If I was in Britain I would not want to be in the EU

The foundations of national sovereignty are the currency-issuing capacity of the national government. The foundations of a democracy include the ability of the citizens of that currency zone (the ‘national government’) to choose the political representatives at regular intervals who will make decisions on their behalf. A direct chain of responsibility between the elected officials to the voters is thus established and the citizens can take action accordingly if they feel they are being disadvantaged by the legislative outcomes. The anathema of this sort of direct responsibility and accountability is the European Union, which is cabal ruled by unelected officials (in the conventional sense) who are not held accountable for their decisions, no matter how poor they turn out to be. The history of the Eurozone is one of policy failure with millions of people rendered unemployed, in poverty, or otherwise disadvantaged by the destructive decisions made by successive European Commission administrations. There was a good reason why the French president Charles de Gaulle resisted the development of supranational power blocks in Brussels and elsewhere (for example, in Frankfurt under the Eurozone). His preference for Inter-Governmental relations, where large common issues such as climate change, migration, rule of law, etc could be decided upon by representatives of each Member State government, without surrendering national sovereignty, was sound. Given all of that, the United Kingdom should exit the dysfunctional European Union immediately and only negotiate with other states on a government to government basis.

In May, I will be doing a two week lecture tour of Spain promoting the soon-to-be-released Spanish translation of my book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale. Full details will be forthcoming soon, if you are interested.

I’ll spend some time in Barcelona and will meet with some of the protagonists pushing for independence of Catalonia

My position on that issue hasn’t changed in recent years and I fully support their desire to break away from Spain. However, as I outlined in this blog – Catalonia’s vote largely misses the point – it can only achieve true sovereignty if it abandons the euro and all the destructive restrictions and rules that go with being a Member State of that dysfunctional monetary system.

My evaluation of the Catalonian position is that it should develop its own independent nation and use its own currency to build on its prosperity. It certainly has the economic structure in which to prosper materially.

Britain is in a better position than Catalonia, because as a result of the foresight by Margaret Thatcher they avoided entry into the monetary system.

Thatcher understood that the joining the Economic and Monetary Union would be an imposition on Britain’s sovereignty. Her Government ‘would not be prepared to have a single currency imposed upon us, nor to surrender the use of the pound sterling as our currency’ (House of Commons Hansard, 1990a).

She delivered her famous tirade, which produced the headline in the Sun tabloid newspaper two days later ‘Up yours, Delors’ (House of Commons Hansard, 1990a):

Yes, the Commission wants to increase its powers. Yes, it is a non-elected body and I do not want the Commission to increase its powers at the expense of the House, so of course we differ. The President of the Commission, Mr. Delors, said at a press conference the other day that he wanted the European Parliament to be the democratic body of the Community, he wanted the Commission to be the Executive and he wanted the Council of Ministers to be the Senate. No. No. No.

[Reference: House of Commons Hansard (1990a) ‘European Council (Rome)’, HC Deb, 30 October, vol. 178, cc869–92].

When Britain entered the European Union in 1973, it was still not much more than a ‘common market’. Subsequent treaty changes (in particular, the Treaty of Maastricht and what followed) have centralised power in the Commission and choked prosperity.

The Treaty of Lisbon, that came into force on December 1, 2009 accelerated the trend to increased EU power – broadening the scope of its regulative remit and further limiting the political sovereignty of the Member States.

Tony Blair dudded the British people at the time by refusing to hold a referendum on the Lisbon Treaty. France and the Netherlands did hold a popular vote on a prior version (the ‘Constitutional Treaty’) in 2005 and it was rejected. The Lisbon Treaty was around 96 per cent of the Constitutional Treaty (Source).

As an aside, we should not forget that Tony Blair would have had Britain in the Eurozone if he had have had his way.

On the Lisbon Treaty, only Ireland held a popular vote and 53 per cent voted no in the first instance.

One aspect of the Lisbon Treaty was the declaration of “exclusive competencies”, which mean that the EU is the only body that can create law in these areas.

So, democracy took the back seat in this increased centralisation of power in the EU bureaucracy.

While Britain negotiated so-called Opt out clauses in the Treaties that govern the EU, it is still subject to a host of rules that compromise its economic sovereignty.

Protocol No 15 of the Treaty on the Functioning of the European Union relates to the “certain provisions” that apply to Britain.

We read that while the UK does not have to join the euro it:

… shall endeavour to avoid an excessive government deficit.

It is also bound by Articles 143 and 144 of the Treaty on the Functioning of the European Union, which relate to Balance of Payments issues.

The reference to excessive government deficits has a specific meaning within the Stability and Growth Pact (SGP) rules governing fiscal deficits under Article 126 of the Treaty and Protocol 12, which accompanies the Treaty.

Protocol 12 details the “reference values” for the fiscal rules, specified in Article 126:

– 3 % for the ratio of the planned or actual government deficit to gross domestic product at market prices;

– 60 % for the ratio of government debt to gross domestic product at market prices.

But the European Council publication (November 30, 2009) – COUNCIL RECOMMENDATION to the United Kingdom with a view to bringing an end to the situation of an excessive government deficit – says that:

Pursuant to paragraph 4 of the Protocol (No 15) on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland, the obligation in Article 126(1) of the Treaty on the Functioning of the European Union to avoid excessive general government deficits does not apply to the United Kingdom unless it adopts the euro. Paragraph 5 of the Protocol provides that the United Kingdom shall endeavour to avoid an excessive government deficit.

However, despite this opt out while Britain does not use the euro, it is still subject to:

1. Monitoring from the European Commission.

2. Action from the European Commission under the so-called ‘Correction Arm’ of the SGP.

3. Statements encouraging Britain to reduce a deficit if considered ‘excessive’ under the rules.

However, the opt out does not allow the European Commission of Council to launch any sanctions against Britain should it choose not to comply with any Excessive Deficit orders.

In general, these rules have been demonstrated over the last 10 years to be highly destructive and dysfunctional.

At present, the UK is caught up in this ‘corrective arm’ and has until the financial year 2016/17 to correct the excessive deficit as judged by the European Council.

You can read all the stifling and ridiculous reports about the UK and the excessive deficit mechanism – HERE.

You could not make this stuff up.

The most recent report was released on November 16, 2015 – Commission communication to the Council on action taken.

These rules alone are enough to justify the departure from the EU. However, there are countless other rules and requirements that compromise the British people as a result of their membership of the EU, which the people have no discretion over nor ability to override by throwing their elected Government out.

I thought this article was in the New Statesman (june 11, 2015) made some arguments that I would make – The left wing case for leaving the EU.

There is a lot wrong with this article – especially about ‘having more money to spend on other things’ type errors. But, in general, his intent is supportable.

