Brexit is just another example of what is happening to many liberal democracies worldwide. The ruling class capitulates to the monied class and alienates the working and countrified class to globalization and some of its negative consequences on those classes. Throw in the naivete of those classes to social media domestic and foreign influences and snake oil promises of a better working life with sovereignty and isolation and a rising tide of white nationalism, xenophobia, and outright racism naturally occur. The irony is that theses classes run into the political arms of the parties and influences that do not have their best interests at heart and instead use their social and cultural naiveté to further the advantages and wealth of the monied class under a banner of a fake populist agenda. This has definitely occurred in the USA, and having drank the Kool-Aid, these classes are not sophisticated enough to do an about face or a sufficient self examination without an economic upheaval of epic proportions. The rank and file of these classes will continue to follow any pied piper scenario in which they can maintain a past life, fear of the other, denial of the reality of globalization, and a hard reticence to enter or retrain in that world. As such, they will continue to scorn the intellectuals and scientists as elitist, believe in unicorns, and vote with the liars and money hoarders against their own economic and cultural survival.
2
@Ron Cumiford.
The ruling class may be more influenced by the rich, but in an intact democracy the "masses" are still heard. Media like Spiegel or Guardian point to the growing inequality in the UK as a main factor behind Brexit. What May called "burning injustice" was too much to handle for the Tories, a PM Corbyn - which appears possible in the next election - should do significantly better. For Europe's future not all signs are looking dim. I hope for more citizens' assemblies about major issues. Climate change can still be stopped...
1
That Eurostat manufacturing graphic doesn't reflect actual market conditions. Sales of EU manufactured goods are still up and rising. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Evolution_of_the_value_of_sold_production_for_top_5_manufacturing_activities,_EU-28,_2008–2017_(2015%3D100).jpg
1
Oh please. Individual member states of the EU don't get to rewrite the rules as they please.
5
It's the Irish border!
In 1975 I voted in a referendum to "stay in the European Community" in the hope that, by Britain remaining in that large union, that vile sectarian conflict could be brought to and end.
In 2016 I voted to remain in the E.U. convinced that doing so would help to maintain the Good Friday Agreement of 1998; as some of your readers might know, the resulting Power Sharing Assembly at Stormont has been suspended for 2 years due to a dispute between the political representatives of said sectarian divide.
3
This is a beautiful analysis, given the prospect of a hard Brexit on schedule. But the prevailing reality is that Brits generally don't want Brexit anymore! The polls have been against Brexit for months. And there's the simple solution: No problem. Just don't do it. There is absolutely no good reason to do it.
And we all should give more merit to the political dimension. The world isn't constituted by macroeconomics. Britain's leadership in the EU has never been more needed, now that Merkel is retiring, and peripheral members are dealing with ultra-nationalism.
A road to solution to those manageable problems that motivated the "Leave" campaign (in the middle of a recession that has waned) is a stronger EU (e.g., a formal constitution) in which Britain is a leading member. It's never been implausible that Britain's problems couldn't be solved within the EU, given effective leadership by Britain.
Come on, Brits: Get the second referendum done, forget Brexit, and remember that the instability that led to the "Leave" movement was partly inflamed by Putinists fooling around, just as they did in the U.S.
8
'And there’s no reason not to believe that things will in fact be worked out — no reason, that is, except everything that has happened between Britain and the E.U. so far.'
This could also be said about Trump's border wall and the shutdown. Nobody would have predicted the Shutdown either. Lets hope it ends soon.
3
There has to be some type of "law of unintended consequences" here. Fallout/Brexit.
2
I've been following the reporting on Brexit and I am baffled by the profound lack of knowledge on the mechanics of the European Union. Many smart people write a lot about the politics, economics and immigration aspects, but no one seems to clue in that at the basis lies a complex legal problem.
The United Kingdom essentially signed many contracts and agreements withl the EU and, indirectly, the other 27 countries or Member States.
The legal basis and foundation of the European Union are the four freedoms of movement of goods, persons, services and capital. This means that these 4 things must be able to move freely around and across the borders of all 27 countries. The European Court of Justice has basically clarified this through many court cases.
The United Kingdom doesn't like some of the EU laws and their real life consequences, which coincidentally, all of the other countries have to follow. So they essentially want out of the contract. But they still want some of the things that they do like, such as free access to the EU market. The issue really is, how can the United Kingdom and EU successfully disentangle themselves from 40 years of laws and legislation within 2 years?
11
If the EU hadn't insisted that the UK basically cede N. Ireland as an integral part of the UK and give them say in the rule making of that current British territory her plan might have had a chance.
The fact that she caved on that point demonstrated to the EU they were dealing with an inferior player on the other side.
She conflated getting a deal with success.
The result is a deal no one wanted, expected or asked for. The UK will pay the price for their naivety which is a strange thing to say for such an old nation. Yet today's article describing the ineptitude of the Brits ruling and governing class makes it quite appropriate.
The solution to the problem is still the same assuming the government wants to pretend the non-binding referendum was binding.
That is to lay out the choice as stark and exclusive to one another. It will be either a hard brexit or staying in th EU. There is no and never was an option that would allow the UK to leave the EU on equal terms.
Leavers lied when they claimed the cost of a hard Brexit to the EU would be enough to force the EU to give the UK what it wanted. That lie ignored the fact that as far as the EU was concerned what the UK wanted compromised the legitimacy and governing authority of the EU itself.
That being the case they could never offer what the UK leavers conned the public into believing it would.
The UK has to face the fact that one side will win. One will lose. There is no in-between.
4
"Part of the problem is that there don’t seem to be many rational actors out there. Much has been written about the fantasies of many Brexiteers; I don’t have anything to add to all that. But we should also note the fantasies of the Eurocrats, who have behaved at every step of this process as if Britain were Greece, and could be bullied into capitulation. Minor gestures could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way."
This only applies if your read of history begins in 2016.
Britain has NOT been treated with arrogance or determination to humiliate for pretty much all of EU history.
It's very much the opposite. There is no country for which the EU has bent more rules, given more special exemptions, and lavished with more presents than they have Britain. Heck, with their arrangement to save the pound, they basically had the best of both worlds, access to the entire customs union without being tied down by the euro. And yet there is also no country in Europe that's been MORE whiny, petulant, and unwilling to do its part for Europe than Britain. It's why all those special arrangements were made - the rest of Europe wanted Britain in, so they found ways to accommodate its tantrums.
The intransigence of Europe post-2016 comes from two generations of having to deal with this crap.
21
It's hard for a yank to fully appreciate the consequences of Brexit, when we don't fully understand what the benefits and consequences of being an EU member is. It seems the ones who benefit most from the EU are those who are most mobile - ie, the banking industry; so it seems safe to assume the open European markets have caused the same kind of disruptions to the blue collar economies as we see here in the USA.
Additionally, EU member countries, with open borders, must also submit to directives from the EU governing body concerning the number of refugees they must take. Britain looks to place like Sweden, where this has not worked so well despite (initial) popular support for liberal migration.
Europe may well have enough "savoir faire" when it comes to trade deals, but they're naive about borders and immigration, and they ignore the needs of their blue collar workers and shrinking middle class at their peril, as our Democratic Party discovered in the last presidential election.
1
@Mary Ann What I don't understand is the obsession of so many american commenters here about "open borders" in Europe. Are you in favor of hard borders between, lets say, North Dakota and South Dakota, too? How would that make your life better?
8
@Mark B In your metaphor, the EU is America and the member nations are states? Surely a better comparison would have been US/Mexico?
This is a good example of the attitude that has generated anti EU sentiment in Britain. Pretending that there is no validity to any discussion about national borders doesn't shut down the discussion; it just ensures that the open border argument will not be represented.
For the record, I voted remain but I am a little wary of the oversimplification of opposing arguments.
Paul,
"Both sides do it" has never been a good look for the mainstream media. It isn't any better in this case.
4
Dr. K. Maintains his equanimity about Brexit as far as the nuts and bolts go, but isn’t it a terrible step in the wrong direction—more nationalist competition, less international cooperation?
Please have another referendum now that folks know more. The ones saying that would be anti-democratic are, um, mistaken.
6
The obvious answer is that the referendum was advisory, not binding, and as we now know, heavily influenced by Russian propaganda and other meddling. Is any British agency analogous to the FBI investigating Boris Johnson for his obvious dealings as Putin's agent?
The British government can retract their intention to leave under Article 50, citing the flagrant lies made by proponents of self-immolation. Ambivalence is a prominent feature of suicidal ideation whether on the personal or national scale.
Fortunately the UK has the option to simply not pull the trigger.
7
I'm no expert on the mechanics of all this, but it seems really sad to throw the baby out with the bathwater. There's gotta be a better way.
3
"Part of the problem is that there don’t seem to be many rational actors out there."
Nails it in the second paragraph. The UK political class leadership is clueless. Some living in the past - dreams of empire - some in the future - socialist utopia - none living in the present.
A solution requires the backbenchers in both parties to reject their leadership, form a party of national unity, and start governing the country for the people.
6
@Brent Beach
I think part of the problem with this cluelessness is the EU, actually.
Not anything they've done, but the fact that for the past generation at least, the British political class has known that no matter how badly they screw up the governance of the country, they can always just point at Brussels and blame "Eurocrats." It nicely relieves you from any need to actually be good at your job.
3
Why not just hold another vote? Looks to me like the English voters were duped by similar forces to what led American voters to favor trump and now have realized that and would vote to stay in the EU. Done deal other than the hard Brexit nationalist/anti immigration forces would be peeved. Financially Brexit no longer makes sense for England or the EU so lets just see how another referendum turns out and go from there.
12
Supply chains see goods passing back and forth and although the UK may have no incentive to impose inspections or tariffs, that is simply untrue for the EU. As for services, the UK immediately loses its passporting rights after March 29. That means the UK loses the 20% of its banking business denominated in Euros and Frankfurt, Paris, Zurich and Amsterdam will recover most of that.
In short, there is no incentive to accomodate the UK in its delusions of grandeur, and every incentive for individual EU countries to cheer as they exit. Germany may lose some car sales as the UK economy craters, but they have a lot of cushion to absorb it. Food sales to the UK will continue regardless, even if prices reflect increased costs of shipping.
Those are the facts, and they will cause disproportionate disruption to the UK.
Personally, considering the incredible amount of damage the UK has inflicted on the EU project over the decades, I'll be cheering as the door smacks May on the bottom March 30th.
10
@Andy
As it happens, I work in the manufacturing sector in the US.
After 2/3 of a century of integration, I doubt there is even ONE supply chain of any importance in the whole of the EU that doesn't include at least some British content.
The direct suppliers may not be British but they likely use goods that are, at least in part, dependent on British firms.
We had our moment of awakening in 2009, when it looked like General Motors would collapse.
That failure would, in turn, have destroyed many of GM's vendors. Vendors who, it turns out, were also vendors to every OTHER auto manufacturer, foreign and domestic, producing autos in North America.
We also learned, recently, that 90% of all the IV bags in the US come from one manufacturing plant, even though they are distributed through many different intermediaries. To a hospital in Charlotte, NC, the supply chain seemed robust. 20 different distributors all offer these critical supplies. But those distributors were all buying from ONE manufacturer.
A manufacturer located in Puerto Rico, and taken off-line by hurricane Maria.
Only when the cross-channel trade is disrupted will you know which critical component (precision bearings, or tooling, or electronics components, or whatever) is stuck in truck sitting in line at Dover.
But no one will know which truck that is. For the want of a nail, a kingdom may be lost.
7
You don't need to lecture me on supply chains. UK EU supply chains result in semi finished products crossing the channel multiple times, with all the disruption potential that implies. But your presumption on the UK is grossly overinflated as the UK is not a manufacturing platform in any sense
The UK is 80% service economy, and that's where it'll get battered the most. UK manufacturing by value is cars, military equipment, and aerospace. By far the most vulnerable and largest segment is autos. The UK government has pledged to insulate auto producers from the impacts of Brexit un order to maintain plant and investment. How it will do that is not a mystery, and will involve subsidies paid for by the rest of the UK economy. The promise is unsustainable in the long run. The cars that are built in the UK are sold elsewhere. Excess capacity elsewhere can and will easily take up the slack when the UK lraves the customs union.
The cars sold in the UK are and will continue to be built elsewhere, there's no credible local production investment scenario.
Aerospace and military are less vulnerable because of the value added.
If the pound falls, the UK may conserve its arms industry. But Airbus wing production will inevitably move to France.
So large scale disruption is the name of the game, but it will fall disproportionately on the UK as it will have lost its major competitive edge, unfettered access to EU markets.
6
@Andy
The French are separated by a perfect romance language. Good tires, good wine, bad beer. Manufacturing in the EU is mostly German. If the UK leaves the EU will weaken as a world power.
Renegotiate the terms of the EU. It was on shaky grounds from the beginning, should have used the United States as a blueprint. From the beginning the winners and the losers were set. This leaves the losers revolting, the winners wondering why.
Free trade makes sense. I once serviced a machine that came from France with a French user manual that was translated into American English, the problem was with the vacuum pump. The pump was sold to an Italian company that built the machine for the French company. The vacuum pump was made in the USA, sold to the Italian company that translated the user manual into Italian. Then they sold the machine to the French company, who translated the user manual for the pump into French. The French company sold the whole machine to a company in USA. They translated the pump manual from French to English. I ordered the user manual from the company in Southern California in its original form. If I had not I could have killed a perfectly good vacuum pump.
We need open trade, no tariffs, easy communications with very little nationalism.
1
As always, another excellent article!
2
No: a wrong paper written by an arrogant “economist” who doesn’t know what he is speaking about. NYT should do a better quality control. Freedom of speech is one thing. Carrying wrong information is another one..
1
@Gerard
OK, Gerard please elaborate. How is it wrong. I don't always agree with Krugman but he's not so easily dismissed. After all, some thoughtful Europeans gave him a Nobel Memorial prize.
1
I think that much of the turmoil in the UK, US and for that matter in most of the democracies in the world are due to politicians lying to their constituencies for their own gain and a media that focus on the fight rather than exposing the truth and challenging the lying and/or exaggerations of each side. There is no guarantee that people will make the "right" choices but there is no chance if the truth is not known. For democracies to work efficiently people must know the truth sooner rather than to find out later by living out the pain of the lies. The sad part is that it is the innocent that suffer the consequences of the failure.
17
Probably doesn't help that in both the U.S. and U.K, Newscorp has penetrated very far into the political system.
Paul, did you mean "basically a customs union in principle but not in practice..."?
What a mess! This is what happens when you have unimaginative, tribal party leaderships who are interested only in party advantage and not in working for the benefit of all the people. There is much talk now of another public vote, but this would not be appreciated across the UK, and might not be successful in breaking the impasse (these objections being in addition to more theoretical objections about the disruption of democracy). I think it would be better to solve it by free votes in parliament following an interparty agreement on procedure and a citizens' assembly (https://www.theguardian.com/commentisfree/2019/jan/16/mps-brexit-citizens-assembly-lisa-nandy-stella-creasy). Yes, it's unprecedented, but this is an unprecedented problem.
3
crisis in usa and uk at the same time. coincidence? i think not
6
@melissa
"crisis in usa and uk at the same time. coincidence? i think not"
so says our friend Vladimir Putin.
1
Krugman's perspective is as usual in favor of technocrats and self-proclaimed movers and shakers of the world which is US establishment. Simple truth is Britons hadn't realized what Brexit would mean. Now that it's looming with all its stupidity undermining Europe's and North American integrity in the face of growing Asian power reconstructing the world order Krugman's articles and doubtful ideas do anything but helping the situation fueling doubts and choosing festering over holding us all together. How do they call it? Cynicism?
5
IMHO the British government should postpone thewhole thing by cancelling their departure notice.The BREXIT 's deal will split the "United" Kingdom and, only on this effect, is not acceptable.
2
The Great English-Speaking Allies, the United States and the United Kingdom, seem to have been infected by the same debilitating virus: Stupidity.
Unfortunately the very nature of the virus lessens the prospects for a vaccine.
In the distant future, we see young lads swapping cards: "I'll trade you a Trump for a Cromwell."
So it goes.
7
From day one the EU has been belligerent during the Brexit talks. and reflects their knowledge the EU is better off with them in, so make it difficult to leave has been their policy. Why, EU's political turmoil today is loosening whatever cohesiveness they have, losing UK is not a bright spot in their day as when one goes who knows who will be next. Today a little drip in the dam wall in Boulder, NV, later it could mean no Lake Mead. Announcing a hard exit is the best way to go, that way the clock will start running down for those bullies across the Channel, and the EU will start sensible negotiates.
1
@Me Too Correct me if I am wrong, but as far as I know no european gouvernment is elected to do what is best for the UK at the expense of their own people. If they want to leave the Union, it is their decision. But that does not mean the rest of Europe has to roll our a red carpet for them. What exactly was so "belligerent" from the EU-27?
10
@Me Too
Britain has gotten used to getting its own way because every time they got into a dispute with the rest of the EU, they could just stomp their feet and threaten to leave.
Welp, now that leverage is gone. So there's little reason not to be "belligerent."
2
“God knows, and even He may be uncertain.”
Good Grief, Mr. Krugman! How about “IT” may be uncertain?
2
The use of the male pronoun for God can get one into trpuble today. Be careful.
2
@San Ta I find its capitalization much more troublesome.
4
The issues are not GDP but rather ethnocentric English arrogance that thinks superiority of culture. This is irrespective of their failures and global decline of influence beginning circa 1770.
4
PK should not write about things he doesn’t understand. This is real arrogance.
5
It is impossible for May to give the brexiteers what they were promised y people like Boris Johnson. She would do well to arrange another vote on Brexit.
7
First time I've agreed with Paul Krugman in recent memory
Mississippi announces it will secede from the Union. Unless...
The remaining states agree to "minor gestures" that Mississippi be allowed to reintroduce slavery, restrict travel of all dark-skinned persons and provide free candy to all white children, paid by the Union.
Would it be arrogant for the Union to refuse this deal?
10
Just a minor style point; the statement of God as "He" could be brought into current writing by the term "He/She".
2
Paul, please don't refer to God as He.
1
“If the border infrastructure isn’t there, then just postpone the event until it is…”
For the umpteenth time, where will the borders be? Between Northern Ireland and Republic of Ireland OR Northern Ireland and Great Britain.
