Why a Leave Vote May Not Result in a Brexit

The officialdom in England and in much of the rest of the advanced world is suddenly in alarm over the possibility of a Brexit. US Treasury yields sank last Friday as investors ran for cover, and the flight to safety continued today as a surge in the yen led to a 3% fall in the Nikkei

The UK”s elites had been confident that frequent, loud “Don’t Touch That Dial” warnings, with vivid descriptions of all of the horrors that would ensue, would herd voters into line well before the June 23 polling date.

Instead, an online poll commissioned by the Independent showed the Leave campaign to be winning by a stunning 55% to 45%. That revelation coming on top of weak economic data from the US, put Mr. Market in a funk. The Financial Times’ “poll of polls” puts Leave in the lead by a smaller margin, 46% to 44%.

Moreover, the sense is that with only 10 days to the decision date, the Leave campaign is gaining momentum. The Conservatives have realized that having a bunch of toffs, big banks, and intrusive foreign leaders tell British citizens how economically damaging a Brexit would be seems only to have persuaded voters at most that the people at the top of the food chain would take a hit. Voters seem to be in a bloody-minded enough mood to be willing to take a hit if they can inflict some pain on their putative leaders and take the banking classes down a notch or two. Another sentiment (and one that the elites appear to deny) is that voters are willing to pay an economic cost, even a large one, for more national sovereignity. So now Labor leaders have been moved to the front line of the sales campaign.

But even the referendum next week results in “Leave” getting the most results, that does not mean a Brexit will necessarily happen. There are at least two ways that the will of the public could be thwarted.

Peter Hitchens outlines one possibility, that Parliament refuses to honor the vote. From the Daily Mail:

I think we are about to have the most serious constitutional crisis since the Abdication of King Edward VIII. I suppose we had better try to enjoy it.

If – as I think we will – we vote to leave the EU on June 23, a democratically elected Parliament, which wants to stay, will confront a force as great as itself – a national vote, equally democratic, which wants to quit. Are we about to find out what actually happens when an irresistible force meets an immovable object?

Since the intricacies of Parliamentary procedure are well over my pay grade, I will leave it to our British readers to game out how the Parliament could maneuver to keep the UK from departing the European Union even in the face of “Leave” winning.

Aside from some sort of crude rejection, there is a second, time-honored way that has gotten recalcitrant voters to fall into line: keep sending them back to the polls until they give the desired answer. Admittedly, it make take the European Union giving the UK some real concessions in order for voters to be swayed. For instance, Denmark required approval in a referendum as a condition for signing the Maastrict Treaty. The first vote narrowly turned the pact down. Danish officials then negotiated four exclusions from the treaty, and voters ratified in just under a year later.

More recently, Ireland was the only EU member that decided to hold a referendum on the Lisbon Treaty. The result, in June 2008, as over 53% opposed. The European Commission made concessions on three issues. Over 67% of voters supported the agreement in the next referendum in October 2009.

Thus it appears that many experts have been focusing on the wrong issue, at least for now. They’ve been worrying about, “Which post-Brexit trade and economic model will the UK use, how long would it take to implement, and what would the costs be?” Yet European and UK officials are highly motivated to prevent a Brexit, and given that there is no clearly defined set of next steps if Leave wins, they have plenty of latitude to improvise.

However, just because the will is there does not mean a patch-up operation would work all that well. One driver of the Brexit vote is a desire to curb immigration. While getting waivers on that would seem to be the fastest path to flipping “Leave” voters to “Remain,” it would seem to be fraught to offer the UK concessions on that front. The first is the philosophical issue that restricting the free movement of people violates the spirit of the Schengen agreement, and also obviates one of the big reasons for the European Union in the first place. Second is that voters in other EU member states are unhappy about refugee quotas; letting the UK get a break (if that were to be part of the deal) means they will presumably have to take even more. What European elected official wants to have to sell that to his constituents right now? Put it another way, what does a European Union mean if big countries can rewrite what are seen to be basic rules? The vision for the European Union had been more and more integration over time, but a successful effort to reverse a Leave vote would put it on the path of more decentralization of power. In the long run, that is likely more viable, but the transition would contested and disruptive.

And third impediment is that, as Hitchens argues, voters are deeply disaffected with the political classes:

It has been a mystery to me that these voters stayed loyal to organisations that repeatedly spat on them from a great height. Labour doesn’t love the poor. It loves the London elite. The Tories don’t love the country. They love only money. The referendum, in which the parties are split and uncertain, has freed us all from silly tribal loyalties and allowed us to vote instead according to reason. We can all vote against the heedless, arrogant snobs who inflicted mass immigration on the poor (while making sure they lived far from its consequences themselves). And nobody can call us ‘racists’ for doing so. That’s not to say that the voters are ignoring the actual issue of EU membership as a whole. As I have known for decades, this country has gained nothing from belonging to the European Union, and lost a great deal.

If Zambia can be independent, why cannot we? If membership is so good for us, why has it been accompanied by savage industrial and commercial decline? If the Brussels system of sclerotic, centralised bureaucracy is so good, why doesn’t anyone else in the world adopt it?

In other words, the Leave vote is to a large degree a repudiation of the political elite. Thus trying to deny voters their way by cobbling together a deal may enrage them further and thus backfire. Of course, the officialdom may hope that a period of market turmoil and economic dislocation may discipline them, um, bring them to reason.

So even if the ruling classes pull out the stops to keep the UK in the EU, it’s going to be a fraught, messy process. The past precedent show that with smaller countries, with less central issues at play, in times of much lower political stress, the effort still took over a year. That is an eternity in financial time. While a Brexit would be a seismic event, a protracted effort to reverse a Leave vote would be an ongoing source of uncertainty and hence volatility.

And if the last-ditch push works and Remain prevails? While it would stave off a crisis, it still leaves the European Union damaged The UK would be seen as only a provisional member, and having come so close to a win, the Brexit advocates are certain to keep the issue in play.