The author, John King writes that:

The EU will influence the future of the NHS just as it helped smooth Tory privatisation of the Post Office and the organisational break-up of the railways; it is in tune with austerity and drives a larger and more deadly version in the eurozone; it escalates problems linked to housing, work, wages and education; creates worry and stirs up anger and threatens people’s sense of self. A lazy acceptance of establishment propaganda and a fear of being branded “xenophobic” have silenced many liberals and left-wingers. And yet the EU is driven by big business. This is a very corporate coup.

I think his reference to the “establishment propaganda” is relevant to the recent announcement that the British Labour Party will campaign against exit.

Here we have the Left once again eulogising about some dream world they call ‘Europe’, which in reality, has turned into a disintegrating and dysfunctional amalgamation of Member States, devoid of their own national sovereignty and quite clearly not serving the interests of their citizens.

When the citizens do express dismay through the political process, one or more of the EU institutions (Council, Commission, ECB) exacts its toll on the nation in particular, in recent times with the IMF in tow or leading the charge. Think back to June last year and the way the ECB treated Greece and turned Syriza into a front-line, neo-liberal austerity attack dog.

John King notes that at the core of the EU is a “undemocratic and distant” central authority, which is “a threat to all those living in its shadow. However sweet the propaganda, it is a tool for multinationals …”

The other point he makes is that the EU is not “synonymous with ‘Europe'”. It was claimed that if Greece left the Eurozone it would forfeit its status in Europe.

Europe is a geographic and cultural mass that goes far beyond the shrouded and protected bureaucracy in Brussels. King notes that the “European Enlightenment was about the collectivisation of political power in the hands of the masses, then the EU model is the antithesis of this: centralising decision-taking in the hands of an unaccountable technocratic elite”.

King reminds us that:

According to House of Commons Library research, if one counts regulations as well as directives, half of all UK laws are derived from Brussels, measures that cannot be reversed once passed; but if even one law is made outside parliament, then that is a huge abuse of power.

The House of Commons Library has also put together an informative Briefing Paper (No 06091) – In brief: UK-EU economic relations – (released January 19, 2016), which contains all sorts of updated data and helps us disabuse ourselves of some of the myths that the pro-Europe lobby pump out on a daily basis.

We learn that:

1. The EU “is the UK’s major trading partner, accounting for 45% of exports and 53% of imports of goods and services in 2014”.

2. “The share of UK trade accounted for by the EU 28 is lower than a decade ago”.

3. The “‘Rotterdam effect'” overstates this share because “trade recorded as being with the Netherlands is actually with non-EU countries”.

4. “The EU is a major source of inward investment into the UK. In 2014, EU countries accounted for £496 billion of the stock of inward Foreign Direct Investment, 48% of the total”. However, is that due to its membership status or because it has been growing while the Eurozone has been stagnating?

5. “Various studies have attempted to quantify the benefit or cost to the UK of its membership of the EU. This is a very difficult exercise and depends on a wide range of assumptions. Estimates vary significantly. For example, a 2005 study by the Institute for Economic Affairs found a cost of between 3% and 4% of GDP while a 2013 study by the CBI found a net benefit of between 4% and 5% of GDP. A 2015 study by Open Europe found that the cost of the 100 most burdensome EU regulations was £33.3 billion a year.”

The last point is important. The doomsayers are out in force at present obscuring their real intent with horror stories of the collapse of the British economy if the nation leaves the EU.

The fact is that none of the studies are definitive and swing wildly between large gains and large losses.

The reality is that no-one really knows but the smart money would be on minimal impact other than saving some public funds (see next section) and a going free of a heap of regulative costs that businesses and other organisations are forced to incur as a result of EU rules.

Britain’s net payments to the EU

Under Treaty of Lisbon, each Member State makes contributions to the EU, which run the bloated bureaucracy and provide resources for transfers between States.

These contributions are worked out on the basis of a complicated formula which includes VAT and customs duties receipts, gross national income and sugar levies.

Even though Margaret Thatcher negotiated a special ‘abatement’ on Britain’s contributions in 1985 (which amounted to about a third rebate on the assessed contribution), subsequent policy changes (excluded items that attract the abatement) have substantially increased the net real contribution.

The contribution is extremely volatile on a year-to-year basis (see this UK Treasury Report – European Union Finances 2015

The contribution is also sensitive to exchange rate movements between the sterling and the euro.

In 2014, Britain was the third-largest net contributor to the EU (after Germany and France), although on a per capita basis, Britain slips well down the rankings.

The following graph is taken from official data compiled by UK House of Commons Library and shows the Britain’s real net contribution to the EU from 1973 to 2015 (with forecasts out to 2020). Britain’s contribution in real terms has risen sharply in recent years as a consequence of changes in rules etc.

UK_Net_Contributions_to_EU

In terms of Britain’s GDP, the 2015 contributions of £8,473 million will be around 0.5 per cent of GDP, a fairly small figure. Given Britain issues its own currency, I do not consider the quantum to be a major issue.

Unfortunately, the pro-exit lobby often lies about how significant this contribution is in the scale of things. But then we are dealing with the likes of UKIP who lie about most things.

It is what Britain is buying into with that contribution that is the issue.

Trade relations with the EU

There is also a lot of misinformation about trade between the EU and Britain and how it would dry up should Britain leaves.

The latest data from the British Office for National Statistics – United Kingdom Balance of Payments – The Pink Book, 2015 – was published in December 2015.

From Table 9.3 of the 2015 Pink Book, we can compute Britain’s trade position with a major regions. The following graph shows the UK trade balance from 1999 to 2014 in £ millions.

It clearly runs a surplus with the Americas (read mostly the US) but a substantial deficit against the EU 28 Member States.

UK_Trade_Balance_Region_1999_2014

From Table 9.3 of the 2015 Pink Book we can compute the UK trade position with the EU Member States. The following table shows total exports and imports and the trade balance in £ billions against the other 27 EU Member States in 2014.

It’s quite clear that Britain ran a £61.7 billion deficit against the other EU Member States in 2014. It ran a surplus with only six of the Member States and the magnitudes were inconsequential other than with Ireland. The latter surplus reflects historical connections rather than EU connections.

UK_Trade_EU28_2014

The point is that it is highly unlikely that these trade patterns and FDI flows would alter much if Britain was outside the formal apparatus of the EU.

Geographic proximity, superior economic performance, global multilateral (outside of the EU ambit) rules are all more relevant to Britain than the membership of the EU in this regard.

When thinking about the so-called ‘damage’ that exit of the EU would bring to Britain, it is worth considering Switzerland, which adopts no EU rules or regulations as a matter of course, although it sometimes implements the same rules as a global commitment.

Its exporters supply into various markets and have to meet the standards applicable. This is what all exporters do around the world.

Which country do you think has the highest share of its exports into the EU? Britain or Switzerland?

By 2014, 44.4 per cent of Britain’s total exports went to the EU (noting this is an overstatement given the ‘Rotterdam Effect’ – the figure is closer to 41 per cent).

