The UK has the worlds fifth largest economy by GDP and the second largest economy in the EU (Germany is larger, France is smaller) [1]. To claim that they're 'not that important globally' is, frankly, asinine. Do you really think that the EU won't also get hurt by the UK leaving? If you think it won't then it's worth asking why EUR/USD has also gone sharply down today...
[1] http://money.cnn.com/news/economy/world_economies_gdp/index....
Our televised news hosts like to dramatise, it seems.
Meanwhile, the Spanish market is down is down 11%, Belgian one is down 5.5%, France down 7%, Germany down 6%.
It's looking like Europe is hurting more from this announcement than Britain at the moment.
He knows nothing....
Sorry couldn't resist.
If their debt is not in UK Pounds, it will limit their economic flexibility severely, and I think could lead to a default if things go bad (which we are currently quite far away from right now.)
Thus is the UK debt in UK Pounds? Or is it mostly denominated in Euros, Yen or USD?
But whether or not that is an advantage is hard to establish, that all depends on how much of an export position the UK will have post brexit.
And yes, France is now a bigger economy than britain, and it's just been a few hours now.
People do not just moving businesses for purely political reasons, there has to be concrete economic reasons.
I actually think that the UK may be less regulated than EU exchanges and that may stay in order to keep the UK more attractive.
If you do not list any real economic reasons, I think this is just scare talk.
London is one of the biggest (or rather the biggest) hub for EUR-denominated trading and AFAIK they're only allowed to do so because they're EU member. There's also the practice called passporting: Bonds, Insurances etc that are regulated in one EU country are allowed to be sold in all EU countries. The UK had the most favorable regulations for those bonds, so a lot of them moved to London. Now that London might soon not be part of the EU any more, the banks at least need a residence in a EU member state. Some might consider to substantially reduce their London operations.
— Ben Thompson (@BBCBenThompson) June 24, 2016
Sources at Morgan Stanley tell BBC it's already begun process of moving 2,000 London based investment banking staff to Dublin or Frankfurt
lack of a free trade agreement with europe comes to mind.
Stability plus the fact that Frankfurt is already a major financial hub, and that Germany is a major driver of the EU economy.
Funny how the leave voters of fear and spite are now here talking about punishing the uk out of spite :)
We are living in interesting times, it would seem.
> this may be good news for the EU, even when we
> sacrifice a generation of UK citizens for our benefit.
Isn't that the point, though? UK just said "no" to half a century of following these principles - making sure there are consequences means protecting EU ideals, not harming them.
Sure, in practice there will be plenty of replacement treaties - but for EU _and_ for those principles it's quite ok if UK ends up 6th or 7th economy instead of 5th. We're not talking about bankrupting anybody here.
The loss to our economy is going to go some where, manufacturing jobs lost in Sunderland will go to Greece or Lithuania where they will welcome the employment, the same will happen to service industry too. The EU has a responsibility to its member states not to us anymore.
This is basically a divorce -- and those things generally are filled with hurt feelings, lashing out, clearly competing interests and a scramble for the valuable assets. It is likely going to be more problematic on the weaker party (the UK) than it is on the stronger party (the EU.)
As a citizen of another EU country, it pains me to she what's happening, some people just want to blame all their problems to a common "enemy" and at that point, demagogues use that for their own gain, I've seen it and keep seeing it on my country in a grand scale.
My hope is that somehow a good deal between UK & EU comes off that which the least amount of change, but I'm probably wishfully thinking.
Of course things are going to change. As a good outcome, changes should be neutral, not punishment, but noticeable. So in other words, still hurts.
There are a lot of people across the EU who are essentially totalitarian in nature. They believe remaking Europe into a new EU country is civilisation itself, and relish the prospect of a trade war with the UK which they are convinced they will win.
I believe this has to do with the globalization and the problem it brings for local people. To be relevant in the world, one should be strong, united and of reasonable size (economically, ...). If the EU would collapse now into individual states, each of them (esp eastern europe) would suffer greatly and maybe has to deal with russia. How much of a help the NATO is? just ask ukraine.
What doesn't make sense is having a commonwealth/fiveeyes country bolted on the side of the EU.
The fact that Ireland has high EU approval ratings is immaterial to the fact that it's not logical to have it be apart from the UK. This is a tragic artifact of history. Ideally this would be fixed, but I agree it isn't likely to happen.
You wouldn't need a counterbalance if things were done right, which is to have the larger chunks (today's England, Scotland, Republic of Ireland) be split into more similar-sized chunks. Having a couple dozen chunks (called what you like: parish, county, state, province...) is probably sane.
There are many who voted for other reasons but those are far less vocal.
The attacks on the 'British' are just as dumb, since a lot of people (50%, plus a majority of the Scots and the Irish) are being dragged into this.
