Wry & Dry

Brexit: who gives a fig?

The referendum in the UK as to whether it should stay in the European Union or leave has been in W&D's diary for over 12 months.  It's next Thu-23-Jun.  (Polls close at 9pm, so readers won't get a result until about noon on Fri-24-Jun.)

What troubles W&D is that this is perhaps the most momentous poll to take place anywhere for many, many years.  And until this week had hardly hit the Australian media.  Which perhaps reflects the media's ongoing insult to the needs and intelligence of the Australian public - just look at the extraordinary rubbish on free-to-air TV and in the major newspapers.

But W&D digresses. The possibility of Brexit, i.e. the exit of Britain from the European Union, looms large.

W&D points out that the UK is not a member of the eurozone, that geographical definition of those 19 countries that have the euro as their currency.  Britain, along with Sweden and Poland (amongst others), is a member of the EU but not of the eurozone: the Scrabbley-powerful zloty is used in Poland, and the very nordic Swedish-krona is found in Sweden.  The UK has the pound sterling, or just plain pound*.

Without going into too much detail, the Stayers want to stay in Europe because of the economic benefits: access to European markets, freedom of labour movement etc.  The Exiters want to leave because of the increasing myriad of bureaucracy from Europe, the freedom of labour movement and the freedom of residents (and others) to live anywhere in the EU. 

Does it matter?

Well, yes.  The short-term consequences of a Brexit are profound.  This is principally because of the uncertainty - no country has left the EU, and so no-one knows what will happen.  And the UK has agreed with the EU that, in the eventuality of a Brexit, it will take two years for the UK to 'negotiate' its exit.

If the Exiters win, the currency will fall sharply, global stock-markets will fall a little, but the London stock-market a lot.  Separatist movements in Scotland will quickly re-escalate, as will those in Catalonia.

EU leave

In W&D's ever-so-humble view, a government's first duty is the security of its borders.  Membership of the EU has fractured any sense of border security - and with EU expansion eastwards and an unwillingness to effectively manage its own southern and eastern borders, the UK cannot control its borders.  Note, that this is an EU issue as well as one for Britain.

The short-term economic consequences of a Brexit may be painful, but a Brexit doesn't mean denial of access to EU markets.  Norway and Switzerland have negotiated free trade rights with the EU without having to belong to the EU.  Britain can do the same.

So, yes, next Thursday's vote matters a great deal.

But the likelihood of a Brexit is low.  There is much media beating-up of the issue.  But, in the end, W&D considers that the Brits would prefer economic certainty to border security.

Friday 24 June will pass as just another Friday.  And W&D can focus on local, but now lesser voting possibilities.

*The pound was a unit of account in Anglo-Saxon England, equal to 240 silver pennies and equivalent to one pound weight of silver.  Note that the French livre, established by Charlemagne, was the unit of account in France, and was also equal to one pound weight of silver.  The word livre is from the Latin libra, a Roman unit of weight.  This why the symbol for the pound sterling is a stylised 'L'.