DONALD TUSK : THE ONLY ALTERNATIVE TO A HARD BREXIT IS A NO BREXIT

 

Extracts from Donald Tusk’s speech 13/10/1016

” The threat today is that of the disintegration of Europe, in a political and ideological sense… It is no coincidence that very often those who question liberal democracy are the same ones who call for the break-up of the European Union. It is not surprising, since the Union is not only a political organisation which restricts national egoisms and eliminates violence as a basis for relations between countries, it is also a unique territory of freedom…

…Finally, let’s move on to Brexit.

…”As for the negotiations, the situation is pretty clear. Its framework will be set out by the European Council – that is by the guidelines foreseen in the Treaty. Our task will be to protect the interests of the EU as a whole and the interests of each of the 27 member states. And also to stick unconditionally to the Treaty rules and fundamental values. By this I mean, inter alia, the conditions for access to the single market with all four freedoms. There will be no compromises in this regard.

“When it comes to the essence of Brexit, it was largely defined in the UK during the referendum campaign. We all remember the promises, which culminated in the demand to “take back control”. Namely the “liberation” from European jurisdiction, a “no” to the freedom of movement or further contributions to the EU budget. This approach has definitive consequences, both for the position of the UK government and for the whole process of negotiations.

“Regardless of magic spells, this means a de facto will to radically loosen relations with the EU, something that goes by the name of “hard Brexit”.

“This scenario will in the first instance be painful for Britons. In fact, the words uttered by one of the leading campaigners for Brexit and proponents of the “cake philosophy” was pure illusion: that one can have the EU cake and eat it too. To all who believe in it, I propose a simple experiment. Buy a cake, eat it, and see if it is still there on the plate.

“The brutal truth is that Brexit will be a loss for all of us. There will be no cakes on the table. For anyone. There will be only salt and vinegar. If you ask me if there is any alternative to this bad scenario, I would like to tell you that yes, there is. And I think it is useless to speculate about “soft Brexit” because of all the reasons I’ve mentioned. These would be purely theoretical speculations. In my opinion, the only real alternative to a “hard Brexit” is “no Brexit”. Even if today hardly anyone believes in such a possibility. We will conduct the negotiations in good faith, defend the interests of the EU 27, minimise the costs and seek the best possible deal for all. But as I have said before, I am afraid that no such outcome exists that will benefit either side. Of course it is and can only be for the UK to assess the outcome of the negotiations and determine if Brexit is really in their interest. ..

WHERE NOW FOR THE UK AND THE EU AFTER THE BREXIT VOTE ?

 

“Financial Times/Bruegel European Forum:

Three months after the results of the UK referendum there is still a lot of uncertainty about the future. The Financial Times and Bruegel bring together a panel to discuss the most crucial questions.”

 

Panelists:

Lionel Barber FT Editor      Guntram Wolff Bruegel Director

James Blitz FT Editor           Sylvie Goulard  MEP 

SUMMARY

“Lionel Barber expressed the view that the Brexit vote was not a vote against globalization in general although direction and the rhetoric in UK politics have changed dramatically against it. James Blitz argued that Brexit supporters underestimate the extent of reduction in trade a hard Brexit would entail and overestimate the degree and speed with which trade deals with third countries can compensate for it. Sylvie Goulard emphasized that any future arrangement with the UK would have to fully respect each of the four freedoms of the EU. She added that the discussion is not specific to Britain, but pertains to a more general debate about the desirable degree of openness in society. She finally wondered whether domestic policy failures and the introduction of the euro contributed to the course of events. Guntram Wolff took the view that the future deal should strike the balance between preserving favourable outcomes for the citizens and respecting each side’s political principles. He agreed on the importance of EU-UK trade for both parties, and thus spoke in favour of maintaining the deep integration of goods and services markets, while reaching a compromise on free movement of workers with the UK, outside of the EU.

“In his second intervention, Lionel Barber drew the context for Theresa May’s recent speech at the Conservative Party Conference. He argued that she intended to address Brexit voters’ anxieties and pointed at her tenure as Home Secretary makes her sensitive on security and immigration. Barber concluded that, while whether globalization has peaked in Britain is an open question, certain aspects of it will not be complete. James Blitz agreed that domestic policy shortcomings contributed to the referendum result, adding that May’s post-referendum response has been to advocate a strong state to address them. The problem he sees is an intrinsic contradiction between that domestic policy vision and the strategy currently pursued, which is limiting the economic resources a strong state would require. Sylvie Goulard also supported the need for a balanced solution but insisted that supranational jurisdiction over the single market should remain a precondition for participation. Guntram Wolff, in turn, made two final points; firstly, he raised the prospect of policy dumping should the UK becomes estranged from the EU. Secondly, he argued that the depreciation of the pound should be seem as a correction, whereby the financial sector is shrinking, driving down the value of the currency and, thus, making British industry more competitive.”

HOW TO DESTROY THE CAPITALIST SYSTEM

 
Keynes on The Economic Consequences of the Peace:
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

“By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.”

 

Chart £ – $

Chart of exchange rate values over time

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