It's dumb beyond understanding, but it's a nice insight in how much of the lessons learned during the last two world wars have been forgotten.
It's a cycle - every 3 generations like clockwork. The generation that goes to war comes back swearing "never again", their children grow up hearing war stories, but everything is going well around them as they grow up. Their children's' children have long forgotten the lessons of conflict, and proceed to uproot the trees their grandparent planted. Rinse and repeat.
To be fair, we continental Europeans have been at the butt end of patronizing hogwash and armchair economical and ethical advise from our Imperial friends from the island, so a bit of a role reversal is appropriate.
Also, I found countries keeping rich royals around a bit suspicious to begin with.
OTOH i think most europeans do not consider britain racist relative to some continental countries.
We hackernews folks will be OK. As always, the vulnerable will suffer most.
We do not actively "sacrifice" them. They voted for themselves to go out, they believe it's better to them. Okay. But why should the EU not do what it can the make the best of the situation? Do not answer with european spirit, the vote was against this, for the hope of a little better financial situation (aka: selfishness).
I really support everyone who needs help whenever I can, but I can't stand this behaviour, expecting mercy for their own selfishness. And as it seems, we have more important problems where real lifes are on stake, syrian immigrants for example.
It won't but it will shrink significantly.
> even when we sacrifice a generation of UK citizens for our benefit.
Is the kind of language that has no place here or in any other discussion.
Keep in mind that a good portion of the UK citizens voted 'remain' and that we do not do any sacrificing at all, since that includes me.
They have just committed suicide.
- The Euro collapses as countries leave
- Spain and Italy leave the EU
- the EU collapses completely within 20 years
Look, we can all make wild claims!
I voted remain, but your list is a farce. It's a list of the absolute worse case scenarios.
Obama's gone, the US isn't going to follow through on that threat. It was just fear mongering because they liked the status quo. It was actually a massive misjudgement of the British psyche by Obama. He threatened us thinking it would help the Remain camp! That's not how Brits think, he probably convinced more people to vote Leave with that threat then anyone else, it was a stupid thing to do.
The EU won't be too crazy as it needs access to the UK's market to keep their own economies afloat. It's in the interests of some EU politicians + bureaucrats, not in the interest of the actual states or companies in those to economically alienate the UK now. There's a lot of anti-EU feeling in a lot of other countries and attacking the UK using the unelected bureaucrats of the EU will fuel that, not reduce it.
NI won't leave as it might start another civil war.
The UK economy won't "collapse completely". Not important globally? The 5th or 6th biggest economy is "not that important globally". That's simply not true.
EDIT: Also, what's actually happening in the EU at the moment? You might argue that they're attacking US companies. Data privacy laws. Google anti-trust laws. And the UK is leaving that? But somehow we'd be at the back of the queue...
Only IF the current government loses in September AND a new electoral law can be agreed AND an euroskeptic party wins a full majority (there is currently only one with a realistic shot at majority) THEN a referendum might be considered, and tbh it would be pretty low on the agenda anyway. The fastest this could happen, realistically, is sometime in 2018, and a lot of things can happen in 2 years.
Besides, Italy was an EU founder and public opinion is strongly pro-EU by tradition, unlike the UK. This position was only dented by the Euro problems, with a couple of fixes (like Eurobonds) things would be totally fine.
As for Google and Amazon and their datacenters in Ireland, as well as all the tax deals there I think that tax advisors are right now working overtime on how to limit the damage to their Irish clientele.
Maybe a good time to buy land around Frankfurt a/M.
Ah, I thought some of them were North of the border. Foresight at work!
Most tech on the island is south of the border due to that.
I think the complete opposite. This gives NI a real debate on independence. We now all face issues bigger than the usual partisan/sectarian nonsense. Border controls will effect a lot of people. That coupled with the many other problems could potentially lead to people putting their usual differences to one side as there are bigger fish to fry. And stop with the 'civil war' hyperbole. We are past that.
The DUP was campaigning for leave and several counties, ones not on the border, returned an overall leave majority.
So I'm surprised you believe the unionists will allow what they've been fighting against for a century to just happen in a peaceful referendum? I'd love to be wrong, I have no insight to how the more extreme elements of each side think these days, are the troubles completely behind the country?
There are but on a small scale. Off the top of my head I can think of 1 shooting and 2 or 3 'successful' bombs in the past 5 years targeted at security services. Obviously not common in most countries but nothing on the scale of the past. Shootings tend to be punishment style attacks within communities, usually involving drugs. None of these acts get support from anyone these days.
I think the DUP was the only party out of the 5 or 6 main parties advocating for leave. It's also not great for them that they hold the first minister position, advocated for leave, and within Northern Ireland people voted to remain. Similar position to the one Cameron is left in if you ask me.