Nobody seems to be answering this question. If it is NI & RoI they will break the Good Friday Agreement else flights from Londonderry and London will arrive at the international terminal.
1
I'm sorry Paul, but you've missed a few too many episodes for your resume to be credible.
1. What flexibility are you talking about? Have you bought into the brexiteers fantasy world of having your cake and eating it too? That phrase was cheekily written on Boris Johnson's notepad in plain view of reporters.
2. The primary negotiating tactic of the UK has been that they're too important not to make an exception for. Sorry mate, that game has played out over decades of EU membership and it was DOA before brexiteers won the referendum.
3. You missed the entire propaganda play on UK preparations including the vote this past week to cut off funding for preparations in order to force the government to get real!
So yes the EU will suffer from the UK shooting itself in the foot but there's literally nothing we can do about it's decision to commit suicide except open our arms if they see reason. Slumping car sales to the UK will hurt Germany but they've got a lot of cushion to work with. Food sales to the UK won't stop even if delivery costs rise.
So if the UK drives off the cliff we won't be on the beach to catch them. But we'll happily take the banking business currently fleeing London.
PS do get up to speed Paul,you're sounding like a one man Brexit disinformation campaign. I literally don't have the space in a comment to debunk every one of your poorly supported points.
12
I generally dislike almost all of Krugman's columns, but must salute a pretty clever headline/lede.
1
Very few divorces are without some yelling screaming and crying. I expect nothing less.
1
I think that the Brits forgot that 1922 happened and that the island next door isn't entirely theirs, and that now they don't live in those islands in splendid isolation from the Continent.
Everything is just some longing for the "better" days of glory and empire, together with some pretty strong economic interest of some few, and the great interest shown by the two great powers East and West of Europe, now Putin and Trump, to kill the European Project in its track. I believe they will succeed thanks to our own historical stupidity.
3
The EU are the grownups in the room. They've shrewdly offered to take Britain back into the fold. The prodigal country. Britain brought this on themselves due to their prejudice against Eastern European immigrants in the same way some Americans demonize Mexicans.
10
I asked before and I will ask again.
If products from the EU had minimal customs inspections
when they were imported into the UK, what need is there
for the UK to inspect EU products after Brexit ?
As long as the Order Manifest makes sense,
why should the UK inspect them ? Unless specific tariffs
are to be assessed.
If products from the UK went straight into the EU
what need is there for the EU to inspect them as
long as the Manifest makes sense ? Unless specific
tariffs are to be assessed.
I have been unable to find an email to send Mr. Krugman
this message, so I shall try here.
You used the word "Moron" in a previous column.
That terms is extremely insulting to those who were
so labeled decades ago.
I would ask that you apologise for using it and never use
it again.
I would ask that the NY Times also apologise and pledge
to never use it again.
1
The punches and counter punches between the UK and "Euope" (actually, England and Europe) have a long history. England has always been ambivalent. They had the Commonwealth. De Gaulle never hide his mistrust or dislike for the Island. Fun fact that it was William Penn that first talked about a United Europe, centuries ago. He ended up in the future USA.
Brexit is stupid as stupid does, but historically not that surprising. Hopefully they can vote again and let the young decide their future.
3
"...God knows, and even He may be uncertain...
Actually, he's having trouble seeing beyond next week's vote on the no-confidence motion that Lucifer tabled following the McCarrick fiasco...
Neither the angels nor the devil’s liked God’s approach – forgiveness just is so Old-testament...
Both think the Cardinal should just burn in...
Brussels...
Where all the worst sinners from any European denomination go for punishment...
"When stupid people are allowed to be free, free an stupid they will be."
Dr. Krugman, when I was in high school, some friends and I had an "ironic" motto—if it's stupid, I'll do it. We were all honor students, though that hardly excuses us. It never occurred to us that real adults would want to be as dumb as we were.
1
@Eric Berendt
In theory, the logic behind transitioning from childhood to adulthood, with all the rights and freedoms that the latter implies, is that you've now matured enough that you know how to use those rights and freedoms responsibly.
One of the great tragedies of growing up is learning that for a huge number of people, this isn't in fact what happens, and becoming 18 is taken instead as a sign that since your parents can't boss you around anymore, you can now spend the rest of your life doing all the stupid things they stopped you from doing as a child.
1
Sanguine. Oh my. This was dumb from the start. The smart guys acted like they knew everything, except they are dumb. The dumb guys thought they knew more than they did, but are just plain out of touch. So you get what you got and got what you get. Making sense? None of it does.
2
Krugman seems to forget that the U.K. has had a sweetheart deal ever since the Iron Lady wanted her money back.*
*
https://en.wikipedia.org/wiki/UK_rebate
4
"Minor gestures could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way." Well, what astounding, utterly baseless insinuations! May has NOT made such ludicrous assertions or even hinted this was the case. The EU made immense concessions at every stage. The form of the backstop that's the major headache now is not even the EU's preferred option, it was May's option and the EU (and Ireland especially most reluctantly conceded).
To clarify, in December 2017, May had accepted a deal with the EU - Northern Ireland while an integral part of the UK in EVERY respect would have a special status with all that comes with full membership but with a sole requirement for adherence to European Court of Justice and some checks on goods trafficking between mainland Britain and Northern Ireland. But when the DUP (that's the evangelical Christian, in evolution denial/creationists, against marriage equally, or choice, Irish language..) got word, they torpedoed this. This Dec 2017 deal overwhelming support in the London Parliament. If May doesn't tame the DUP, British democracy is in crisis. But, if she dumps the DUP (their total vote in NI, 300,000, about half the population of Bristol), her government will fall.
Krugman, here, seems seems uncharacteristically very, very uninformed about nuances of British politics or the scale of lies and manipulations of Brexit camp.
7
@Branagh
Word.
The Tories' alliance with the DUP destroyed any hope of them being a rational functioning party, much as the Republicans' decision to absorb the Southern Democrats did in the U.S.
1
Your criticism of the EU is completely unjustified. If the UK chooses to abandon Europe, why should Europe's leaders be responsible for making it easier for the UK? Indeed the have a legitimate reason to treat their divorcing partner without mercy as a deterrent to other states that might be considering something similar. If the EU is a good thing (and I believe it is), then its leaders are right to try to preserve it. If the UK suffers as a result, it is a fate they chose for themselves.
Indeed, the willingness expressed by Juncker and Tusk to delay Brexit and to allow the UK to retract its awful decision shows more kindness than the Theresa May deserves. Let's hope the Brits come to their senses and abandon this self-destructive behavior, but don't blame the EU for the UK's folly.
11
Sorry to say so, but the English seem to want to perpetuate the uneven economic balances they exploited when they had colonies. Now they are surprised that the Europeans won't play along with their cherry-picking neo-colonialist dreams. Thatcher extorted special conditions by threatening to leave, but if the leave is already on your agenda, what will you threaten with next? The Brits should have tried to figure out what they wanted before they decided to leave, rather than announcing their intention to leave and then figuring out what they wanted. Since the Brexit campaign was full of lies and pipe dreams, the wishes of the English were all over the place -- a bad way to start negotiations.
8
Why did MPs vote no?
1. change of party to run UK; power.
2. not wanting to be on the hook politically for the inevitable problems and criticism; cowards.
3. the alternative plan was better; wait, they had no alternative plan.
At least the Russians are happy.
6
Dear Professor Krugman,
To hear about plans in Calais, you just have to fetch the information. Today, France triggered its "hard Brexit plan" presented in last April.
https://www.lemonde.fr/international/article/2019/01/17/la-france-declenche-son-plan-lie-a-un-brexit-sans-accord_5410404_3210.html
I'll let you look for the corresponding plan devised by the UK.
But honestly, writing a column with such a professorial tone, without even taking the time to make the most elementary research is not what is expected from you by your readers.
5
When the British referendum came about, the author took a very strong position against Britain's exiting the EU. Recently, the author has shifted his view and considers that exiting the EU will not be catastrophic for Britain. Perhaps, he is correct, after all Greece survived (and it is still barely surviving) the stringent economic conditions imposed on it. But, there are two many hidden variables in the author's arguments to be convincing. I found his argument that a lower pound would revive British manufacturing industries in the North baseless, and contradictory with his views on manufacturing in advanced Western societies. Services are close to 80% of UK economy as reported by the FT (see link below) . I am very disappointed by this piece because I do respect the author's views.
https://www.ft.com/content/2ce78f36-ed2e-11e5-888e-2eadd5fbc4a4
2
Hard Brexit ,Syria fiasco ,government shutdown to honor Trump's campaign promise of a wall that Mexico would pay for,this all seems like a huge win for Putin's investment in electing TRrump. World chaos, TRump pulls us out of NATO dismisses senior military and intel input as he knows so much more than they do as he watches FOX/STATE TV the fount of real intel . Is Trump a Putin puppet ,does a bear do his biz in the forest.
2
After spending over 30 years living in the EU I have never seen anything more on the shelves of French, German and Dutch supermarkets other than Colemans mustard and Earl Grey tea.
Bangers and beans? Nobody in their right mind on the continent would eat that. And course, Scotch whisky is a completely different story.
F3
4
Every time I read a comment from a European on Brexit I hear the vitriol towards the British. There seems to be alot of bad blood there. And most Europeans probably don't write in English-language comments sections, so we're not even really seeing how vast this bad blood is. You can only imagine that if more of them were posting here, what the tone of the discussion would be.
@EC
Open a British newspaper, especially a tabloid, and you will see it is full of Trumpian vitriol, lies and slurs on the EU. You don't need a European to tell you Brexit is based on lies, the Brits will tell you it themselves. The situation is idiotic, and the Brits are continuing to lie blaming the EU for the UK's stupidity and now even Krugman is getting into the act. There is no bad blood, there are only smug, irresponsible, ignorant, lying Brexiteers, and sane people.
Perfid Albion rises once more.
7
How comes it that all across the world a few actors, using false information, deceptive arguments and marketable slogans, push decisions upon millions of citizens that have such profound effects?
Is there no politician left who actually cares about constituents and a socially balanced commonwealth?
I am so sick of these alpha male ‚elites‘ in politics and business who act like Grand Vizirs of old.
Ask the EU for three more months, hold a referendum and then get out of the way with your egos.
‚We the People‘ counts: not only in the US but everywhere.
4
I probably don't understand the article, since it sounds like this is much to do about nothing, this Brexit thing, so you wonder why everyone is having such conniptions.
When a country doesn't take the deal, nor can decide to outright leave, what you have is a mess, of sorts, something quite untidy. The clock is ticking, though, and come the end of March, it will be time to get off the pot.
In the background of my own machinations, I don't really understand why they want to leave in the first place, other than wanting to avoid an influx of immigrants that they don't seem to want, or at least the white people don't want. I don't see how this and value in terms of economic underpinnings to the proposed action to leave. I had initially read that England wanted to avoid paying a huge medical tax to Europe, when their own health care was having problems. That made some sense, but why wouldn't you just negotiate that or raise taxes in your own country to correct the problem? As well, I don't understand the divorce proceedings, since it doesn't seem possible that they could have gone better. What did Brits expect?
Do these people, any of them, know what they want? They seem so confused. Not any worse, of course, than here in the USA, but we are only fighting among ourselves, while disparaging the entire world. It seems though that the governments of both countries are filled with a form of arrogance that is simply self destructive.
4
@Reuben The EU has been a whipping boy in the UK ever since they joined. Its about so many things, race, class, economics, alienation, etc, that you're right, they don't know what they want, they only know what they don't want. Kinda, sorta, maybe, perhaps.
1
Once in a blue moon Prof. Krugman gets it all wrong.
His obsession with how bad the EU is has TRUMP like qualities.
But it is not based on facts. The truth is very few in Brussel are scared of a hard Brexit. They know clowns when they see them - and whatever GB is offering right now is nothing but clownery. Which is on top of two years of lies.
Almost no one wants the bluffing UK back in - so it would be an actual blow to the EU leadership if the UK unilaterally withdrew article 50 - which will not happen, of course. But still...
6
He's not wrong that there are big problems in the EU, but he's wrong about this.
1
It seems that the reason that many conservatives voted against May's Brexit proposal is because it commits GB to remain in the custom's union of the EU until a further exit from that is negotiated. And it seems that May claims that remaining in the customs union (CU) is necessary because getting out quickly would be extremely disruptive. Krugman suggests that the disruption is easily avoidable by just postponing the exit from the CU until GB is ready to implement it. I suppose that the Brexiteers don't like that because they don't trust May to ever do what is necessary to implement restrictions on European goods, either tariffs or quotas or anything else. But I would note that even if GB exited the CU today, that does not imply that GB must impose restrictions on European goods tomorrow, or indeed ever. And although the Parliament allowed the people to decide whether to exit the EU, I don't suppose that the Parliament is going to be so stupid as to allow the people in another referendum to determine what the restrictions are going to be on goods from Europe. It is surely going to make those decisions itself. And it surely is not going to impose restrictions on goods from Europe until it has created the infrastructure necessary to enforce those restrictions. So getting out of the CU now will be disruptive only if Parliament chooses to make it so. And so May agreeing to stay in awhile is surely a poison pill designed to kill Brexit.
@Bob Richards
Supply chains see goods passing back and forth and although the UK may have no incentive to impose inspections or tariffs, that is simply untrue for the EU.
As for services, the UK immediately loses its passporting rights after March 29. That means the UK loses the 20% of its banking business denominated in Euros and EU countries recover most of it.
In short, there is no incentive to accomodate the UK in its delusions of grandeur, and every incentive for individual EU countries to cheer as they exit. Germany may lose some car sales as the UK economy craters, but they have a lot of cushion to absorb it. Food sales to the UK will continue regardless, even if prices reflect increased costs of shipping.
Those are the facts, and they will cause disproportionate disruption to the UK.
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@Bob Richards the staying in the CU is the 'cake' (and eat it) argument, the UK wants to stay in a CU (although they are calling it a C "arrangement"), but it is the EU who will decide the tariffs to be imposed on UK goods entering the EU after the end of March. They EU will NEVER allow the UK completely the same terms as they enjoy within the EU without the UK being in it and abiding by the four freedoms, one of which, the free movement of labor the UK currently will never agree to. The UK is trying to have it both ways, or rather the Tories are, any delay will only provide time for the Tories to come to terms, or not. The EU ain't gonna budge!
Professor Krugman:
Your level of economic expertise appears not matched by your understanding of Theology 101 or Introductory Gender Studies.
"Uncertain" juxtaposed as a modifier of the divine is an oxymoron regardless of whether "God" is assigned LGBTQ or M or F.
1
One cannot help but wonder if Russian social media efforts influenced the brexit decision?
1
"God knows, and even He may be uncertain."
Didn't Paul mean "She" rather than "He?"
1
Good to hear from a world-class scholar's mouth that the Brexit won't be economically as hard as often predicted in the media.
However, the Brexit is NOT about economics in the first place. It's about the grievance of white men, fearmongering, racism and prejudice. It's about egoistic, selfish and shameless self-promotion of career politicians (all elitist white men) who play games, lie plainly to their constituents only to feed their little egos.
It's undoubtedly not about arrogant European institutions that are bossing the poor, starving the British population and don't give hard-hearted a jota room for May and her negotiations. On the contrary. The European British relationship is a long story of British cherry picking.
The Germans will miss their British friends the most. They were vital allies when fiscal, and other economic subjects were on the table. Germany must find a new position in the EU. This is going to be a political challenge with at least the same impact as the Brexit itself, especially when with Merkel's slow exit from the stage an era of uncertainty in Germany is descending upon Europe. This again will have an impact on the UK. The British can leave the EU, they cannot leave Europe.
Why were the sane minds in GB napping when our future was on the ballot? Please, dear fellow Europeans watch out May 26th.
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@Hans von Sonntag
" It's about egoistic, selfish and shameless self-promotion of career politicians (all elitist white men) who play games, lie plainly to their constituents only to feed their little egos."
I agree with this analysis of our politicians, but it is incorrect to say they are all elitist white men. There are a number of equally elitist white women, for example: Amber Rudd, Andrea Leadsom, Theresa Villiers and last but not least Theresa May.
I, and many many others, would like to put an end to this madness with a second referendum and the withdrawal of Art 50.
When the parents fight, the children lose.
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Why do so few understand that Ms May has, at this point, WON the Brexit battle?
1. She was never in favour of Brexit.
2. The PMship was dumped on her by those who thought that she would mumble-jumble into some sort of yucky (but accepted) deal with the EU -- to be blamed on her.
3. In fact, she has beaten David, Nigel, Boris and Jacob at their own game.
4. She has proven that Brexit was stupid -- and she's got a couple of years's worth of stupidities to prove it.
5. She somehow got the EU-recognized ICJ to say that the UK's warning about leaving is a political (not law-based) statement that can be ignored. And, recently, the UK Parliament said that exiting with no deal in place is prohibited.
6. At this point, it's all over but for the shouting.
The EU hasn't been arrogant; members' leaders seem to understand what Ms May's game has been.
EU bureaucrats are getting hysterical because there are growing objections to the bureaucrats' arrogance, the expense of the (toothless) EU Parliament, laziness and corruption among parliamentarians and other themes that were first and most loudly shouted out in the UK as Brexit began.
There's at least one proposal from EU member-states about reforming the Union itself. Ms May's gov't may well support that as the EU elections get closer.
1
@Harold so....you are predicting, delay in 50, dramatic reforms of the EU (perhaps something on free movement of labor??), effectively taking the wind out of the Brexiteers sails, followed by a no or very soft Brexit?
if Europe is soft, then a hard Brexit should immediately depress UK exports to Europe. This will not be good for the industrialized north and the financial south along with London real estate going into the toilet will start a long recession which is also a possibility.
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Whatever the short term problems, it is highly more likely a single nation will fix them more quickly once they actually occur while a bureaucracy of a multi-nation compact will flounder for quite awhile. The EU better get concerned over how it will look and act in the transition. We have seen no evidence in last decade of a quick response to anything. The poor response would reinforce the negative perception of the EU.
I am surprised PM May has not called them on it in the negotiations.
The old adage never gets old; Elections have consequences.
Thoughtful actions yield good results.
Hate and anger are met with chaos that are then resolved by thoughtful people.
There must be a C.I.A. backed television network in Britain stirring things up just like here.
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AT last, Paul, a column about something other than Trump.
