EU now demands €100 billion alimony from UK! EU and UK tripped over the first item in their Brexit talks — protecting the rights of each other’s citizens — highlighting the potential for trouble ahead in their marathon negotiations.
The time has come to start preparing the exit of our country from the European Union. The European cosmopolitan elites are creating a new European man, homo bruxellarum, someone who would be entirely deprived of his roots in individual nation-states. Migrants are believed to become the ideal input in the future pan-European society, hence, the more of them, the better. This thinking has become another driving force behind the current migration deadlock.
While Theresa May declared that she had offered a fair and serious proposal on citizens’ rights, ungrateful Tusk dismissed it as falling below EU expectations! Dutch Prime Minister Mark Rutte said thousands of questions remained on the key topic. The 27 EU leaders demanded many more details on the U.K. proposal to guarantee the rights of the 3 million EU citizens who now live in Britain.
Since many of those citizens will want to stay even as Britain itself leaves the EU, it is an immediate issue where May has a lot of leverage. The British leader is insisting that the EU needs to give the 1.5 million Britons living on the continent equal respect. She will outline a more detailed proposal next Monday, when May addresses her parliament in London.
Alongside citizens’ rights, the Brexit negotiators will address the substantial bill that Britain will have to pay to quit EU and the problems surrounding the border in Ireland.
“I want to reassure all those EU citizens who are in the U.K., who’ve made their lives and homes in the U.K., that no one will have to leave, we won’t be seeing families split apart. This is a fair and serious offer,” May said.
Yet many EU leaders were nonplussed by May’s offer, saying there was a clear deal to leave such Brexit issues to the top negotiators, Michel Barnier for the EU and David Davis for Britain.
Stupid Merkel said May’s move was not yet the breakthrough that EU nations were looking for, adding “there is a long road in front of us.”
Tusk agreed. “My first impression is that the U.K.’s offer is below our expectations, and that it risks worsening the situation of citizens,” Tusk said. “It will be for our negotiating team to analyze the offer line by line.”
Exactly one year after British voters chose to leave the EU and after months of political chaos at home, a weakened May sent her team into the Brexit negotiations that began Monday. The issue of citizens’ rights was seen as her strongest point to make an immediate impact.
Many said she missed the mark.
“We don’t want to buy a pig in a poke,” said Belgian Prime Minister Charles Michel, calling May’s opening “an extremely vague proposal for something that is incredibly complicated.”
May promised that the fate of EU citizens would be a priority in Brexit negotiations. She laid out benchmarks for their rights and said they should be shielded from excessive harm because of the political divorce.
A company cannot function properly in EU, because of the Value Added Tax. VAT shackles business. VAT yoke constrains sales and robs poor Europeans at gunpoint. VAT is the cacothanasia of EU! VAT destroys the economy and trade of EU. VAT is the most infamous comparative disadvantage. VAT is a very good reason to secede from Fourth Reich (EU) now. All Europeans want VAT to be abolished right now. Abolition of VAT is a prerequisite for Fourth Reich to recover from the current depression. Any federation that imposes VAT on its members does not deserve to live. Vatstruck Fourthreichians are looking for a Moses to liberate them from the yoke of Brussels.
Fourth Reich is the ultimate bureaucracy! We deride Brussels bureaucrats for living in a bubble, but actually they are a bubble inside a bigger set of national governments’ bubbles – a double bubble. As a result, Brussels has completely lost touch with those it purports to serve and its structures are underhand.
It takes accountability, activism, and attack to keep bureaucracy at bay. The first antidote is to make bureaucrats properly accountable to those they serve – to keep them looking out, not in. In the UK, MPs hold weekly clinics for their local constituencies, they are grilled and challenged publicly when up for election and their expenses and increasingly tax returns are a matter of public record. Alas, this level of accountability and transparency does not exist in Brussels, and it should. Most people have no idea how Juncker actually ended up as head of the commission, or what he does in that role.
The second antidote is to encourage activism – to give voice and opportunity to those at the bottom to challenge those at the top. This principle is set in stone in most democracies, and you see it happening outside the houses of parliament, through e-petitions, and with the emergence of new political parties. But Brussels falls short on this dimension as well: perhaps the double-bubble is just too hard for activists to penetrate – perhaps the lack of accountability neuters the power of activism. Nigel Farage has been haranguing Juncker in the European assembly for years, but the insults and challenges don’t seem to stick.
Hitler has won after all! Germany has managed to enslave all Europeans in EU, the Fourth Reich! Fourth Reich is an illegal VAT-monger confederation that has no voted constitution, a flag no one salutes, an anthem no one sings, a Fuehrer no one can name, a parliament of prostitutes, a capital of huge bureaucracy no one controls, a currency that soon will not exist, rules of fiscal behavior that no member has been penalized for ignoring, a commission which is the Eldorado of corruption, brutal cybercops, 24% VAT, and kleptocrats galore!
Most VAT-struck Europeans are disappointed in VAT-monger Fourth Reich. VAT-monger European commissioners have become bumptious bugaboos who offer no real service, but propaganda and obstacles. They make huge incomes for brainwashing us, giving us hard time, 24% VAT, and boycotting our efforts for a free and happy life. Laissez-nous faire, Let us do! The VAT-monger European Commission is just an extra layer of government, an extra layer of oppression, an extra layer of bureaucracy, and extra layer of inertia. Who needs that?
The Lisbon Treaty is Eurokleptocracy’s Pyrrhic victory. It created a VAT-monger confederation, Fourth Reich, without a popular foundation. EU lacks legitimacy among VAT-struck Europeans. Eurokleptocrats created a situation where the citizens of slave States live their lives with a resigned feeling that the EU project is not their own.