In 2014, 59.2 per cent of Switzerland’s total exports went to the EU and they ran a surplus against the EU, unlike Britain (Source).

I don’t want to suggest that a trade surplus is a desirable target – it clearly means that a nation is giving away more of its real resources than it is getting back from abroad. In some cases, that might not be as problematic if the exports are bits of iron ore and the imports are flash consumer items. But generally, exports are a cost to local residents (they could be using those resources themselves) and imports are a benefit.

The point is that Switzerland maintains its complete fiscal sovereignty by staying out of the EU and doesn’t appear to be shunned by the EU Member States.

And when you think about the trade deficit that Britain runs with the rest of the EU, the day that it exited, it would become the EU’s largest export market.

So, pure self-interest would prevent the remaining 27 EU Member States from trying to ‘punish’ Britain in some way, not to mention that fact that all nations are bound by World Trade Organisation rules that prevent discriminating trade arrangements.

It is just far fetched to think that these flows of goods and services and income payments will be seriously affected at all by an exit.

And if Britain needs another example of how staying out of restrictive arrangements such as the Eurozone and the EU, in general, then it just has to look northward to Iceland, which suffered the worst banking collapse of all (courtesy of ridiculous era of neo-liberal policies), yet came out of it the best.

Conclusion

As a Modern Monetary Theory (MMT) proponent, the sovereignty of the currency-issuer is an overwhelming priority in terms of organising the monetary system.

Once the government has that capacity it can always do the best for the people given external circumstances. The best might in some cases not be very good but that would reflect real resource constraints etc, something that Britain is not particularly troubled by.

The next priority is to ensure that all economic policy institutions are accountable and responsible to the people who can regularly cast votes to affirm their approval or otherwise of the economic direction the nation is taking.

A currency-issuing government should never cede policy-making powers to an external body unless it is via intergovernmental agreement and is ratified (implicitly or by referendum) by the domestic political process.

The EU membership for Britain is the anathema of these principles.

Further, it is clear that the original European Project is dead as the EU and the Eurozone teeter on the edge of chaos as a result of years of incompetent policy making by the entrenched elites who have sold the people out to the corporations.

I laugh when I hear ‘progressives’ from the Labour Party rail against the the travesties of so-called Investor-State Dispute settlement clauses in these awful ‘Free Trade’ agreements that neo-liberal governments are tripping over themselves to sign. These agreements unambiguously shift the balance towards the corporations away from citizens and undermine democracy.

It is correct to rail against them – they are the beach head of the struggle against neo-liberalism.

But then the same characters on the Left, in the next sentence, extol the virtues of remaining in the EU. Same deal really. Don’t they know that.

And equating exit with xenophobia and nationalism is another sideshow that should be ignored for what it is – a ridiculous ploy to obscure what is going on.

I am not big on national identity. But I am huge on sovereign currency capacities and unless nations decide to merge or break away (such as South Sudan, and hopefully Catalonia and Scotland) then the current geography is it!

That is enough for today!

(c) Copyright 2016 William Mitchell. All Rights Reserved.

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    55 Responses to If I was in Britain I would not want to be in the EU

    1. mahaish says:

      number 1 goal for Britain for atleast the last 500 years is to have a disunited Europe.

      the question is , do you do it from within, or without

      plan b was always from within. plan A was always to make a pigs breakfast of it from without ;).

    2. Jake says:

      Yes excellent points all.
      Another issue is the wage suppression created by the influx of surplus labour from E.E which has suppressed wages at the
      Low end of the job market.which has exacerbated in-work poverty.

    3. Mark Redwood says:

      I am very conflicted over the European issue. After Greece, I was horrified by the actions of the EU and the ECB in particular.

      There was a plan for Greece to develop an exit strategy and issue its own currency, but 2 things became very clear very quickly. 1) They lacked the expertise, and 2) even worse that the plan would necessarily involve so many people that it would inevitably leak what the Greeks were planning. If the Europeans ever got a whiff, then that would be bad, very bad.

      And how do we know this? Well just prior to the declaration of the results of the referendum, Tsipras was summoned. He met the heads of the EU, and he also met with the ECB, when he came back he was very glum. Presumably, he was told in no uncertain terms what the consequences would be if he went along with a yes vote in the referendum. The ECB had already forced the Greeks to close their banks, and they could do much worse.

      So on the one hand we have a power, which bemused none other than Gorbachev, who had tried to dismantle the very system that the Europeans were busily trying to construct, but on the other we in the UK do not actually have a democracy. What we have is something masquerading as a democracy. It is really a form of feudalism based on wealth and power. One of the things about the EU is that they passed laws that prevented some of the worst excesses of our so-called democracy.

      One stand out is the working time directive. Employment law in the UK is already somewhat weighted against the employee, and I dread to think what it would look like, without the EU. Let’s talk about taxation. Tax avoidance is a massive issue, and seems that if you have wealth and power, taxation is a purely voluntary act, and philanthropy is not something our elites seem very interested in. What our Government are most interested in negotiating for, is to make sure that the City of London’s financial centre can continue wealth stripping, inflating asset bubbles, and money laundering with gay abandon.

      The EU seem to be rather against those sort of things. It is a very sad day, when we in the UK have to rely on the House of Lords, itself an archaic feudalistic institution, to restore any sense of democracy, as they did over Working Tax Credits.

    4. Daniel D says:

      What would Churchill think ?

    5. Some Guy says:

      The ECB had already forced the Greeks to close their banks, and they could do much worse.

      Like what? Over the years, the Eurocrats had done all they could do, and Greece still said NO.

      The Greek tragedy was that Syriza had won, but its leadership could not recognize that. As is so often forgotten, Schauble offered a negotiated Grexit. This was the best possible plausible outcome, and better than I had hoped for, and Tsipras could have had it for the asking. In retrospect the turning point was earlier, when Varoufakis was replaced & Tsipras definitively turned to the “realist” “right wing” of the party. Tsipras action was that of a colonized mind.

      It just illustrates something that IMHO can never be repeated often enough:

      The most potent weapon in the hands of the oppressor is the mind of the oppressed.

    6. Neil Wilson says:

      “Employment law in the UK is already somewhat weighted against the employee, and I dread to think what it would look like, without the EU.”

      It will be what the people elected their government to provide. If that is for everybody to be clasped in irons then that is the will of the people! Who are you to decide that is wrong and call on unelected supranational forces to stop something because you don’t believe it is ‘right’.

      If you want better employment rights, then get a Labour government elected on a strong manifesto to provide them. One with a Job Guarantee top of the list!

      People on the left cling to things like the working time directive – which pretty much everybody in the UK is forced to opt out of when they sign up for a job and is unenforceable in practical terms because there are thousands of others wanting your job.