Print Friendly
Tweet about this on TwitterDigg thisShare on Reddit0Share on StumbleUpon0Share on Facebook0Share on LinkedIn0Share on Google+0Buffer this pageEmail this to someone

80 comments

  1. ewmayer

    Mike Shedlock has also covered the growing-momentum-indicating latest polls, and believes the double-digit-lead claims to be highly suspect, concluding

    This will all come down to two things:

    1. How undecideds break
    2. Turnout

    Right now, undecideds are breaking heavily towards Leave. That trend will have to continue to seal the fate, but there is no reason to believe it won’t. Moreover, it appears fear-mongering is not helping the Remain camp at all.

    History Lesson

    Matt Singh, like Nate Silver before him in the US, relies too much on history, in a political year with many surprises.

    My gut sense is similarly that the final tally will be much closer than the latest polls indicate, but I am in fact “relying on history” as my guide there, specifically the recent Scottish independence referendum, where when push came to shove the establishment fearmongering campaign had its desired effect and convinced enough fence-straddlers to step back from the brink to tip the balance.

    OTOH if the Brexit vote turns out to be the UK’s version of the same anti-establishment revulsion that has powered Sanders and Trump campaigns here in the U.S., I could well be wrong (and would happily be proved so in this instance).

    1. m-ga

      One of the problems for the Remain campaign is that it can’t send a positive message.

      For example, when Cameron says how terrible a Leave vote would be, the question put to him (even if tacitly) is “Why on Earth did you offer a referendum then?”. Cameron can’t answer this. If he told the truth (i.e. that it was to tamp down on dissent in his own party, so that he could continue to be Prime Minister) he would be exposed as the political opportunist that he undoubtedly is.

      I think the switch to Labour pro-remainers this week is an attempt to counter the incoherent messaging coming from Cameron. At the moment, it doesn’t seem to be working too well. Brown has already been discredited by the UK press, with the result that his persuasive powers are weak. Corbyn doesn’t seem too bothered about the referendum outcome – he likes the EU’s worker and human rights, but nothing else about it. John McDonnell perhaps has the best chance of putting forward a positive case, but he’s likely to do so at a pro-migrant rally, which is a gift to the Leave camp.

      Possibly the strongest Remain tactic has been to have John Major and Tony Blair campaigning together. For whatever reason, the UK press won’t criticise either of these politicians. There’s a novelty factor in seeing them together, and it makes people remember when the UK was in a better state than it is now. Indeed, the impetus to leave among many (especially the over 60s) seems to be that they think it will rewind the situation to how Britain was in the 1980s. In other words, the UK would better off than it is now via time travel. That such a reversion is highly unlikely to be the case isn’t dissuading the older voters.

      1. Deep Though

        I concur. Cameron has backed himself into a corner, and the same negative campaigning that won the AV referendum, Scottish referendum and general election does not seem to be working this time. It failed in the London Mayoral election too. Outside of my narrow circle of liberal friends, everyone seems to want to vote out because clearly that will bring back the faded glory days of their youth when everything was so much better?!?

        And yes, Blair and Major seem the best hope right now. I never ever thought I’d say that!

        Yves – I assume you know that the UK is not a signatory to the Schengen (not Schengren) agreement? The right to free movement is separate to that, and there is no way in hell Merkel will ever allow a restriction on that. She grew up in East Germany and actually remembers how crap strong borders are.

        1. Yves Smith Post author

          Sorry re Schengen. The UK is indeed not a signatory but has adopted some of its provisions and also informally adheres to the “free movement” policies.

        2. Aaron

          Outside of my narrow circle of liberal friends, everyone seems to want to vote out because clearly that will bring back the faded glory days of their youth when everything was so much better?!?

          It’s that sort of condescending attitude that grates with people and could be the undoing of the remain campaign.

      2. vlade

        Cameron promised it because it looked like 2015 election will be shambles again, and he wouldn’t have to call the referendum. It backfired on him massively, which tells you that if you have two wings in the same party that push opposite directions, something will give regardless.

        His remain campaign runs mostly negative as you say (similar to Zack G. campaign for London mayor) – although the leave campain mostly runs on empty, unfillable, promises and fairy tales (even more so than the Scottish one).

        If you wanted to run it on negative, there was one thing you should have done “bet scotts feel happy they stayed in today” (when all of their oil revenue evarated, oil industry lost about 80k jobs in Scotland, etc. etc.). At least make the plebs feel superior to someone in the negativity ;)

      3. larry

        That the Remain campaign can’t send a positive message is false. That is primarily what they are trying to send, but not viscerally enough, so it is failing to have the impact that they would wish. It is the Leave campaign that has no positive message to send. Only hysteria. There are falsehoods being promulgated on both sides.

        And Peter Hitchens is not the most reliable commentator. I would not have used his comments, even though some of the things he says are right. It is his general position that is questionable, and always has been. His position on the EU is extremely distorted and cannot be taken seriously.

        If a Leave vote wins, and Parliament abides by it, then the position of Wolfgang Schaeuble, a powerful European politician, can not be ignored. He will punish the UK if only to attempt to deter others who might be thinking about doing something similar. And he doesn’t bluff.

        As for Cameron, he may be unseated as PM, whatever the outcome of the vote.

        1. Yves Smith Post author

          I recognize that HItchens is seen as being histrionic, but that doesn’t make his point any less valid. Parliament may well chose not to honor a Leave vote, particularly if the markets tank the next day. We had the same drill in the US with the TARP. We didn’t have a referendum, but the press coverage on the initial bill was very negative, and the many calls to Congress were over 95% negative, which dropped to about 80% negative when banks got wind and enlisted employees to make favorable calls.

          Even though Schauble is powerful, he is still not the Chancellor. He calls the shots on matters related to the Finance Ministry, particularly bailouts. Merkel is still the lead actor on Eurozone/EU policy. He’s trying to box her in but that does not mean his view will prevail.

          After Congress voted down the TARP, markets swooned. Without belaboring the details, a new version with tons of port added passed.

        2. Tom

          If a Leave vote wins, and Parliament abides by it, then the position of Wolfgang Schaeuble, a powerful European politician, can not be ignored. He will punish the UK if only to attempt to deter others who might be thinking about doing something similar. And he doesn’t bluff.

