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If the UK manages to extricate itself from the rentier economy model it has pursued while an EU member, and adopt an industrial policy based on innovation and rising productivity growth, that could work.
Münchau has been hoping for this since the Brexit vote (before, he campaigned for Remain) it's taken him over a year to conclude that
The trouble is, I see no signs of that happening.
I think he still believes reversing Brexit would lead to violence. I suspect before he would have argued that the Norway option counted as reversing Brexit, politically. I guess by the time the second anniversary of the referendum comes around public debate in the EU will have shifted enough to make the EEA option acceptable. Maybe.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 8th, 2017 at 11:46:20 AM EST
[ Parent ]
Paradoxically a lot depends on how the UK economy performs in the interim. The Brexiteer's strongest argument ATM is that the referendum didn't lead to the immediate melt-down predicted by "Project Fear". In their eyes that invalidates all arguments that Remainers might put up now.

However the UK economy has been losing momentum for quite some time now without actually going into recession. If it does go into recession prior to March 2019, that could change the political landscape considerably, enough to make EEA acceptable, though probably not enough to actually reverse Brexit.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 11:58:12 AM EST
[ Parent ]
In hindsight, it should have been obvious that economic damage would begin with the Art 50 letter and not with the referendum.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 8th, 2017 at 12:15:22 PM EST
[ Parent ]
I was with Krugman on this, arguing any turnabout would be slow and incremental, and given the strong momentum the UK economy then had, might well take quite some time to become obvious.

I think "Project Fear" was overly influenced by the "confidence fairy" theory of economics - that a downturn in certainty would result in a down in confidence with immediate market and real world economic consequences.

Yes Sterling did devalue radically, reflecting such a loss of confidence but paradoxically also making the UK economy more resilient in the short term.

My concern was always more about investment rather than consumer confidence - all those businesses putting investment decisions on hold pending greater clarity, all the strategic focus being on contingency plans for a hard Brexit rather than current investment opportunities.

By definition, those effects would be slow, incremental, long term, and largely invisible until large scale relocation decisions actually come into effect.

We're only beginning to see those effects now.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 12:59:27 PM EST
[ Parent ]
May did make some noises about developing an industrial policy/strategy when she first became PM, but little has been heard of this since. Au Contraire all the signs are that the UK will double down on a rentier model, attracting hot money from dodgy regimes and Oligrachs all over the place, and engaging in regulatory arbitrage to keep the rich happy - a sort of Giant sized Jersey.

Speaking of which, has anyone heard anything about what will happen to jersey and it's extraordinarily privileged position post Brexit? Brexit seems like a good opportunity to wipe out some tax havens like Jersey, Isle of Man, Gibraltar etc. They make even Ireland look like a model of tax probity.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 12:09:37 PM EST
[ Parent ]
UK staked a claim in "Future customs arrangements, a future partnership paper" that The Crown Dependencies and Overseas Territories are not members of the EU Customs Union.
archived:Wed Aug 16th, 2017

Accordingly, Apple, for example, moved some its off-shore cash from Ireland to Jersey. This event came to light recently in disclosure of "Paradise Papers".
Apple used Jersey for new tax haven after Ireland crackdown, Paradise Papers reveal

UK finance market regulation has always been a joke. BREXIT portends greater difficulties for EU enforcement of its modest campaign to choke tax evasion and avoidance worldwide.

Diversity is the key to economic and political evolution.

by Cat on Wed Nov 8th, 2017 at 04:03:07 PM EST
[ Parent ]
I see no way to avoid violence at this stage. The idea that appeasing xenophobes will satisfy them is immensely stupid. The choice is whether to wreck the place and break some heads a little later or not wreck the place and have to break some heads a bit earlier.
by Colman (colman at eurotrib.com) on Wed Nov 8th, 2017 at 01:11:52 PM EST
[ Parent ]
Personally I think most Brexiteers are paper tigers huffing in their dotage. Pathetic armchair generals yearning for empire for the most part with no relevance to a modern economy...  Sure there will be a hooligan element who take advantage of any conflict to have a riot, but UK securocrats are past master at turning political protest into criminal activity so as to deal with it more easily.

The problem is more immediately political.  The Conservative Party might well implode, and at the moment Conservative Party interests trump all others.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 8th, 2017 at 01:51:09 PM EST
[ Parent ]

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