      What you are doing is curve fitting the data. You are looking for crumbs of comfort in a despotic regime. Never mind the jackboot on the throats of the Greeks crushing and killing them lets talk about ‘workers rights’ from the EU, pretty much none of which are really that enforceable in practice. And that’s because they are there as a fig leaf. They are there so that the left will continue to be the useful idiots of the right. They are there so the one world without borders belief won’t reveal itself as the daft idea it is.

    7. GrkStav says:

      The notion that the UK would perforce be better off outside the EU, given its special status, now enhanced, is a bit far-fetched.

      The UK’s special/privileged EU membership mandates/imposes none of the crappy policies that it has pursued/enacted.

      It will also not prevent, in the least, the abolition or doing away of such policies and pursuing better one, were the UK electorate to vote in parties and MPs to do so.

      Of all the members of the EU, the UK is the one least likely to benefit, per se, from exiting the EU, imo.

    8. Neil Wilson says:

      What I find entertaining is that those on the left love everything about the EU except the treaty, the commission and how it is run.

      The UK Green Party Policy on Europe should be required reading for any students of cognitive dissonance and total refusal to accept reality in the pursuit of a religious belief.

      (The policies on Citizens Income and Monetary Policy come a close second).

      The problem we have in the UK is that Labour seem to have switched from trying to pretend to be the Tories to trying to pretend to be the Greens. Unfortunately they are very bad actors.

    9. Neil Wilson says:

      “It will also not prevent, in the least, the abolition or doing away of such policies and pursuing better one, were the UK electorate to vote in parties and MPs to do so.”

      It does. For example outside the EU we can cancel PFI contract that are currently close A&E departments at hospital. And they can be cancelled without compensation if parliament chooses – as they should because they are a rip off.

      Similarly outside the EU we can nationalise the Railways and other institutions – again at a compensation level set by parliament not the ‘market’ as required by EU law.

      And most importantly of course we would be outside article 123 of the EU treaty which prevents access of a government to a simple overdraft at a central bank. So we could end the corporate welfare of government bonds paying risk-less income to the wealthy.

      The biggest problem all the national parliaments have at the moment is when the politicians propose an idea, the civil servants go into full “Yes Minister” mode.

      Michael Gove, the UK Justice Minister, and a man with whom I rarely agree, actually made the same point in his essay the other day.

      “It is hard to overstate the degree to which the EU is a constraint on ministers’ ability to do the things they were elected to do, or to use their judgment about the right course of action for the people of this country. I have long had concerns about our membership of the EU but the experience of Government has only deepened my conviction that we need change. Every single day, every single minister is told: ‘Yes Minister, I understand, but I’m afraid that’s against EU rules’. I know it. My colleagues in government know it. And the British people ought to know it too: your government is not, ultimately, in control in hundreds of areas that matter.”

      It’s not 15%, or 75% of UK laws that are determined by the EU. It is all of them.

    10. Andy says:

      Brilliant. Lots of ammo there Bill. Thanks.

    11. J W M says:

      I prefer Yanis Varoufakis’ approach: to democratise the EU. To start a break up of the EU experiment because monetary policy isn’t working for all members is a failure of imagination and guts. Having said that though, I am not sure how discretionary monetary policy could be accommodated within a democratic EU to account for particular macroeconomic problems that different countries may be experiencing. But I’m sure it isn’t an impossible problem if you put aside the slight matter of bureaucracies entrenched in the status quo.

      My attitude on the EU changed when “it” received the Nobel Peace Prize. It’s about peace. And a thing that works contrary to idiotic nationalist tendencies (which can lead to violence and war) should not be casually set aside.

    12. Mike Wright says:

      “I prefer Yanis Varoufakis’ approach: to democratise the EU.”

      Yes, and I want a pony and world peace…

      The EU cannot be changed from the inside. The treaties have set the neoliberal path in stone and, unless *everyone* with a vested interest decides to drop those interests because the Left think it would be nice, nothing of note will change. The Left may get get a few consessions to make them feel like the struggle is worthwhile but that’s about it. IMV it amounts to appeasement. Those vested interest will continue with their corporatist policies through the continued commodification of society entrenched further through ‘trade deals’ like TTIP and TISA. ‘Sovereign democracies’ will continue to shown up for what they really are: provinces of empire – just like Greece.

      The UK is in a perfect position to show the rest of the EU what it could look like if they reclaim their democracies and their currency sovereignty or, if that is deemed too much of a risk, it may spur those in the Eurozone to get on with Federalisation.

      Either way, maintaining the status quo is resulting in mass impoverishment for millions and no obvious way out of it. History is fairly unanimous in recording where that takes us next..

    13. supermundane says:

      @JWM – The EU has proven itself sclerotically resistant to reform as amply demonstrated by Varoufakis’ own failed attempts to reason with the Troika during the Greek crisis. He fails to demonstrate how this time it is different and how such reform will be achieved when the EU was, as he himself admits, institutionalised as an anti-democratic organisation.

    14. Postkey says:

      This is result of BREXIT?

      “The Out campaign’s main economic argument – that Britain’s huge trade deficit is a secret weapon, because the EU would have more to lose than Britain from a breakdown in trade relations – is flatly wrong. Britain would need to negotiate access to the European single market for its service industries, whereas EU manufacturers would automatically enjoy virtually unlimited rights to sell whatever they wanted in Britain under global World Trade Organization rules.
      Margaret Thatcher was the first to realize that Britain’s specialization in services – not only finance, but also law, accountancy, media, architecture, pharmaceutical research and so on – makes membership in the EU single market critical. It makes little economic difference to Germany, France, or Italy whether Britain is an EU member or simply in the WTO.
      Britain would therefore need an EU association agreement, similar to those negotiated with Switzerland or Norway, the only two significant European economies outside the EU. From the EU’s perspective, the terms of any British deal would have to be at least as stringent as those in the existing association agreements. To grant easier terms would immediately force matching concessions to Switzerland and Norway. Worse still, any special favors for Britain would set a precedent and tempt other lukewarm EU members to make exit threats and demand renegotiation.
      Among the conditions accepted by Norway and Switzerland that the EU would surely regard as non-negotiable are four that completely negate the political objectives of Brexit. Norway and Switzerland must abide by all EU single market standards and regulations, without any say in their formulation. They agree to translate all relevant EU laws into their domestic legislation without consulting domestic voters. They contribute substantially to the EU budget. And they must accept unlimited EU immigration, resulting in a higher share of EU immigrants in the Swiss and Norwegian populations than in the UK.
      If Britain rejected these encroachments on national sovereignty, its service industries would be locked out of the single market. The French, German, and Irish governments would be particularly delighted to see UK-based banks and hedge funds shackled by EU regulations, and UK-based businesses involved in asset management, insurance, accountancy, law, and media forced to transfer their jobs, head offices, and tax payments to Paris, Frankfurt, or Dublin.”

