The remarkable thing about the European Union is that even when it is growing economically it is failing – as I predicted would happen in my 2001 book Fascist Europe Rising (chapter 3). Destroying 28 constitutions, democracies, parliaments and 17 currencies and central banks led to stagnation, mass unemployment, social degradation, health services collapse and desperate mass migration from the poorest countries to serve as cheap labour for Germany and the central core of the Eurozone.
Now that at last the Eurozone is growing the Euro is so high that it is a threat to EU trade, the currency is 15% undervalued for the Germans but overvalued by 7.5% for Spain, 6% for France and 5% for Italy. The distortions grow, the economic disparities grow and as the UK lines up trade deals with other countries, the EU still has no trade with the USA, China or “any of the top 10 economies” as the Telegraph’s excellent Liam Halligan reminds us.
As the EU negotiator Michel Barnier struts the stage with threats to the UK and his vow to “teach the UK what Brexit really means” German industrial output fell 1.1% in June and the investor expectations index fell from 12.6 to 5.8.
2 weeks after the UK chose Brexit the EU’s credit rating was cut (from AAA to AA, the same as the UK) unemployment and country indebtedness are still at crisis levels and other countries like Hungary and Poland are in stark confrontation with the EU bureaucracy and could be the next to leave.
The German Professor Thorsten Polleit said recently of Brexit
“……. for having free trade you don’t need this Single Market and all the bureaucracy that comes with it. People in Great Britain have realised that this [the EU] isn’t a concept that will bring prosperity for current and future generations, so they got out and I think others will follow. It will take some time but the EU in its current form will fall.”
GOOD NEWS FOR UK
A study published by Economists for Free Trade , Labour Leave and others claimed that the poorest 10% of British households will benefit from Brexit by £36 per week and the second lowest 10% by £44 per week.
This is because food costs (which bear heaviest on the poorest) will benefit from the end of EU tariffs and EU immigrants tend to compete with the poorest Britons driving down wages. As those migrants go home we are already seeing a rise in wages for first time recruits.
Growth in the UK’s manufacturing sector accelerated in August with output, orders and employment all picking up. The Markit/CIPS purchasing managers’ index (PMI) for manufacturing rose to 56.9 in August from 55.3 in July. The PMI reading was the second highest for more than three years. Job creation rose at its fastest rate for 13 months
The City of London after the Brexit vote increased recruitment by 18% (Morgan McKinley). London is the leading financial centre in the world – there is not one other European City in the top 20!!
Investment in central London property was £11.5bn to end July – up 24% on last year. July alone saw £2.5bn – the highest monthly figure since March 2007. 17% of the investors were European !! – “teaching a lesson” about Brexit for M. Barnier!!
The biggest threat to the UK from Brexit was that overseas manufacturers seeking to manufacture in the UK and export in the “single market” to the EU, would pull out.
But Japanese car giant Nissan has just announced that it will increase production by 20% at its Sunderland plant. Nissan is also planning to double the British sourcing of parts from 40% to 80% – creating more UK jobs. Nissan produces nearly one third of the 1.73m cars produced in the UK last year.
HILTON the American hotel chain is expanding its hotels in the UK by 25%. Having opened 6 new hotels in 2016 it is planning to open 30 additional hotels to create the second largest market outside the USA
These big investments in finance, hotels, property and cars reflect the fact that since the June 2016 referendum Foreign Direct Investment in the UK has steadily increased: Q2 2016 $20bn, Q3 2016 $36bn, Q4 2016 $147bn. The UK trade deficit is now down Euro 18bn in the first half of 2017 as against 2016 and down nearly Euro 4bn with the EU.
UK unemployment is at lows not seen since the mid 1970s!- at less than half the level in the European Union where in individual countries disgraceful unemployment rates of up to 22% for all adults and 50% for youth unemployment still pertain.
Another “lesson” for M. Barnier!
Finally let us see how the former Bank of England “Wise man” Professor Patrick Minford sees the overwhelming advantages of a clear Brexit.
Some say they want a ‘soft’ Brexit, This status quo agreement would promote the interests of existing producers who obtain protection from the EU through its high trade barriers on food and manufacturing, who benefit from EU regulation that supports the aims of large lobbying businesses against smaller competitors and who gain from taxpayer-subsidised cheap unskilled EU labour.
By contrast ‘hard’ Brexit would eliminate this protection and regulation in favour of free trade and full competition and would remove taxpayer subsidy from unskilled migration. These moves benefit UK consumers, lowering the cost of living by 8% on our estimates and by so introducing competition raising productivity across the economy – with a total gain in UK welfare and GDP of around 4% from free trade and another 2% from improved regulation, a total gain to GDP of 6%. On top of this there are gains from regaining our net EU budget contribution (0.6% of GDP) and removing the taxpaper subsidy to unskilled Immigration (0.2% of GDP). There will also be longer term gains to growth through enhanced innovation and entrepreneurial activity.
So the correct conclusion is, ‘hard’ Brexit is good for the UK economically while ‘soft’ Brexit leaves us as badly off as before.
One thing is certain the EU (and especially the unelected bureaucrat M. Barnier) is fearful of any advantage to Britain of leaving the EU and seems willing to burn his own boats if he can set fire to ours!
That is the kind of malicious stupidity which only an arrogant and disastrous European Union could impose on the world. Every day of such behaviour convinces more and more Britons that we must leave as soon as possible – and no deal may indeed be better than a deal which this EU will accept.