This was quite refreshing.
Keep it up !
1
Why has Parliament not hit pause after the extent and purpose of the Russian activity during the campaign became known?
Is it an exhausted "Well, if that's what Putin wants ..."
Why do the younger generation, for whom EU membership offers greater career opportnities and better lives, get no respect and no veto?
Russia may not be able to attack the UK militarily but has put it at risk, isolated from neighbors by broken ties with the EU and by Scotland and Ireland peeling off. With the US as an iffy ally from the same electoral interference, are not Britain and the EU twice weakened? With this material Barbara Tuchman could write another March of Folly.
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I don't understand why you think the EU has "bullied" the UK. The UK was a member of a club that maintained peace for decades, and enabled all its member citizens to live, work and love across 28 countries. David Cameron only sought 'flexibility' prior to the referendum to placate a braying, far-right mob (the European Research Group and Tory voters leaning to UKIP - a party that in its entire history succeeded in electing two MPs). The Leave campaign was run by multi-millionaire disaster-capitalists with the help of Russia. Promises were made - take control of our fisheries! more money for the NHS! make free trade deals prior to the formal divorce! - that were flat-out lies. The amount of time and money this process requires EU member states to spend is enormous. And yet Brussels bends over backwards to accommodate this shambles while maintaining its right to hold firm to its founding principles of free movement of goods and people. With all that in mind, can you go further in illustrating what you mean by the "minor gestures" the EU might have made in the face of this horror-show?
By the way, I'm a dual USA-UK citizen. My Danish wife and I were happy in England in part because we knew our daughter had the right to live, work and study in Denmark where education is free from the ABCs to the PhDs. What now for us and millions of others for whom a united Europe was, for all its many faults, a model of how a post-nationalist life could be lived?
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@Daniel
My story is very similar to yours (we live in B&H too!) for the same reasons. I agree with everything you have said, in particular the effect brexit will have on our daughters' (we have two) lives.
It is profoundly depressing to see how the Tories are destroying this country. And that is not an exaggeration.
Let's hope Parliament can seize control and we can have a second vote and stop this madness.
8
It seems to me that the underlying issue with Brexit, and with the US struggle with "the Wall", is that nation-states are becoming irrelevant; mere administrative entities like cities, towns, states, and provinces. This is not out of choice but rather the inevitable result of the growth of communications and transportation technology. Many people are uncomfortable with this new reality and cling to the notion that they can seize control and somehow reverse the process. Nothing new there. Resistance to new ideas and methods of organizing things has been around probably since the invention of the wheel.
But history doesn't pause nor can it be reversed, (not the same as repeating itself.) There will be a US of E at some point. It's just going to be a bumpy road getting there.
3
An uncharacteristically poor column from Mr. Krugman.
In what manner was the EU deal "offensive"? The EU deal quite clearly was constrained by the introduction of the British Govt's red lines in the Lancaster House speech.
What "minor gestures" could have saved Remain in 2016? The Conservative Party has been on the road to this position since Maastricht and none of the many concessions offered by the EU to Britain could save this (Schengen, the Euro, etc.)
When it comes to the EU's contingency plans, I am surprised that Mr. Krugman would not do some small research to show that the Irish government, as part of the EU, has put in place numerous contingency plans for a sudden hard Brexit. This includes the hiring of new customs officers, loans to small and medium businesses to deal with the fallout from Brexit.
This is in addition to plans for road haulage, aviation, medicines, trade, retail, tourism, agriculture, data, among others. It should be noted that a number of these measures and plans involve the cooperation, both financial and political, of the EU.
Mr. Krugman forgets the crucial role that the Irish border plays in this whole saga, having not mentioned it once in this column. Post Brexit there will be only one land border with between the UK and the EU, in Ireland. How can one discuss border infrastructure without mentioning the historic and practical implications of the imposition of a Hard Border on the island of Ireland?
14
I agree with many of the other commentators that this is entirely self inflicted. Mr Krugman's comments regarding the EU are the typical throw away comments that obscure the essential elements of the situation.
These types of anti-EU comments fall into the typical buckets of
1) The EU/Euro is not an optimal currency area. Is the US? Is the UK with its combination of some of the poorest and richest parts of the EU? If there are no optimal currency areas then why keep repeating this?
2) The EU should have given Mr Cameron a bone. What exactly? Two and a half years later I don't know what the bone might have looked like; and
3) The EU is a large organisation which made some mistakes. Again, how does this compare with other organisations of similar complexity? Are there lots of efficient, well run multi-national organisations out there: Fifa? The UN? The WTO?
We need to remain practical and pragmatic in this debate. Simlarly Mr Krugman's second throw-away statement that he suspects that the UK has prepared for a no-deal but that Europe has not has little basis in fact. Following the referendum the UK has struggled to even staff new departments and has gone through numerous Brexit ministers. He should read the comments of Sir Ivan Rogers, the former UK ambassador to the EU, and in this regard.
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A rare misfire from prof. Krugman. Other readers have already remarked that the EU countries are preparing for a hard Brexit. I would like to point out the word that is missing from this column: Ireland.
The major problem in any Brexit plan is finding a solution for Northern Ireland. This got even worse after May lost the election and became dependent on support from the DUP.
But the economy of the UK and the Republic of Ireland are also much more interwoven than those of the UK and the EU as a whole, so for Ireland this is a major problem. Just think of the number of Irish nationals living and working in the UK. And then there's a few centuries of history that make the Irish not looking kind to plans from London that are bad for them.
13
We now live in a universe rather than a country. I’m no longer going to think of myself as an American or as an expat living in France. I live in a space I’ve temporarily rented, leased, or bought which can be anywhere in the earthly universe.
When I retired in 2000 I decided that my health insurance and cost of living was not giving me the return I deserved so I moved from Marin county to Provence in France where my national health insurance and general cost of living was superb with medical services and glorious as a life style.
My neighbors are an assorted group of Europeans who have also moved at retirement to improve on their quality of life. Some new retirees are moving to Portugal where special government deals are enticing new expatriates to another universe.
The lesson is don’t wait for it to come to you. Go and find it for yourself!
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@Michael Kittle - I wager your net worth is pretty high. Telling people to move to a country with public healthcare is not realistic for 98% of us.
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@Mike. 99
2
It might be useful if PK actually described the instances of purported EU arrogance, because I have no notion of what he is talking about, and I have followed the issue closely since before the referendum.
Further, I find the comparison of Canada/US and Britain/EU to be wholly strange. Is Canada using island protectorates to hide untaxed cheese? Britain is a small overpopulated island with a dependence on a marginally legal financial industry which is about to lose all of its advantages. Canada is a very large somewhat underpopulated country with a diverse economy. Canada may want America's trade, but it doesn't need it the way Britain needs the EU.
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In your third paragraph from the last, allow me to partially enlighten you. Britain's contingency plans for transport through Dover and other ports in the event of a hard Brexit are derisory. Calais, however, is well ahead in its planning, as are Antwerp and Rotterdam. There would be far fewer problems on the Continental side of the Channel than there would be on the coasts here.
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The whole Brexit mess is what happens when political emotions trump (wordplay intended) rational thinking. We are seeing the same dynamic at work with "the Wall" - Trump's very own irrational fiasco of governing. The Congress could debate, and derive some kind of reasoned compromise that meets most intelligent considerations for immigration reform (it already did, in 2013) but political emotion (and political emotional manipulation of the "base") would stymie that, despite it being exactly what the Constitution and the Founders intended for the legislative process. Nobody is supposed to get everything they want - and that's all Trump has signaled he'll take... so we are at impasse. Brexit is the same folly, only with a British accent, the same peculiar willful ignorance of reasoned and rational solutions in favor of political emotional manipulation and political gamesmanship. Meanwhile, while the politicians play mind games, the economic damage adds up for ordinary people, both here and in the UK.
One has to wonder how much political economic abuse ordinary people will take before they wake up to the political emotional manipulation games of the politicians, and a huge backlash happens. PM May risks her government, it squeaked by a confidence vote today, but let a few months of chaos after an unplanned hard Brexit happen, and that government will fall. Trump will go down hard as soon as his blundering political games hurt enough of his "base" that he can't keep them fooled.
5
It is shocking to see this from Krugman who is usually more considered. One to three percent is an accountant's take on Brexit. An easy and successful out for Britain will have the southern nations of the agreement lining up to abandon the EU leaving an economic disaster in the wake.
That is what Trump and Putin have been angling for all along. Once in pieces the divided the nations of Europe will be picked apart economically by Trump and militarily by Putin. Perhaps nothing can prevent this, but to blithely dismiss Brexit with 'one to three percent' economic damage is caviler.
7
Ignoring wrong claims of Mr. Krugman ("bullied", "insulting") let's concentrate on
Who will lose under Brexit in Britain ?
1. The Financial Sector. I.e. the ritzy bankers in the City of London that besides regular services hide the money of Russian Oligarchs and Dictators from various Stans in a web of Channel Islands, Crown Dependencies and British Overseas Territories
If the U.K. is unable to strike a deal for the financial sector, London's title as the financial hub of Europe will cease.
Market insight company MLex estimates 13,500 U.K. companies rely on passporting, many of them without knowing it.
2. Who will gain under Brexit in Britain ?
To cite Krugman
"We might also note that there would be some winners from Brexit,,,, would mean a bigger manufacturing sector, which would be a benefit to industrial regions
I agree
Summary
The costs of Brexit will fall mostly be paid by the Rich in London that make money hiding the misbegotten gains of Russian Oligarchs
On the other hand it will help workers
And thus reduce INEQUALITY in Britain.
Personally, I consider this a positive development
------------
For those interested in how the London Financial Sector enables the Super Rich escape taxes I recommend
Moneyland By Oliver Bullough.
Reviewed by The Economist
Excerpt : the real scandal is the way ritzy bankers, lawyers, accountants and PR people enable money stolen in poor, ill-run countries to be invested in rich, safe ones.
4
Krugman has really missed the point on this. The UK wants all of the benefits of the EU, but one of the obligations. It's called having your cake and eating it too. The real world doesn't work that way.
The EU is willing to give the UK as hard of a Brexit as the UK wants. I don't think that the EU has been tough or unfair, just realistic.
You can't expect to obtain all of the benefits of a private club and refuse to be a dues-paying member.
14
@expat london
You can if you work in the public sector in the US and refuse to join the union.
1
The livelong anglophile shows his understandable bias for the country of Newton, Darwin and Keynes (but also Thatcher), and it can easily be forgiven, as many on the old continent feel exactly the same way toward the UK. Though the feeling—as we had to learn— is not mutual.
But in his judgement over the process of Brexit himself, Mr. Krugman is wide off the mark. The british government has, for the past 2.5 years, squabbled almost exclusively with itself in an echo chamber. It never engaged with its former european partners in any serious way, often showing a barely disguised two-faced approach in Brussels and London, betraying everybody in the process but mostly the britishers themselves.
The cake is to be had or eaten, the square cannot be circled. To upheld such trivial truths with such patience for so long, as the EU chief negotiator Barnier clearly has done, does not constitute arrogance. It's just the way of an adult.
The point that should be driven home by the Brexitshambles, is the utter inpotency of medium scale nations to 'take back control' in the age of hyperglobalized trade and hypercomplex technology, not to speak of hyperthreathening global problems. Therein might lie a crucial difference between European nations and the USA/China, but I'm not even sure about that, seeing Trump and the authoritarian character of the chinese rulers.
15
The idea that the EU has meaningful concessions to offer is entirely premised on the idea that UK politicians are the only ones that have to worry about their home opinion. Krugman is buying into the Boorish Johnson world view in which this is a battle between British politicians and Brussels beaurocrates. This is a delusion. It is politicians on all sides and they all have to worry about how they look at home.
Combine this with the fact that Thatcher long ago negotiated particularly good membership terms for the UK by threatening to leave, you know, that famous handbag banging. That has worked well for some time, but any mutual, friendly relationship only allows for so much handbag banging, so the UK started their negotiations at a pretty big goodwill minus. The EU politicians really don't have that much that they can offer the UK in terms of more favourable terms.
9
I wonder how much the UK would gain if it had an exclusive free-trade agreement with the US?
Can you explain how the strength of London as a financial centre has kept the pound high
The UK is now caught between a rock and a hard place. The Hard Brexiteers are empowered and wont accept any deal that requires the UK to accept any EU rules that supersede British sovereignty and the rest of parliament are divided between different shades of soft Brexit and Remain. Consensus should prove impossible.
Should a Hard Brexit prevail the Tories should be careful what they wish for, without the bogeyman of the EU to shield behind, you can expect Britain to either turn away from them and leftwards to protect rights, rules and services or in the worst case, to a rabid self defeating nationalism that sees Britain whither on the self-determination vine...
4
@Miguel Valadez
The hard Brexiters have suffered almost as great a reverse as the Govt. and face difficult decisions. Parliament seems intent on preventing Hard Brexit, has the numbers to do so and a Speaker who will allow Parliament to have its say. However, hard Brexiters might yet adopt May's plan on the basis that any exit from the EU however watered-down will put UK in the position of having to accept eg Shengen and the Euro if it re-applies. This means the UK will not apply to rejoin unless in dire straits - in other words probably a permanent alienation from any European community.
We will find out some truths about the EU if it tries to facilitate such an outcome. Hopefully the mood music from London will persuade EU leaders that ultimately the outcome will be a very soft Brexit with a tamed UK effectively in but legally out of the EU or a decision to Remain.
2
Where Dr. Krugman sees Eurocrats fantasies, I see 27 countries and governments unanimously backing the EU's negotiators.
By the way, I'm happy with the UK leaving the Union. It will be painful for a while, but their only reason to be on board was to spoil any political or social development.
6
There seems to be lots of focus on the part of almost all commentators on what the faults and problems of the EU are today and what might happen next week economically in various scenarios. The basic issue is that what happens in Europe is important to Britain as it is to all the individual members of the EU. In that context, having a seat at the table is of the utmost importance for each, in this case including Britain. To sit on the sidelines would be contrary to Britain's interest. Some of my older friends worry about the EU becoming a United States of Europe. Though I think that is a distant prospect at best, surely the point for Britain must be that if there is ever a USE, Britain needs to be in the midst of it taking part in the decision making, not on the outside hoping for the best.
5
A surprisingly low information column from Krugman. The column does not mention that the main constraint in the Brexit negotiations have been the red lines drawn by the UK government, principally the one about freedom of movement, which the EU considers a fundamental principle. The UK government is also hemmed in by the demands of the hard Brexiteers, who do not want to accept any form of customs union. Then what can the EU possibly offer, without opening itself up to a cheery picking approach, which would amount to a slow unraveling of the single market.
The EU has to protect its greatest accomplishment, the single market, and it has done so. It is also obliged to take into account the demands of 27 member countries and form a consensual negotiation stance. It has done that as well.
Meanwhile the UK government has not bothered to consult with other parties in the UK parliament itself to see what form of Brexit would pass the house of commons.
16
It is refreshing to read someone who points out that discourse emanating from the EU on Brexit has been wrongheaded. For two years Juncker has talked about how much Britain will lose, but has always failed to mention that the EU will lose a lot, too. For example, where are the EU's best universities? Answer: Britain. Britain is a net contributor to the EU. Juncker and others conveniently do not discuss what they will do without Britain's net contribution, nor how many EU programs will suffer as a result of a much smaller budget. The EU's attitude of disdain towards Britain will prove to be counter-productive for the EU.
4
@JD At least here in Germany it has always been clear that the EU, and specifically our country, has a lot to lose through any form of Brexit. But there seems to only gradually have been openness in the UK on a broad level to the damage a Brexit will do there, including the many, many EU (but not British) citizens who even now are choosing to leave the UK. That affects UK universities, the NHS, and many other areas. If Paul Krugmann can argue on the basis of his feelings (from across the Atlantic), I will argue from here that there was not arrogance and disdain, but rather increasing peplexity from the EU side. The UK Government seemed to disbelieve or distrust nearly everything said by the EU in the negotiations, as though the EU were "bluffing" (as a former member of Cameron's staff said after the Thursday vote in Commens).
9
I do not know where the anti-EU sentiments of PK have originated, but this opinion is flawed at best.
Maybe he can do a study on the actual financial benefits of membership of the EU, because not a single person in the UK seems to have a clue. The benefit of being in the single market could be a net gain for the UK economy of dozens of billions of pounds a year.
8
It is not frequent that Prof. Krugman gets negative comments like this but they are deserved. While I fully agree with him on the foolishness of the EU economic policy during the crisis, this was a different matter, more political, and the EU position was very coherent: we are willing to accept any system as long it's consistent (eg the Norway option, or the custom union option, or the Canada option). But the UK came with unreasonable and uncoherent claims , trying to cherrypick benefits (eg we want a custom union but also the right to negotiate our own trade deals, we want to keep the four basic freedoms except the free movement of persons). Actually very often the UK itself didn't know what it wanted (with ministers resigning now and then to protest one or another point). Let's face it, the UK didn't know what it was getting into (not that they don't have experts in the field, they have very good ones but they're all woking in Brussels, and they were treated with disdain). Blaming the current chaos on Brussels is unfair.
18
A couple of observations on this piece.
- a fall in the value of Sterling might be good for manufacturing industry but as Prof. Patrick Minford, one of the few notable pro-Brexit economists cheerfully observed before the 2016 Referendum, the policies he advocates and that have been endorsed by many Brexiteers would pretty much eliminate British manufacturing industry. The benefits of devaluation may therefore seem illusory to manufacturers.
- as to planning for a No Deal Brexit I'm a bit surprised Paul Krugman is not aware that at points in this process British civil servants have been prevented from planning for No Deal, or under-resourced for the task and that when such planning became a political priority last year there were leaked opinions that it was already too late in some areas to do more than give the public reassurance that something was being done but not to implement effective measures - eg establishing new ferry facilities at alternative ports that PK alludes to.
Those with a taste for gallows humour might look up/read round (HMG minister) 'Chris Grayling' and 'Seaborne Freight' for a hint of the omnishambles to come.
4
The UK misery is completely self-made. While the UK was a massive force in the EU which btw. agreed in 98% of all decisions, they built up the picture of the poor British lion that was led by a nose ring through the arena. Of course, people at home got mad, if they have to read lies in the Yellow Press every day.
