The British are about to shake the kaleidoscope. Here is the W&Y’s guide to what the picture might look like when the pieces begin to settle.TM

IN?

The global financial markets may still be a little jittery but should calm down as the overwhelming reaction in that world will be one of relief. In the short term the slight dip in inward investment to the UK should end. There will also be a collective sigh of relief in capitals from Washington to Warsaw, but not in Moscow.

However…. The EU still may not survive in its current state.

The German and French response to the UK’s ‘difficulties’ with ‘Ever Closer Union’ may be to try and accelerate towards…’Ever Closer Union’. If so that will alarm the governments of several EU member states which have significant numbers of Eurosceptic voters. They can be expected to respond to that by demanding their own concessions from Brussels on the grounds that the British were given special treatment when negotiating membership terms ahead of their referendum campaign. Some might even go for their own referendums. Either way groupings of ‘Less Europe’ will emerge more clearly in the wake of the result.

In the UK the margin of victory matters more than it does elsewhere. A narrow victory may lead Prime Minister Cameron to attempt to heal the bitter divisions in his conservative Party by bringing into the cabinet euro sceptics such as Boris Johnson. Senior cabinet members who campaigned for the Out vote such as Michael Gove and Chris Grayling could hang onto their jobs. An extremely narrow victory could even lead to Cameron calling a general election.

A clear victory, say by 10 points or more, would allow the Prime Minister to take his revenge. Leading Out campaigner Boris Johnson could be kept outside of the cabinet which is where Gove and Grayling might find themselves along with other Brexiteers. Mr Cameron then would continue to try and reform the EU from the inside while reaching for his legacy – the man who kept Scotland in the UK, and the UK in the EU.

OUT?

The global financial markets are likely to be extremely volatile for at the least several days as confusion reigns amid much scratching of heads as to exactly what the ramifications will be. Eventually, when they realize the sky has not collapsed, there will be some settling down, but the voyage into the unknown will continue to affect the markets. Both sides are guessing how badly the UK and EU economies would be affected by Brexit and, depending on which is right, the effects will either be severe, or, minimal.

The politicians and lawyers will begin declaring their interpretations of Article 50 of the EU Treaty which sets out how a state leaves the Union. In this uncertain period the UK government will begin to outline which of various routes it wants to take. However, whichever it is, it is unlikely Mr Cameron will be Prime Minister as he will take the blame for calling what Remainers felt was an unnecessary gamble by allowing the referendum.

If there was a clear split in the vote in the UK, with the English solidly voting to leave and the Scots to stay, it is probable the push for another referendum on Scottish independence and subsequent application to join the EU will quickly gather pace. This would mean a very different legacy for Mr Cameron – the man who failed to keep the UK in the EU, or Scotland in the UK.

Leaving the EU would take up to 2 years during which time the UK would still be officially a full EU member, bound by its laws, albeit being simultaneously semidetached from the club. At the end of the process the deal thrashed out would be put to the European and British parliaments for approval.

The UK would try and negotiate a trade deal with the EU something which could take much longer than two years. There are various models including one which would mean the British could still benefit from the single market, but would remain bound by some EU laws including those on the free movement of peoples. Other models include a free trade deal trying to remove regulatory barriers and protectionist policies. This would be very complicated although its likely several European states would push the EU to accelerate the deal in order to facilitate efficient trading with the world’s 5th largest economy.

The thorny issue of immigration would also have to be sorted out within two years. If London did not allow EU citizens complete freedom to live and work in the UK Brussels would retaliate in kind.

The EU states would watch, and involve themselves, with intense interest in how the UK performed outside of the Union. Over the next few years any sign that it was flourishing would strengthen the possibility of other states holding their own In/Out referendums.

Either way, the Union itself would be diminished. It cannot lose its second biggest economy, and most powerful military and be otherwise. The loss of the UK would strengthen the German/French dominance of the EU which would cause regional groupings such as the Nordics and the Videgrad Group to come closer together to block this. This would also diminish the EU’s political clout.

