NO-ONE WILL BE HAPPY
By: Glint Pay
Tags: Gold, Money, UK, Economy, Brexit

Says Gary Mead, Glint’s editor

It’s sad but true — whether it’s a “deal” or “no-deal” over Brexit, neither the 48% of Brits who voted to remain in the European Union nor the 52% who voted to leave in the 2016 Referendum will be happy with the outcome, whatever it is. And the Anglophobes and Anglophiles on the European continent will no doubt feel cheated, too

The nail-biting run-up to the end of the year saw the pound sterling rise to its highest level against the US dollar since May 2018[1], as forex traders took note of the odds moving to 72% last Friday in favour of a deal being struck before the end of 2020, only for the betting to flip back to rating the probability of a deal at 47% by Monday 21 December.[2] The British Prime Minister said on 3 November 2019 that the UK had “a deal that’s oven-ready”.[3] But it’s now obvious that he hadn’t even started to de-frost the turkey.

In fact, the more time passes, the more Johnson seems to have morphed into the British Donald Trump — someone who makes extravagant claims which turn out to be fantasies. I say this with sadness, as someone who voted to leave the EU, and who voted for Johnson’s Conservative Party a year ago. Not that there was a great deal of choice — it was either that or vote for a massive state expansion of debt proposed by the wild spending plans of the Labour Party. Ironically, that’s what we have now, thanks to all the lavish government handouts as a consequence of Covid-19. Now that England’s Health Secretary, Matt Hancock, has said that the new strain of Covid-19 is “out of control”[4] one wonders what all the previous “lockdowns”, “circuit-breakers” and other euphemisms were for? It’s a virus; viruses mutate to spread themselves as far and wide as possible. All talk of “controlling” them is wide of the mark.

Destructive wrangling

It is time to end the bitter wrangling. Whatever side of the divide we once were on, we’re all (by definition) Leavers now so we must make the best of it.

The big disappointment however is how the voting public was obviously sold a pass by Prime Minister Boris Johnson in the last election in December 2019. Far from the oven-ready deal, we face at best a fudge. It’s difficult to believe that an industry (fishing) which constitutes a mere 0.12% of the UK’s gross domestic product (GDP) and employs less than 0.1% of the country’s workforce[5] has become such an obstacle to getting a deal done. If both sides agree that a no-deal Brexit would do serious damage to their economies — some estimates put the job losses in the European Union at one million[6] if Britain leaves without a trade deal, and Britain would also be seriously damaged by going onto World Trade Organisation rules — then surely both have a tremendous incentive to come to a deal?

The European Commission’s president, told members of the European Parliament on 16 December that there “is a path to an agreement now” although it was “very narrow”. What has narrowed most of all however is the tightrope on which both sides are now balancing.

Trust is precious

Leaving the European Union was never going to be easy. Why would a club which has long touted the importance of membership happily wave farewell to one of its bigger members? With Britain outside the EU, it’s not just Britain that might suffer economically. Britain has long been one of the EU’s biggest contributors to its budget of some €148 billion.[7]

But the greatest damage if no deal is struck before 1 January 2021 will not be economic, but moral. Politicians and the bureaucrats they have appointed to negotiate a deal will have failed — and none of them will escape blame. If a deal is arrived at, we can expect more wrangling down the line — one or other party is bound to have some lingering dissatisfaction.

Governments everywhere have called Covid-19 wrong — new strains have emerged and will emerge. The vaccines which have been so rapidly developed are effective against the original virus, but will they be so against mutant variations? And there is no vaccine to prevent the outbreak of bitter disappointment that people in Britain and the European Union will feel come 2 January — deal or no deal.