          He’ll be far too busy trying to prevent the whole shambles from collapse to punish anyone. If the UK votes out I can well see the Dutch et all coming along for the ride.

  2. Chris

    If the vote is to leave, it’s not just an issue of whether parliament will do that, but just how “leave” is interpreted. There are four or five different trade relationships which could be negotiated.

    Only one of these, the WTO option (which is probably the least advantageous in trade terms), would release the UK from continued mandatory involvement in the freedom of movement.

    Here’s the catch: the focus of the ‘leave’ campaign (this week) is around anti-immigration; this seems to be what people think they will be gaining by voting to leave. Yet the WTO option is, I suspect the one least preferable to this business-sympathetic Parliament.

    So what happens when those who thought they were accepting a fall in living standards at the “price worth paying” for reduced immigration realise they’ve been misled?

  3. vlade

    I will, with gritted teeth, vote in – not because I’d have any love for EU/Brussells, but because Leavers are really even worse bunch of idiots that the current crop (and I always thought that was hard to beat). Even ignoring everything else outside, seeing Boris J as the next (unelected really) PM is to me even less appealing than Trump – because Trump is at least honest-to-god idiot, while Johnson is his personal quest for power is genuinely scary (for him it’s not about EU, but about a fast-track to being PM).

    On the parliament issue – the referendum (as people should read before they start screaming) is non-binding.
    Cameron was very very careful about that.

    To me, if Leave wins, the only reasonable choice is to call an election – because if people voted out, they should then vote on what the out negotiation should look like (especially since it’s clear that free labour movement will be a condition on any reasonable access to EU markets similar to Norway/Swiss).

    But that’s a problem, because of the Fixed Parliament Act – basically two thirds of the parliament have to vote to dissolve the current one. And given that we can expect Tory civil war, and likely Labour one too (both of them are already simmering, and this would just fire them off), it’s very unlikely to happen. So it’s entirely possible, that the article 50 notice may not go out of the door. In fact, I can see a situation where Cameron loses confidence vote as PM, but no new PM can be put in, so Cameron will be there until 2020 – purely because it will end in a gridlock.

    1. oho

      devil’s advocate. you can always vote out your local MP if she’s an idiot. How do vote out Juncker?

      1. vlade

        I can always vote in an MEP? Who has, overall, about as much power in Brusells, as my MP in Westminster, given the first-past-the-post.

        And given the “safe seat” approach, it’s not so easy to vote out a placed-in idiot.

      2. m-ga

        In many (most?) UK constituencies, you can’t vote out your MP.

        For example, I’m in George Osborne’s constituency. It’s one of the safest Tory seats in the country. It took the plainly corrupt Neil Hamilton for the folks here to stop voting Tory. And they only did so for one term reverting to type at the 2001 election.

      3. Kat

        By a motion of censure under article 234 TFEU, i.e. the European Parliament’s equivalent of a motion of no confidence. However, because Juncker commands a clear majority in the EP, this would almost certainly go nowhere (unlike with the Santer Commission, which was forced to resign). Euroskeptics tried it already in 2014, just a month after the Juncker Commission had been elected, but the motion was easily defeated.

    2. efschumacher

      But that’s a problem, because of the Fixed Parliament Act – basically two thirds of the parliament have to vote to dissolve the current one.

      But the Queen can dissolve Parliament at any time, given that it serves at her pleasure. And since she’s evidently a Remainer, then that would be a not-completely-out-of-the-question possibility.

    1. Max Gattie

      However, I think the other comments regarding migration are correct. As a long-term resident, the feeling I get is that the referendum is by now almost entirely being fought on an anti-migration stance. One of the ironic aspects is that leaving the EU wouldn’t make much difference to migration. Firstly, it would be very difficult to halt EU migration without also leaving the trading bloc; Secondly, the UK government and corporations don’t want to stop the migration; thirdly, migration to the UK is mostly from outside the EU (e.g. from former British colonies such as India) and would be unaffected by a Leave vote.

      The only other issue which comes up for the Leave campaigners is a perceived undemocratic foundation to some of the EU regulations. That these are often mythical (e.g. the shape of bananas) seems to be irrelevant. It is also as if the UK doesn’t send MEPs to Brussels (it does, and the MEPs vote on the perceived undemocratic regulations which UK newspapers complain about).

      In short, the public are basing their judgement on a hellish handbasket of misinformation which has been been peddled relentlessly, mainly by the Daily Mail and the Sun, since at least the early 1990s. Putting Britain’s role in Europe to a referendum is one of the larger miscalculations that Cameron has made. Taken in conjunction with his Scottish referendum gambit (which lost Scotland’s confidence in Westminster, but won the UK general election for Cameron), Cameron’s legacy is likely to be the break-up of the UK.

      There are, of course, excellent reasons for leaving the EU. Many of these are outlined by Corbyn (who is reluctantly recommending a Remain vote), but no-one is listening. The referendum debates are some of the most unpleasant political activity I’ve seen in the UK. They’re based entirely on misinformation. And, whatever the result, they’ve stirred up some very nasty racist groups, and have given them a veneer of respectability.

      1. Tom

        thirdly, migration to the UK is mostly from outside the EU (e.g. from former British colonies such as India) and would be unaffected by a Leave vote.

        Err no, you are wrong. The former colonies and commonwealth countries are effectively penalised by our membership of the EU with the number of migrants from them being squeezed year on year in order to keep totals down because we have to take those that come from the EU.

        1. Max Gattie

          Tom, you had better tell that to the University of Oxford. They seem to think that non-EU nationals constitute an estimated 95% of total net migration to the UK:

          http://www.migrationobservatory.ox.ac.uk/britains-70-million-debate/executive-summary

          In the event you think the University of Oxford is biased, you might prefer to get a similar story from the clearly partisan Migration Watch:

          http://www.migrationwatchuk.org/what-can-be-done

          Unfortunately, misapprehension of this issue is playing a major factor in the UK referendum. The Leave campaign is now campaigning on immigration as its major (only?) plank. But leaving the EU will not do anything to halt non-EU migration to the UK.