I have many UK Facebook friends, and before the referendum 90% of the reasons were based on immigration. The terrible memes were EXACTLY the same as in during the Trump campaign. That is no coincidence, and the influence of Russian trolls would need to pursued harder.
Plus, the role of the 5 billionaires (Murdoch included) who own 80% of all UK newspapers, and who have a serious gripe with the EU because of finance regulations. They have a huge part of their fortune parked in offshore tax havens, partly even the newspapers' official location is on one of those. Time and again the EU is trying to eradicate this system, so the billionaires have a personal motive to get the UK out of EU. This gets far too little attention, if you look at the impact, the Fleet Street rags actually have on the lesser educated people. And these are the drivers of Brexit in the hope their prosperity will come back. Only, it won't, because these jobs are oversea, because it is cheaper. And, of course, because of the incredibly unjust wealth distribution which gets worse with every year.
24
@Dean
Please google for plots of population growth in the UK and in Germany over the last 15 years. This may show you (one reason) why immigration is such a large issue in Britain, and less so in Germany.
Oh wait, isn't immigration an issue in Germany now too?
@Dean
I agree completely, Dean. A few Tories fell out, PM Cameron proposed a plebiscite (this would not happen in USA or Australia, constitutional federations). Scotland and N Ireland were ignored (pro-EU) and the "United" Kingdom is probably breaking up.
Second, Krugman needs to look at BoE data: the place only has a financial centre (FIRE); "The E.U. has been good for London’s role as a financial center, but this role has kept the pound high, hurting the industrial North (PK)." There is hardly an industrial North, destroyed by the City 140 years ago, nor agriculture sectors.
Third, "plans" for a "no deal" Brexit are horrifying: PM May will have 3.5k troops in the streets (shades of Amritsar?), N Ireland a boost of London police (the Black and Tans again?); the "test" for food and medical supply trucks at borders suggests a 6 week wait!
Fourth, the EU has better labour laws and is tightening further on 'light touch' with London seen as an 'off-shore' tax haven
Fifth, Dean's great point about Murdoch: Liverpool won't touch his rags, their opinion is pro-EU and the city ran some neo-Nazis out of town peacefully only a month ago.
Krugman, I am glad you asked us! "U"K is mainly third world.
What do you call an American pundit who pronounces on matters he knows nothing about? Arrogant.
6
@abo
He is not a "pundit," he is a Nobel Prize winning economist and Distinguished Professor of Economics, who also writes a very interesting economics column in the NYT.
1
You would expect Pr Krugman not to start with a prejudice, assuming once and for all that actors are irrational and full of fantasies and arrogance. Could the situation be described as an economist or a game theorist would do, in pure neutral terms ?
Great Britain wants a free trade agreement, and nothing more than that. This has always been true since the inception of the European Union, and the debates of the 2016 campaign over Brexit have shown that this is, more than ever, true.
The European Union is a political project, part of which is free trade. It can be seen as a cooperative game where the political caveats (and, don’t forget, advantages) must be accepted by all participants. In this game, a player that would benefit from free trade without being fully part of the political project would put the others at a disadvantage. Its example would be followed by others and the whole cooperation would flounder.
Would Pr Krugman be so kind as to discuss the details of this problematic and suggest what kind of cooperation he would recommend ? What move could the Europeans make without being called “arrogant”, and without ditching the European Union ?
10
What? Economic actors don't have rational expectations? But that means that Bob Lucas is wrong, wrong, wrong! My whole faith in the Chicago School of Economics has been shattered!
3
The deadlock is due the Irish backstop. So it is not clear how the EU is supposed to compromise on that according to Prof. Krugman.
2
Having covered EU/British issues for NPR from the defenstration of Margaret Thatcher, through the launch of the Euro, and having spent subsequent years of my career reporting on the issue for a variety of other outlets allow me to say that Professor Krugman has reached the limits of his knowledge with this piece. What is at issue is far beyond spreadsheets and other data representation.
This para in particular is flat out wrong:
"The E.U. has been good for London’s role as a financial center, but this role has kept the pound high, hurting the industrial North. Brexit would mean a persistently weaker pound, which would mean a bigger manufacturing sector, which would be a benefit to industrial regions (although diluted by higher consumer prices)."
The high pound is not behind the pain of Britain's industrial `North (actually it is Northeast, but the Laureate cannot be expected to know that). Decades of industrial policy going back to the 1980s killed what was in the 19th century the workshop of the world.
In that brief period when everyone paid attention to Thomas Piketty I spent a week in Middlesbrough. Once the steel center of the country, now struggling as badly as those corners of Ohio I reported from in JUne 2016 just after primary season - think Akron/Toledo and Bruce Springsteen: "Foreman says these jobs are going boys and they ain't coming back."
As in Ohio with Trump, Middlesbrough provided Brexit's winning margin, & as in Ohio, the jobs won't come back.
25
Very efficient machines with fewer workers in Asia have become the workshop in the 21st century. Although on many occasions, the Dickensian sweatshops have moved in toto without many of the modern comforts to Bangladesh, where thousands of women made clothes for western famous brands.
4
@Michael Goldfarb well, yes...and no. True Thatcherism decimated British manufacturing, but with the right industrial policies and access to the EU single market manufacturing can prosper. Take motor manufacturing, which in 2017 produced over 1.7 million vehicles, only a shade below its peak of 19 m in the early 70's - 80% of which were for export.
Inward investment by Toyota, Honda, Nissan, BMW, & Tata was all underpinned by these companies' assumption that the UK would remain an integral part of the internal market.
Since 2016, the UK Government's inchoate approach to negotiations has led one manufacturer after another to reconsider/suspend future investment.
The financial industry hasn't crowded-out manufacturing, neither has a high pound - but nor will the jobs come back. This is because manufacturing is a capital intensive enterprise and is far more labour efficient than it was 50 years ago.
The tragedy is that the real challenge of fair distribution of wealth and rewards to commerce has been conflated with, and obscured by, petty debates about sovereignty in a world that is irreversibly globalised.
1
@Michael Goldfarb
[Rolls eyes toward heaven:] I guess it just can't be helped!
For once, I can't agree with Paul Krugman. First, Europe is about more than just trade. Europe is about bringing together the peoples of a Continent in which war has been endemic for centuries. Europe is now the largest zone of liberal democracy in the world, in terms of population numbers. If Britain retreats into "splendid isolation" and distrust of its neighbors, that is tragic indeed, and only its enemies should rejoice about it.
Secondly, regarding the negotiations: the British have been very vague from the start, but if they had a distinguishable position, it would have been "cakeism", as it's called: having your cake and eating it. Having all the economic advantages of membership but none of the burdens. Why would Europe agree to a situation in which British companies have a built-in advantage over their EU27 counterparts?
The European position has been quite consistent: if the British want certain advantages not available to non-members, then they should in return stick to the relevant rules like the rest of the EU.
If this is "vassalage", as Brexiteers call it, then good luck to them making "vassalage-free" trading deals with non-EU countries. If the EU allowed the British to pick and choose, then that would mean the beginning of a quick unraveling of the Union, and a return to the old antagonisms that have led to mutual distrust and war.
With an EU in tatters, Putin and Trump would cheer, but who else?
53
@Koen Decoster
Does the EU have a plan to deal with depopulation of the East, and the flow of the enterprising youth from the South to the North?
Free movement is all very well as a principle, but occasionally one should look at the actual effects.
Excessive movement causes problems both in the places where too many people go, and in the places that too many people leave. These are delicate issues for all, but the EU has not been tackling this.
1
@ChrisW
As you post 'delicate issues' but I can't resist repeating a phrase you will know:
"he got on his bike and went looking for work".
The issue exists within countries (inc. the UK) as well as across the European region. The limits of the policy prescription underlying Norman Tebbit's anecdote have been tested, to say the least. Let's not blame it on the EU when individual states have more direct influence.
1
@Koen Decoster The British cakeism was wanting to eat their cake and to have it too. That is different from having their cake and eating it too.
Here are some of the people who helped make this mess:
Weak David Cameron and his delusions
Nigel Farage
Boris Johnson
the Kochtopus
In addition, people who want to take advantage, deeply unappealing:
Rees-Mogg
Osborne
Paul Krugman should inform himself better about the looting and exploitation going on in the UK. Imitation is the sincerest form of flattery, but the UK's imitation of the worst of the US is not a good thing.
15
I forgot Arron Banks. I'm not making this up. Since the vote was won with lies and corruption, the honest thing to do would be to hold another, better informed, referendum.
17
Susan,
The invisible hand is the real actor, these are only personifications of an ideology that believes that wealth comes from personal ingenuity and financial know how . Wealth as Adam Smith discovered a long time ago comes from work and the riches that the earth gives gratis (although some appropriate privately)
2
I almost always agree with PK, but here he seems to have fallen to the "false equivalence" syndrome himself. It is European leaders and not Euro bureaucrats, who drive the negotiation. If those leaders do not regard the demands of Britain reasonable, then why would they agree to it just because Britain is more important than Greece? Do British themselves know what they want other than some imagined better deal? If they don't, what is Europe expected to negotiate on? The reality is Britain is driving off the cliff because no British leader knows how to stop going off the cliff. All they want is that someone else gets the blame when they do go over... Personal interests over national interests... oh how far the mighty have traveled from their hey days!!!
30
@PaleBlueDot Also, if EU had agreed to a bit more, it would not have led to a deal as PK thinks, but just that those ludicrous British leaders would just return with a demand for bit more .... They know they can't get what they want, but they can't stop pretending that they can get more - if only they were leading (and not May)....
1
There is a basic contradiction that can't be resolved. Britons want to have all the things they like (free movement of goods, free movement of capital, freedom to establish and provide) but not the things they don't like (free movement of persons, response to distant EU regulators and parliament). They want to stay in the EU and leave it at the same time. it can't be done.
Financial services are already hightailing it to Eire and the Continent. Their taxes go with them. Even if it turns out Brexit doesn't happen in the end, things are simply not going to be the same as before the fiasco.
25
There is absolutely no way to back out of Europe and keep the border between Northern Ireland and Ireland open without checks - period. This is so clear that it might as well be chiseled onto the face of Big Ben. Ireland will remain in Europe, where one set of tariffs will apply and Northern Ireland is British, so not being part of the same customs union with the same tariffs and so forth is simply not ever going to be accepted by the Europeans, nor should it be. So they therefore will have to accept the horrendous possibility of reopening the old wounds that tore apart the UK for decades which involved Catholic Ireland and Protestant Northern Ireland OR they will have to standardize their tariffs with the EU, prohibiting the freedom to negotiate separate trade deals. Fact is that membership in the EU had one paramount benefit to it, and that was to firmly eradicate the tensions that existed between Ireland and Northern Ireland. Where people could move freely, protected by more or less the same set of social regulations, the division between the 2 areas became moot - but no longer. The backstop will not be negotiated away and in this the hardliners are correct for if it could be dealt with they'd be dealing with it NOW. One can only pity poor PM May whose mandate was specifically to manage the withdrawal from Europe without major disruptions. The hardliners who want a total break and those who want no borders present an irreconcilable situation, full stop.
14
" But we should also note the fantasies of the Eurocrats, ... a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way."
Krugman is a brilliant economist, but a poor judge of the human soul. Portraying the UK political class as being victimized by the Eurocrats is slightly more than bizarre. It is true that the EU is standing helplessly by as the UK shoots itself into the one foot first, now the other. But is it really the EU's fault that it took the UK a year to discover that the only border with the EU they have is in Ireland?
34
A huge portion of the UK's economy is wrapped up in financial services. Why are financial services such a huge part of the economy? Because of their status within the EU. Krugman seems to think replacing funds with factories might be good for the UK in the long run. That's spectacularly misguided.
9
This is ALL the EU's fault. Once there was an alliance of the four big powers of Western Europe, all countries of around 60 million people: the UK, France, West Germany, and Italy. Smaller countries from Denmark to Portugal and Greece all belonged to the same EEC and every country benefited. Then the Iron Curtain fell, Germany grew to 90 million strong, and, with lightening speed, the neo-liberal globalists of Europe expanded NATO and the EU into countries that were former Soviet satellite states. Citizens of Bulgaria and other hopeless lands in the East were now free to escape to richer Western countries, and Western corporations were now free to escape high labor costs and unions by moving manufacturing into the East. Then came 'austerity' to save the Euro in 2008, crushing living standards for provincial populations almost everywhere outside of Germany and prospering cities like Paris. London, and Rotterdam. Just as suffering heartland voters in the US voted for Trump in desperation, Brits outside of London voted for Brexit, and the French Yellow vests from the countryside exercised their dissatisfaction in the traditional French manner of hurling the paving stones of Paris at the forces or order. Macron, May, and Merkel are presiding over the sad denouement of a united Europe envisioned by Mitterrand, Thatcher, and Kohl, but that now is being torn apart by the growing economic inequality that their citizens cannot abide.
8
@georgethe founder members of the forerunner of the EU, the EEC, did not include the UK which begged to be let in the 70s.
The 'Neo Globalists of Europe' were in this case the US and the UK. The UK pressed for eastwards enlargement, inter alia, because its Conservative politicians hoped that making Europe wider would prevent it becoming deeper.
Free Movement was good for London and good for GDP, our politicians liked it but they preferred Europe to take the blame. Under the existing rules States could exercise all kinds of controls non-contributing migrants but the British government chose not to avail itself of those measures. The Leave vote was fueled by anger over that and also lots of concerns unrelated to the EU, austerity and poor wealth distribution as you note but also the Syrian refugee crisis (with Russian trolls telling Brits that it was Merkel and Juncker behind it, who trust me, most Leave voters would not have been able to name 5 years ago) and most of all, the need of Conservative leaders i.e. the current and previous Prime Ministers, to patch up the internal splits in their party, to get power (by appealing to a minority of Euroskeptic voters) and to keep it (by effectively forming a Government with the ideaological DUP which is the direct cause of the immediate problems).
The EU is a convenient scapegoat and it may be that it won't be until it has collapsed that the politicians and people of Europe finally realise the problem was themselves all along.
11
@george Not to forget that the neo-liberal globalists you decry were mostly British. If the Brits had had their way, Turkey would also have been a member of the EU by now.
@Certified Diplodocus thank you for this correct analysis. It is amazing how many people have and opinion without having all the facts.
@georgegethe, let me assure you that Germans feel the pain of austerity. And the million refugees that Germany took also need to be fed. The scapegoating that goes around is hard to take.
I care very little about the trucks waiting in line at Dover. It is people’s choice. Brits should take hard exit, instead of trying to go around it and violate democratic principles. They should never ever invoke article 50. The country should pay for it if they make wrong choices. We made wrong choice by electing Trump and we are paying for it. Since there is a silver line of improving manufacturing with lower pound value, it should not be all bad. But here, we have federal employees and their families standing in line at food banks and their economy is shattered. No one except Kevin Hassett sees a silver line for furloughed government employees.
1
@Kodali the reduction in the value of the pound has made imported goods more expensive and allowed foreign actors to buy up British firms, which I assume will be quite bad in the long term, and British property, which won't make anyone happy, least of all the Brexiters. Also, last time I checked, it had not helped to improve manufacturing exports...
For those who wanted Brexit in the worst way, that's exactly what you're going to get.
There's been a lot of concern about the rise of authoritarian regimes lately; the failure of leaders in the western democracies to provide competent leadership and inspire their citizens to have confidence that government is addressing their needs and fears is a big part of what is driving it. The rise of inequality shows that letting oligarchs gain ascendency is the road to disaster - and that's who has been benefitting the most in recent years.
The turmoil and discontent is not a coincidence.
2
The Brexit controversy cannot be understood only with economics in a narrow sense, requiring other social sciences. With most economists favoring free trade-- the free movement of products and resources -- that doesn't mean it's possible in reality. Simply because we can fantasize a world with free trade, like the way Plato fantasized his ideal state, doesn't mean we have the power to realize the fantasy.
Political science is important to understand, not only the maneuvering among British factions, but also the E.U. officials' need to make Brexit hurtful for the British, for example, to discourage other nations from leaving the E.U. https://www.washingtonpost.com/news/monkey-cage/wp/2018/10/09/this-is-why-the-e-u-is-being-so-tough-about-brexit/?utm_term=.529c57293e6c
An important factor is social/psychological -- xenophobia. https://www.independent.co.uk/news/science/brexit-prejudice-scientists-link-foreigners-immigrants-racism-xenophobia-leave-eu-a8078586.html
When we grasp our lack of power to realize Platonic-style fantasies, we can begin to see their limited value.
6
Thanks, Mr. Krugman, for pointing out the EU's part in this folly. If the EU had budged even a bit on their draconian insistence on open borders Brexit might not have happened in the first place. I can only hope that the German car manufacturers are right now screaming in Madam Merkels's ear to have a word with Junker and the others so that a sensible compromise can be worked out.
5
@Lotzapappa If open borders are so bad, ould you like to have a hard border between north and south dakota?
Actually, the EU has started to prepare for a hard Brexit, and has been for a while. A recent article in the Washington Post described the effort that the Netherlands (the UK's main trading partner on mainland Europe) has made to prepare for a no-deal Brexit, including hiring and training more than 1000 customs agents and recruiting veterinarians from throughout Europe and enrolling them in crash courses to learn Dutch. (https://www.washingtonpost.com/world/europe/the-dutch-love-to-plan-but-even-they-may-not-be-able-to-avoid-the-chaos-of-a-no-deal-brexit/2019/01/06/4492f7da-020a-11e9-958c-0a601226ff6b_story.html)
By contrast, the UK has staged a single traffic drill with fewer than 100 trucks (when estimates include the possibility of more than 10,000 trucks backing up at ports), and has contracted to reopen the Ramsgate Port to handle excess ferry service expected with a no-deal Brexit even though it is estimated that the port cannot be ready in time for the March 29th exit. In short, the UK's strategy coming into Brexit has been that it is more important to the EU than the EU is to it, and its planning has all been predicated on the subsequent assumption that there was no way that the EU would allow for a hard Brexit. Unfortunetly for the UK, it looks like it was wrong on both counts.