>> "So I'm surprised you believe the unionists will allow what they've been fighting against for a century to just happen in a peaceful referendum? I'd love to be wrong, I have no insight to how the more extreme elements of each side think these days, are the troubles completely behind the country?"
The troubles are very much in the past. There are obviously still those who cling to the past but they tend to be concentrated in a few small communities with zero support outside those communities. Even when you look at the average person who would consider themselves nationalist all they really care about is keeping the peace we have. I think overall the climate is there with the people to have a debate about it - with the politicians not so much. When we have tactics in place that allow politicians to say no to even debating some social issues (gay marriage, abortion etc.) it's difficult to imagine them debating an issue as serious as this. I believe there are provisions in the peace agreement for a border poll so if those are met then it doesn't require anyone to allow the debate, it's automatically in the public arena where I believe an honest debate could occur.
fwiw, Northern Ireland consists of just six counties. Only one does not share a border and only it returned an overall leave majority.
As a fellow European I thought about this too, as I was trying to see a silver lining in all this. And then I went to read the comments on the French paper's Le Figaro website and got depressed again. Most of the people commenting in there really believed that the EU is to be accused of everything that's been going wrong with the French economy. If we do get a French referendum and if France leaves then the EU will just die. It pains me to put this down in words, but it's a valid possibility.
The big mistake the brexit voters made is that they thought that the UK as it was before the EU would have been a better place to be in today if the EU had never happened. Contrary to their belief the sum is a lot more than the parts but explaining that to the electorate is a challenge that modern politics (soundbites and tweets) is badly equipped to deal with.
Much easier to push the emotional buttons of xenophobia and economic malaise due to 'others'.
You probably ought to convince Switzerland (an enclave) and Norway to join. You probably ought to convince Greece to leave. You then need federal taxes, a unified military command, a head of state, a single EU citizenship, and all the other trappings of a real country.
Unlikely. More likely is that they will remain in the European Economic Area ("the internal market"). This means keeping their trade relations the same as they are, including all the EU regulations, but without a way to influence how the regulations evolve. In return they will save some membership fees (a net amount of about 80 Euros per person per year, IIRC). It's what Norway has done for decades, and what Norway has decided to keep doing in two or three referendums. Seems to be working OK for them.
Of course this doesn't "fix" perceived problems with immigration, because the EEA includes the "four freedoms": free movements of goods, persons, services, and capital. But it seems that even a lot of Leave supporters find the single market more important than xenophobia.
The dogma of ever closer EU integration and the creation of a superstate is just as bad as the dogma of those who voted to withdraw from the EU
Of course, this is the opposite of what Boris Johnson and Farage would want, right? You might be forgetting that no one outside of the UK could have changed this - the UK will reap what it (the majority of voters) has sown.
That's one perverse curiosity question answered for me; the final one will be answered in the US in November! Good luck to the denizens on both sides of the pond.
But that won't happen, partly because we don't want to punish the people living there. Partly because the UK is important after all. Partly because firms want to keep trading with the UK and want to keep there centers there, instead of moving around.
And at the end, they are the ones calling the shots.
Such good news/s
It may also be a start of countries leaving, but if the rest of the EU comes together and says "hey, we need to double down on this or else what the hell are we even doing" they may do the former.
Which is a good thing imo, but a lot of people don't think so...
The UK imports a lot of stuff from the mainland, they'll probably end up in the economic area (with all the strings attached) but with no say in the EU... maybe don't let the masses vote next time heh
As an Englishman, let me tell you somethings from an opposing view.
- International companies won't be moving to ireland/continent. The UK at one point wasn't as integrated and was doing quite well. It will do again.
The financial industry will not leave London. It's not going to happen. There are many reasons why. Keep dreaming.
London is the best startup in Europe currently.
- Sure the EU can be hard as possible, but then so can the UK. There are many EU countries which export to the UK. It's not just a one way thing.
- The British economy will not collapse. How you can think that I have no idea. Yes the pound did go down, it's gone down many times in history. But it will recover again. The Bank of England, already accounted for this. There is no panic.
- The US said the UK is not that important? Says Obama because his dad is from Kenya hates the UK. But in reality it actually is. Germany, Spain, all other countries of EU are not as important as the UK.
- Scotland will most likely want to exit. They are 4 million people after all. But when they do exit. All the British companies currently there, will leave to go to London. They'll join as another country like Estonia or worse off. I don't know if Europe will have them lol.
- N. Ireland won't exit. They are deeply patriotic people and see themselves as British.
Sorry. But I really don't think you know what you are talking about!
Probably true, but they will certainly strengthen their position on the mainland.
> The financial industry will not leave London.
