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Beyond Brexit doomsday myths

  • 28 June 2016


There is a great deal of distress in the wake of Britain's decision to exit the EU. The pound has fallen to a 31 year low against the greenback, over $US2 trillion has been 'wiped off' extremely inflated global stock markets, and so on.

Various shocked commentators — including George Soros, one of the main progenitors of financial market attacks on currencies and governments, which became the motive for forming the euro — are forecasting the demise of the Union. That is far from inevitable.

What seems to have been lost in all this noise is that Britain has a separate currency and an independent financial system. Had Greece decided to exit the EU last year the consequences would have been far greater than Britain's exit, because Greece uses the euro as its currency.

Britain has the pound, which means that it has an independent monetary regime. British interest rates are not set in Brussels, they are set by the Bank of England. And it has an independent fiscal and budgetary system, to the extent that it is possible.

The British government has been imposing 'austerity' measures because the government subscribes to the neoliberal orthodoxy, not because it is being told to do so by Brussels, or the Germans.

To see the difference it is worth reading Yanis Varoufakis' description of his 'negotiations' with the German finance minister Wolfgang Schäuble. They were not negotiations at all. Varoufakis had prepared what he thought were intelligent proposals to deal with Greece's debt. He was told in no uncertain terms what would happen; there was no attempt at reasoned debate.

As he commented later, 'we don't even agree to disagree'. The need to protect German and French bank loans was far more important than secondary concerns like respect for the Greek nation, or Greek pensions, or the nation's social fabric.

It is the kind of well dressed thuggery that characterises the EU elite and will continue to do so. Calls for the EU to 'reform' are almost certainly fanciful. It is run for the banks and powerful corporations. Many of the economic losers are starting to work that out and are voting accordingly.


"Claims that Britain will be locked out of the world's largest market are fanciful. Britain and the EU need each other."


Britain, however, experienced none of that financial pressure. Its exit will only have an economic effect, especially on trade, and on the movement of people. Television shows featuring Britons