This site caused something of a stir yesterday in asserting that getting Sovereign Brexit on 31st October is a lost cause. Below I outline further my reasoning, using the real time pressures, tied hands in Downing Street and the inevitability of a huge econo-financial crash in the very near future to make clear my position. Once the storm takes hold, the issue of freedoms in Europe (and tough measures to reform financialised capitalist globalism everywhere) will dwarf Brexit….and the EU as we know it will collapse anyway.
The last post at The Slog was, for once, something of a cathartic experience for me. It summed up a hunch I’d been living with for six weeks, and once the evidence in support became overwhelming, it was a piece that had to be written.
I wasn’t surprised that it was seen as “defeatist” in some quarters, but it’s an impression I am quick to scotch. As I wrote in reply to threader Desmond last night,
‘Not defeatist Desmond, Dunkirk.
Let’s assume that by some byzantine miracle, No Deal happens, and we leave, and the EUnatics have to suck on it….do you really think it will end there?
Forget it: NATO will focus on keeping us in the EU defense union, MI6 will plot with europol, the Republicans will make trouble at the Irish border, the Scots will try to secede, Wall St will attack our debt, Whitehall will conspire with eurozone allies to continue as normal, the media from Bloomberg to the Indie will blame everything on Brexit, Soros will order mass rallies, Miller will bring every kind legal action against every member of the Government, the Judiciary will find in Brussels’ favour on every trumped-up Human Rights issue, Brussels will spray money all over the UK’s Leftlibs, Farage will not listen to those who know that he’ll get nowhere without more focused campaigning, but the Remoanoid Tories will listen and learn….Bojo will not die in a ditch for anyone or anything.
Meanwhile, the vital business of governance will grind to a halt.
Is that what you want?
We simply cannot win in Britain against this ruthless alliance of stupidity, myopia and controlling power-mania.
So we must (figuratively not literally) do Dunkirk in reverse and move – as I have said many times before – to destabilise the EU peacefully on every possible occasion.
I do not suffer from denialism. I am a realist, an empiricist, and a strategist by nature: cede the battle, and win the war. Let the idiots have their Pyrrhic victory: they are doomed.’
Consigning one of the world’s largest trading blocs to imminent doom will no doubt be judged cavalier in the extreme by some. But for me, the writing on the EU wall is now so extensive, it’s too small for many to see.
I headed yesterday’s Slogpost ‘There will be no Brexit until the EU is gone’. The truth remains that the European Union faces existential problems to which there are no solutions….as indeed does the entire global monetarist financialised construct.
Global stock markets fell sharply yesterday, the Dow Jones by 500 points. The IPO launch of WeWork failed, and there are more serious downturn signals in the US: Trump’s fiscal stimulus has petered out, the manufacturing index plunged to 47.8 last month, and export expectations are way down at 41. The Fed’s reversal of a potty ‘rate normalisation’ move came far too late. Economic contraction beckons.
Forces in the States will gamble that this should be allowed to continue, as they see it as the best chance of getting Trump out: there is, for instance, a lot of “it’s the Trump trade war” self-excusing going on. Out of the top eighteen sectors monitored for orders, only three are up. Deutsche Bank calls recession “a real risk”. Many opinion leaders think the merest headwind from elsewhere in the world will be the only nudge it needs to fall off a cliff.
But headwinds work in both directions if you have a bonkers, globally-linked economic and banking system. And the eurozone is by far the most vulnerable to these. There are several obvious reasons for such a conclusion: currency dealers have long felt the euro is ludicrously overvalued, and in terms of its structural rigidity, something of a dead man walking. Italy is, in terms of banking solvency and sovereign debt, a complete basket case – its debt has just risen again to 135% – and among its Club Med neighbours, sovereign debt-to-GDP is now 30 to 60 points higher than it was in 2008. Only negative interest rates are keeping the bullrushes basket afloat.
Further north in the Union – but beyond the deadly euro – Sweden too has plummeted to 2008/9 levels of manufacturing output: its export economy is a key global trade dipstick, used by many commentators to flash alarm signals for global business as a whole, and its confidence numbers usually predict imminent eurozone trends. Its factory activity last month plunged to 46.3, a disastrous result.
In the late Spring, my conclusion that Germany’s pitch into recession was unstoppable evoked a Facebook storm of Remainer trolls. Well, guess what people? Germany is in recession.
The EU as a whole is in a deepening slump. Mario Draghi has been forced to re-apply QE, but to quote the ever-prescient Ambrose Evans-Pritchard, ‘The European Central Bank is a broken and exhausted institution, whatever the theoretical possibilities of extreme monetary stimulus’. I blogged back in the Summer to point out that the ECB now has a lower gold reserves to obligation ratio than the Bank of England.
Any serious glitches in US or Asian business – or any further escalation in the Middle East energy supply fears – would give Germany serious influenza, and the rest of Europe pneumonia. The EU’s own key forecasters have said in recent days that ‘the global threat to the German economy has become “acute”, and a disorderly Brexit would have grave consequences’.
So yes, in theory this puts Boris Johnson in a stronger bargaining position vis a vis Brussels….but, lest we forget, Remainer MPs with help from John Bercow (and the disgraceful body formerly known as the Supreme Court) have almost completely removed the PM’s freedom to threaten Barnier & Co with No Deal.
Also, remember that to have a fully agreed ‘New’ deal in place by 19th October is a very tall order indeed. To suggest that this in turn can be approved and signed off by Westminster in the remaining twelve days simply defies credibility.
I have written this before, but it bears repeating: if the Brussels Commission brings a No Deal Brexit on itself, it has some short-term difficulties and is, in the medium term, a busted flush; but if it gives Johnson a much better deal than offered to May, it has an immediate existential crisis because other member States will know that, once their bluff is called, the EU folds. So I still think they will reject the PM’s new proposals, and hope they can somehow muddle through.
In a nutshell, the game in play here is The Independence of the UK vs The Death of the EU. And as I stated yesterday, the geopolitical BSDs are simply not going to let the latter happen….if by some weird quirk it does, they will unhappen it.
Ultimately, however, the EU is doomed. It is abundantly clear that Boris Johnson is nowhere near a new deal that Leavers would buy into. And regardless of BoJo’s huge lead over Corbyn, mass defections from Labour to TBP plus a LibDem surge could very easily produce a four-way hung Parliament…..with its more treasonous members still sitting on the green benches.