    15. Neil Wilson says:

      “I prefer Yanis Varoufakis’ approach: to democratise the EU’

      You can’t do that. Any organisation that exists over time without attack develops entropy to the point where it is functionally inoperative. It becomes stuck in a groupthink and mindshare that is impossible to change. The only way you can fix it, is to replace it.

      Yanis is unfortunately deluded on this point – as his aborted negotiation in Brussels for the Greek people showed.

      The main reason the private sector is seen to be more efficient than the public sector is because large section of the private sector fail, or almost fail, on a regular basis. That causes replacement of ossified structures with new organisations.

      It’s why trying to go around insulating old properties is a fools errand. They are completely the wrong design for the 21st century and need to be torn down and replaced with new better buildings designed with climate change and modern building science in mind.

      There is another meme on the left about never fundamentally changing anything. Everybody must always have the option of the same job, even if that job and those skills have become obsolete. There is simply no acceptance that destruction and tearing down of old broken oaks is how new ones get the space to grow. Probably because there is no acceptance of a mechanism that decides when something is broken beyond repair.

      And so we see Yanis and Corbyn – all of a certain age, all of a certain generation, all trying to prop up the dreams of their youth that time has proved to be false. It’s quite sad to watch.

    16. Neil Wilson says:

      “Britain would need to negotiate access to the European single market for its service industries, whereas EU manufacturers would automatically enjoy virtually unlimited rights to sell whatever they wanted in Britain under global World Trade Organization rules.”

      Seems to me that makes the argument even stronger. Once again the myth there is that Britain needs the exports for some reason. If the EU doesn’t want our exports then the trade deficit will get bigger and the Europeans will have to fund it by stocking up on Sterling. Or they won’t be able to sell their goods to the UK.

      So rather than handing over services to the EU, we hand over electronic blips that the ECB will have to discount.

      And it frees up lots of resources in the UK for more productive domestic uses.

      Sounds like a win to me.

      And bear in mind the numbers:

      “Furthermore, those parts of the economy that do not export to the European Union (and make up the vast majority, 85%, of Britain’s GDP) would benefit from their freedom from European Union rules and regulations, with which they currently have to comply. With the single market as it stands, the United Kingdom needs to apply European Union regulations to the whole of the economy, even though only 14% of its output is exported to the European Union.”

      Ultimately this decision is not about numbers – none of which anybody knows with any certainty.

      It is about self-determination and the ability to change direction by having politicians the UK elects who can set the entire direction for the UK.

      This argument is about resilience, not efficiency. And therefore ultimately about sustainability of a society.

    17. Mark Redwood says:

      “It will be what the people elected their government to provide.”

      This is some kind of joke, right?

      If only this were true. What we have is a Government which MOST people in this country do not support, running round implementing policies MOST people don’t agree with.

      This notion that there is a left and right, is nothing but a simulation to persuade people that there is a choice, when in fact there is none. We do not have a democracy, because if we did, my vote for Brexit would be on that ballot paper. What we have is a representational oligarchy. Our political class emerge from a tiny proportion of the population, following a carefully laid down educational pathway. Their advisors are drawn from a carefully selected and narrow band of people. And if all that fails they are ultimately kept in check not by the people, but by another allied class – the media. Journalists follow the same carefully laid pathway – they rub shoulders with the very same people who will form the political class.

      And indeed when it seems that we may actually have a choice, although I am not convinced that Jeremy Corbyn is a choice, the howling scandal hunting monitors of the political class, are working hard to ensure that we don’t have one.

      It’s not really a choice is it?

      A bunch of imperial oligarchs who pass some laws I happen to like, or another bunch of oligarchs, who if I’m really lucky might somehow change, if only someone can find that moon-on-a-stick, and who are right now passing laws I really don’t like.

    18. Andi says:

      Many important criticisms of the EU.

      However, as a “cognitively-dissonant” Green (thanks Neil :) I’m still holding my nose and voting to stay in the EU, as the least worst option.

      Leaving the EU is highly likely to lead to a break-up of the UK, first Scotland, which will encourage Wales to do likewise. Regardless of whether Wales goes or not, it still leaves the political map in England dominated by Conservatives who are far more neoliberal than the EU. When the EU is pushing for something terrible it’s often UK representatives in the vanguard.

      Leaving the EU would certainly give us more (legal) control over own destiny, but ironically it will empower the very people who won’t use it – and they’ll drive us off the cliff. And it will be harder to prise their hands from the steering wheel than before.

      Bill said:

      equating exit with xenophobia and nationalism is another sideshow that should be ignored for what it is – a ridiculous ploy to obscure what is going on.

      I don’t think this is fair – the Out campaign by and large is relying on anti-immigrant sentiment that needs to be challenged.

      Now, of course there are numerous exceptions, such as those posting here, and various eurosceptic Greens and Labour.

      But the thrust of the Leave campaign is to talk about regaining control of our borders because they know that argument will resonate with a lot of voters – I certainly don’t want a decision of national importance decided by people voting simply because they “want their country back”.

      Sadly this campaign is going to be decided by an ugly shouting match – on one side fearmongering about foreigners, an the other fearmongering about damage to our economy and ‘a leap into the unknown’.

    19. The UK can leave the EU but it can never leave Europe.
      As a believer in European unity I do have to admit that the EU is currently making a hash of many things.
      But with Russian tanks menacing the Ukraine I am reminded of the original purpose of the Union.
      The U.K has always been conflicted about its membership of the EU. When it got it’s act together it had a substantial influence on the EU but this happened rarely. For most of it’s membership it has stood on the sidelines and blamed the Foreigner for its problems.
      The advocates of Brexit who imagine that exit will somehow magically restore a lost sovereignty are living in a fantasy.
      The U.K.is at the nexus of a complex network of relationships cultural, military, social as well as economic. It is impossible to calculate the impact that leaving the EU will have on all these factors. The advocates of Brexit have very different ideas about what relations the UK should have with the EU.
      So if the UK votes to leave I foresee a very messy divorce as the EU will almost certainly seek to discourage other members from following the UK.
      And don’t forget the Scots have made it pretty clear that they won’t follow the English so we are looking at the break up of the U.K.
      Sounds like a pretty high risk strategy to me

    20. John Doyle says:

      Bill, Is it true that Britain is not fully monetary sovereign? Having signed the Treaty of Lisbon and the Stability and Growth Pact, it is prohibited from practicing Central bank direct payment for its debts. No signatory country to these treaties can finance its deficit by money creation. In the UK there is a Consolidated Fund which is used to collect taxes and pay government spending. The BoE can fund a deficit there but has to sell gilts to match the deficit.

      If so it seems a solid reason for a Brexit.

    21. Phil says:

      Bill,

      I think that you’re leaving out an important component: the sterling. The sterling is driven by the financial markets to a much larger extent than I think any other currency in the developed world. You can see this from the fact that it has dropped substantially in recent days on the back of European scaremongering. It does not seem unreasonable to think that the sterling might drop substantially if the UK exited the EU. Although you never know about these things.