18
@Scott Nolde
I entered the comments to make the same point, that the EU has done far more preparation for hard Brexit than the UK has done, and to provide the EU press release describing what they have done and linking to the full document: http://europa.eu/rapid/press-release_IP-18-6851_en.htm
There seems to be little thought being given to the long term consequences for the EU and how those are colouring the EU's negotiating position. If the EU grants concessions now to the UK, it will open the floodgates for other EU member nations to try 'sweetening' their current agreements. Which means more arguments, threats, and the gradual erosion of the EU. Possibly even its death. So expect no last-minute flexibility from the EU - jointly felt short term pain is better than long term death.
10
"If the border infrastructure isn’t there, then just postpone the event until it is — or, if that’s impossible for some political reason, settle for minimal enforcement, basically a customs union in practice though not in principle, while things get sorted out."
WTO has provisions for mutual recognition of standards. Since on exit the UK will be compliant with EU standards why can't they accept shipments without massive customs inspections? The only reason will be to punish the UK - but given the trade imbalance in favour of the EU, that could backfire.
2
@Ian
As one of the often stated reasons for the UK to leave the EU has exactly been the possibility to no longer HAVE to adhere to the standards of said EU (red tape, red tape, Brussels bureaucrats!), you might perhaps reconsider your suggestion.
Please don't think of the EU as a bunch of easily fooled imbeciles. You might end up looking bad.
Dr. Krugman writes: "Minor gestures [by the EU] could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way." The seminal arrogance was of the Tory government in London, and specifically of its feckless leader, David Cameron, who bet the future of the country on a referendum in order to keep his divided party in power. Now the country's on the brink. He's doing fine, though, so that all right. "Arrogance"?
23
The more we find out about Russian "influence" in our 2016 elections, the more plausible the idea that Brexit is at least part "Borschit" becomes.
The three main reasons Brexit could be completely home-grown stupidity would also make it easier to effect (and disguise) disruption.
The first is that several decades of promoting the maker/taker concept has left the Conservative Party with an increasingly hazy idea of much of the electorate. When residents of a London neighborhood rioted and burned stores, then-Prime Minister David Cameron moralized about the "nation of shopkeepers" turning upon itself. He apparently had no idea that many of the rioters felt that owning a store was far beyond their families' ability to achieve. While Mr. Cameron was looking down at the shopkeepers, the rioters were looking up.
As the U.S. has learned, two different realities make it easy to substitute ideology for facts when determining policy.
The second factor: a thousand years of whatever makes England, then the UK, invariably choose the wrong way to "handle" Ireland. (An early example: Henry II's belief that it was England's right to handle Ireland at all.)
The third factor: a surprising lack of foresight. Within hours after the vote, the minister who had just become in charge of Brexit arrangements told the BBC she had no idea what would happen next. The interviewer was actually outraged as he tried to point out that she was the government official who was supposed to know.
9
As at least one comment points out, the EU before Brexit gave the UK many special favors. I think Krugman must see the EU as too many in Little England do, a convenient economic vehicle. The goal of Europe is bigger than that.
A big problem with England in the EU is that too many Englishman have never joined in the ideal of Europa. They do not see themselves as English and European at the same time. Other Europeans routinely fly the European flag alongside their national flags; I do not believe the English so often fly the UK flag alongside the European flag.
23
@JR
But yes, they do (fly the EU's flag). Unfortunately, mostly since the Brexit-referendum.
Mr Krugman seems to making one very optimistic assumption: that the people whose incompetence has made them unable to negotiate an exit deal will be able to competently manage a no deal exit.
15
@Steve Bright
And they're off to a bang up start...14 million pound contract awarded to a company to provide no deal ferry services..a company with two employees, no money, no ferry experience and no ferries!
4
@Steve Bright
They did negotiate an exit deal...
I'm usually a big Krugman fan, but this is weird.
I think he should talk to some people in England.
Also, he should look at what the conservatives have done to clean energy (basically, ban it and promote big fossil; also, they're imposing fracking on communities that don't want it, and shut down wind).
18
A couple of cartoons; one UK asset is their lack of comic restraint!
https://www.theguardian.com/commentisfree/picture/2019/jan/16/steve-bells-if-time-for-a-second-will-of-the-people
https://www.theguardian.com/commentisfree/picture/2019/jan/15/steve-bell-on-theresa-may-desperate-brexit-mission-cartoon
5
This reader worked off the books in central London forty years ago earning nine pounds a week and living, little better than a squatter, in a cold water flat. Nevertheless, basic needs were easily affordable, and being in London was grand. On the other hand, wouldn't want to do it again -
6
Actually the guy in charge of Calais has been well prepared . You might want to take the time to check that one out. It’s also interesting to read an article on Brexit without so much as a nod to the main bone of contention amongst the Brits ~ the Irish backstop. Holding firm on that doesn’t reflect intransigence in Brussels. Rather it is irresponsibility and irredentism in Westminster.
14
My impression is that many Brits voted for Brexit because of the open borders with the EU and cases of Polish coming and getting government assistance.
7
I also am absolutely certain that I do not know whether the (possibly quite soon) result will be hard Brexit, soft Brexit, or no Brexit. Because May is still in power, the no Brexit result has diminished in likelihood.
I am more confident that a Brexit would in the first few years be uncomfortable to Britain, Ireland, and the rest of Europe. Possibly May and the Conservative Party lost when they remained in power.
4
Since the Brits are so eager to uphold the sanctity of the Brexit vote and safeguard their democratic decision, the only win-win action is to go ahead with the Brexit on schedule, regardless.
Scotland should decide if it wishes to leave UK and rejoin EU as an independent country, asap. Likewise Northern Ireland should also decide if it wish to leave UK, merge with the rest of Ireland and remain in EU too.
This way everyone will get what they want and the people's wishes respected. Isn't that what democracy is supposed to be?
19
"Scotland should decide if it wishes to leave UK and rejoin EU as an independent country, asap."
Despite the desire of the Scots to remain in the EU as evidenced by their vote, the fact of the matter is that Scotland trades far, far more with England than with the EU. If it did join the EU, would be a hard border with England. The savings derived from being part of the EU would be more than offset by the costs of a hard border with England.
"Likewise Northern Ireland should also decide if it wish to leave UK, merge with the rest of Ireland and remain in EU too. "
Protestant Northern Ireland is not going to merge with Ireland.
1
@Observer
The biggest hurdle for Scotland is a threatened veto against its entry into the EU from Spain. Spain reasonably sees an independent Scotland in the EU as pure foreshadowing for Catalan and Basque independence, and those are the two most economically dynamic provinces of Spain.
@Barry: It is now more important for there to be no border between British Northern Ireland (only six of the nine counties of Ulster) and the Republic than the ancient religious differences.
The people of British Northern Ireland can obviously see that Dublin holds them in far higher regard than London does.
4
Most of the polling suggests that the British population would now reject Brexit if a second referendum were held, because it's now obvious that the leave campaign were basically lying. And the notion that a democracy can never change its mind is ludicrous: every general election is an opportunity for the people to change their mind, and change their government. The only reasonable thing to do now is to go back to the people of Britain and ask them to make a choice between actual options, not the fantasy they were sold.
"Minor gestures could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now."
Don't agree with this at all.
The EU could not give Cameron much more than it did without changes to the treaty. Besides, the UK already has a good deal with the EU with the rebate and opt-outs.
The brexit agreement May finally reached with the EU was severely constrained by her own red lines drawn early in the negotiation process, and the need to pander to the hard brexiteers in order to keep the Tory party together. One day students of politics and history will study Mrs May's handling of these negotiations as an example of how to guarantee failure, from her red lines to her failure to engage with the other parties and devolved governments to her appointment of chuckleheads and hacks to critical posts, and her utter utter intransigence.
24
@Joan
Not to mention the invocation of Article 50* BEFORE any intra-british agreement on any logically sound negotiation position vis-a-vis the EU. You really couldn't make it up.
(*Art. 50 starting the clock on a fixed two-year negiotiation schedule after which the departing country automatically exites from all EU treaties)
3
@Joan
Where were the other members of her party in all this ?
Where was the know-it-all Boris ? Why was so much expected of her with no constructive help from her fellow party members who instead sabotaged her every step of the way. Quite incredible.
1
@Brigitte Wood
May's fellow Tory party members have their own agendas.
May's agenda has always been to keep the Tory party together, which is why she has had to pander to the hard-brexit crowd.
Yes, it is all quite incredible.
1
I second the comments of the others who generally agree with many of Mr Krugman’s views, but are disappointed and surprised in a bad way by his accepting of the unfounded and quite fantastic anti-EU polemic which helped to bring about the current deadlocked situation.
The reality is that the UK still insists on being able to find a deal which gives them all the advantages of a member state, with none of the disadvantages and responsibilities. That is not going to happen - and it shouldn’t. Contrary to what Mr Krugman asserts, the EU has not been specifically hard or uncompromising on the UK, namely by trying to find a way to solve the Irish situation without the kind of bloodshed the UK had lived with for a long time before joining the EU.
The EU has no interest in punishing the UK, as it’s quite clear that that would only hurt its own interests. But I fail to see why the EU would give in to the UK’s unrealistic and petulant demands either.
47
I agree with your points, but I want to point out that all but about three years of the Troubles happened after Britain joined the precursor to the European Union in 1973. (In fact, Ireland and the UK joined the union on the same day: January 1, 1973.)
I don't think the fact that the UK and the Republic of Ireland were both members of the European Community had much at all to do with the escalation -- or really even the eventual cessation -- of violence in Northern Ireland. That's arguably a function of the limited power of the EC when compared to the EU.
Admittedly, animosity and violence between the UK and Ireland was not exactly unknown before the so-called Troubles started in 1969, so maybe you were referring to that.
3
It is remarkable how often those with limited knowledge of how the EU actually works present it as an arrogant, colonialist bureaucracy when in practice it is in essence a community of laws and fiendishly complex political balances and trade-offs. Monolithic it is not.
The EU is here presented as treating Greece arrogantly. This casual comment is made so often that one wonders if those who make it have every actually looked at the Greek story in full historical depth. Greece is largely the author of its own misfortunes. While the EU might have handled things better, the Greek expectation that other European taxpayers should pay for its two decade long party is hardly reasonable.
Likewise the British. The EU has not behaved "arrogantly". It has been consistent and pragmatic. Like any other entity it has acted to protect its own self interest and survival. That the EU would do this should have been obvious to British politicians if they had stopped to think about it, but mantras such as 'we hold all the cards', 'a trade deal can be done in a few months' and 'they depend on us more than we depend on them' display a degree of self-delusion on the part of the Brexiteers that dwarfs any supposed arrogance on the part of the EU.
It really is important that those who comment on these topics do their homework - especially when they write for the New York Times.
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@Frank Bannister
I totally agree. I am always surprised by how pervasive a certain distaste of the EU -- I wouldn't call it Europhobia in the case of Professor Krugman -- is among the US commentariat. Even the best, like Krugman, can't honestly comment on the EU.
38
I agree as well. And it's not just the Fox news pundits or other Murdoch monstrosities. The NYT has also pandered anti-EU sentiment for decades. I cannot recall a single article or opinion piece in which the many obvious advantages of the EU are cited (the first and most precious of these being peace and democracy). Growing social inequality in the community countries has less to do with EU policy than with the hegemony of neoliberalism driven by the United States (where the levels of inequality are much greater). So Krugman is plain wrong on this: Britons, who never felt European to begin with and who peddled neoliberal ideas even more ferociously than their American cousins, are finally getting a taste of their own medicine,
7
@Frank Bannister
Sorry but the Greece situation should be considered differently and critically than Brexit. How can it be in Europe's long term interests to have one of its members suffer soaring unemployment and mass migration and no growth for decades? The Greeks' "2 decade party" was financed by German Banks who should have known that Greek finances were weak. Instead of giving them a share of responsibility for the crisis as irresponsible lenders, all responsibility has been landed on the Greek people. And instead of combining some sort of punishment to the Greek authorities for financial mismanagement with EU productive investment into the Greek economy to support an exit from the crisis, the EU prefers to teach every Greek, young and old, a lesson.
That I must say is a particularly cruel form of arrogance.
2
"If the border infrastructure isn’t there, then just postpone the event until it is — or, if that’s impossible for some political reason, settle for minimal enforcement, basically a customs union in practice though not in principle, while things get sorted out."
Oh come on Paul, this is the crux of the issue, you can't just assume it will 'get sorted out'! Oh wait, you're an Economist, I take that back. Assumptions are your stock in trade!
At least you concede its unlikely to happen.
What this may promote is greater political integration within the EU. With the troublesome British finally dealt with, the EU may turn to some deeper integration issues to bring the remaining countries closer together.
12
Revocation of Article 50's notice of withdrawal would remove artificial time pressure, provide unlimited time to renegotiate and allow for a new referendum upon completion of negotiations. The two year time limit may have been sufficient time for a withdrawal agreement when enacted but the modern economies of the UK and EU are much too extensive and complex to be disentangled in such a short period especially after decades of integration.
8
I agree with Prof Krugman that the EU has behaved towards Britain with considerable arrogance.
The signature characteristic of the British approach to the negotiations, by contrast, has been incompetence (rather than arrogance) and this has rightly been widely excoriated.
The British government naively assumed that the EU would want to negotiate a Brexit that would be in the interests of both parties, given the two will remain closely linked, whether Britain is in the EU or not. Instead, they discovered that the EU was determined to punish Britain for its temerity in wishing to leave, and this desire trumped other considerations.
The EU’s hand in the negotiations was of course immeasurably strengthened by British ineptitude, but the EU did not have to exploit that as much as it has. It might have been more statesmanlike – and preserved better relationships in the longer term – to have been a little more accommodating.
An example.
The EU insisted that the UK commit to large payments to EU coffers even after it had left the EU. This was perfectly reasonable if the EU was offering something in return for the very large amounts of money it demanded, but very explicitly it refused to do so. Essentially it demanded the money first before it would discuss anything else. In effect, the UK was being asked to pay for the privilege of negotiating a deal but had no idea what that deal might be – “pay us first, then we will decide what you get for your money”.
4
@David Buckland
1. The EU refused to allow the UK to engage in cherry picking, the idea that the UK could keep the bits of membership it liked, and dispense with those it didn't like. The arrogance here was on the British side. There was even a name for it: "cakeism" after Boris Johnson's comment that the UK could have its cake and eat it too.
2. I assume the "large payments" you are talking about is the £39 billion agreed as settlement of the UK's existing obligations as a member of the EU. When you leave a club you are expected to settle your bill.
3. I agree completely that the UK has been incompetent throughout.
35
@David Buckland
It's really not a matter of arrogance on the EU's side, but of a HUGE miscalculation by the British.
Their assumption was that continental business interest—led by German car makers—would press their politicians into giving the UK what it wanted. But while it's true, that the export from the EU to the UK is substantial, to maintain the integrity of the whole European Single Market tops this interest by a wide margin for most European AND international business.
Now, go figure what Japanese car makers—currently based in the UK—are going to do when they loose access to the single market under a hard Brexit.
To invoke and acknowledge mutual interest between partners is a two way street. The UK failed miserably on that account.
3
Have you considered the impact of reciprocity in this argument ? The UK has abused Europe ever since joining and now even while departing. And you dare to claim that Europe should overlook these facts and help them out while being abused even more ? The arrogance of this argumentation bewilders me. Europe has ony defended its and some of its members core interests in a very predictable and consistent manner. While being as flexible as they could in the light of the british arrogance, petulance and unclarity of demands. The brits got what they wanted and deserve. And they have only themselves to blame for their current and future misery.
1
I am a big fan of Dr Krugman’s columns. But he really misses the point here. It was the UK who decided to leave the club. It was the UK that drew up a set of non-negotionables very late in the process without any agreement back home (checkers accord). Knowing that some of these would basically ask the EU to give up/in on some of the core of the union. Which they knew Europe would not give in on as this is the core of the club. The Brexit deal was the only solution possible given all the constraints on both sides. Where the EU has been flexible as far as it could without jeopardizing their reason for existance and safeguarding the key interests of some of their member states. And most European countries have been preparing for over a year now for a hard Brexit. Contrary to the UK who awarded a contract for shipping and customs clearance to a company who has no boats and no customs clearance experiences only in Q4 of 2018. Now that’s called preparation. They basically gamble that their big neighbour will chip in if things go south in the UK. And now on top of it all Westminster votes their own Brexit deal down without any clear sense what it is that they want: Brexit, no Brexit ? It is a gross misrepresentation to point at the EU as having to do something to help out if you don’t know what the other side wants. This is beyond economic impact, it is about principles. And I’m sorry to say, but the Brits cannot have the cake and eat it. And no, there are no cherries today!
52
In 2016 British voters were mostly concerned about free flow of workers; more so than they were about the economics of leaving the EU. Remember the "Polish plumbers" trope? The EU couldn't offer much on that head without changing the nature of the union. The voters were also told that any economic impact would be made up by better trade deals with non-EU nations; maybe so, maybe not, but at this juncture at least the short term economic impact looks rather poor. The 2% to 4% estimate for a few years wouldn't be fatal, but would cause grief for many of the UKs poorer citizens.
The "Eurocrats" are responding to protect the EU, I believe. If the UK were given what could be construed as an easy slide out of the EU, several of the other EU members would likely file their own Article 50s to leave. Also, the EU had to act to protect members Ireland and Spain from the impacts of Brexit.
David Cameron's initial political pandering of a vote, followed by the Government's willingness to proceed with a 3% plurality seems to me questionable. Should a major economic action supported by around 53% of the voters be the rule of the land? It was, the politicians decided to save their positions rather than to be honest with their constituents, now the difficulties come home.
15
". . . settle for minimal enforcement, basically a customs union in practice though not in principle, while things get sorted out."
Is it not the case that any such agreement that in practice allows the UK the same status as an EU nation, is illegal (under EU law)?
11
@Karl Gauss I believe you are correct, at the very least the EU wouldn't countenance such status for fear of rendering the raison d'etre of the EU moot! They are never going to let the UK have their cake and eat it too.
8
@Karl Gauss
That is, following a hard Brexit.
In other words, for most part there are problems and issues that people who want to get along could amply work out. Unfortunately the people working on it have no interest in getting along, and may be required by their constituents to fight no matter what.
4
In the end, I think they will do a second referendum. A no deal Brexit would be a gamble, and I don't think Theresa May is a gambler. That leaves a second referendum as the only possible road out of this mess.
If a second referendum is held I think remain will win. People are going to be very tired of hearing about Brexit and a remain vote makes it all go away.
