The United Kingdom and Europe are in the midst of a crisis that can destabilize the region and rock the world. A movement, (BREXIT), is in full flight to take Britain out of the European Union that could have paradigm changing consequences. In this day and age of instant communication the whole potential train smash that is being played out in slow motion has almost been totally ignored by the media in the USA.
This state of affairs is also indicative of the current place the United Kingdom occupies in the American psyche. Other than in financial circles, the crisis labelled BREXIT, hardly registers on the radar screen. What’s a crucial issue for Britain and Europe no longer seems to fuzz the American populace that till very recently spoke so fondly of their brother nation across the pond. It really does not seem so long ago when George Bush and Tony Blair decided that they would, rather than hang alone, would hang together over Iraq. There are plenty of reasons for the apparent American disinterest but before going there Jay H. Ell better explain what BREXIT is before he loses the bulk of his readership, which is American.
BREXIT
BREXIT, (Britain exit the European Union), is the acronym given to the referendum that the British peoples are holding on June 23, 2016 to decide whether or not to remain in the European Union, (EU). The latter is made up of 28 European nations that form a sort of loose federation. There are four essential areas of cooperation to the Union that allow for a free flow of workers, goods, capital and services. The EU is managed by an independent bureaucracy in Brussels and that is big part of the problem. The British Prime Minister, David Cameron, recently exacted concessions from the EU but those that want to exit are still not mollified. The concessions related to less benefit payments to migrant workers, the protection of London as a financial service center, the maintenance of the pound sterling and the ability of fifty - five percent of EU nations to block any EU legislation.
Now the British population are split down the middle on this issue. The hierarchy of the major parties are all in favor of remaining in Europe but there is wide spread resentment at “being told what to do by Brussels”. Much of the opposition to the EU, however, as one might guess relates specifically to immigration issues.
BREXIT AND OBAMA.
As far as the US administration is concerned the UK is far better off in the EU. Obama spelled it out on his recent visit to the country. America has elaborate and comprehensive trade deals with the EU and the POTUS made it quite clear that the US would put the project of renegotiating these with Britain, “at the back of the line” should they exit Europe. There were reasons for Obama’s out of character intemperate statements. He has high ratings in the UK and maybe he was doing an old friend a favor by backing a position which is obvious in most circles of power throughout the world. Next he has defocussed from Europe period - Blog: “Onward Obama’s Brave New World”. Finally, Obama is the first modern era President who does not have his roots in Europe - his are African and Asian. In short America sees the new world axis being the Pacific Rim and the Americas where all the potential growth is. However, first and foremost, Obama has to be more aware than anyone else of how BREXIT could destabilize the world’s economy.
BREXIT AND THE US FINANCIAL CIRCLES
The American financial circles are extremely agitated about BREXIT and the impact of a vote to leave the EU. In the short term they are virtually unanimous that there will be a convulsion on the US and World financial markets. An exit will result in a precipitous drop initially. In the long term the Fed Chairman Janet Yellen who has been positive about the US economy has forecast that the that the shock will have profound effects and this would be one of the factors that her Board would take into account whether to raise interest rates or not. It would be hard to imagine BREXIT not creating a chain reaction as the financial markets are so linked in the global economy. Much of the USA business activity would leave the UK. For example, J. P. Morgan has indicated that they will scale down their London operation markedly in the event. J. P. Morgan is not alone according to The Washington Post. US companies employ a million people in the UK and the US is it’s largest investor of over a half a trillion dollars a year. The corporations otherwise operating in London are doing so as the UK are in the EU. American corporations are donating heavily to fight BREXIT.
There is a minority view however who maintain the US, in particular New York stand to gain from BREXIT. London is a world financial center but BREXIT will reduce it’s influence and the business will end up in New York. Finally, there are those that believe when it all washes out and it will take a few years to do so the whole hullabaloo will turn out to have zero impact on the USA.
BREXIT AND THE US BODY POLITIC
The fact that Trump has not tweeted about it means that the media have not focussed on the issue. ( No further commentary is needed to the extent the media have sold its soul to ratings). In fact Trump has been so all absorbing that the citizenry and its media have all but ignored Obama’s reorientation of American foreign policy towards the East let alone his attitude to BREXIT. Trump’s neglect is incomprehensible in a way as the controversy is so much bound up on the question of immigration and immigration largely means “you know who” to “you know who”. Plenty of squealing is emanating from the BREXIT crowd on the immigration numbers and in many ways it has fueled their whole campaign. Cameron promised to cut immigration in 2015 to a net of a 100,000 but the figure was closer to 350,000.
One of the reasons Trump is not exploiting an event that is so much part of his narrative and one that his base can identify with is that he made such an idiot of himself on the London Mayoral issue that at end of the day he will just trade on the local xenophobia and miss out on any that might just be floating around in the United Kingdom.
AT THE END OF THE DAY
Although the Brussels bureaucracy has to be driving British society to distraction, in this day and age of globalization and breaking down of boundaries, Britain would be ill served going it alone. Also they will take a financial hit all over the show. With the efflux alone of the multinationals, who are in London because it is central to the financial world, the UK populace would take a knock. Local business, trade and the like not to mention the potential drop in property prices and in sterling would all be sequelae of the BREXIT decision. So while Britannia no longer rules the waves it should not waive goodbye to the EU. The International Monetary Fund, reflecting world wide concern believes that BREXIT would be “negative and substantial”. That is a masterpiece of understatement. It would be a disaster.
One can only hope sanity will prevail on Thursday. In fact the polls are turning and the bookmakers have dramatically shortened their odds on BREXIT triumphing. However, it is scant comfort to learn that the USA has not the monopoly on self destructive and insane constituencies.
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