      In terms of voting, I’m very tempted to vote to exit. The one thing keeping me from doing so is that it would seriously screw over all the Europeans that I know in London who have fled austerity to try to build a life for themselves here. They would have to go through the visa program which is a total meat-grinder. I would be okay because I’m Irish and the special relationship would be reestablished after exit (I assume, since we can vote in each others’ countries!). But I sort of feel I’m selling these people out. I don’t know. I think I could be convinced to vote to leave. But that’s the one issue that gets to me.

    22. Postkey says:

      Neil,
      Thanks for the comment.

    23. bill says:

      Dear JWM (at 2016/02/23 at 17:27) and others

      As to Yanis Varoufakis’s grand plan for a Pan European Left Movement – please read the critique from my current co-author Thomas Fazi – https://www.socialeurope.eu/2016/02/a-critique-of-yanis-varoufakis-democracy-in-europe-movement-diem25/

      The plan is a pipe dream.

      best wishes
      bill

    24. Postkey says:

      “A historical fact, yet hardly anyone is aware of it: the EU has been one political-economic unit, that is, one country, since the acceptance of the Lisbon Treaty at the end of year 2007.”

    25. Nigel Hargreaves says:

      “And most importantly of course we would be outside article 123 of the EU treaty which prevents access of a government to a simple overdraft at a central bank. So we could end the corporate welfare of government bonds paying risk-less income to the wealthy.”

      Neil, very well said, and I’m surprised Bill didn’t allude to this in his piece. It seems to me to be the most important thing about all this, and what is central to MMT – the ability of currency-issuing states to finance deficits. It is prohibited by article 123 of the Lisbon Treaty to which the UK is a signatory even though it is not a member of the eurozone. Unfettered from this constraint, the ridiculous plaver by which HM Treasury account (the Consolidated Fund) has to be kept in balance from the Government Loan Account which is itself funded by the sale of Treasury Securities by the BoE.

      Unfortunately, however, if the UK were to leave the UK this would carry on as before. The government would continue trying to eliminate the deficit, which it might do one year, and continue to finance its deficit with so-called borrowing. Plus ca change!

      I have said before that the UK will not be leaving the EU even if there is a leave vote on June 23rd. Even if it does it won’t make a blind bit of difference to you and me. (Not being one of the wealthy).

    26. Morten Hansen says:

      The core problem with Bill’s argument:

      … is the simple fact that he’s conflating principle or idealism with the political realities. Sure, if there was a pro-MMT majority in the UK, it would make sense to leave the EU, but there isn’t. Instead, the UK has pursued one of the hardest austerity regimes in the EU during Cameron’s watch, and unless Jeremy Corbyn manages to wrest power in Labour from the Blairites and redirect the party in a more pro-MMT direction, a change in government would not be likely to see Britain charting anything resembling an MMT course.

      Indeed, Bill’s earlier scathing indictment of the entire European left (which I completely agree with) makes any “insert preface”EXIT strategy a purely hypothetical cure for the ailments he (correctly, I think) diagnoses, because the various potential left coalitions in most European countries would not actually pursue a policy markedly different from the current EU trend, let alone anything resembling the MMT prescriptions championed by Bill.

      Thus, the only countries for which it would make sense to leave the EU (as seen from Bill’s MMT perspective) would be those in which a pro-MMT governing coalition would be feasible and any list of such European countries would be depressingly short. Conversely, if we envision a future in which a large proportion of EU countries would be able to muster powerful pro-MMT coalitions, then a change from the current austerity regime in the EU (which Bill described as having become increasingly entrenched via legislation) would look a lot more likely, given that such a pro-MMT coalition would probably be as eager as Bill to remove the “mainstream economic” straight jacket, which would make an EU exit a somewhat moot point.

    27. Richard says:

      Andi,
      You don’t know that. You have no evidence whatsoever to back up your case.

    28. Phil says:

      What are you co-writing with Fazi, Bill?

    29. supermundane says:

      @Andi

      So you’re perfectly fine with diktat and undemocratic mechanisms? You would rather a ‘benevolent dictatorship’ – a thoroughly opaque institution if it means implementing a progressive agenda even though there is no guarantee that such an agenda will be maintained given the neoliberal bent of the organisation? Such an arrangement is a double-edged sword as Greece has discovered and there is no adequate democratic recourse when it doesn’t go your way. As far as I am concerned, as someone of the left, principle of democratic accountability trumps all and it is up to the left to get off its arse and make its case to the people in the democratic arena rather than rely on diktat from a supranational institution. If it hasn’t been fought for it’s not worth having.

      Besides, the EU has demonstrated that it is immune to reform; even it Britain stays, what makes you think it’s reformable now or that it will survive its many internal contradictions? It’s falling apart as we watch, and is less than a few decades old. Thee is nothing inevitable about the EU.

    30. larry says:

      Neil, you are a Schumperterian in the sense of being an advocate of creative destruction, or so it appears. I prefer mutability, in the evolutionary biological sense, rather than creative destruction. Replacement without destruction as occurs with instances of speciation.

      Phil, I feel similarly as you do about our European friends (not the sense in which Corbyn used the term) if we exit the EU.

      A number of businesses have claimed that they will be disadvantaged were the UK to exit the EU. This may be an instance of Neil’s creative destruction. Whether for or against the EU, it might be worth from having a look at Fintan O’Toole’s “EU has taken decisive turn from democracy” (Irish Times, 7 July 2015). It complements Bill’s post.

    31. Neil Wilson says:

      “Neil, you are a Schumperterian in the sense of being an advocate of creative destruction, or so it appears.”

      I wouldn’t go quite as far as that. You do get replacement without destruction, but generally only when there is a massive shock to the structure that becomes a pinch point. In nature that is what accelerates evolution. But even in speciation, individuals are selected. And selection requires that the others don’t make it.

      So it is with processes within organisations. They only get changed under stress conditions when an organisation becomes moribund and entropic, because as we have seen in the financial system and the political system nonsense can carry on for far longer than anybody can believe possible.

      The maxim in my line of work is that when an specialist with a reputation for change comes up against an organisation with the opposite reputation, it is the organisation’s reputation that stays intact.

    32. Neil Wilson says:

      “You can see this from the fact that it has dropped substantially in recent days on the back of European scaremongering.”

      No it hasn’t. Go look at the 10 year graph rather than the 10 minute one – preferably against the Euro.

      There is no ‘collapse’ of Sterling. There is a move towards the US dollar from all currencies.

      ‘currency collapse’ is the last bastion of the ignorant. A scare story put about by the same pundits that were moaning about excessive imports and lack of exports last week.