11
The funniest part of the Brexit process has to be the wailing about the dreaded 'vassal state' outcome. It's just so beautifully ironic for one of history's largest empires to face that possibility. That gets me every time.
18
I have to differ strongly with Mr. Krugman. May's Brexit deal would stand a much better chance of passing if it were not for the 'Backstop', which keeps an open border between the Ireland and Northern Ireland.
The EU is absolutely properly protecting the interests of the Republic of Ireland, which is remaining in the EU. Why would it not protect the interests of its own member state? It is bad enough already: Ireland is likely to suffer economically from Brexit. On a side note, it is also in Britain's own interest to keep the Irish border open, as closing it might help lead a drift back to the horrific sectarian violence of the past.
Britain, I am sad to say, has reaped what it has sowed... both in terms of how it has treated Ireland over the centuries, and in terms of its people's quixotic vote to leave the EU.
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@Malcolm I agree with your last point. England greedily held tight to as much of Ireland as she could, and now she will choke on it
1
As discussed on BBC Newshour, in UK press, UK Think Tanks and some Parliamentary Group determined that Russian Disinformation Campaign focused on Anti-Immigration with well-honed cyber techniques to the voters in areas outside Greater London. This Disinformation Campaign together with oversimplified and inaccurate messaging from a small group of Tory Hucksters resulted in a 52% to 48% vote (72 % of eligible voters)to leave the EU.
RATIONALE: The world noted with alarm all the political-bureaucratic-press time, resources and money spent (read ?% wasted) in UK and EU over Two-and-One-Half Years which resulted in a Overwhelming Failure for P. M. Theresa May, the 5th largest economy in the world and UN Permanent Member.
ACTION: A strong case can be made to conduct a transparent educational campaign on key issues and a new Referendum Mark II within a year - and 'extending the Referendum Mark II process' through EU Article 50.
One CONCLUSION: Why wouldn't we expect more tremendous wastage of time, resources and money trying to resuscitate a variation of P. M. May's Mark II or Mark III?
6
What is broiling and bubbling across Europe is the old time ethnic sectarian nationalism that made Europe the root of colonialism and imperialism at home and abroad.
But the nominal socioeconomic political philosophies that brought blood and mayhem in two world wars in the last century glossed over that primate ape reality. Populism is a euphemism for nationalism. BREXIT is nationalist nostalgia.
The sun set on the British Empire and rose on the American Empire. Britain lives on " Masterpiece Theater".
The purpose of the European Union, the Eurozone and NATO was to bring Germany economically and politically inside. Germany must humble itself economically, diplomatically, militarily and politically.
With 7% of humanity Europe has about 22% of nominal world GDP. America with 5% of humanity has 25% of nominal world GDP. Europe has aging and shrinking nations with below replacement level birthrates. Brazil, China, India, Nigeria and South Africa are rising and suspicious.
3
Thanks for plainly and clearly explaining the short term trade problem. It's the first good explanation I have seen.
6
Mr Krugman, I am a regular reader of your op-eds which I mostly find well informed, to the point and refreshing.
This one is an exception and I am surprised how uninformed you seem to be about the whole issue.
1) Most members of the E.U. set up contingency plans in case of a hard Brexit on 03/30. This is particularly true of France and obviously Calais.
2) As for plans on the British side they seem to be quite organized regarding health care and specific sectors relying on imports, but as to to organization of customs at Dover all reports tell that so far provisions have failed miserably…
3) England was a member of EU. Therefore England was NOT in a customs union situation. Not only goods and people traveled freely between as all other members of the EU but UK received massive subsidies from EU and took part of its policy making.
4) Actual project rejected yesterday is a customs union so that Northern Ireland and Republic of Ireland wouldn't be forced to reset a hard frontier on the island which would inevitably trigger in a not distant future new conflicts between Protestants and Catholics there.
5) Much has been said about Theresa May, but she showed fortitude and pugnacity against demagogs like Johnson (Boris) who calls for a no customs union Brexit ("hard") and Jeremy Corbyn who's only interest is reaping the rotten fruits of the mayhem among Conservatives.
6) As for the EU agreeing to postpone Brexit they show no sign telling they would accept : they're tired.…
36
@vincent7520 I agree that this is not his best column, however I take issue with a couple of points you make. The UK absolutely was, and for seven more weeks is, in the customs union. Schengen, the Euro, no, but the customs union yes. And that is the 'cake and eat it' position, the UK wants to stay (by another name) in the customs union, but without the pesky inconveniences of free movement, etc, etc, etc. Secondly, the UK is and pretty much always has been a net contributor to the EU, you can argue about some of the knock on economic benefits of EU investments, but its clear that the UK, even after its rebate, that Thatcher negotiated, like the other major northern countries pays in more than it receives. Hence the 350 million pound a week back from the EU claim that was made by the Brexit campaign. Bottom line: a mess!
A 2-3 % drop in GDP in exchange for a renewed manufacturing sector and perhaps less-distant, more representative governance doesn't sound too bad. Has anyone done any modelling on how distribution of income would change? It seems like trading the financial sector for the manufacturing sector would benefit more people and close the gap between the haves and the have-nots.
4
A renewed manufacturing sector probably won't result in as many jobs as some might expect, and certainly no where near the number of jobs that the UK had at one time. As with US companies that are now "on-shoring", most of the incremental production will be handled by automation, often in "lights out" factories. The UK could wind up wrecking the financial sector and finding that it has little to replace it with.
3
Much of what the good Professor says is contrary to what I think will happen, but he's just a tad better informed than I am.
Still, the fact is, for those 45 years UK-based corporations made investment decisions predicated on Britain being a member of the EU. Doesn't it hurt them if all those decisions now have to be operationalised in a different legal and economic (to say nothing of political) framework? Isn't that *a lot* of adjustment?
Isn't it a bit like assuming that you will have your very-well-paid job for life then finding yourself laid off and marginally employed? What about the big mortgage? What about the Harvard tuition? What about the boat payment? That may be a poor analogy or over-simplified, but I would think that with Brexit an awful lot of moving parts are suddenly going to have to change direction.
Clearly the EU wants to punish the UK and they have good reasons to make them an example. But it also signals that they admit that there will be a significant effect on their own interests. But they also know they're the dog and Britain is the tail, and they have no intention of being wagged. Both sides are playing the same game.
15
@Stevenz
Show me any club on this globe who can afford to treat outsiders better than members without destroying itself, and I will buy into your argument of the supposed 'punishment' handed out by the EU toward the UK.
Thanks in advance.
1
I am at a loss as to why a small, island nation would seriously disrupt the very trade for which it will be desperate to maintain after its exit from the E.U. Almost everything that Britain trades to the E.U. (except for tourism) is easily replaced with alternatives. Even wings for Airbus jets can be shifted to the continent. So where is this imagined leverage coming from?
England has done many dumb things over the centuries. Think the Corn Laws, Opium Wars, it’s jumping into World War One, the struggle to maintain an Empire and its policies towards Ireland. And that’s just to start. This exit from the E.U. will be added to that list.
The European Union has produced far greater prosperity and peace for the last 70 years in far greater amounts than Britain could have achieved on its own. But the income distribution has been uneven and those left behind are lashing out. But I still have to ask: Now that time is short, what exactly do you plan to do come March 29th?
24
@Mark Young
I think Brits still over-estimate their importance to the world. They were once the "essential nation" on which the sun never set, and they still have an element of the hubris that comes with dominance. This may be their ultimate comeuppance.
20
@Stevenz They are still one of the largest economies in the world and London for many years has been the most significant capital market in the world.
5
@CHM With Brexit, that latter may well be changing. (The "most significant capital market in the world.")
8
Non-enforcement may work from an economic perspective. However, I don't really want to consider the political implications of such a decision. Rock meet hard place.
If a hard Brexit gums up the works of commerce, businesses big and small are going to revolt as their products sit idling on the docks. If you give commerce a pass though, the Brexiteers on both sides are going to revolt. The EU-UK will accomplish a soft Brexit through inaction rather than compromise.
What's the incentive to ever compromise then? If you loosen the border regulations without a deal, don't expect the regulations to ever come back. Don't expect voters to forget either. Europe isn't going to be happy when Britain gets to have things both ways.
Things are going to get messy one way or the other.
3
What Mr. Krugman has failed to take into account is the personal, and very human, cost of a no-deal Brexit; it's the same as shrugging off the US govt. shutdown as merely a temporary minor blip in output, ignoring the damage done to families and contractors affected by it.
Whilst the UK's GDP may only dip by a few points, our already fragile high streets and small businesses will face a huge amount of unwanted extra pressure which could very well be the tipping point into bankruptcy and job losses.
Foreign and domestic vehicle manufacturers, a major employer in the UK, would face extra tarrifs exporting their vehicles to Europe and might choose to switch a European location to avoid this. I picked this because it's a headline industry but there are undoubtedly many others.
The UK, like the USA, really is a nation underpinned by small businesses; they are currently under a financial squeeze from Conservative taxation policies and austerity and a further hit from a drop to WTO rules may be a bridge too far.
The whole riddle of Brexit, certainly economically, seems to be wrapped up in words and phrases like 'might lead to' or 'likely to occur.' We can't function like this and Scotland, especially, is highly dependent on frictionless trade and freedom of movement for workers.
Scotland shouted 'no', because this country needs to be part of the European Union, but we shouted it into a roaring gale of English populism and were not heard.
48
Thank you Zoe for your article, the best guesstimate the independent WTO projections came up with was an 8.8% drop in GNP, the post 2008 drop was 2%. But as you say, especially in Scotland it’s the personal level too. My healthcare team has lost two Senior surgeons, we’re struggling. I recently spoke to a third female Registrar, from Spain, she told me something I hadn’t considered, the exodus of EU Nationals disproportionately affects women, although being here with EU residency and partner, those who have had maternity leave and hence dropped off paying NI and Tax, are finding that that unfairly discriminates against their proving they have been resident for the stipulated five years.
15
@Zoe Additionally, I have seen recent polling which indicates nearly 60% of Scots want a second Independence Referendum if Brexit actually does come to pass. One can't say the government weren't warned, either.
16
@Alan Harvey
The Scottish NHS, by far the best in the UK, has always relied on EU surgeons, doctors, nurses, administrative and cleaning staff - employees at all levels. I don't blame them for returning home due to uncertainty or ridiculous residency requirements and I doubt you do either.
My pilot's license is issued by the EU. It essentially becomes worthless on a no-deal exit but I doubt I'll be grounded if it happens because politicans and their donors need air travel.
The race to privatise the NHS, however, may well continue unless we can get rid of this thoroughly discredited, hopeless austerity Westminster goverment. All I can offer is a bewildered shrug and sympathy as your staff continue to leave, gutting our NHS of talented, essential people and piling on the pressure for those of you who remain.
19
Britain's situation vis a vis the EU somewhat resembles that of Greece during the long financial crisis, but with a big difference.
My reading of "Adults in the Room" by former finance minister of Greece Yanis Varoufakis, is that Greece was trapped inside the Euro and so had to submit to severe austerity dictated by Brussels and international banks. Had Greece retained her drachma she could have deprecated her currency to lessen the pain. (The problem of owing external debt in foreign currencies would have been made worse however as her currency weakened.)
Unlike Greece, Britain retains the pound, and that could be very useful during the next economic crisis, which appears to be starting. Brussels cannot force austerity on Britain during a crisis as it did to Greece.
6
Wow. I'm amazed to hear someone admit to the "arrogance" of the EU. (Ministers openly spoke about "punishing the UK" so as to discourage copy-cats. They refused to bargain, even discuss, any of the details, instead sitting on their hands, just waiting to shoot down any UK proposals. One needed only to read the Times with an open mind, it was all there.)
And I'm also very pleased to see the "muddle through" option recognized; a British specialty. And the recognition that one effect may be the beginnings of the re-industrialization of the North; privileging industry over finance for a change.
We could use a bit of re-industrialization here in the US!
5
@laurence I suppose it might be possible that punishing Britain and accepting the cost could be what it would take to stop others from leaving and the whole enterprise unraveling. It might have been a rational decision if a largely intact EU creates value, and I expect most agree that it does.
10
@Laurence
it is completely untrue that the EU would not discuss details.
The EU have published extremely detailed position ppapers regularly while Britain’s David Davis refused the uk’s equivalents even to Parliament.
And when the uk governments papers were published they were amateur by comparison.
31
@laurence
EU negotiated for two years with the UK in good faith, patiently and consistently. And all 27 member states agreed and signed off on a deal with the UK govt. Only the UK has and had no idea what it wants.
Re reindustrialisation of the North and rebalancing of the UK economy, this is another Brexiter pipe dream which I'm amazed to see Prof Krugman advancing. UK manufacturing accounts for little over 10% of UK employment. It has one of the most reduced manufacturing infrastructures of any advanced country despite its glorious traditions in this area. To wit, its trade deficit in goods is as high as in 2016 despite the huge fillip of a 15% devaluation of its currency.
43
If Britain leaves, it will become a smaller, poorer and more quintessentially British, nation. Northern Ireland should be ceded to Ireland, and Scotland to the EU as an independent nation. Hadrian's Wall could be resurrected, the foundations are still there.
The losses for England would be economic, the gains, social. How much is it worth to remain British?
12
@Herman Tiege
The gains will not be social, as they involve narrowing not broadening the nature of Britain, parochially closing off our relations with our nearest neighbours, and encouraging ageing xenophobia at the expense of the opportunities our young people currently enjoy.
@Herman Tiege "I'll build a great big beautiful wall, and make the EU pay for it!"
@Herman Tiege
Hadrian's Wall. That worked well, too, didn't it? ;-)
I think part of the problem is allowing ballot measures to make decisions that are too breathtakingly large. Ballot measures are fine about smaller more specific things (like legalize something), but not tenable about really big things like Brexit (or California should split in two). If the government in place cannot pass such a measure, then the government is not in place to manage it if it is forced on them. If you want a Brexit, there needs to be a parliament that can support it in place already, and in that case it would not have to be a ballot measure, it would already be happening. The ballot measure can be a dastardly sort of shortcut bent on chaos.
39
@James Smith I agree completely. Cameron should never have thrown it out for a vote especially since there was no plan of action if it won. When it did he just walked away and hasn't been heard from since.
18
absolutely true. I often feel that the California legislature dodges tough votes by punting to the people.
6
@James Smith
Right. It was a dereliction of duty of historical magnitude. Representative government is there to make tough decisions, not just issue dog licenses. Cameron threw this bomb to take himself off the hook. History won't forget that.
The grass is ALWAYS greener on the other side of the fence right? Yea, sure their water bills are higher, their fertilizer and weed killer bill is bigger, their mower uses more gasoline, and the kids can't play on it, but it's greener. Or maybe just average green is fine as well. Next time, if it ain't broke just don't fix it.
13
Unintended consequences. That's what happens when problems are ignored for too long.
One problem ignored in the US and Europe is poverty in the third world. Part of this is driven by population growth. The population of Africa is projected to double by 2050.
One consequence is the dying off of large species of mammals on the African continent. Another will be a continuation of immigration into Europe. It was partly a fear of immigration that caused Britain to approve Brexit, which comes at exorbitant costs.
Accompanying high levels of immigration is the decay of democracy itself. US population has increased by 86 million since the Immigration Reform Act of 1986 was passed and then ignored, particularly by liberals. Yet liberals are right about another issue. Women everywhere need access to family planning, particularly in those parts of the world afflicted by population growth.
And it is here that democracy is failing. The message has not gotten out that it is not racist to discuss limiting population growth. In fact, it is essential to the survival of civilization in the long run.
China at least had the vision to introduce a one-child policy in 1979. Now the Chinese economy is vying with that of the US for leadership. But not successfully. At least not yet.
Too bad the liberal leaders in Europe did not see fit to couple strong restrictions on immigration with a recognition that Africa and the third world need help in controlling population growth.
20
@Jake Wagner
the EU has no control on how much migration the UK permits from Africa, you do know that right? The UK has total control over non-EU migration, it always has, and exactly like the United States it has obligations towards refugees which have their basis in International Law - no UK politician or political movement has proposed we derogate from that. Our government currently expects that we will have to increase migration from the Global South to make up for the loss of workers from the EU after Brexit.
I accept that some people might have voted Brexit because they were as confused on this point as you appear to be but I'm really sorry to be the one to tell you that the majority who voted because of immigration did so out of a dislike of migration into the UK of citizens from other European nations (mainly Poland). That's what pushed a once marginal Euroskeptic movement over the line.
Would you be prepared to rework your narrative to change the fecund Africans to white Christian Eastern Europeans? I'm going say, 'No'. You probably wouldn't...
This op-ed brought me back to a time when I enjoyed reading Mr. Krugman's op-eds. This was a long time ago, a little over two years back. I know this kind of stuff may not sell newspapers to the same degree as some of the more politically incendiary commentary, but this is the good stuff, and I'd like to see more of it. It's fun to think about economics; but the economics always go out the window when the agenda isn't discovery of the truth, but, rather, rallying people behind a common political ideology or narrative of events.
20
@Bill
The link between politics ( defined as the manner in which polities choose to distribute resources) and economics is so tight the two are often indistinguishable.
In most societies, certainly in our own, the equivalence of power and money would make it very difficult to speak of one without taking note of the other.
Maybe another way to put it: politics is economics in action.
13
@Bill: I'll bet that if you go back and look at those columns that you don't regard a fun you'll find that a concern for truth is behind almost all of them. I don't think they're fun either, but I don't blame that on Paul Krugman.
11
@Bill Bill, do not wary, Krugman will stop writing comments you do not like in little less than two years.
The part about EU arrogance is nonsense: England (let's not involve Scotland and Ireland in this) has been a problem since day 1, weakening it at every turn and, overall, trying to have the proverbial cake and eat it too (or as we say in French "le beurre, l'argent du beurre et le cul de la crémière")
...and the Brexit dealings with the EU have been pretty much more of the same (retaining all the advantages but none of the constraints that make EU something more than what the Brits have always wanted, an open market region more or less aligned with US interests). As for remain 2016, the truth is that many Brexiters voted with the conviction that their (more reasonable) neighbours would save the day: an ample demonstration that the electoral ballot, a privilege, comes with its responsibilities (a point to meditate, in these "populist" times
134
My question is :
What UK is hoping to achieve getting out of EU, and so far Ireland and Scotts( which is in the UK ) couldn't figure out.
