in Europe. And judged by that standard over the past 70-years both Britain and Germany deserve a truckload of Nobel Peace Prizes. Jolly good, gute Freunde!
Until the Brexit implementation period ends in a little over 2-years, the UK must continue paying a net £11.5 billion annually (2019-2021) and it will still need to pay the expected £9.15 billion in expected future liabilities (which for some as yet unexplained reason was trotted-out as £40 billion) and is payable up-front, and it looks like it must also pay to gain or be in a Customs Union agreement with the EU.
As Theresa May has said many times, ‘Nothing is agreed until everything is agreed’ which may yet prove to be among the wisest words a British Prime Minister ever spoke.
Interesting times, indeed.