          In other words, it’s not just that Leave are pushing an economically unsound argument with unpleasant racist undertones. It’s more that the central plank of their argument – even for those inclined to accept it – is rotten.

  4. steve

    nd if the last-ditch push works and Remain prevails? While it would stave off a crisis, it still leaves the European Union damaged…having come so close to a win, the Brexit advocates are certain to keep the issue in play.

    IOW, neverendum? If the people vote Remain, just keep redoing the vote until they vote the way the separatists want?

    I love the utter cynicism that dismisses any vote for Remain as illegitimate and the fruit of “establishment” demagoguery. Do people believe in democracy or not?

    Ask the Bloc Quebecois how neverendum worked out for ’em. People don’t like the instability caused by an indefinite, constant campaign of separatism. And by “people” I don’t just mean banks. I mean actual working people. Living your life with the cloud of uncertainty hanging over your head, wondering if you can make plans for the future–no one reasonable wants this.

    If the economy tanks again, then there will be a lot of angry people out of work who might go for Brexit. But at this point? A majority will vote to stay.

    1. tony

      If the situation changes, the voters get to change their minds. If they vote Remain, it does not mean they must be stuck with the EU forever. This is however different from what the EU does. The EU arranges votes until they get the desired result. No one is expecting the Leave vote to be immedeately followed by more Leave votes until the desired result is acquired.

  5. BruceK

    The EU doesn’t normally roll over and accept an unwelcome referendum result- why would it do so now? Anyone here (in the UK) that I have mentioned that possibility to, though, has been shocked.

    My guess is that Cameron was hoping that the Labour leadership would save his bacon as they did in Scotland, a reasonable expectation at the time the referendum was called. Since then Labour has imploded in Scotland and the new leadership shows less enthusiasm for being tarred by association with the Tories. Also, the Greece episode badly damaged the EU’s image on the Left. Even so I would be surprised if we vote to leave. Cold feet at the last minute and all that.

    I agree about the main Leave campaign, which is an appalling sight.

    1. anobserver

      I concur. The EU (and elites in every EU country) will do their utmost to invalidate the result of the referendum if it goes against their interests.

      After all, the EU circumvented the Dutch and French “no” in 2005, sent the Irish back to the polls until they gave the “correct” answer, put down the Greeks who wanted to organize a referendum in 2011, simply walked over (with the active complicity of the Greek politicians) the Greek “no” in 2015, and is now quietly ignoring the recent Dutch “no” against the treaty with Ukraine.

      If the UK and EU politicians make it too obvious that they will discard the result of the referendum, could this lead to an even greater push for a brexit (kind of screaming “up yours!” even louder)?

      There are two interesting rumours coming from the other side of the Channel.

      a) The French government is intent on punishing the UK in case of a brexit — i.e. it is in a much more aggressive mood than Schäuble — and would take the brexit as an argument to accelerate EU integration (further reducing national competencies and transferring more power to the Commission);

      b) Because of the deteriorating polls regarding brexit, eurocrats have been instructed to keep quiet and no longer talk about the brexit because “every official statement from the EU is systematically given an unfavourable interpretation by the public opinion”. In truth, the utterances by Juncker probably did not help the “remain” cause.

      All in all, there are no good reasons for the UK to leave the EU, but unfortunately only bad reasons to remain in it. Voters will have to choose the lesser evil.

      1. Tom

        I love the idea that the French would “punish us”. If the UK does leave then their economy, already on the brink, will be in utter disarray. Anyone who thinks that only the UK economy will take a hit whilst the unworkable union over the water sails merrily along with its dribbling deflationary growth is sadly deluded.

        1. m-ga

          France (Hollande) has to do so, in order to contain the threat from the Front National.

          Hollande’s problem is that the Front National are campaigning on a Leave platform. If Britain is seen to leave the EU without consequence, then the case is strengthened for France leaving (put aside for a moment that France is in the eurozone, and Britain isn’t). Thus, it is in Hollande’s interest for the consequences of leaving for Britain to be very bad.

          It’s this unpredictability of consequences which makes a Brexit vote so risky. About the only thing that Brexit guarantees is that Britain would have less influence on the direction of the EU. The reason that Britain would have less influence it that it wouldn’t be invited to EU meetings.

  6. christian_h

    The referendum is advisory. It has no power over parliament beyond the political inadvisability of ignoring its result.

    Also the main and crucial driver for Leave, and what has recently pushed it ahead, is blatant xenophobia.

    1. Strategist

      Since the intricacies of Parliamentary procedure are well over my pay grade, I will leave it to our British readers to game out how the Parliament could maneuver to keep the UK from departing the European Union even in the face of “Leave” winning.

      Yeah, as Christian H says. Parliament is sovereign – until dissolved for a general election. No legal impediment whatsoever to ignoring the referendum result. And the numbers are there – Leave probably has the support of no more than 200 (??) out of 650 MPs.

      However, there is no discussion here in UK that I have seen that parliament would defy the referendum verdict. Be an interesting test of le fairplay Brittanique

  7. Roger Smith

    As an outsider, this issue feel like a tangled mess with no really good solution. Can any UK reps summarize what is bad about leaving and the social stress that pushes some to want to leave?

    1. jabawocky

      However bad the EU is, it is no patch on the far right of the Conservative party in the UK, thus I’m still supporting Remain in the EU as the lesser of two evils. Leaving is only rational in my view if the see that the EU is on an inevitable path to self destruction (Best get it over and done with). A vote to leave the EU effectively puts the crazies of the right wing of the conservatives in control of the ship, a collection of neocons, libertarians and market-fetishists. What they want to do is:

      1. Roll back EU-driven laws on worker protections: right to union recognition, right to limits to working hours, paid holiday, maternity/paternity leave/pay.

      2. Free the country from EU red tape, such as: environmental protections, drinking water quality directives, air quality directives, safety protections, bans on agrochemicals, bans on GM crops, regulation (however wimpish) of the finance industry, EU taxes aimed at promoting stability of the financial system.

