Theresa May and the Brexit

Note kindly translated by Anne-Marie de Grazia

Mrs Theresa May has announced her plan to implement the so-called « Brexit », i.e. the separation between the United Kingdom and the European Union. She chose, in the end, what is called the « hard » solution, or a « hard Brexit », meaning a break with the single market.

 

« Brexit means Brexit » : a divorce is a divorce

This option is understandable if one examines what the « single market » has become : a monster of complexities, with ever more finicky rulings, and on top of it, a tool which prevents the countries of the European Union to defend their own interests. The delegations of power enjoyed by the Commission in Brussels as well as by the various European institutions, and one must remember that none of these are elected, lead to rules being imposed, reaching way beyond what may be considered necessary for any particular country. So that the single market has become a steamroller pretending to eliminate differences between economies which turn out to be remaining different indeed. As a matter of fact, the single market has even brought about an increase in divergences between the economies of the EU, in what I have called, in various texts, the process of « euro-divergence »[1].

If, at least, these rules had had as a counterpart a coherent and voluntaristic policy, seeking to preserve the economies of the countries of the European Union in their confrontation with international competition. But it must be said that on this point, the EU as worked in reality like a « can-opener. » The Brussels Commission negotiated various free-market treaties, not from the standpoint of the member states, but from its own ideological standpoint, which maintains that the free-market is the best solution to all problems. We saw an example of this in the case of CETA as well as of TAFTA[2]. However, it is not only ideology which is guiding the action of the Brussels Commission and of the European institutions. It must be said for the record, loud and clear, that the EU has progressively become a tool in the hands of Germany, to the detriment of the other nations. This started with the Euro, which gave Germany two essential advantages : a protection against the depreciation of the currencies of his main European competitors, while assuring, in addition, that the currency in which Germany would be trading would be itself depreciated in relation to what should have been its logical levels. This double advantage explains to a very large extent the immense surplus of trade of which Germany is benefitting. But this favorable, and now dominant position of Germany is also playing itself out in the external negotiations of the EU where, clearly, German interests are being served first.

It should be remembered therefore that this domination of Germany, and the type of stealthy federalism which it implies – and which plays also to the benefit of Germany – were important arguments weighing in in favor of the Brexit. One understands better the two points stressed as most important in the speech delivered on July 17th by Theresa May : a will to put an end to the preeminence of EU law, which is precisely an instrument of stealthy federation, and a will to take back the control of the borders.

Theresa May, Donald Trump and a vanishing of France

Theresa May’s position can only be comforted by the recent declarations of the President-elect of the United States, Mr Donald Trump. In the interview which he gave to the Times of London as well as to Bild, he has clearly indicated his pessimism as far as the future of the European Union is concerned [3]. It is by the way significant that no French newspaper was associated to that interview. Donald Trump aimed his speech at a British and German readership, because at present, in reality, these are the two only ones that count. We must state it regretfully, but France no longer has any weight, except on the margins, in European affairs.

The European Union, which has been sold to French public opinion as a means to demultiply the audience and the power of France has turned, in reality, into a machine aiming at dissolving French influence, as a preparatory stage to the dissolution of France itself. And we are beginning to notice that since the mandates of Nicolas Sarkozy and of François Hollande, the capacity of France to make its voice heard in international politics has been constantly receding. An important point in this dynamic was reached with the signature of the TSCG treaty, also called « Merkozy, » for it was de facto negotiated between Angela Merkel and Nicolas Sarkozy, and validated by François Hollande right at the start of his mandate. From this point of view, continuity is total, and catastrophic as well. The so-called « European » policy followed by these two presidents and their respective parties, the « Républicains » and the « socialist » party, ends up in a true dead end.

We will have to take the full measure of this effacement of France. The policies implemented by the EU are no longer tolerable from the point of view of democratic principles. It is therefore essential to have a close look at what is now playing itself out between the European Union and Mrs Theresa May. The fact that she has mentioned Great-Britain and France as nuclear powers insuring through dissuasion the peace in Europe (therefore, beyond the simple framework of the European Union) is an incitement to take our affairs into our own hands again.