What is that magic formula when UK is out of Eu and succeed in todays world much better economic prosperity while Danes, Sweden, Ireland didn't even think of.
What snake oil is this Brexit, when it happened British empire re claim the Canada and Australia and India again. Take back Hong Kong.
UK is a small country however it's economy is big but it is a small country. UK will never out run, Japan, Korea, Singapore, Canada, China and India even Mexico and Brazil.
13
@su But unfortunately, this is what the Hard Brexiteers actually think: that Britain can become some kind of magnet for trade with those countries who right now are excluded from the best EU trade deals and, in my opinion, that we can also become the low-wage, de-regulated mecca for international business.
What these Brexiteers fail to see is that as soon as they try to negotiate with emerging economies like India or other 'friends' in the Commonwealth, the first thing that these countries will be asking for, in the words of David Lammy MP, is 'visas, visas and more visas.'
What I like about this analysis is that even the most die-hard Remainer has to admit that there could be some positive benefits from Brexit, but what many people fear is that the Tories will see this as an opportunity to strip away all of the social protection, food safety and environmental laws that are enshrined in Europe. Anyone who knows of thehorrors of TTIP should be wary of what the Right has in midn for us.
23
@Tim Brown
I agree , Right wing parties economic recipe is for masses is always the same, work for less and make profit desirable.
Lets also remember what is cooking in US corporate world: Abolishing Retirement until 2050. that is ultimate, one factor is going to enable that is AI-Robotics once humans loose majority of work force , corporate will dictate to human employee giving up helath insurance and retirement.
Brexit is not a brilliant idea or economic solution etc. it is just a veiled attempt to rob masses much better way.
8
The hard right of the Conservative Party, were the ones pushing Brexit. Most ills in the UK were supposedly outside the control of the UK, with the EU being the popular scapegoat, for issues the UK had the power to deal with, but chose not to.
Another vote on Brexit would confirm the 2016 vote, or stop a Brexit that will make Britain permanently poorer, than the remain alternative. Brexit will see the gradual dissolution of the UK as Northern Ireland and Scotland still want to be in the EU.
A common theme in Brexit and the election of Trump, was the free propaganda of Rupert Murdoch, who was pro Brexit and pro Trump. How has the Murdoch influence worked out for Britons and Americans?
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@Barry of Nambucca
There are certain devils who would have been paraded on sticks in the dark ages. Murdoch is one of them.
@Barry of Nambucca A friend of mine has suggested that Theresa May's strategy has been part of a secret plan to reunite Northern Ireland with the Republic. Scotland, alas, is hosed since it would need to both secede from the UK and then apply for membership in the EU as an independent nation.
Ordinary people will always be the last to know or to find out the truth. British people were misled in the beginning. And now people will face the consequences of an isolated country facing border, tax, immigration, capital movement, and all other kind of problems. I have no such confidence in Brexit as Dr. Krugman suggested. But one thing for sure is that UK won't be the same as before. Hopefully, she will be for the better.
15
Were they misled? Yes, the Brexit advocates made all these grand promises about money that could be poured into the NHS and how Brexit would be painless because the EU would roll over. But, the "leave" forces made it quite clear that those were impossible promises (a bit like Trump promising to bring back coal). The people, by a small margin, chose to believe that they could have their cake and eat it too. It doesn't mean that they were misled, just that they made a bad choice.
2
It is true that monetary policy cannot do much more for the possible coming downturn in the Eurozone. However, the North has a sizeable fiscal space and can implement a fiscal expansion if needed while the South maintain a neutral fiscal stance. This is a strength of the Eurozone. Not may other "zones" have fiscal space.
I only hope policy makers in the Eurozone, especially in the North, have learned the lessons of the past crisis.
7
Judging from the way Greece was and is treated, and Italy and Spain soon will be, I am surprised there isn't a general trampling of one another to get out the door. The EU is Germany's neocolonial export gig.
10
@gnowell The US has problem states too and problems to solve, there is Mississippi, Louisiana, Arkansas, Alabama, and New Mexico. Sure they are not the same as Itali and Spain and Greece, but all gained by being in the EU. That is true for GB too, Maggie knocked on the door three times to be let in. She was turned down twice and came back a third time. The UK had a voice and vote at the table like all the other nations. They knew they could leave if they wanted to but they could not be made to leave the EU.
They too enjoyed prosperity as did Greece. So the EU has to deal with problems, but that is true for the US as well as the UK. We will see how they deal with their problems. The EU has to deal with a hostile Trump administration too and the American ambassador in Germany acts like a Victorian colonial Vice Roy dictating to German industry as well as the German government where they have to get their energy from.
We should not ignore that wars are fought for economic reasons, markets and resources and strategic advantages. The ME is up in flames and rubble for oil and pipelines not for the Arab Spring for sure. Money makes the world go round, religion is only a tool to get it.
4
@gnowell
Let's consider one observation that falsifies your hypothesis (aka: populist statement) that "EU is Germany's (...) export gig". E.g. consider trade between Germany and the Netherlands. In 2017 Germany exported 85.9 GEU to NL, and NL 91.4 GEU to Germany (my source: www.dnhk.org/nl/advies/marktinformatie/handelspartner-duitsland).
So how about a counter-hypothesis: there is no trampling at the exit because it is actually favorable to remain inside?
6
@gnowell
Sure. So informed you are. NOT.
The countries don't run because they want to be in.
Germany wanted to have Greece leave the Euro Zone during the crisis - it was the Greeks who did not want that, but rather wanted their debts (the result of uncollected taxes from the oligarchs while the low level bureaucrats were handing out government jobs like candy to relatives) canceled. They were to lazy to chase their corrupt rich for their back taxes...
The only option is The Restoration. Bring back The Monarchy! It's the only hope!! (Okay, smart guy, you gotta' better idea?)
8
@Cody McCall,
The UK is a monarchy -- indeed, a constitutional one -- but a monarchy nonetheless.
Brilliant and reasonable! I hope he UK is listening!
1
Just to make sure, is Britain still getting the £350,000,000 to fund its NHS?
27
@JSD Sounds like da wall...
Professor Krugman, one thing you overlook when you deplore the "arrogance" of EU leaders, is how much good will Britain has exhausted in decades of demanding all sorts of contractual extras from the EU, and usually getting them. I would think that the hard stance of many EU negotiators is rather intimately connected with this, because - well, people are people. I will offer no opinion on how foolish or not such an approach is.
139
The people voted for brexit. Those in charge fear that they may lose power so they fight it. Is this how voting is supposed to work? The British people are being lied to and misdirected by those entrusted to run the government....what could possibly go wrong?
4
@Lucifer - Except that the entire "leave" movement did nothing but feed lies to the public during the campaign before the referendum. Given the scope of the actual deal, voters are entitled to say if this is what they voted for,
52
From the outset, Brexit was a fiasco wrapped in a disaster waiting to happen.
For openers, leaving the E.U. made no sense whatsoever and was a ploy for attention by a hard-right political party that had no support among voters - sort of the alt-right of Britain.
Things were not helped by the chicanery of Cambridge Analytica during the Stay-Leave campaign.
Then, as someone at the Times noted the other day, it all got worse with David Cameron agreeing to a referendum followed by his arrogantly believing it would be easily defeated. When he was booted out of office by his own party after the vote, Conservatives picked the least-competent person in the room to become PM and negotiate terms of the departure.
Finally, as you correctly note, the Eurocrats dug in their heels, perhaps thinking that if they took a hard line Britain would back down and either accept unacceptable terms of just call the whole thing off. Ms. May accepted the awful deal.
As for the future, it seems apparent that whether the economic disruption is short- or long-term, the looming slowdown in the US economy won't soften the blows anyone will feel.
Like most revolutions, this is how serious recessions begin: Not with a bang but with a series of whimpers.
39
@Charley James
How did the Eurocrats dig in their heels?
May went to them with a set of 'red lines' and the EU declined to change their constitution to mitigate the consequences for her. Why is that hard line?
The eu is so 'hard line' that the uk currently has financial rebates and opt outs possessed by no other member.
Which the EU has sad we can retain if we cancel Brexit.
Which it is now the opinion of a majority of Brits that we should.
I hope we do.
14
@Charley James The EU offered the UK the same deal and relationship with the EU as they have with Norway and Switzerland, but they wanted more they wanted special treatment.
12
Whatever one thinks of the merits of leaving or remaining, the EU has not behaved particularly arrogantly. The UK has said it is going to leave. It is perfectly within its prerogatives to do so. The EU is holding to the rules which are central to it - if it didn't, it would cease to exist.
The situation is not particularly pleasant at present, but fanning flames by talking about EU intransigence is not unusually helpful. As someone who works on some of the areas in question, the most useful thing people can do is be prepared to set out clearly and coherently what the issues are and why different parties are likely to take particular positions. A few people have been doing this: on Twitter, for example, David Henig and Dmitry Grozoubinski have been explaining technical issues around trade, and Brigid Fowler those relating to parliamentary procedure. Trying to understand each other is vital for the next steps.
116
Given the fact that trade is a dynamic system, how confident are we that any discrepancies from forecasts about events in the short run might not radically affect what the long term situation looks like?
10
"Minor gestures could have saved Remain in 2016." is like saying "Minor gestures from the democrats would have prevented a shutdown". Pelosi and Schumer should have bowed to Trump for the sake of the people.
Britain was asking for special treatment, they wanted free trade without the free movement, and other perks. And we already have an attitude by some nations in the EU, that other nations would describe as freeloading or in a more economic term as moral hazard.
There was nothing humiliating about that. This is a premise for all nations joining the EU alike, there is no cherry-picking.
Of course the behaviour now of the EU is punishing. If we wouldn't do it, everyone would try to carve out a bigger piece of the cake for himself.
No, you should cave in for bullies. Americans shouldn't do it, europeans shouldn't do it.
116
One bright spot that was not mentioned is that, at least, Donald is not leading England and Brexit.
18
Strange how wrong Krugman reliably is when he writes about the European Union. Is there some grudge at play here? He may know economics, but he just doesn't get, or doesn't want to get, that the Union is a political entity. A EU citizen is not a foreigner in another EU country: he is not a national - but no longer a foreigner either. That's what the European project is about: and that is what free movement is about. Impossible to negotiate away the core of your identity.
Humiliating terms for the UK? - a complete red herring! It's Prime Minister May's red lines from the outset that set the tone and the course: if no free movement, no remaining in the Single Market; if own fully independant trade policy for the UK, no remaining in the Customs Union. Simple as an elementary equation, if you know political math. The EU gave everything it could given May's red lines. And not the EU, but the UK Parliament refused to endorse May's deal.
175
@Oliver Nette Krugman has just showcased his ignorance of all matters EU in a rather embarrassing way. Talking about the EU as a customs union really gives it away. Maybe he is not aware that due to decades of regulatory harmonization, trade in goods an services is often more frictionless in the EU than it is in the US.
22
@Oliver Nette The US has 50 states with free movement within the UNION. Most likely, no borders and free movement between states is for economic reasons.
Even military weapons and handguns can be moved and transported freely from one state to another between states with different gun laws.
1
@Oliver Nette gets that which Krugmen misses "hat the Union is a political entity. A EU citizen is not a foreigner in another EU country: he is not a national - but no longer a foreigner either. That's what the European project is about: and that is what free movement is about."
4
The Eurozone has some re-thinking to do; rumors of extending the Brexit deadline until perhaps 2020 are a first step.
At the same time, May and her party have to decide whether to proceed under the auspices of the flawed Brexit vote, or do as Northern Ireland and Scotland are advocating: re-vote the issue.
There are off-ramps available, but we wouldn't hazard a guess they will be taken.
May and her party face the same problem as Mayhem 45* and his McConnell Mini-Me face with the Trumpster Shutdown: back down and take an off-ramp, or persist, which will fragment the party. Of course, the Orange Jabberwock and his cohorts came to D.C. in order to take everything apart, as declared by former White House Chief Strategist Bannon, stating he was a Leninist:
“I’m a Leninist,” Bannon proudly proclaimed. Lenin, wanted to destroy the state, and that’s my goal too. I want to bring everything crashing down, and destroy all of today’s establishment.” Bannon was employing Lenin’s strategy for Tea Party populist goals. He included in that group the Republican and Democratic Parties, as well as the traditional conservative press."
https://www.thedailybeast.com/steve-bannon-trumps-top-guy-told-me-he-was-a-leninist
There is ample evidence the Brexiteers were driven by these same interests; the question is whether the conservative U.S. and U.K. political parties can reject these elements ?
42
I think the Irish border issue is quite intractable. There is some chance that reimposing a hard border will restart the Protestant vs Catholic killings and terrorism that happened in the 1970s and 80s. The whole Irish economy is likely to be badly affected because much of their trade with the rest of the EU travels through the UK.
Also, Brexit uncertainty is quite likely to lead to people postponing big purchases and business postponing investment. That could tip the UK economy into recession. Delays in the arrival of parts from UK factories could disrupt production across Europe.
In the long run European supply chains will have to be rebuilt and that will mean some British factories will shut down while others might open to serve the UK market. That will produce a lot of disruption for the workers and towns affected. If Airbus moves their wing manufacturing out of the UK that will cost a lot of money and will undermine their ability to compete with Boeing.
Also in the long run there might be some conflict between UK and European regulators. For instance, the Europeans have made a mess of regulating emissions from diesel cars, so the UK might write new rules for themselves that put the German car industry at a disadvantage.
Finally, a slowdown in China plus a Brexit slowdown in Europe will have some negative impact on the economy here in the US.
16
The historical tensions of tribal warfare seems to have gripped much of Western Europe in this case. Britain's aversion of its neighbors and the perceptions, true or false, that they are snobbish has been roundly reciprocated by the EU insistence that Britain shall "pay" for its mistake to withdraw from the Union.
The animosity bubbling underneath the surface seems to have hardly helped.
Even now, it seems that many Eurocrats are taking delight in the British parliamentary chaos related to this issue, while at the same time short sighted rabblerousers like Boris Johnson and Nigel Farage are saying "I told you so".
One just hopes that the rest of the world will not be exposed, yet again, to the mutual distrust that exist within Europe's tribes.
8
@Plato Maggie knocked on the door asking to join three times. All because the British economy could not keep up with the continental economy, they were in trouble, the empire was gone. But still, she demanded special treatment and she got. Even now, the EU just wants the money that the UK owes for services rendered, just pay your bill, nothing else.
4
I have been following the Brexit situation carefully and very pained by it. As a European I feel compelled to state that the formation of the EU has been the greatest political accomplishment of Europe in my life-time. I remember the exhilaration of freely crossing borders. Being able to study at the Sorbonne in Paris with ease filled me with tremendous joy that has never waned. If Britain had experienced the complete devastation of country and its people that the European mainland suffered due to WWII there would be no Brexit. "Never war again" and therefore avoiding that nationalism raises its ugly head again is worth all the structural and political challenges within the EU. We must overcome.
306
The European Union was definitely an experiment worth doing. It hopefully survives
These outbursts of nativism. Perhaps some things can be tweaked ensuring the Union
survives. To say that Britain did not suffer
during WW Ii is a bit of a stretch. Ask any Elderly Londoner (not many are left) whether they suffered in the years 1940-1. Not to mention places like Coventry.
25
@Pedro Greenberg
I did not say that England did not suffer, but I was talking a COMPLETE devastation AFTER the war and would like to add, not just a physical, but moral devastation.
42
@Birgit, You said it well, we learned peace is prosperity and war is nothing but destruction and death and more wealth for the war profiteers.
That is something people in the US have to learn again. The civil war was long ago, but the South still remembers. The nation is wasting her wealth on weapons and wars and the working people can barely make ends meet, the standard of living for normal people has been going down steadily for decades because of never-ending wars.
The EU has faced lots of problems in the past and they worked to solve them. 28 nations over time came together to form a Union based on the ideals listed in the preamble of the American constitution, and they succeeded in an unimaginable way, they know they have to fight to keep it. conservatives in the UK seem not to care enough to keep it, it is good if they just leave, they are the trouble maker.
8
Maybe things have been going so well in the U.K. that a 2%-4% drop in income isn’t noticeable, or if noticeable well worth the ability to thumb the nose at those faceless Eurocrats. I wouldn’t bet on it.
25
@Yeah working people in GB still appreciate the social progress Britain made due to EU influence compared to the social Darwinism the USA still practices, the results can be seen all over the US.
1
"But we should also note the fantasies of the Eurocrats, who have behaved at every step of this process as if Britain were Greece, and could be bullied into capitulation. "
Complete nonsense.
"Minor gestures could have saved Remain in 2016."
Completely delusional.
Again and again, Mr. Krugman shows he knows nothing about the EU. I can only infer he knows just as little about every other topic he writes about.
Sad.
42
@abo
" I can only infer he knows just as little about every other topic he writes about"
Unless you know everything about everything, you know nothing about everything?
(A good homework problem for students in a mathematical logic class).
The UK managed itself just fine for centuries before the EU. I don't see why it can't do the same after a mere 40 years inside the EU. There will be some short term pain for many, and severe short term pain for a few. But I seriously doubt the long term will look like the post-apocalyptic wasteland forewarned by EU bureaucrats and pro-free-trade politicians.
The long term looks more dire, however, for the EU. If Britain leaves and the sky does not fall, other disgruntled member states will take note.
7
@Jack Other disgruntled member states ...
Who?
All the small countries (like my little Austria) can`t even think of that because of sheer size; France is glad to balance as a co-leader the bigger and economically stronger Germany; Italians feel somehow weak all alone, efforts promoting to leave the € (by the populist Lega) have dramatically backfired in the population; the Eastern countries benefit incredibly from the EU.
The Germans learned their lesson in nationalism the hard way ...
And no, the UK did not manage itself just fine! They had an ongoing bloody war at the Irish border - that could be solved only through EU membership of both UK and Ireland.
75
@Jack
Exactly, the UK managed quite well - as long as it had an empire that stretched 3/4 of the way around the globe, and if we ignore minor details like two world wars that devastated its people and economy. Just dandy.
28
@Jack, the UK manage itself just fine? I remember Great Britain to be called the sick man of Europe before it decided to join the EC in the 70th. Actually at that time the UK suffered from having lower growth than the average of post war western europe resulting in lower living standard than lets say France, Germany an Belgium.