      3. Privatise the NHS, land owbership records, education, police and prisons, and basically any service they can.

      4. keep out unskilled migrants from the EU, while admitting only skilled labour. This would leave britons to do the crap jobs for the foreigners who have the best jobs, whilst tanking the economy.

      5. make further drastic cuts to government spending and end the welfare state, in the process further tanking the economy.

      Really the drive to leave has always infected the far right of the Conservatives (The Bastards as former Conservative Prime Minister John Major famously called them), but was enhanced by the electoral threat of the UK Independence Party at the last election, which is funded by City of London Hedge fund types fearful of EU regulation of finance. The faux focus of UKIP on EU immigration (despite leader Nigel Farage having a German wife) led to race to the right on the subject from the other parties, which moved the whole discourse to the right, which stoked more fears of immigration etc etc etc and led to David Cameron calling the referendum to ‘shoot UKIP’s fox’, which prevented defection of numbers of his own MPs to UKIP and probably neutralised UKIP’s electoral threat to the Conservatives.

      As for social causes, these are secondary to the dominance of the right wing press of the political discourse in my view, but others may disagree.

    2. larry

      Here are a couple. The first is a set of interviews of a number of people some of whom know what they are talking about. I wouldn’t take Shah’s views too seriously.

      https://thoughteconomics.com/wp-content/uploads/2016/06/The-European-Referendum-Vikas-Shah-1.pdf

      And here is an article about Wolfgang Schaueble’s views on Brexit. He is an important player.

      http://www.theguardian.com/politics/2016/jun/10/no-single-market-access-for-uk-after-brexit-wolfgang-schauble-says

      Don’t forget the implication a Brexit vote may well have with respect to Scotland and Norther Ireland.

  8. DDF

    Too many Tories, including Boris Johnson, who hopes to take over from Cameron if Brexit wins, want to leave. That would make it difficult to ignore a Brexit win.

  9. pirate3012

    The referendum is about who governs the UK. We are not voting for a Remain or Leave government. It will be civil servants who negotiate the article 50 agreement with the EU.
    We were promised a free and fair referendum. That has not been delivered; the MSM control the message and the leave campaign takes place mainly on social media. Looks at all the establishment figures that have been wheeled out to support one side.
    In the US you probably believe the EU is a free trade area only. That is wrong. The EU has always been about creating a supranational government over Europe. Initially the CIA backed European Movement were behind this. US citizens could not accept their laws being overruled by politically motivated NAFTA judges whose role was to create a supranational government over the trading area.
    The 4 freedoms, of which freedom of movement of people is one, is part of the EU’s DNA and they will not compromise on that. It would be like stopping people moving from one US state to another.
    The UK is not big. It is very crowded here now and it puts huge strain on our public services, wages and job opportunities. We need to get control back of our country, of our lawmaking, so that we can address the issues. Quality of life does count for something. Like Mish, please add your voice for Brexit. The world will not stop. Any problems that arise will be due to EU intransigence. The UK wants to trade and co-operate with anyone, including the EU. We just want to be self-governing like 140+ other nations in the world. It is the EU that is the anomaly.

    For well researched information about the leave campaign visit http://leavehq.com

  10. jabawocky

    ‘Voters seem to be in a bloody-minded enough mood to be willing to take a hit if they can inflict some pain on their putative leaders and take the banking classes down a notch or two. Another sentiment (and one that the elites appear to deny) is that voters are willing to pay an economic cost, even a large one, for more national sovereignity.’

    The issue with this interpretation according to this Brit is that the banking classes are also running the leave campaign with Boris Johnson and UKIP. Leave is bankrolled by a bunch of hedge fund managers who feel threatened by EU moves towards finance industry regulation and taxation. The way I see it is not that ordinary people are willing to take a financial hit to leave the EU, it is more that people don’t believe anything they are told anymore, and so don’t believe there will be a financial hit. The conservatives are largely responsible for this post-truth political scene in the UK where politicians routinely lie and decieve about pretty much everything, and now it is quite rewarding to see Cameron get his comeuppance, all his own tactics used against him, agonising over the triumph of PR and deceit over evidence which defines the Vote Leave campaign.

    A second issue is demographics, with many leavers home-owning pensioners who feel they are financially secure whatever happens, and this can take more risks.

    A small correction, although it is obviously confusing, Schengen is nothing to do with ‘free movement of people’ as normally discussed, but is instead the borderless zone at the heart of the EU from which the UK opted out. ‘Free movement’ is the founding principle of the EU, that citizens of EU states are EU citizens and thus can live and work wherever they choose in the EU. EU citizens are not considered migrants if they move and work in other member states (except in the UK where few have really understood this philosophy). This was considered a ncessary counterweight to free movement of capital at the inception of the EU, and the two are viewed as instrinsically linked and inseperable for sustainable economic development.

    1. m-ga

      I think another factor is that UK voters want change.

      However, change to Labour isn’t on the cards – every single newspaper (save the Morning Star) is against it, disliking Corbyn even more than Miliband. The opinion of English voters in particular seems to go exactly as they’re instructed by the press, a very sad state of affairs.

      Voting to leave the UK is a way for voters to get the change they want, without (in their minds) upsetting the status quo too much. The thinking would go: in the event of a leave vote, we get rid of Cameron (who barely won a popular mandate) and the UK politicians will be forced to do what we want. The lack of substance in the leave campaign fits almost entirely with this mentality.

        1. m-ga

          The UK electorate have for years seen conditions getting crappier in the UK. Major newspapers (Mail, Sun, Times, Telegraph etc) have told the British public repeatedly that immigration is at the root of the problem. But, frustratingly for this thwarted electorate, both major parties have had similar, business-friendly immigration policies.

          Now, the UK electorate are offered a referendum which the electorate is told will stop immigration. In other words, exactly what the UK’s newspapers have been telling them must happen for Britain to be Great again.

          Unsurprisingly, the Leave vote seems like a wonderful opportunity. It’s almost irrelevant that the facts are made up, and that the underlying calculation is flawed. A four week campaign can’t compete with 20 or 30 years of brainwashing.