 

The Brexit creates a precedent…

The Brexit process has been launched by Mrs Theresa May’s speech on this January 17th. It will take a while, but its tempo should now be set. It is clear that Theresa May has two trump cards in her hands. The first is the depreciation of the pound Sterling. There is a lot of talk of a « collapse » of the exchange rate, but in reality, when one looks back at the past ten years, the exchange rate of Sterling has only returned to a « normal » level in regard to the competitivity of the country.

Graphique 1

Exchange rate of the Euro against the Pound Sterling

a-01-eur-bpd-5ans

Source : BCE

This depreciation explains moreover why the growth forecasts for 2017 have been hiked up. We are really very far from the catastrophe which had been announced by all the anti-Brexists and other Eurolatrists. The IMF has just pushed up its forecasts, which it had moved down in the autumn of 2015, from 1,1% to 1,5% growth[4]. This is a confirmation that the Brexit plays indeed in favor of the United Kingdom.

But Theresa May has another trump up her sleeve. She can threaten the EU to play to the hilt the card of Britain as a tax-haven. The two countries which would suffer most from this would be the Irish Republic and Jean-Claude Juncker’s homey Luxemburg…

So that one has reasons to think that she will be able to bring things to a conclusion, and that the divorce between the United Kingdom and the European Union will not get bogged down. The important point is that this divorce is going to set a precedent. Up to now, the possibility for a country to leave the EU had been purely formal. Of course, it existed in theory in the article 50 of the Treaty of Lisbon. But the political conditions of its implementation remained quite indistinct. This is why Theresa May’s speech is of such great importance. While materializing a strategy of break-up, and showing that she is in full mastery of it, Mrs Theresa May is in effect exposing the weakness and the impotence of the EU. The latter is not only showing itself to be nefarious and dangerous for the member countries, with the exception of Germany ; it turns out that it is unable to prevent someone from leaving, and especially, to prevent someone from leaving for one’s greater benefit. To demonstrate the « cost » of this break-up was one of the great challeges of the EU. In failing to up the antes and to dissuade one of the great countries which is composing it from leaving, the EU is registering its loudest and most definite failure.

[1] Sapir J., « The social roots of the financial crisis : implications for Europe » in C. Degryze, (ed), Social Developments in the European Union : 2008, ETUI, Bruxelles, 2009 ; Idem, « Is the Eurozone doomed to fail », pp. 23-27, in Making Sense of Europe’s Turmoil, CSE, Bruxelles, 2012.

[2] Sapir J., « Le vrai sens du terme. Le libre-échange ou la mise en concurrence entre les Nations » in, D. Colle (edit.), D’un protectionnisme l’autre – La fin de la mondialisation ?, Coll. Major, Presses Universitaires de France, Paris, Septembre 2009.

[3] http://www.thetimes.co.uk/article/brexit-will-be-a-great-thing-you-were-so-smart-to-get-out-09gp9z357

[4] https://www.bloomberg.com/news/articles/2017-01-16/imf-raises-u-k-growth-forecast-for-2017-reversing-previous-cut

 


Jacques Sapir

Ses travaux de chercheur se sont orientés dans trois dimensions, l’étude de l’économie russe et de la transition, l’analyse des crises financières et des recherches théoriques sur les institutions économiques et les interactions entre les comportements individuels. Il a poursuivi ses recherches à partir de 2000 sur les interactions entre les régimes de change, la structuration des systèmes financiers et les instabilités macroéconomiques. Depuis 2007 il s'est impliqué dans l’analyse de la crise financière actuelle, et en particulier dans la crise de la zone Euro.

Vous aimerez aussi...

Laisser un commentaire

Votre adresse de messagerie ne sera pas publiée. Les champs obligatoires sont indiqués avec *