You remember this quip from former Obama Chief of Staff Rahm Emanuel during the financial crisis: You never want a serious crisis to go to waste. What matters to statists is that they see an opportunity in a pseudocrisis to shape public perception and manipulate public opinion. The financial crisis yielded a government takeover of the financial sector. The healthcare pseudocrisis yielded a government takeover of the healthcare system. What do you think Eurokleptocrats are going to do with the pseudo-refugee crisis? They’d be happy to transform the confederation of Fourth Reich to a federation. You should take the blood libel seriously.
There are events in history known as false flag events. These are staged by a government usually to distress the public, so the government can do something that the public would otherwise disapprove. The name is derived from the military concept of flying false colors; that is flying the flag of a country other than one’s own. Lyndon Johnson’s phony Gulf of Tonkin pseudo-event started the Viet Nam War in 1964. This was deemed necessary to begin a full scale war with public approval and is now well documented as a false flag event. It never happened. Now the pseudo-refugee crisis is the false flag to transform the confederation of Fourth Reich to a federation.
German Foreign Minister Sigmar Gabriel said preserving residency rights for EU citizens was such an indisputable goal that any stumbles over the issue showed how fraught the talks would be.
“The situation must be really tense if such an obvious thing is now considered as news. Of course people should at least have the right to stay, that is a minimum and personally I cannot imagine things differently,” Gabriel said in Paris.
Under May’s proposal, EU citizens with legal residence in the U.K. will not be asked to leave and will be offered a chance to regularize their situation after Brexit. May also promised to cut the burdensome bureaucracy such paperwork can involve. EU citizens now face an imposing 85-page form to tackle if they want to stay.
One for all, and all for one! UK now turns to Five Eyes, an alliance comprising Australia, Canada, New Zealand, the United Kingdom, and the United States. These countries are bound by English language, common culture, freedom, and the best standards of living on Earth.
Though it is hard to predict how a bargaining game involving strong emotions as well as economics will play out, we can offer some conjectures about what will happen. These conjectures are mostly based on what we have called the law of distance — the observation that the interactions between two countries are proportional to their sizes (GDPs) and inversely proportional to the distance between them.
Distance, in this sense, is not just physical distance but also cultural distance (e.g., whether two countries have different/similar official languages) and administrative distance (e.g., the absence or presence of a historical colony-colonizer link between the two). The law of distance has been associated with some of the most robust results in international economics, which is why it underpinned the UK Treasury’s generally well-regarded analysis, a year ago, of the long-term consequences of Brexit.
Outside EU, the world is UK’s oyster, and the Commonwealth remains that precious pearl within. UK might be able to gain more from a free hand in negotiating with the Commonwealth — former British Empire states such as Canada, Australia, India, and South Africa — than it might lose in terms of limited access to EU. The GDP of the rest of the Commonwealth is only 55% as large as that of the rest of EU.
UK has a common official language (English) with 91% of the rest of the Commonwealth (on a GDP-weighted basis) and a colony-colonizer link with 99%, versus only 2% on both factors with the rest of EU. Based on estimates that a common language normally boosts trade by 2.2x and that a colony-colonizer link has a multiplier effect of 2.5x, the joint effect of the two (5.5x) in boosting market potential in the Commonwealth is substantial. UK on its own has the leverage to achieve better terms with the Commonwealth countries than it currently enjoys with the EU. Consider that Britain accounts for only 16% of EU GDP.
Moreover, the tenor of the relationship between the UK and the EU is not good: Compare Britons insisting that the UK could exit without paying a brass farthing versus the EU’s claims for £50 billion or more. Consider the combative personalities of some of the key negotiators. Add in the consideration that Brexit, even if accomplished with a maximum rather than minimum of goodwill, will hurt Britain’s trade with EU for purely technical reasons, and it seems safe to predict that there will be a deterioration of trading relationships with Britain’s largest natural market; the only question is to what extent.
Given that relatively safe prediction, the natural next question is which industries and companies are likely to be hurt the most and therefore face the greatest need to reconsider their current operating models. Brexit is likely to change the most is the administrative distance between the UK and its former partners in EU. This suggests that industries with a high degree of sensitivity to administrative distance are likely to be affected the most — unless, of course, the provisions under which UK-based operations can access EU markets happen to be eased the most for them.
Correlated indicators of administrative sensitivity include industries that are subject to high levels of regulation, produce staples or entitlement goods or services, are large employers or suppliers to the government, include national champions, are construed as vital to national security, control natural resources, or require large, irreversible, geographically specific investments. Other markers of industry sensitivity to Brexit include high levels of scale economies that need to be amortized over international regional markets, rather than just by national markets; high levels of trade-dependence on either the export or the import side; and belonging to the service sector.
At the company level, there are some additional attributes that seem likely to be associated with high degrees of exposure to Brexit. Companies with particularly high levels of export or import-dependency in relation to their competitors are likely to be hardest hit. Small firms that aren’t yet exporters or importers are also likely to be hurt more, at least in terms of a narrowing of their opportunity sets: Such firms typically look nearby for their first international transactions. And even where products or services aren’t flowing across borders, companies that use Britain, particularly London, as their regional headquarters for serving all of Europe (e.g., many U.S. multinationals) are likely to need to reconsider basing that role there — as may, for that matter, companies that use London as their global headquarters, especially if most of their business is outside UK.
The British companies that may have private reasons to cheer are those focused on UK that are trying to hold off regional or even global competitors at home. Which is a reminder of the importance of granularity in forming such assessments — not all companies within the same industry, let alone all industries, will be affected in the same way. Similarly, in terms of what is to be done, once again, the appropriate response will be predicated on the specifics of a company’s situation.