    2. larry

      One serious problem with the financial hit is not that there won’t be one but that the numbers are entirely concocted. There is virtually no empirical data relevant to this issue that the Treasury can call on. So, effectively, they have made up the numbers. An example: house prices falling by as much a s18%. Where do they come up with this figure? Where many of Osborne’s figures come from, the ether.

      1. Deep Thought

        It’s even worse than that, because it wasn’t really an 18% fall. It was that house prices would stay flat, whereas if we Remain they would go up by 18%.

        (I am voting to Remain, but if there was ever a reason to vote Leave this is it!)

  11. hemeantwell

    The editors at Salvage, a new lefty journal, offered their somewhat undecided thoughts a couple of months ago.

    http://salvage.zone/in-print/neither-westminster-nor-brussels/

    One of its strengths is good background analysis, e.g.

    That – aside from George Galloway, who still claims to be on the left despite forming a coalition with Nigel Farage, posing for a photo that once seen can never be unseen – there is not a Left voice to be seen on the ‘Brexit’ side of the debate is in part because the majority of the social-democratic and trade-union left has evacuated any position critical of the European Union since at least the turn of the 1990s. In the case of trade unions, it was a logical culmination of the strategic ‘new realism’ germinated in that moment, in which unions sought peace with both employers and governments, and looked to legislative processes to defend their position. Having been thrashed by Thatcher, the labour movement took a longing look across the channel at the minimal social rights and protections built into the new machinery of economic and monetary union. In the context of New Labour, and its insistence on British opt-outs from basic workers’ rights, a pro-EU disposition, predicated on defending those EU-supported rights, could even be compatible with a mildly politically dissident stance.

  12. FergusD

    I agree with the comments above about it being austerity neo-liberal shit in or out of the EU. A socialist perspective on international co-operation is not being offered. My inclination wa sto abstain. However, a victory for Leave would be such a boost for UKIP and the Tory right I feel I have to try and stop it and vote Remain. I agree many will vote Leave to “Stuff the toffs and bankers”. Trouble is the Leave campaign is supported by plenty of toffs and bankers (Farage and the guy who was CEO of Northern Rock when it imploded and was rescued at taxpayer expense). This doesn’t seem to have come out in the media.

    The anti-immigration tide is high, stoked by endless scare stories in the press. Many voters blame immigration for poor wages (Who sets these low wages, employers! Could that be stopped if workers were unionised, anti-union laws were removed and better pay regulation was introduced – yes. Does the Leave campaign support such measures – definitely NOT).

    I suspect a general nostalgia for when Britain was “Great” is at work with some as well.

    If there is Brexit the EU contributions the UK makes to the EU will not be spent on the NHS. Most Tories and UKIP want to privatise it.

    All very depressing. Very hard for a genuine left perspective to come across as it would cut across all the mainstream debate and media obsessions. Which is something to ponder on.

    1. Roger Smith

      Very hard for a genuine left perspective to come across as it would cut across all the mainstream debate and media obsessions.

      I feel this is why I am having such a hard time wrapping my head (a Non-Brit) around either side. I am coming from left and to me, both sides of the argument seem to lean right in leadership with no necessarily tempting benefits either way (though a vote to at least attempt to save NHS as another user described for me above is a plus). Your post sums my confusion and the issues pretty well. Thanks!

      1. Tom

        The simple way of looking at it is this

        Do you want your elected (however you may dislike the method) Government to be sovereign or subservient to a higher a notably less directly elected “Government”?

        I would have though that, assuming you are American, a nation that fought a war of independence against a group of self-serving unanswerable asshats would see that sovereign rule and self-determination is paramount.

        1. Ian Ollmann

          We have layers of government ever more abstract the higher up you go. City, County, State, Federal. Having the social backwardness of the flyover states derail “my country” is something I’m well familiar with. We also have heavy immigration from other countries. I welcome those people. I think they are generally hard working decent folks here to help make this country great. Our own citizens say they want to be great, but don’t want to pay for it. We’d be a lot worse off without immigration.

          The EU is like the original pre-federal U.S. Composition before out current constitution was ratified. It failed. The E.U. won’t succeed until even more power is ceded to Brussels.

  13. Hayek's Heelbiter

    Yesterday had a lovely celebration of the Queen’s Birthday in Petworth, sort of Midsomer without the murders.

    Not only do I not know a single person over here who is going to vote REMAIN, I don’t know a single person who KNOWS someone who’s going to vote REMAIN.

    Nevertheless, Dodgy Dave recently said, “Those in favor of Brexit must accept the results of the referendum.”

    I’m not sure how it might be arranged, but his statement makes me suspect that the fix is already in.

    IMHO

    1. harry

      The whole of London will vote to remain. As will Scotland, and all the farmers of the UK. A good block of the lefties will vote remain. They will be funded by the bankers, and the BBC will run free propaganda for them.

      So it will be close.

  14. David

    There’s nothing in what passes for the British “Constitution” that makes referenda binding, or even gives them an influence. Unless the government has said it will abide by the result (and I don’t think it has) then the result is like a giant opinion poll. If it was prepared to weather the storm, the government could simply say, thank you very much, how interesting, we’ll bear that in mind. At the most, the analogy would be with a manifesto commitment, which in the end doesn’t commit governments to anything, really.
    But the reality is that extracting the UK from the EU, which is not one thing but lots of things, would be an incredibly complicated affair, which would require years of negotiation even before there was anything to put to Parliament, and Parliament has a solid majority of remainers. Nobody really knows how this would work in practice, but there would probably be a whole stack of laws to be passed, defeat on some of which could effectively end the process of leaving. And of course Cameron, having made a stupid political mistake, has no incentive to hurry the process. He will hope, with some chance of success, to leave the problem for his successor to solve.
    My own hunch is that the leavers are an amorphous group, some ideological, some financially driven, but most hoping to land one on Cameron’s chin to pay him back for his cynical opportunism.