SHAKEN ALL ABOUT?

The above is why our politicians tells us this is an epoch making vote. Whatever the result the effects, other than on the financial markets and on politician’s careers, will not become clear for months, possibly years. But they will be of great consequence.

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19 Comments on "The Day After the 23rd"

  1. mahatmacoatmabag | 22nd June 2016 at 10:24 am | Reply

    I have my fingers crossed for a Leave victory tomorrow & for me the best outcome even if its a narrow win or narrow loss will be the ultimate demise of the EU as a political force forever. Leaving the EU means shifting our trade to outside a low-growth, protectionist bloc, controlling our own borders & setting our own immigration policies. Remaining means slowly suffocating under bureaucratic political dictates, over-taxation and socialist regulation stifling all innovation & personal liberties, the loss of national identity under the forced imposition of third world immigration & non-Judaeo-Christian values and the ever increasing tempo of the destruction of family values by the Godless heathens of the Left. Tomorrow I will proudly be voting Leave, my head held high, my conscience clear.

  2. I would say that I’m praying for a Remain vote tomorrow but I don’t believe in that superstitious nonsense.

    I am trusting instead in Reason. I’m hoping that the British people look at the evidence that’s been presented by the experts and aren’t led by the deceptive rhetoric of the Leave campaign and a man who has used the EU issue to mount his own quest for power. This is not a time to be handing control to nationalists of any kind or those over to the hard right. This is not the time to subject ourselves to people who believe in the market so utterly that they’d make life a Darwinian struggle. This is the time for moderate voices to win the day.
    The EU might not be perfect but its imperfections are caused by human hands and human hands can fix them. The alternative is to see Europe fracture into nations which would soon be at each other’s throat, surely to the delight of Putin and his newly dominant Russia. A Remain vote, though couched in doubts and caution as it should, is a vote for progress and unity. Choosing to leave is to take the gamble that destabilizing our current system will eventually produce a better equilibrium in the future. However, history has taught us that it much prefers chaos. That chaos won’t happen on Friday morning or even after a hundred Friday mornings. But I do fear that in ten or twenty years we might look back and realise that this was the time when things began to unravel.

    • The problem is that the human hands on the controls don’t want to fix it and the only way that attitude will change is if they are faced with some sort of calamity. That may not be Brexit, it could be a victory for Marine Le Pen next year or a far right party gaining a large amount of seats in Germany but the longer the EU and the governments of Europe ignore large swathes of their voters the more those voters will be likely to countenance extreme politics as the answer to their problems and the worse the eventual outcome will be. A remain vote will be taken as a ‘carry on as you were’ vote by the EU commission and why shouldn’t it be.

      • Very true but I don’t think Brexit is the answer. The only way I’d approve of Brexit is if it could be the kind of Brexit that BJ was hinting at when he launched his campaign. Brexit as a means for a renegotiation. Howard Jacobson was on Newsnight last night and put it well when he said that the problem is the ‘in’/’out’ nature of the referendum. Most of us, except for some obvious ideological zealots, are neither entirely in nor entirely out. We’re in the middle somewhere but are being forced into these hard positions which lack nuance. You and I would probably agree on many things but, when it comes to the vote, we find ourselves in rival camps. I am now firmly for Remain but it’s been long months of reading and thinking about Europe. My firm Remain still means that I have problems with Europe. And that’s what annoys me the most, I guess. The lack of nuance to so much of the debate. Just saw the Mac cartoon in The Daily Mail: a family in a bunker, list of EU regulations on the wall. Cell door opens and it’s a sunny paradise beyond. Dumb propaganda. It would a great cartoon instead of mediocre if on the other side of the door there was another cell, just with different furniture. That’s generally how I see this vote. I do, however, think the dangers are greater if we leave than if we stay and use the closeness of a Remain victory to force Europe to change.

        • Yes, another cell with different furniture just about sums up the choices in every western democracy nowadays, no one to blame but ourselves for that.