19
“. But we should also note the fantasies of the Eurocrats, who have behaved at every step of this process as if Britain were Greece, and could be bullied into capitulation. Minor gestures could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way.”
Krugman forgets that Britain already had a sweetheart deal with the E.U., thanks to Margaret Thatcher. They said at the outset that there would be no cherry-picking on the part of the UK. And the UK was blindsided by the insistence on The Irish border backstop. According to E.U. negotiators, the UK hadn’t given any thought to Ireland at all. No, the Tories brought this entirely on themselves.
206
@msd
Also bear in mind that the hard Brexiteers not only want the UK to leave the Union, but actively seek the destruction of the EU which they consider intrinsically flawed and historically doomed. Several Brexiteers were even expecting the EU to crumble in the face of Brexit, opening the way for a new Divide and Rule. Heck, UK ministers constantly tried to go behind the Commission's back. Not only that, but the Brexit game plan is to set up 'Singapore in the North Sea' from which to undercut the environmental, health, social and financial regulations of the EU and effectively destroy it.
The EU negotiators were right to be extremely vigilant. And they have managed to remain unfailingly courteous even in the face of abuse from the likes of David and Raab. I say kudos to them.
24
@msd
Add to that the deal which Cameron and the EU leaders negotiated prior to the referendum, which would have addressed some of the UK's concerns. The "minor gestures" suggested by Krugman were there, and then some. With the Brexit vote, that went off the table. Therefore, I also really don't understand Krugman's sneer.
Just so love the title to this editorial. And amidst all of the seriousness, thanks for a hearty laugh for the day!
6
The EU would say they were not arrogant but just firm because otherwise everybody would be breaking down the door for a "deal" like Britain - not only EU's door but the palace doors in every country in Europe.
Having said that, the EU now faces the prospects of a union that didn't hold. One gets the feeling they are placing their bets on the fear of loss they can engender in the Euro population by pointing to England's failure post-Brexit.
2
@Excellency all the nations joined a prosperous EU. Their social market economy was and still is successful. They proved to the whole world that peace creates prosperity and wars based on social Darwinism bring nothing but death and destruction.
The current budget in the US funds war and destruction and brings poverty to the working middle class. The US too will win the war and lose the peace. See Iraq, what did the neo-cons win?
England joined the Union because their economy was failing, Maggie begged to be let in and the empire was gone, two wars did it and they were the winners and still, they lost.
5
@Excellency The union holds, just like the USA hold, although a Calfornian`s vote has not the same weight as the vote of a man from Wisconsin.
To understand Brexit, you have to grasp the incredible influence of UK tabloids, all but one traditionally anti-Europe to cater old Empire-feelings. Imagine that the judges, who established what just happened (that the House must approve May`s deal - this had to be fought for) were called "Enemies of the people".
@R. Littlejohn - a little bit of research would show you're a bit off-base there.
The nations didn't join a prosperous EU - the nations still rebuilding after WW2 created the EU which became prosperous.
The UK joined the EU in 1973, long before Maggie (although their economy wasn't going so well at the time, so half-points there). They applied to join in 1961, but de Gaulle (ever resentful of having had to be grateful to the British and Americans for freeing France from the Germans in 1944) vetoed their joining.
And the UK (not just England) were broke after being on the winning side in two wars because they had beggared themselves doing so. Fighting against the Central Powers and the Nazis, spending their reserves, holding them off long enough for the Americans to be bothered enough to lend a hand (and I will be the first to admit, when the US decided to join the fight against tyranny, they did it with full noise and fury).
If the UK had not bothered, or had decided it was better to look the other way and stay wealthy (as was offered by Hitler), what kind of world would we be in now? So, maybe just a little respect there thanks.
THIS is their Trump. I’m sorry and best wishes. WE will get a do-over, in 2020. If we last.
132
"But we should also note the fantasies of the Eurocrats, who have behaved at every step of this process as if Britain were Greece, and could be bullied into capitulation. Minor gestures could have saved Remain in 2016; a bit of flexibility, a bit less determination to impose humiliating terms, might have led to a soft Brexit now. But it was arrogance all the way."
Yes. But that would have required an entirely different kind of majority leader and an entirely different kind of minority leader, neither of which Britain has at the moment in May and Corbyn.
What the UK needs is a Jean-Luc Melenchon; someone who is clear-headed, in tune with the needs and wants of the population, well-read, persuasive and eloquent.
The leadership vacuum the West has been suffering from over the last decade continues as many nations are being dragged into the rabbit hole and the oligarchy continues to succeed in exerting enough control over political parties to limit progress or entirely take over as they have done in the U.S.
The consequences of Brexit, hard or soft, will never be confined to the UK. Today's defeat of the no-confidence vote buys the British left a bit more time to force Corbyn to not only do the right thing in getting squarely in the Remain corner, but working hard of securing the votes of the public not to commit Brexitcide.
--
Things Trump Did While You Weren’t Looking [2019]
https://wp.me/p2KJ3H-3h2
29
William Keegan in Sunday's The Guardian
"Perhaps Corbyn thinks he has been playing a clever game, keeping the Leave minority of Labour voters on board. However, this is at the expense of alienating the vast majority.
Given the popular view that the referendum result was principally swayed by the discontent of the “left behind” and those with “nothing to lose”, I was interested in the point Corbyn made last week that the left-behind in Mansfield may have voted Leave but the left-behind in Tottenham elected to Remain.
But what do you make of a so-called leader of the opposition who “cannot wish away the votes of 17 million people who wanted to leave”? What this means, given the preponderance of Labour people who voted to remain, is that a Labour leader affects to be swayed more by the Conservative supporters whose government he wishes to dislodge. It is as if, in the early 1980s, he would have opted for Thatcherism, or sado-monetarism, because more Conservatives voted for what the Conservative government of that era became.
Corbyn is a walking and talking disaster. Just imagine how different things would be now if the increasingly impressive Yvette Cooper had beaten him to the Labour leadership. She is right to back an extension to article 50 – a move also championed by the estimable Lord Kerr, who, when in the Foreign Office, actually drafted article 50."
35
@Rima Regas
"What the UK needs is a Jean-Luc Melenchon ..."
Yikes!! You've not been keeping up with French politics during these recent weeks, Rima.
Poor old, out-of-date Melenchon has shot himself in the foot so many times, the only people he's popular with are the boot, sock and bandage makers.
I can't speak to the economic, because I am not a world class economist like you Dr. Krugman, however I can give you a little sense of the politics on the ground.
There is no way a hard border is going to fly, and in actuality, this is only speeding up reunification of me home country. I suspect it is fueling separation in Scotland as well. The troubles are already flaring up here and there, as the DUP is being hard line much more than usual. Stockpiling is beginning in earnest, and hours are being tacked on to lorry drives.
I truly think that this is going to be the disintegration of Britain as whole, and no longer being great. (as if it has been for a very long time) I don't see the Monarchy lasting much longer either, as they stay mum on it all.
We shall see...
142
@FunkyIrishman
The Queen, as you must know, is required to stay publicly mum on political issues, as part of the requirements of the government system Britain operates under.
I think Charles is not so popular, but his son is quite popular.
However, the monarchy may well collapse under the weight of all the parts fleeing, as you suggest.
Still financial issues for Scotland, Wales or Northern Ireland (as well as a possible flareup in the troubles) may make leaving England, which heavily subsidizes them, difficult. The North Sea Oil will be depleted soon and that is Scotland's main source of revenue. While those three prefer to stay in the EU, and the last Scottish referendum to leave failed (before the Brexit vote succeeded -- the outcome might well have been different had the Brexit vote happened already), I don't know that their preference for no Brexit will overrule the financial issues. Of course, as the cost of Brexit becomes more real, England may cut subsidies to the three and change the financial calculus.
But while it is a understandable long time dream to reunite Ireland, and re-imposition of a customs border would make that dream even more attractive, re-igniting the troubles is in no one's interest, so I think the Irish must be careful of what they wish for.
9
@FunkyIrishman
I agree the Irish border is a powder keg. But in case of no-deal, as increasingly looks likely, what gives? There will have to be a hard border to prevent smuggling of goods into the EU and smuggling of people into the UK. So that border is going to have to go up. And that is when the violence will start.
8
@FunkyIrishman
Since Elizabeth was emotionally not capable of handing the crown over to her son (or now even to her grandson) when her brain was still working she is now the defunct geezer without influence but with a certain fake power.
All this despite the marvelous THE CROWN on Netflix.
Thank you, Dr. Krugman, for finally coming back to the subject of the EU economy in general and Brexit in particular. If you can avoid disparaging the orange one for long enough, I think that you could help us all out a lot. To get the ball rolling, I have a few questions. I think of these as real questions, not rhetorical ones.
First, the ability of the EU to control the Euro still seems a bit weak compared to, say, the US or China controlling their own currencies. If the Pound takes a big dip, won't the Euro as well? Will this affect the EU's ability to keep Italy on the straight and narrow (or, umm, straighter and narrower)?
Second, the EU is governed by treaty, and many changes require unanimous ratification by 28 (soon to be 27?) quite diverse countries. In contrast, the US Constitution can be modified by a supermajority of states. Can a Eurozone banking system really be set up and supported in such a rigid political environment?
Third, I notice that sometimes in the US large natural disasters such as major hurricanes can stimulate the total economy because they require so much infrastructure rebuilding and modification. Couldn't a hard Brexit actually benefit some EU states by, for instance, moving parts of the supply chain off the island and onto the continent? I notice that some of the EU states have still not yet reached full employment and full use of infrastructure.
8
This is like watching an entire country drink itself to death, seemingly powerless to stop it.
I part with the usually perceptive Paul Krugman here about EU arrogance. While I did see the way they acted toward Greece as exactly that, the UK acted with such astonishing arrogance that the EU response was a natural one. Google "the new Iron Lady, Daily Mail" and you'll see a newspaper cover story declaring her the new Thatcher who's showing the EU who's boss, and "will make them pay" in the bargain, in other words a close parallel to Trump making Mexico pay for the wall.
Krugman's chiding of the EU reminds me of people in the US now saying "come on, the Democrats could give a little" regarding the shut down and the wall. The fact that not only Democrats but the entire Congress agreed to a budget that Trump then got scared off of by being yelled at by Ann Coulter makes this especially silly. Caving to Trump now would mean he'd just up the ante, on this or anything else. There is zero reason to trust him.
Similarly with the UK. They thought they'd be in charge of the exit, which is the same arrogance as what led them to imagine they were being harmed, not helped, by being in the EU to begin with.
It's tragic and not pleasant to watch, but the destruction of a once great entity is self-inflicted, and by some of the same characters, literally, who helped Trump like Nigel Farage.
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@Jeo Absolutely spot on. There's a lot to be said against the EU and its bureaucrats, not least regarding Greece. But the Brits have brought this on themselves. And the EU is very wise not to budge much, lest it encourage irresponsible, counterproductive rhetoric and withdrawals by other member states.
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@Jeo
I don't really know why the Professor has such a blind spot with the EU.
Most EU countries have managed to get their Billionaire class (reluctantly) pay their taxes. Not so the Greeks who at some years lost half their taxes to evasion and tax havens. That just as an antidote to the myth of how the Greek were so victimized. Greeks were victimized by their own oligarchs and wanted the ordinary 9 to 5 European worker pay for it with their taxes.
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@Jeo
Last paragraph is spot on. You could also point to Ruppert Murdoch's press empire (Fox News) who has been inundating the UK with anti-EU propaganda for years, presenting the EU as the source of all possible evil (liberals and Hilary got the same treatment on Fox News, and the US got Trump)
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Postpone the customs procedures taking effect for trade btw UK/EU? Just like that???
May I remind you, Professor, that, in the event of a no-deal Brexit, WTO rules will be applicable by default.
Under WTO rules you cannot discriminate and apply a different set of rules to your trade with certain nations (e.g. EU nations but not with the US or Brazil, Japan etc). The import of a German car into the UK would remain free, while a US car would incur 10%. Dutch beef: 0%, Brazilian beef 25% etc? The discriminated nations would rightfully sue the UK for breach of WTO rules.
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Germany has hired 900 new customs officers, Netherlands 750, Ireland 1,000, France 700. The EU has repeatedly warned the UK that it doesn't do enough to prepare for a no-deal Brexit. Only in October the UK has hired 600 customs officers, instead of the thousands it will probably need (one estimate said 5,000).
I admire Paul Krugman for his honesty, but this piece shows he is badly misinformed about the EU, the negotiations and the UK. To express "hope" that the UK will be well prepared, and then speculate that the EU may not have done enough is a distortion of the real situation.
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@Blackforest It really is quite shocking that any economist, let alone Krugman, couldn't be bothered to even google the basic, publicly available information you've shared here. Also, he tries to push a narrative of future manufacturing success thanks to a cheap pound. The pound has now been depressed significantly for 2.5 years, and every day there are announcements of major manufacturers pulling out of the UK, or massively scaling back operations. When will his manufacturing nirvana emerge? When the pound is worth 50 cents?
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@Blackforest I have followed this Brexit mess as far as I could tolerate on The Guardian.
It would appear that most Brits are either blithely unaware of any problems or are heartsick and some are very frightened.
It is not just the movement of goods. The UK doesn't seem to be anywhere near prepared for the necessity of customs borders, but it is the movement of people too.
The National Institute of Health that runs the health system in the whole country is heavily dependent on immigration of every kind of worker from janitor to respiratory technologist to nurse to surgeon from the EU. They currently have thousands of vacancies, are suffering badly from understaffing because few have immigrated in the last years since the Brexit vote, and many have left.
It is the same in other industries, particularly agriculture. Eastern European immigrants have taken a lot of the jobs similar to Mexicans and Central Americans in the US. Even this summer, some crops went unpicked.
Dr. K. does not mention the political instability that lays Europe open to Russian interests in destabilising NATO and the economic alliance. That is a factor as well.
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@Blackforest Thank you for your remark, I was just about to write something similar. Just to add to that, the European Commissions legal notives can be easily found here:
https://ec.europa.eu/info/brexit/brexit-preparedness/preparedness-notices_en
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As usual, I learn a lot from reading a Krugman column about economics and policy, in this case Brexit and what should but may not happen.
But I want to make a completely unrelated point that is important to American politics from the Professor's writing:
"God knows, and even He may be uncertain."
Why not "She may be uncertain." The point being with the pronoun for "God" being "HE", it is impossible for religion to treat man and woman equally. That is when considering the American Constitution as amended for the 21st century, men and women must be treated equally. However, under all monotheism, Jewish, Christian and Islam in historical order, women are not equal to men. Therefore when considering religion in a legal sense like the application of healthcare, the American constitution demands that women be treated equally whereas religion likely treats woman as other than equal which is why religious institutions have no issue covering vasectomies but object to covering the any birth control for women. This is just one of many instances where the application of religion in American policy and politics is bad for women.
So I thank Professor Krugman for his column explaining the important issue of Brexit as economic downturns in Europe that will in the short run result from other than good policy and that will to some extent affect America. But I also want to point out that his writing on a point not addressed is even more important to American politics and policy.
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@Dangoodbar. My mom used to say: "God only knows and she's not telling
" . . . short-run risks for the rest of Europe now look substantially larger than they were only a couple of months ago". What does that mean? Nobody is able to accurately predict the future, predictions keep changing so don't put too much faith in them; dire warnings now about the negative effects of Brexit are no more likely to prove true than earlier wildly optimistic ones. Brexit will work, countries not in trade-unions successfully trade with one another. The early going will be messy, concentrate on sorting that out. There's no need for another referendum, no need to panic, just expect some confusion; long-term effects look tolerable--get on with it.
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I won't argue the economics, but it seems to me that the major goal for the EU is to keep the Union together and discourage other members from leaving. That's not an economic priority; it's a conscious effort to prevent the political refragmentation of Europe and a return to the inter-state rivalries that led to the slaughter of millions and the devastation of many of the continents great cities. The fact that the Brexiteers never understood that reality is one of the prime reasons for today's chaotic impasse.
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@Matthew Hughes
I take your point but I don't believe the EU needs to discourage countries from leaving (it has rather been a prize to join it), nor do I believe that the EU has done anything to coerce the UK into staying.
And let's be clear that the notion that the EU is some sort of USSR / 3rd Reich is just plain bizarre.
Brexit has some silver linings. One of them is the realization in previously more 'eurosceptic' countries such as Denmark of the value of belonging to the EU.
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@David - a couple of points -
First, @Matthew Hughes wasn't suggesting that the EU was some kind of Fascist or Communist state, more that their intention was to make it painful so that no one else was tempted to leave - the EU leaders openly stated that anyway, thus directly contradicting your assertion that they don't need to discourage countries from leaving.
Second, let's also be clear that the EU as it currently stands, and as it apparently intends to proceed, is nothing like the EU as it was when the UK entered it (after being petulantly kept out by De Gaulle some years earlier).
Ever tighter integration - why? The current level of economic entanglement is sufficient to prevent the kind of wars that used to sweep across Europe, what profit in trying to force dissimilar countries into one homogenous mass?
and finally - the whole EU approach to Brexit was to coerce it to stay by punishing it for wanting to leave. There was no attempt to meet halfway, no attempt to make staying in more attractive, only making leave more unattractive. Not very perceptive about human nature, your average EU bureaucrat.
It stands to reason that you in Brussels love the EU - it's given your city a central place in the future of Europe, which it could never have come by otherwise; but make no mistake - the EU as it's headed is not actually that attractive a place for a country with the history and institutions of Great Britain (and I think the EU secretly resents that ...)
This is the best example ever of "The devil is in the details"!
The pro-BREXIT-ers should have realized this, and the initial referendum should have contained the proviso that an initial Yes on BREXIT instructs UK leadership to hammer out their best possible terms with the EU, fleshed out with full details that would be put before the people in a second and final vote in two years. And the people should have been told that the achievement of a BREXIT requires both the instructions from the voters to begin the process, AND the voters' approval of a detailed final plan. Without both being achieved, there should be no BREXIT.
Unfortunately this is now 20/20 hindsight unless Parliament decides to put a second referendum to the people, where this time they're voting on the best detailed plan their leadership could come up with, and not just an aspiration.
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@Bob
Other considerations for repeat vote are that Brexit vote was tainted by deceitful right wing propaganda, outlandish promises and obvious lies. Plus, Putin involvement made the results even more illegitimate.
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