    1. vlade

      European Communities Act of 1972 would have to be either repealed, or a new Act that supersedes passed. This could prove problematic as I wrote above – although it very much depends on who’s in charge by then and how smart they are. For example, when this was being passed originally, the opponents assumed it would be a thousands-pages-act and they could just hold it in the parliament indefinitely. It turned to be a much shorter act (sort of “we say we do, and we’ll say how later”), and all opponents were so stunned it passed very quickly.

  15. Steve C

    Many thanks for this. This plus the comments has for the first time given me, an American, a framework for thinking about Brexit.

  16. Paul Handover

    This Brit living in Southern Oregon believes that if the vote is in favour of Leave and the British Parliament doesn’t honour that decision in a timely manner then the consequences would not be pretty. For the record I voted to remain (postal vote) even though I was, and still am, unclear about what is in the best long-term interests of my old home country.

  17. ChuckyNut

    I am really unsure what the good people of Petworth and the rest of the home counties want. You live in one of the most prosperous corners of the world (literally), with low crime, low unemployment, better schools than most of the country etc..

    I can understand why people living in some of the more deprived parts of the country are voting for change but I am at a complete loss as to understand the discontent among the 60/70somethings in the home counties that is driving them so firmly into the BREXIT camp. You are right, it is a near universal opinion but I just don’t understand what drives it – the issue is bigger than your near universal dislike of David Cameron.

    1. Strategist

      Ah yes, the good people of Petworth who don’t know a single person who KNOWS someone who’s going to vote REMAIN.

      It’s such a charmed corner of the world, I think the problem is that nobody’s told them that not only is there no longer an empire, there is no longer a British-owned manufacturing sector. Blissfully unaware that it’s cold out there when you’ve run out of chips.

    2. Tom

      The 60/70 Brexit voters of Petworth would be the same voters that voted for a free trade area way back when and ended up with a supranational ruling Government and red tape everywhere they turned. They feel they got shafted by something they never voted for and they haven’t forgotten.

  18. William C

    I think no one really knows what happens if the UK Government is defeated in the EU referendum. It will be a situation unprecedented in British history in terms of its kind, gravity and complications. Will the Government resign, given the rejection of a major plank of its policies? Will the Prime Minister resign or be forced out? What if England has voted to leave but the rest of the UK wanted to stay? Can the British government negotiate in good faith on behalf of what will be a very Disunited Kingdom?

    A second referendum has to be a possibility. Johnson, the most likely candidate among the Leavers to replace Cameron, has advocated that in the past. He might well try to revive the idea somehow, though it will not be easy. But as someone who was pro EU and pro immigration until recently, before he did a 180 degree turn on both (probably because of personal ambition), he may well give it a go, though I am not currently sure how he gets there.

    Maybe seek some further concessions from other member states on freedom of movement? But it is hard to see other EU states being prepared to give much unless there is a quid pro quo (who was the Polish politician who said they could accept less freedom of movement provided they were paid an extraordinarily large sum of money?) . In the less prosperous parts of the EU, where unemployment is high, freedom of movement is a real asset, seen as a quid pro quo for free trade (if free trade is going to cost us our jobs, we need to be able to move to find work). So maybe something which can be sold in the UK as being meaningful while being represented elsewhere in the EU as trivial in its impact?

    It is, IMO, a real mess, with very little intelligent debate going on, both sides trying to frighten voters into voting their way. Project Fear is in operation on both sides whether it be fear of the unknown (Remain) or fear of strangers (Leave, for whom opposition to immigration is the big vote-winner). The result will not be determined by well-informed, carefully considered opinion but by whoever is most successful in scaring voters to their side.

    It is no way to run a country.

    1. vlade

      I am sorry, but Mitchell should really do some catching up. Eurozone is not the same as EU (which he freely conflates left and centre), Thatcher’s govt didn’t keep UK out of Euro (ironically, Brown under Blair as PM did – despite a strong push from Blair to go to EUR), etc. etc. In fact, Thatcher was chucked out as a PM beause of EUR.

      As for the rest, Mitchell assumes that EU is semi-rational, which has clearly shown not to be the case. Assume can opener, as Yves likes to say.

      EU shown it’s very willing to cut off its nose to spite Greece/Spain/Italy.

      There’s zero chance that French would try to be nice to exiting UK – because any chance of seeing that exiting EU has low cost would make Marine Le Pen the next French president (she may end there anyways, but if UK is not punished, it’s pretty sure). With Germany and AfD it’s less extreme (yet), but not dissimilar.

      If Leave wins, I am willing to bet that one of the first things France does is to close “The Jungle” in Calais, and happily load all of the refugees there on the next traject to the UK – just to spite the UK.

      I haven’t looked at the other ones.

      1. David

        I don’t think its in the interests either of the British or the French to overdo the results of negative vote, although there will obviously be some posturing and face-making. The two countries have too much wrapped up in bilateral cooperation in all sorts of areas. It’s unlikely to be much of a factor in the next French elections, or much of a factor in them. But i agree we can’t rule out a completely irrational and potentially dangerous response from the powers that be in Brussels.

        1. vlade

          do you seriously think that what would be a sucessfull show of a middle finger to eu would not play in the french election, given that one of the parties that is polling at the top has a program that proposes just that?

          I am not saying that it would be economically rational or whatever, but in the same way Cameron could not not allow the referendum and have a h ope pf political survival, so will most of french (and ‘european’ in general) political elites have massive vested interest in brexit failing.

          1. David

            Your last comment is certainly true, but I doubt whether the (already considerable) anti-European sentiment in France would change much either way if Brexit happens. And we must distinguish between the EU, the entity people think of as “Brussels” (essentially the European power elite) and the more general cultural Europe, which are not seen in the same way, and seen in different combinations of ways by different people.

      2. BruceK

        Mitchell is well aware that the Eurozone is not the whole EU; he actually points out that Britain has a treaty opt-out from having to join the Euro at any time. He then points out various ways in which membership of the EU restricts the UK government’s room for economic manoeuvre.

        Also, we are affected by Eurozone arrangements despite not being in it, notably article 123 of the Lisbon treaty forbidding monetary financing of fiscal deficits.

        If as you say the EU is willing to cut off its nose to spite Greece/Spain/Italy does that not support Mitchell’s assumption that it is semi-rational?