  3. I can’t see Cameron surviving long either way. While Tory backbenchers have proved to be utterly gutless in the past when it comes to converting their grousing about a leader into action, this time they must realise what a liability he represents. The same economists that Cameron puts such store in are predicting a further slowdown in the world economy and how this will play out for him will not be good. Every job lost, every new law good or bad that emanates from Brussels and every piece of data that says living standards are falling in real terms will be put down to the decision to remain, and who led the campaign to remain….. This for me is where Corbyn has actually been quite smart, he has paid lip service to remain but is not associated directly with the campaign. I’ve changed my mind about the future of UKIP who I initially thought would fade away after the vote. Given how high feelings have run in this campaign and how polarising it has been, if it is a remain vote I can see them substantially increasing their share of the vote as the SNP did in Scotland on defeat.

    • Only aren’t UKIP facing the problem of their older demographic getting smaller year upon year? The young are voting in favour of Remain, which is another reason to vote for Europe. Seems inherently unfair to burden a younger generation with an arrangement they don’t want.

      • The increase in support for them over the last 5 years suggests the opposite David. I have found that as people get older their attitudes harden markedly so I think there will always be a large older demographic with conservative views, after all todays old people were the youngsters of the 60’s who had no time for conservative attitudes. I have to say I did argue a few months ago that I thought that UKIP would be finished and the vote would put the EU issue to bed but that was before I saw just how divisive this vote has been and realised just how disenfranchised a lot of people will feel on a remain vote, especially if the remainers decide to engage in triumphalism.

  4. Peter Kennedy | 22nd June 2016 at 4:05 pm | Reply

    Where will I be for the next five days? At a ham radio event in Friedrichshafen surrounded by Germans, Austrians, Spanish, Poles, Brits, Italians, French, Croatians, Hungarians and a subtle sprinkling of the rest of humanity. The wine and beer will flow, the air will carry the scent of barbecues and the company will be pleasant. We may even get some sunshine.

    Remain or leave, I just hope that it stays peaceful whilst those of us who believe in the European dream carry on living it.

  5. Lesley Lubert | 22nd June 2016 at 4:30 pm | Reply

    Whoever wins tomorrow (result may not come in completely until midday Friday)
    Politics in this country will never be the same again. I think the Labour party will eventually be much diminished, the LibDems are already decimated, there will be a new middle ground party, one the electorate can have confidence in to represent their interests.

    All is conjecture in any event, on both sides.

    I haven’t heard anyone talk about what would happen if we vote to remain, and other countries such as Denmark, Holland, Spain and Italy, decide to leave (a real prospect, since the EU is a failed state).

    Greece is bankrupt already, others are in danger of following.
    We will be left holding the proverbial baby financially, if this were to happen.

    When we joined the EEC (we have never joined the EU; we signed several treaties.) it was sold to the British people as a trade agreement, between a small number of European countries.

    It has as we know, grown out of all proportion and morphed into something very different indeed. None of us agreed to this, but of course it is up to the government of the day, as to what treaties they sign up to. Undemocratic to say the least.

    There is so much corruption in Brussels, it is impossible to fundamentally change the EU. A bit like asking Sepp Blatter to fix his own corruption in FIFA, it ain’t gonna happen.

    As to Cameron’s deal or no deal, it hasn’t been ratified in any way as yet, and only one vote has to go against him for it to be thrown out.

    There is only one solution disband the EU altogether, therein lies a massive problem, what about the vast sums of money owed to the ECB and the IMF, by Greece and eastern bloc countries et al.

    If something isn’t working the worst thing you can do is latch onto it for dear life, you have to know when to let go.

    Sometimes you have to lead the way, for radical changes to come, I believe (in my humble opinion) that time has come.

    David Cameron and George Osborne, are finished however this pans out, because they have misled the British people, and there are enough MPs willing and able to carry a vote of no confidence against them.

    Banks and big business follow the money, they will not invest in a failing € they will invest in £. Yes adjustments will have to be made, but I am sure there will be no Armageddon, no one in the EU will want or can afford for that to happen.

