By John Richardson
THE above diagram is just a sample of the complexity facing Britain, the rest of the EU and the global economy following last Thursday’s victory by the Leave campaign.
And once you have studied the Credit Suisse diagram above, consider the following:
- Nicola Sturgeon, Scotland’s first minister, has suggested that the Scottish parliament could block legislation necessary for Britain to leave the EU. This follows the majority of Scottish people voting to stay in the EU, even though a majority Britons were in favour of leaving.
- A petition for a second referendum had gathered more than 3 million signatures as of Sunday evening UK time, even if some of those signatures may turn out to be fraudulent. The petition has been launched under the claim that, under EU rules, a second referendum should be considered by parliament as the percentage support for Leave was less than 60% on a turnout of less than 75% of Britain’s voting population. Even if some signatures turn out to be fraudulent, the petition is hugely ahead of the minimum 100,000 signatures required to trigger a parliamentary debate.
- We have yet to here in detail how the Leavers plan to manage Britain’s withdrawal from the EU. Is a coordinated, sensible plan even possible, given the differing objectives of many of the Leavers?
This has the potential to drag on and on and to become much more complex and uncertain over the next weeks, months and even years. It will take Britain at least two years to leave the EU, perhaps even longer, if that it is indeed what ends up happening. Meanwhile, anti-EU sentiment could cause major disruptions elsewhere in Europe.
How did this happen? Why we are where are today? It is because politicians and central bankers have failed to firstly recognise that the Economic Supercycle is over and to then do something about it.
I believe that people are directing the anger at the wrong things – e.g. the EU and immigration – because they face diminished economic opportunities.
To some extent in Britain, these reduced opportunities in large parts of England and Wales stretch back to as far as the 1980s.
But you can also point to the lack of credibility nearly all politicians suffer from following their failure to spot the Global Financial Crisis before it happened – and, as I said, their failure to understand that the Economic Supercycle is over. Both of these factors have also negatively impacted livelihoods.
And as a London taxi driver said to me yesterday, who in the end decided not to vote at all: “I don’t think many people believed all the dire warnings about leaving the EU because they don’t trust politicians.”
Sure, you can make the argument that in hindsight it was a very bad mistake to hold another EU referendum in Britain in the first place. But discontent would still have still have surfaced in some other very disruptive ways., even if the referendum hadn’t taken place.