Also true. The reasons mostly being lack of regulation and corruption :P
> The British economy will not collapse.
True. (I hope.)
> The US said the UK is not that important? Says Obama because his dad is from Kenya hates the UK.
WTF
> Germany, Spain, all other countries of EU are not as important as the UK.
Germany has a higher GDP than the UK. Never mind the combined GDP of some of the bigger EU member states. I'm not sure why you think the UK is that important.
> Scotland will most likely want to exit.
Yup.
> N. Ireland won't exit.
No idea, but it sounds reasonable.
IMO
Plenty of companies will move to Ireland/Germany.
I think the EU/UK will reach agreements that are more or less the same as they are now (making Leave a bit pointless).
The economy will not collapse, but it will be worse off short term.
I don't think US cares more about either the EU/UK. Equal for all.
If Scotland goes - why would those companies not move to the EU, since it would be about the same difficulty wise?
Probably right.
> International companies won't be moving to ireland/continent. The UK at one point wasn't as integrated and was doing quite well. It will do again.
Yes, but back then the EU was a lot less strong than it is today, even without the UK as a part of it.
> The financial industry will not leave London. It's not going to happen. There are many reasons why. Keep dreaming.
250 Billion worth of capital has already fled judging by the drop of the pound, and more is likely to follow. Yes, the financial hub of Europe will shift its COG to Frankfurt. That's something that a re-entry in the EU of England at a later date will not be able to recover.
> London is the best startup in Europe currently.
I assume you left out 'centre' or 'hub', and it was so until today. But if I were starting a start-up I'd definitely think twice now about whether or not to do this in the UK, and London specifically.
> ure the EU can be hard as possible, but then so can the UK. There are many EU countries which export to the UK. It's not just a one way thing.
The relative sizes of the parties dictate the likely outcome of such negotiations. Already there are some pretty clear lines drawn and those will only become more stark in time. This was an 'own goal' if there ever was one.
> The US said the UK is not that important? Says Obama because his dad is from Kenya hates the UK. But in reality it actually is. Germany, Spain, all other countries of EU are not as important as the UK.
This is mis-informed. The UK is important as a country within the EU. Once the UK leaves (and especially if the UK then breaks up even further) it is no longer that important a country.
> Scotland will most likely want to exit. They are 4 million people after all. But when they do exit. All the British companies currently there, will leave to go to London. They'll join as another country like Estonia or worse off. I don't know if Europe will have them lol.
I'm not sure if 'lol' is something that you'd want to use about anything today. And Scotland is definitely a viable country and would most likely be very welcome in the EU.
And all the British companies there might actually see Scotland as the backdoor to remain in the EU, and I would not be surprised if they more than anything else would push to achieve this.
> N. Ireland won't exit. They are deeply patriotic people and see themselves as British.
That one is a toss-up, but not hugely important for the EU, though it would be hugely important to the UK, if they wish to keep that 'U'.
In other words: the UK has made itself a bit player overnight and chances are that only England will remain at the end of all this, with a substantially reduced economy and a very tiny market to sell into. It will hurt all those who voted 'exit' the hardest, and it will be studied for decades to come as an example of how an electorate can be manipulated to vote against its own interests.
Having said that, I strongly disagree, see my initial post. Only the future will tell who will be right (or none of us?). Political Power Play is a gamble, and I bet strongly on a more united europe. Others do different bets, as seen in the brexit vote. All sides contain competent and educated people finally.
- International companies will move from GB to ireland/continent, germany is in a good position to capture the financial industry (Frankfurt), Berlin already is a great startup hub.
- the brexit is a strong signal for the other EU states to get their shit together and fix obvious problems.
- its in the interest of all EU states to be as hard as possible when negotiating with britain and outright damage them when possible. No politican will say this loud, though, but it will happen. "Out is out". Harsh consequences will make other states think twice before considering an exit, too. thus, stability.
- The british economy will collapse completely, they are by far not that important globally. The pound already goes down dramatically, trade partners have been EU states mostly who will get doctrined from brussels to punish GB. We do not need anything that must be imported from the UK. Short-term EU companies operating on GB will suffer, though. But this will be overshadowed through the international focus on continental europe instead of UK/London after a while.
- the US already said that the UK isn't very important and are not very eager to make deals separately. And we do no longer have to deal with "special care" for british wishes, which often are the cause of endless discussions and bureaucracy.
- Scotland and n.Ireland may "exit" the UK, further minorizing the role of the UK in the world. Might be possible that they join the EU independently.
So all in all, this may be good news for the EU, even when we sacrifice a generation of UK citizens for our benefit. Maybe in a few decades a demolished, isolated england will try to get into the EU again.
Still, it makes me said, since I really enjoyed my stays in London and would prefer a big, strong, united europe.