    33. Kevin Harding says:

      All the economic forecasts for exit can safely be ignored as economic forecasts are
      little more than examining the entrails.The democratic argument is all.
      Cognitive dissonance is the norm so the ‘left’ can be forgiven its own.
      The enemy of my enemy is my friend is the heart of tribal irrationality.
      Gove,Farage,xenophobia ,are on one side we must be on the other.
      Off course there is loss aversion ,pessimistic fear of unfettered right wing
      U.K. government (maybe without Scottish votes),as well as fear of negative
      economic outcomes.Add on top the nebulous idealism of internationalism and
      peace and the liberal left instinct is to support the EU.
      The fact that the pay and conditions of working people are in long term decline,
      alongside social mobility and owner occupation and there needs to be a drastic
      change of political economic direction which is going to be difficult enough outside
      the EU and impossible within if any of these things are going to be changed is my
      argument against those instincts.

    34. Kevin Harding says:

      Neil to reverse your last comment .The same people banging on about imports being
      an increase in real wealth having no concern for a fall in currency value which might
      undermine the ability for people to get their hands on that stuff.

    35. Andi says:

      @supermundane – thanks for the reply.

      So you’re perfectly fine with diktat and undemocratic mechanisms? You would rather a ‘benevolent dictatorship

      Well, I did say I’d be voting to stay whilst holding my nose. I’m certainly not fine with the various undemocratic mechanisms the EU has. Although to its credit when I cast my vote to elect my share of 7 MEPs it’s the only time I get to vote under proportional representation, so in that sense it’s more democratic than elections to Westminster. I don’t see the EU as a dictatorship – more a bunch of self-interested neoliberal elitists. No different to our government.

      But we each have to weigh the probabilities and I can entirely see why you might come to a different view.

      However, where we do agree is here

      it is up to the left to get off its arse and make its case to the people

      This is true regardless of whether we stay or go, and it all starts from the economic argument, building on the work of Bill et al. The public’s perception of economics is the core strength for the neoliberals. It should be their greatness weakness.

      what makes you think it’s reformable now or that it will survive its many internal contradictions?

      I didn’t mention reform. I see no prospect of that any time soon, but as you say it’s “up to the left to get off its arse and make its case to the people” :)

    36. larry says:

      Neil, yes, but only in catastrophes do species collapse. It isn’t really known what accelerates evolution.

      In a contest of the individual against the organization, I would expect the organization to prevail, at least in the short term. Unless there is at least one powerful faction within the organization that kind of sides with the individual advocating change. Like a cleft in the power structure within the organization.

    37. David Brown says:

      And as the song says, ‘You can check out any time you like, but you can never leave…’ (with apologies for making the only entirely unreasoned contribution to the discussion, but it seemed apt)

    38. Neil Wilson says:

      “I don’t see the EU as a dictatorship – more a bunch of self-interested neoliberal elitists. No different to our government.”

      The difference is that out of the EU we can change the latter at the ballot box. We can never change the former.

      For democracy to work it has to be close to the people. A bunch of unelected bureaucrats and the EU rubber stamping parliament are not democratic and never will be.

      The whole love affair with the EU on the left started in the Thatcher era. And there are still people who think it is somehow a brake on neoliberalism. A very anti-democratic brake.

      Quite how they see that in the 21st century after the total devastation handed out to the Eurozone I don’t know. It’s almost like what happened to Greece is filtered out.

      But ultimately it is supported by people who actually believe they can never win the argument in the UK in a democratic manner and want to stop the democratic will of the people being implemented. Hence their love of European Plantocracy as an alternative to being ignored.

    39. Neil Wilson says:

      “having no concern for a fall in currency value’

      What fall in the currency value? You have absolutely no idea where there currency value will go and neither does anybody else.

      Nor do you have any idea what the price of imports is going to be.

      Do you think exporters to the UK are going to sit there and watch their markets dry up. Or do you think they might actually take action to maintain their market and sales?

      Or do you have an alternative market that these people are going to sell their goods and services to? One on Mars perhaps?

      Let’s get real here.

    40. bill says:

      Dear Neil Wilson (at 2016/02/24 at 14:21)

      Be careful of your predictions about sending exports to Mars!

      The US Federal Reserve Bank is asking those questions too (-:

      https://www.stlouisfed.org/on-the-economy/2016/february/global-current-account-surplus-trade-other-planets

      best wishes
      bill

    41. John G says:

      Michael Bruce “But with Russian tanks menacing the Ukraine I am reminded of the original purpose of the Union.”

      Oh please. There are no Russian tanks menacing Ukraine. Ukraine is a US colony since they overthrew the government there.

    42. gwana says:

      Confused by John G’s comment about Ukraine – did you not notice that Russia invaded and is still running half of it…?

    43. larry says:

      Neil & Bill, This is only the tip of the interplanetary trade iceberg. Driving it seems to be the idea that excess populations will be “encouraged” to go to Mars whereupon trade with the planet will follow. It is only an extreme example of migration. Initially, the transplanted people will be a colony of some kind. But eventually they might wish to extricate themselves from colony status, if the population got large enough. Mars rather than the Moon is considered because of the existence of water. But how large a population can the planet sustain? How much water is there and how is it replenished? While I don’t know the answers to these questions, someone might.

    44. Franz says:

      That argument with switzerland is soo wrong. Switzerland is actually the third highest netto payer to the EU and they still had to take nearly all regulations we had (Austria). They actually pay more than we do, to get the same regulations and treatys but without the votes. Why do you think Switzer Politicans try to get their stupid ppl every 3-5 years into a EU debate. I dont know about those other points some seem fairly good, but you really think the EU with 400mill ppl need the UK more? Your economy except the finance place is shit, and i bet the EU will not really allow London to prosper in that matter. Not when Frankfurt and other towns will want some of the cake too…But good luck with that. I hope you go out of the EU, because frankly the majority in the EU is already really pissed about your unique design on the EU and it would end the discsussion for once and for all, if the EU is good or not.

    45. Kristjan says:

      “@JWM – The EU has proven itself sclerotically resistant to reform as amply demonstrated by Varoufakis’ own failed attempts to reason with the Troika during the Greek crisis. He fails to demonstrate how this time it is different and how such reform will be achieved when the EU was, as he himself admits, institutionalised as an anti-democratic organisation.”

      But you see, YV really doesn’t have a problem with the intitutionalised anti-democratic organisation and he was fine with it until he found out that this organisation didn’t like his fiscal plans for Greece. They should have started their “revolution” in Greece by saying this loud and clear: EU is an anti-democratic organisation. They still love the anti democratic organisation, they just don’t like its policies.

    46. Nell says:

      @Nigel Hargreaves
      “I have said before that the UK will not be leaving the EU even if there is a leave vote on June 23rd.”
      I agree. Months ago Merkel was quoted on possible negotiations after the referendum. And of course Boris is already airing the possibility of a second referendum after negotiations. We also have past examples of referendums being ignored or done over (Greece, Ireland etc).

