Another new Brexit thread

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Saddleworth2 said:
I watched the second presentation. A German with a sense of humour! I liked his metaphor about monopoly, that was certainly me as a child.

Whilst I found some of his anecdotes a little difficult to believe - the President of the Bundesbank needed an economist to tell him what an asset item on his balance sheet was - really, I found it an interesting presentation.

Target 2 was never intended to be used as it is being. It was supposed to be a relatively simple RTSG system facilitating payments between Euro central banks. I would be lying if i claimed to know about this previously and all the times I was genuinely asking for reasons to support Brexit you had this up your sleeve ;-). Having read a bit more about the issue this morning, there are a range of views amongst German economists about just how serious this is, but from my relatively noddy appreciation of macro economics it is a shitty stick and I can well understand how it would form a strong part of a brexit case. That this is the first time anyone on here has raised it makes me think it is not widely known.

I also found this paper which I thought was helpful

https://www.cass.city.ac.uk/faculti...t-system-keeps-the-euro-project-alive-for-now

a couple of extracts:
How much longer will Germany’s hard-working, inflation-averse population tolerate paying for other countries’ excesses? There is considerable anger across the Eurozone’s largest economy, even though most voters don’t know the half of it. Obscure data shows that under so-called Target2 operations, the ECB’s intraeurozone payments system, the Bundesbank is owed a mighty €620bn by other member states. This stealth bail-out dwarfs German’s covert contributions to previous Eurozone rescues, which themselves provoked bitter public criticism.

More recently, Evans-Pritchard wrote:
Vast liabilities are being switched quietly from private banks and investment funds onto the shoulders of taxpayers across southern Europe. It is a variant of the tragic episode in Greece, but this time on a far larger scale, and with systemic global implications. There has been no democratic decision by any parliament to take on these fiscal debts, rapidly approaching €1 trillion. They are the unintended side-effect of quantitative easing by the European Central Bank, which has degenerated into a conduit for capital flight from the Club Med bloc to Germany, Luxembourg, and The Netherlands. This 'socialisation of risk' is happening by stealth, a mechanical effect of the ECB's Target2 payments system. If a political upset in France or Italy triggers an existential euro crisis over coming months, citizens from both the Eurozone's debtor and creditor countries will discover to their horror what has been done to them.

I thought the papers conclusions summed their findings up very succinctly:

To conclude, the answers to the four specific questions asked at the beginning are:
• No, the Eurozone is not an Optimal Currency Area. This is because it does not satisfy the conditions for monetary union. These conditions can only be satisfied if the Eurozone adopts fiscal and political union by becoming a federal state.
• The euro can therefore survive only so long as Germany, in particular, continues – albeit reluctantly – to finance the balance of payments deficits of other Eurozone members, in particular, Italy and Spain. This requires it both to recycle its trade surpluses back to countries with trade deficits and to be the main recipient of capital flight from Eurozone states with weak and weakening banking systems.
• Target2, the apparently innocuous Eurozone payments system, is critical to facilitating the payment flows between surplus and deficit countries. The Target2 credits of countries such as Germany almost exactly match the balance of payments deficits of countries such as Italy and Spain. Since these deficits can never be repaid, the euro can only survive if Germany, in particular, agrees to mutualise Eurozone debts so that the Eurozone becomes a transfer union.
• Political union together with a common fiscal as well as monetary policy is the only realistic way of saving the euro in the long term and avoid further failed rescue packages.208 This is, of course, what Europe’s political establishment wants and has been preparing for since the days of Jean Monnet, but it is not obvious that this is what the people of Europe want. However, given the size of the Target2 imbalances, it is also conceivable that the Eurozone will not survive and will eventually break up; this becomes more likely if political support for the euro project, particularly in Germany, begins to wane.

Target2 is indeed the silent bailout system that keeps the euro afloat – for now.

If Italy were to trigger a new Euro crisis, the only two outcomes would seem to be the collapse of the Euro project (and Brexit or not we would not come out of that unscathed) or the final push of Euro states into a single political and fiscal union where all financial power would lie in the old Germany. Given the cultural differences, I would say option 1. is the far more likely.

So thanks for posting. It has shifted my thinking a little and I will follow this with interest. For fellow 'remainers' please correct me if you think I am missing something here or overstating the importance of the issue.
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@jaseirai

This was the only 'thoughtful' response from Remainers that I could find - generally, as another poster observed:
Bovril said:
The silence is (was) deafening.
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Ifwecouldjust....... said:
Ahhh the handbrake on immigration. He wasn't told to fuck off... he was told to apply the rules that were in place.

