What’s the view from the EU and the big deal about Brexit?
One of my favourite lines from the cherished Lord of the Rings trilogy is “things are now in motion that cannot be undone”. And so it is with Brexit, as clear as Gandalf the Wizard himself knew to be true, there would be war with Sauron and the UK will leave the EU in January 2020. With so much debate and opinion about the big event, it is difficult to remain unbiased. But for so long as we follow a few simple rules, it does become quite easy to see the forest for the trees. We will only look at the facts, make no assumptions and take no views. Seems simple enough, and so here it goes.
It is obvious, the EU will be smaller without the UK. About 60 million people and $2.6 trillion in GDP is leaving the bloc, but that leaves $16.2 trillion and about 460 million people. There are also many other countries from the Balkan region or the East that are willing to join the EU and some are already lined up for expansion. For sure, there is no sense of panic that the EU is now small by any means. It also remains to be seen what happens with Scotland and Northern Ireland, and all may not be lost.
What about trade? In 2018, the total trading volume between the UK and the EU was less than $500bn. Certainly large on an absolute basis, particularly for the UK as this represents about half of all trade, but not so much on a relative basis. The total global economy is worth about $80 trillion and the growth is coming from the large producers, as in China and the US or the population behemoths, such as India, Indonesia or Brazil. The world is a very big place and the EU as a collective is a very large player, whereas the UK is not.
If not in economic terms, what will then be the big effect of the UK leaving the EU? Power will naturally consolidate, with one of the more dominant players leaving the table. The two other largest economies and populations are France and Germany. It is their political alliance under the leadership of Adenauer, de Gaulle, Kohl and Mitterrand that the European project was put forth as a building bloc for peace and the establishment of a counterweight to the large powers of the US, China and Soviet Union (at the time). The UK has always been a third wheel in this relationship, as most aptly demonstrated by declining to join the common currency. It is difficult to see how the EU would not be stronger for it, now that the distraction of other interests have disappeared.
But what about the things that really matter, like travel from one country to the other? For the most part, the EU operates under the so called “Schengen-Visa”. It allows seamless movement between any of twenty or more countries, by alleviating having to wait in line to queue and having the photo page of our passport scanned through a machine, that is still mostly operated by a human being, on both sides of the border. Paradise indeed, yet the UK never signed up to that treaty either, so that won’t change anything. All in all, it seems much ado about nothing, save for the higher phone charges from roaming when we all travel.