    47. Kevin Harding says:

      Neil you are right we do not know what the future exchange rate will be.So of course it could go
      down .As I said there is no good basing your vote on economic predictions ,when such predictions are almost always wrong I will be voting for out for the only possible way of getting the radical changes we need by
      being unrestricted by the Eu but I will not be holding my breath for any uk government implementing
      such changes.
      You just seem oblivious to any reactions of the elite to a government siding against them.And oblivious
      to any currency depreciation effecting the wealth of a nation despite seeing imports as an increase in
      real wealth of a nation.

    48. Stuart Medina Miltimore says:

      Bill: although I favor a referendum on the issue of Catalan independence (something that PSOE, PP & Ciudadanos oppose, which is a mistake because it fails to deliver a solution) I have never been sympathetic to nationalist movements. They are conservative and elitist. An example: the most common surnames in Catalonia do not coincide with the rarer ones sported by the members of the Catalan Parliament. The electoral system is rigged in favor of more conservative rural regions to the detriment of the working class districts. There has been a surge in nationalist sentiment due to the PP’s manoeuvres against their new statute and the economic crisis has been conveniently blamed on Spain. However, the Catalan conservative elite is as corrupt and pro Euro as the Spanish one. Only the CUP have been consistent about getting out of Spain and the Euro altogether. But they are a small party. Since my brother lives in Barcelona and I have good friends who live there I am not particularly keen on seeing our union break. I’d much rather get all of Spain of the Euro.

    49. aka says:

      You have absolutely no idea where there currency value will go and neither does anybody else. Neil Wilson

      It seems the MMT community is for wasting the ability of the monetary sovereign to deficit spend without price inflation by refusing to consider individual citizen, business, organization, local government, etc. accounts* at the central bank itself since individual citizens, businesses, organizations, local governments, etc. have risk-free liquidity needs that exceed, in aggregate, those of the commercial banks, credit unions, etc. that are currently the only members of the private sector that are allowed to have such accounts. And individual citizens, businesses, organizations, local governments etc. have a risk-free savings preference too.

      In other words, with individual citizen, business, organization, local government, etc. accounts* at the central bank itself more of the spending by the monetary sovereign would end up stowed away harmlessly as private savings and as the liquidity needed to pay bills, etc.

      Moreover, individual citizen, business, organization, local government, etc. accounts* at the central bank itself would be a natural check on bubble blowing by the banks since bank runs would be very convenient – just write a check to your central bank account and reserves would be transferred 1-for-1 out of the commercial bank, etc. account at the central bank to your own account at the central bank.

      *And since accounts at the central bank are inherently risk-free, there would be no need for deposit insurance either.

    50. John G says:

      gwana says:
      Wednesday, February 24, 2016 at 20:10
      Confused by John G’s comment about Ukraine – did you not notice that Russia invaded and is still running half of it…?

      I think you’ve been grossly misled by the media. There was no invasion and there are no Russian troops in Ukraine. You can relax on that score.

    51. Michael Bruce says:

      I think John G must be living in a parallel universe. For those interested in the extent of Russian military intervention in the Ukraine there is a useful article in Wikipedia.

    52. John G says:

      Michael Bruce.

      The media espouses neoclassical economics as reality too. Deficit spending will cause the sky to collapse etc.

      It pays to be skeptical and look for empirical evidence. In its absence one must conclude that the accusers have some other agenda.

    53. Jim says:

      “In terms of voting, I’m very tempted to vote to exit. The one thing keeping me from doing so is that it would seriously screw over all the Europeans that I know in London who have fled austerity to try to build a life for themselves here. They would have to go through the visa program which is a total meat-grinder.”

      If they’re already living or working here, their rights to do so will continue no matter which route out of the EU the UK takes. Their rights were acquired under the laws in operation at the time, and therefore in law those rights can’t suddenly vanish just because we leave the EU. The same goes for UK people who live/work elsewhere in the EU.

      This is just another one of the scare stories, like the ones about how we’d have to pull out of Europol, Erasmus and the like. Countries that are outside the EU already have participation in these and other programmes. They’re just agreements and can be kept in place after Brexit with no difficulty whatsoever. But the most important thing to remember is that there is, in law, a presumption of continuity for acquired rights for those living/working in each other’s countries.

    54. Jim says:

      “Well, I did say I’d be voting to stay whilst holding my nose.”

      There’s no box on the referendum for that. You’re either endorsing the EU as it is now and in the future, and the UK’s membership of it, or you’re withholding your democratic consent. Holding your nose doesn’t change a thing. If you consent, you consent.

      “I’m certainly not fine with the various undemocratic mechanisms the EU has.”

      If you consent, you’re fine with it. They won’t interpret your vote any other way.

      “Although to its credit when I cast my vote to elect my share of 7 MEPs it’s the only time I get to vote under proportional representation, so in that sense it’s more democratic than elections to Westminster.”

      No it’s not, because Westminster used to make the laws of this land, whereas the EU Parliament doesn’t make the laws of the land. The Commission does, and you don’t elect them. You’re claiming that the process produces the democracy even though you’re electing people who don’t run the show. The ones who run it aren’t elected and haven’t asked your permission or given you a prospectus and asked you for a mandate. That’s your idea of democracy? That’s what you’re willing to endorse?

      “I don’t see the EU as a dictatorship – more a bunch of self-interested neoliberal elitists. No different to our government.”

      They do have that in common, but you’re confusing people with structure and constitution. The EU was designed from the start to be unresponsive to your wishes, and my wishes, and everyone else’s wishes. Why would you want to be part of that when it’s taken centuries/millennia to get some semblance of democracy in the first place? You’re taking us backwards. Holding your nose doesn’t take you towards democracy, it empowers unelected Commissioners to be your ‘Cabinet’. If that’s what you want to endorse, fill your boots. They will take it as endorsement of the EU as it is and as it will become, not as you wish it to be. I could hold my nose as I do your household chores for you, but I’d still be doing your household chores for you.

      Note that you haven’t been asked to vote on what the EU will become, and you never will be, nor will your elections to the EU Parliament produce a democratic organisation, no matter how much representation of your proportion you are given.

      The EU and its previous incarnations have been going since the 1950s and not once have the public been asked whether they’d like this organisation to exist, what they’d like it to be, how they’d like it to be constituted, and what they’d like it to do.

      You’re writing them a blank cheque and hoping they won’t cash it.

    55. Jim says:

      There are quite a few comments on this blog from people who think that economics comes first.

      Some seem to think that momentous, historical, constitutional-level decisions about whether to stay in the EU or leave it should be based on whether MMT will or won’t be adopted as a result, or that economic/monetary policies in general, rather than MMT per se, come first, whilst others just think that limiting the Conservatives or keeping Scotland in the UK is more important than their country’s constitution, sovereignty, and democracy.

      I realise that this is a blog for economics enthusiasts but it’s disturbing to see so many people put economics before constitutional matters, sovereignty and democracy. Are you really sure? Are you? Really?

      This really is quite depressing.

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