    Tomorrow is either Independence Day or a day of Titanic proportions.

  6. nehad ismail | 23rd June 2016 at 8:58 am | Reply

    I am not agonizing over the big issues. My simple formula is this:
    Do you trust the likes of Boris Johnson, Michael Gove, Nigel Farage or George Galloway?
    If yes; then vote to Leave the EU
    If you don’t; then vote to Remain in the EU.

    • You could easily reverse that formula though Nehad.
      Do you trust David Cameron, Tony Blair, George Osborne or Peter Mandelson?
      If yes vote to remain
      If no vote to leave.

      • Doesn’t really make your case though, Rob. I’d *much* rather trust Cameron, Blair, Osborne, and Mandelson over Johnson, Gove, Farage, and Galloway. In terms of being the lesser of two evils, the former evils win by quite a margin. Add in Priti Patel, IDS, and John Whittingdale and you have quite the toxic brew, even if Remain had Bob Geldof who, I admit, goes quite a way to redressing the balance.

        • That does show how polarising this debate has been David. If I had asked you 6 months ago whether you trusted Tony Blair or David Cameron over Pinocchio you would have said no. Lets face it none of them are trustworthy and to try to pick who is the least trustworthy is a fools errand. I put my hands up myself, I find myself in bed with a whole load of people that make me cringe to be honest, I’m voting the same way as my in laws for heavens sake!.

          • A bit but can’t say it’s been quite that bad, Rob. I mean: yes, I agree that I have big doubts about many politicians. They are like all of us, a mixture of light and shade. However, the Leave campaign from the beginning were a pretty good selection of the people who I really do despise the most in politics. Not so much Johnson (a complex figure whose humour makes up for his many sins) but Gove, IDS, Patel have always been the three people who make my skin crawl. In fairness, Gove has improved his standing. I don’t buy into IDS’s repentance given the pain he has caused in our country (and my family) and Patel remains the person I described back when I first became aware of her climb up the greasy pole. Not all Leavers are in my ‘disliked’ list but I’ve noticed, watching Remained appear on TV, that I’ve repeatedly thought ‘oh, that’s good! Another of my favourite people and we’re on the same side’. Can’t say I can recollect a single moment when I’ve been disappointed.

  7. mahatmacoatmabag | 23rd June 2016 at 9:25 am | Reply

    Where I live we have had a thunderstorm & its been raining but the wife & I went and cast our votes to Leave the EU and as I put my X on the ballot I’m sure I saw a ray of sunshine, at least it was a feeling of sun & warmth that I got inside my heart. God bless the UK, a UK free of EU tyranny !

  8. Thanks Rob, I think David provided the answer.

  9. mahatmacoatmabag | 24th June 2016 at 9:49 am | Reply

    Tim its now the day after !

    Last night I went to bed disappointed & with the bitter taste of defeat in my mouth but this morning I have woken to the sunshine & sweet taste of a victory of historical magnitude !

    Agincourt, Trafalgar, Waterloo, El Alamein, Normandy and now Brexit , great British victories ! The EU common purpose Socialist Elites have been defeated, today the death knell bell of the EU has rung & shortly the sound will reverberate around the world as the Marxist dream of Empire begins to collapse on its own putrid corpse .

    Today is our Independence day, today is a day for celebration, then we must put our shoulders to the wheel & get on with the business of a successful Brexit negotiation and ensuring our countries future.

    The Pound & the markets will recover, exports are now cheaper, holidays abroad more expensive for us but much cheaper for foreigners visiting the UK and the UK tourist sector is a big chunk of our economy.

    June 2016 – Brexit Victory & November 2016 – Trump Victory. Victory against all the odds !

  10. Well the first three paragraphs of the OUT prediction already have ticks against them, carry on at this rate Tim and you will be having to change your name to Nostradamus. Nostradamus Marshall, has a nice Yorkshire ring to it don’t you think.

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