        1. vlade

          yes, but he uses the two terms interchangeably. we re affected by lisabon treaty, but that is an eu lever, not eurozone.

          on the semi-rational – sorry, no, it doesnt. EU is willing to dish out punishment to greece to deter any ‘is there somethig else but austerity’ speculations and tries. it is not rational to expect eu just to shrug and say, ‘so ok, so we’ll deal wit you as normal’ to the uk – uk sucess leaving eu would threaten even more an greece leaving euro. much much more. so if eu is willing to selfinflict so much damage for greece (which is trivial, and no one would blink even if eu thrown it out of euro), what do you think it will try do to the uk?

          tbh, a lot of problems with the uk/eu was uk never paid much attention to eu, and joined too late to have much say. germans managed to protect their sovreignity – any eu law tht conflits with their constitution is automatically invalid. there was no resason why in 70s (or even later) uk didnt get something similar. now it’s of course much hrder to get.

  19. Mark Johns

    “The Conservatives have realized that having a bunch of toffs, big banks, and intrusive foreign leaders tell British citizens how economically damaging a Brexit would be seems only to have persuaded voters at most that the people at the top of the food chain would take a hit.”

    Absolutely. Aren’t these the same bozos trying to shove the TPP down our throats?

  20. Ishmael

    The average European will stay on his knees asking for his bowl of gruel until he has no country left. Those with any cojones left a long time ago. A new feudal system is getting ready to be established and most Europeans will just be serfs as they have during most of the history of Europe! I bet they vote for remain!

  21. samhill

    I was living Montreal during the referendum years. During the most critical one millions of Canadians in cities across the country turned out in mass rallies asking Quebec to stay. It was emotional and IIRC the stay vote succeeded by just 51%. You don’t see anything like this in the EU. Forget anything grass roots and large but not even something spontaneous – a dozen anglophone biddies on Avenue Churchill waving little Union Jacks and macrame hearts. The ruling eurocracy couldn’t even concoct some Please Stay cliques in a few capitals for some narrow angle camera shots. Just a great big nothing. Total indifference from the continent’s people and the elites, with the latter sure they’ll get their way through the media and the markets with a barrage of paranoia. Seems to me to stay in all the British people are offered is fear and threats, and if they stay that’s all they’ll ever have. There will always be an England. Who says there has to be a Euroland?

  22. Chris G

    The fascinating comments above (and AEP’s Telegraph piece linked to) don’t I think give enough attention to the galvanising effect of a strong Brexit vote among the disaffected in other EU countries. Even if the PTB in Westminster, Brussels and Berlin strive to minimise the aftershocks and pretend the vote doesn’t really count, they’ll be driving with several wheelnuts loosened.

  23. Take the Fork

    I can’t remember a time when the West has been so bereft of leadership in nearly every capital, when the perception of elite corruption and incompetence was so pervasive, when the populations seemed so divided.

    I can’t help but think that the O-town massacre will help Brexiteers…

  24. Ishmael

    Yves

    Looks like ZeroHedge was just hit with a DoS. I wonder what the common thread is between you, Kunstler and ZeroHedge! I am being sarcastic there. We all know! Now do we really want someone who shows this sense of disregard for people as the next Prez! May Cod help us!

  25. a different chris

    >having a bunch of toffs, big banks, and intrusive foreign leaders

    But you repeat yourself. :)

    Anyway, I see jabawocky’s list and am properly aghast. The EU, for all it’s faults, is certainly better than UKIP! …. but here’s the thing: the UK had a better grip on that stuff once upon a time. Then they fell for Thatcherism as a magic solution to complicated issues and here they are. What keeps the EU from following the same path? – and if it does, how much harder is it to correct (cough, US, cough) an imposition of right-wing orthodoxy given a “country” of 400 million people instead of smaller blocks? Here in the US we hilariously blather about the states being “test labs” for various socio-political ideas but that really doesn’t work. Instead the whole country just goes rightward and basically all the moving parts have started rusting up. The EU doesn’t even seem to have the concept of “test labs” so how do you change the whole EU, if – and I think it’s a pretty good if – slowly but surely starts working its way down jabawocky’s list.

    1. Yves Smith Post author

      Yes, that is in error. Apologies. The UK is not a signatory to Schengen but has adopted some of its provisions and also informally allows for free movement of people.

  26. William C

    It is now reported that Rupert Murdoch’s big tabloid ‘The Sun’ is calling for Brexit. No surprise to me.

    Anyone who thinks Murdoch is working for the good of the ordinary joe in the UK, I have a bridge I would like you to buy.

  27. paul

    The EU is a very convenient shell game for national elites.
    Considering the sclerosis where there is not outright carnage, I can find absolutely no reason to vote anything but leave.
    That the leaave camp are despicable has no bearing, I can vote against them.
    However, as in the Scottish referendum, the fix will be in. Postal vote fraud is the weapon of choice here.
    There is too much at stake, and our elites are nothing if not ruthless.

  28. Bargepole

    There seems a bit of confusion about Schengen vs free movement of labour. May I clarify? The Schengen agreement says that once you’ve got legitimate entry to one EU Schengen signatory state, you’ve got legitimate entry to the lot. A border official lets you into Greece, you are then free, without further immigration controls, to cross into Italy, France, Spain and so on.

    Free movement of labour is a compulsory and crucial principle of EU membership and means that a citizen of any EU member state can move to any other member state to work or to look for work.

    The UK is NOT a signatory to the Schengen accord. UK citizens have no right of unimpeded entry to any other EU state but must go through border controls like any other nonEU citizen. By the same token EU citizens have to pass UK border controls.

    The UK is a very very formal signatory to free movement, though. It has no option. Free movement is a defining principle of the EU.

    Tl;dr – (1) Schengen says once someone – any nationality, refugee, European, Martian, doesn’t matter – has been given legitimate leave at border control to enter a Schengen signatory state, they can travel freely betwee them all. Britain is not part of Schengen.

    (2) The EU says all its citizens can live and work in all its member states. Britain is bound by this law.

Comments are closed.