As we are not in the Schengen Zone ... the UK only subscribed to Freedom of Movement of Labour, which means that

1. We could've requested evidence of employment (a job offer in writing ) at the border.

2. Or evidence that the individual was self sufficient with income of £18,500 or more per annum.

3. If the individual became unemployed for a period of six (I think might be 3) months or more with no reasonable prospect of finding a job , they can be asked to return home.

Unfortunately the UK did not have the infrastructure at the border and having outsourced BorderForce to G4S in 2012 (after they had fucked up the security at the Olympics and still trousered all the cash) who didn't have the staff or the requirement in the contract to do the extra work.... so nothing happened. Well it did in a way T. May

a. put vans on the streets telling people to go home

b. In 2014 amended the laws on deportation ( UK Borders Act introduced by Labour in 2007) to make them tougher by including automatic deportation for anyone who has committed a criminal offence with a penalty of imprisonment of 12 months or more.

b. has its own problems because the change to the law was not widely advertised and therefore did not act as a deterrent but has been used extensively by Patel. Including deporting people to the West Indies who have no family there and left 40+ years ago at a very young age.

This has led to a clogging up the courts and as you have probably read recently , protests at airports to stop the deportations. A number of cases are being heard by the ECHR.
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Totally correct. The rules were already there, the government wilfully ignored the rules to further their agenda.

Also Patel's deportation flights, the one that was due to leave on 2nd Dec had 36 people on it, 23 of those were removed from the flight because Judges considered the argument for them leaving required further scrutiny.

There is without doubt a section of brexiteer's who have used brexit to further their racist agenda. As James O'Brien says, "not everyone who voted for brexit is racist, but every racist voted for brexit"
 
Guy (Wilkinson?) who wrote May's "no deal is better than a bad deal" speech on radio 4 saying they didn't expect the EU 27 to maintain unity in negotiations.

Brexit is "Emotions versus economics" says another guy who negotiated Canada's EU deal.
 
Rascal said:
Totally correct. The rules were already there, the government wilfully ignored the rules to further their agenda.

Also Patel's deportation flights, the one that was due to leave on 2nd Dec had 36 people on it, 23 of those were removed from the flight because Judges considered the argument for them leaving required further scrutiny.

There is without doubt a section of brexiteer's who have used brexit to further their racist agenda. As James O'Brien says, "not everyone who voted for brexit is racist, but every rac
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Rascal said:
Totally correct. The rules were already there, the government wilfully ignored the rules to further their agenda.

Also Patel's deportation flights, the one that was due to leave on 2nd Dec had 36 people on it, 23 of those were removed from the flight because Judges considered the argument for them leaving required further scrutiny.

There is without doubt a section of brexiteer's who have used brexit to further their racist agenda. As James O'Brien says, "not everyone who voted for brexit is racist, but every racist voted for brexit"
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Correct , brexit became the respectable facade for that element in society to hide behind .
 
mcfc1632 said:
@jaseirai

This was the only 'thoughtful' response from Remainers that I could find - generally, as another poster observed:
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There is an answer to the issue which seems to be debt mutualisation.
That appears to be the agreed way to go following the agreement of the rescue package. Think it might be useful to give a little detail of the scope and size of the package that has been agreed covering as it does COVID support, the MFF, digital transformation and new environmental targets. Pretty ambitious. I have extracted from a couple of articles from World Finance and Politico.

“The French-German [proposal] broke two fundamental taboos: it opened the possibility for European governments to engage for the first time in massive joint borrowing, and sanctioned significant fiscal transfers between its member states.”

The €750bn ($853.6bn) recovery fund, aptly called Next Generation EU, incorporates the essence of the French-German proposal and also adds ideas from countries that are less enthusiastic about shared debt. Michael Hüther, a German economist and director of the German Economic Institute, told World Finance: “The commission’s proposal clearly bears the signature of the German and French Governments, as it includes a high level of transfer.

grants will not be used to finance existing debt, for example. Its timing and innovative set-up, however, has boosted the hopes of Europhiles that something bigger is in the works. Bonds will be issued in the name of the EU, while the commission will oversee fund allocation. For over-indebted countries with volatile sovereign credit ratings, this will be a boon, as the bonds will have the coveted AAA rating that puts them into the ‘safe asset’ category. But Hüther believes the impact on the EU’s coffers remains a concern: “The repayments will place a heavy burden on the EU budget for many years, from 2028 onwards.

EU leaders agreed early Tuesday on a groundbreaking plan to jointly borrow €750 billion to respond to the coronavirus pandemic, which has killed 135,000 people around the bloc and sent economies across the Continent into a tailspin.

The EU's recovery fund, to be composed of €390 billion in grants and €360 billion in loans, will be attached to a new €1.074 trillion seven-year budget, the Multiannual Financial Framework (MFF), on which heads of state and government also reached unanimous agreement — bringing the total financial package to €1.82 trillion.

