Britain without Europe?

A few days I ago I opined about Europe without Britain, but there is also the matter of how Britain might fare without the “supports” (some would say anchors) of the EU.

The anchor analogy is apt, I think. Some see the EU as an anchor that keeps Britain firmly secured to a “base” even when the socio-economic “seas” are very rough. Others see the EU as an anchor that weighs Britain down, preventing it from sailing happily and successfully on the seas of international trade and commerce. Both are partly correct and noted commentators like Martin Wolf in the Financial Times and the distinguished macroeconomist Prof Patrick Minford, writing in Thunderer, the opinion pages in The Times, argue, cogently for and against, respectively, remaining “anchored” to the EU.

Former US assistant secretary of state James Rubin, writing in The Economist, makes the case that if the Out! side wins and Brexit actually happens London will lose its (very unofficial) status as “capital of the world.” This notion that London is the “capital of the world” is based on a couple of models of global GDP and the constant shifting of its centre of gravity …

mckinsey-global-center-map.png

… as the explanation says, America and China are “across” from one another, across meaning over Canada, the North Pole and Siberia ~ that’s why the economic centre of gravity is so far North …

wecg_1980-2050.gif

… another model shows it in a more linear form over a much, much shorter time frame but the effect is the same. The global economic (and, therefore, socio-political) centre of gravity never quite reached North America, Europe, especially, and (in ancient times and once again in the 21st century) Asia have exerted too much “pull.” London (Britain) capitalized on this and, before and even after the Victorian era, remained important as both a financial and a diplomatic “capital.”

The question of whether British banks and brokers would gain or lose is open ~ my guess is short term pain, maybe a lot of pain, for long term gain. I suspect that is one of the reasons that the Deutsche Börse (Frankfurt, Germany’s financial centre) and the London Stock Exchange are, once again, talking merger: Frankfurt believes that if there is a Brexit it will stand to reap major short term gains as companies flee the LSE, looking for a safe haven (an anchorage) in Europe, proper, but that, in the longer term, London will, once again, become a centre of freebooting capitalism.

Britain would remain a global military power ~ not a “great power,” it hasn’t been one since 1941, arguably not since 1916, or even 1901 depending on how you like to read these things ~ but a “power,” all the same, with a nuclear arsenal and a global reach. If it leaves the EU its military power will be, very slightly, enhanced because it will have shed the “anchor” of repeated attempts to develop a common EU foreign policy. But Britain will, most likely, also be exposed as a very, very junior partner to the USA, but that’s something it has been since the 1940s. But as I mentioned in the article linked above, in the opening paragraph, Britain may try to strengthen its ties with the Anglosphere, with the Northern Europeans (it already has quite strong military ties with Norway, which is not an EU member, and with the Netherlands, which is) and it may even try to cozy up to India, looking to displace Russia as a source of arms.

A Brexit, if it happens, will weaken the EU and that will embolden Russia, making it more likely to make a strategic blunder while in pursuit of a short term tactical gain.

But, in my view, the jury is still  out. The “smart money,” the big banks and big business, which craves stability above all else, is campaigning hard for the In! side, but their campaigning, based on fear, may be be backfiring: “the average British voter is unlikely to understand the specifics of the Le Touquet agreement [on the Calais refugee camp] and how an Out vote could result in more migrants heading across the English Channel … instead, they are more likely to think of it as another hyperbolic warning.” the hyperbole may be actually weakening the In! case because it reminds more and more Britons of what they dislike about the EU, in general, and France in particular.

For Canada it seems like a wash, too. We might make some advantageous trade deals with an “independent” Britain and still keep our Canada-EU free trade deal, but they unlikely to compare, in any respect, with the “deals” that a (much needed) shift in focus towards Asia will provide.

By Ted Campbell

Old, retired Canadian soldier, Conservative ~ socially moderate, but a fiscal hawk. A husband, father and grandfather. Published material is posted under the "Fair Dealing" provisions (§29) of the Copyright Act for the purposes of research, private study and education.

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