European Council President Charles Michel heralded the agreement with a one-word tweet: "Deal!" he wrote.
"Good morning everyone," Michel said at a press conference that started just before 6 a.m. "We did it! Europe is strong. Europe is united!"
“We have demonstrated that the magic of the European project works because when we think that it is impossible there is a spring in our step thanks to respect and cooperation,” he added.

Supporters of the plan say it is a hugely symbolic demonstration of solidarity in response to the pandemic and accompanying economic shock.

So what does all this mean? Well it does mean another further step towards fiscal integration, that is very clear. From 2028, EU members will have to start making contributions towards the mutualised debt based on the larger economies making the larger contribution.

Before anyone throws up their hands in horror, the UK has something very similar going on, its called the Barnett Formulae where payments are made each year on a per capita basis by every region of the UK towards the UK debt interest. Mutualisation without any heed to the ability to pay and one of the reasons why Scotlands deficit is what it is.

For me its a natural next step for the EU and one I would have been happy to support had we been a member.

From here is it a large step to believe that the Target 2 issues will be resolved through similar means. Indeed, having reread the original paper that brought the issue to my attention I see that is exactly what it foresaw but caveated that with a view that members would never agree to such a thing. As Steve Matin once said, Oh Reallllyyyy.
 
Mon Autre said:
We were offerened more concessions currently enjoyed by other countries. It was probably the best offer and the best outcome to UK citizens we've had available to us since all of this started.

People need to realise that a good trade deal with the EU, whether we're in or out of it, will mean abiding by some of their rules. We used to have a say in those rules, now we don't and we stand to lose a lot much more than them in this ridiculous game of brinkmanship.

It's almost as if the the main architects of Brexit wanted this to happen all along.
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Correct, we used to have a say in those rules. Then as time went on our membership and voice became less important to the more dominant figures in the EU. Our objections became ignored, our interests were subsided and we found ourselves disagreeing more and more.

Our departure became a question of when not if.
 
Mëtal Bikër said:
Correct, we used to have a say in those rules. Then as time went on our membership and voice became less important to the more dominant figures in the EU. Our objections became ignored, our interests were subsided and we found ourselves disagreeing more and more.

Our departure became a question of when not if.
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I'd be interested to see your assertion backed up with facts ?
 
dave_blue12 said:
I'd be interested to see your assertion backed up with facts ?
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fullfact.org

EU facts behind the claims: UK influence – Full Fact

In partnership with experts at the UK in a Changing Europe project, we've taken a look at the facts behind the claims on the UK's influence in the EU.
fullfact.org fullfact.org

Go nuts, but do be sure to read the WHOLE thing before responding, so as to understand the context of the point being made. ( I can already tell which paragraphs you'll quote and which you'll ignore, you see. You need to read the whole article)
 
gordondaviesmoustache said:
That’s far too simplistic. I know people who are racist who voted to remain for reasons of economic expediency.
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It may be simplistic, but i reckon it is broadly accurate although there will be exceptions as even racists can of course care more about economic expediency than having a Somalian neighbour.
 
gordondaviesmoustache said:
That’s far too simplistic. I know people who are racist who voted to remain for reasons of economic expediency.
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Thank you

It really does not help that some people in positions of influence - like JOB - and people that listen to him and other sources, continue to peddle that narrative

Surely, the only purpose in doing it can be to seek to associate Leave and Leavers to having Racists views/tendencies
 
Ifwecouldjust....... said:
What requests?
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Ahead of the referendum Cameron requested some concessions providing greater flexibility for the UK which may have helped avoid the referendum and leaving.

Herr Merkel the famous "libertarian" ignored these requests and sent Cameron packing resulting in a referendum. The trollop has taken an authorities stance on EU policy for years, I don't recall anybody in the UK voting for him (sorry, her).
 
jaseirai said:
It really isn't random shit. If you are interested, this explains it better than I can.

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Are you going to quote any of my posts where I’ve denigrated the armed forces to prove your earlier slur?

As for the video, it is a good explanation of the clear flaws of the Euro. It explains how the Bundesbank could become insolvent if a number of things happened, not that the Bundesbank actually is insolvent. It is also great justification of why the fact we didn’t join the Euro was a very good thing. The thing that you fail to mention is that TARGET 2 is a Eurozone problem. We were not and were never likely to be in the Euro when we were members. Leaving the EU on the off chance we might have been on the hook for Eurozone problems has created many more problems than it has solved. If the Euro crashes it will have a worldwide impact anyway. It’s hard to justify that being outside the EU would lessen the impact of this hypothetical situation more than the very real impact of Brexit that is happening now.
 
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