Tag Archives: united kingdom

Stratfor: the EU faces painful budget battles after Brexit

Summary: Europe’s elites warned that Britain would suffer for daring to leave the EU. Suffer severely and soon. Four months have passed since the June 23 vote and Britain has felt no ill effects. Britain might have the last laugh, since the EU has to redo its budget following the loss of its second largest contributor. The EU is already under stress. Cutting the budget and raising taxes will make it worse. Perhaps sparking more exits.


A Bitter Budget Battle Looms in the EU
Stratfor, 13 October 2016.


  • Because of the Brexit, the European Union will lose a net contributor to its budget, forcing the remaining members to rethink the bloc’s spending limits and priorities.
  • EU members will have three options for dealing with the loss of the United Kingdom’s income: increase national contributions, trim the budget or look for new revenue sources. Each choice carries political risks.
  • Budget-related issues will create new sources of friction in the European Union as national interests shape the negotiations.


When Britain leaves the European Union, it will take with it the sizable financial contributions it makes to the bloc’s budget. That will leave remaining member states with some difficult choices to make about how big future budgets should be, what they should pay for and how much members should pony up for them. In all likelihood, key policies — from agricultural subsidies to development funds — will have to be redesigned. And as members decide how to proceed, new sources of conflict will arise that will do little to help reverse the bloc’s political fragmentation.

The EU budget is organized around the Multiannual Financial Framework, which establishes spending priorities and limits for a seven-year period. (The current one lasts through 2020.) Every year, the European Commission, the European Parliament and EU member states negotiate annual budgets based on the spending limits and priorities established by this framework.

About 75% of the EU budget comes from payments made by member states, calculated based on their gross national incomes. This means that, in absolute numbers, the largest economies make the largest contributions. But not all member states contribute the same proportion of that income, which leads to imbalances in contributions per capita. Moreover, since the budget is used to finance most EU programs, many countries give more money to the bloc than they get from it. In 2015, for example, 10 of the bloc’s 28 members were net contributors to the budget. The others received more in program spending than they paid in.

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Professor Mark Blyth explains the real roots of Brexit & Trump

Summary: Here’s one of the best essays I’ve seen about the deeper causes of Brexit, beyond Britain’s elites blaming the ignorance racist proles (which conveniently excuses them of any responsibility). Professor Mark Blyth shines light on the real forces at work, and shows how the US has similar problems. Brexit and Trump are the start of a new era for the West, for good or ill.

“Europe will be forged in crises, and will be the sum of the solutions adopted for those crises.”
— Jean Monnet in his Memoirs (1978). He was one of the architect of the program to unite Europe (see his Wikipedia bio).


Mark Blyth explains the hidden reasons for Brexit
Excerpt from transcript of an interview by Athens Live on 26 June 2016

“Let’s think about it this way: was austerity the policy or was austerity a side effect? What we have found out recently from a paper done by the German business school was that, according to their estimates, a full 95% of the cash that went to Greece ran a trip through Greece and went straight back to creditors — which in plain English is banks. Public taxpayers’ money was pushed through Greece to basically bail out banks…So austerity becomes a side effect of a general policy of bank bailouts that nobody wants to own. That’s really what happened, ok?

“…Why are we peddling nonsense? Nobody wants to own up to a gigantic bailout of the entire European banking system that took six years. Austerity was a cover.

“…If the EU at the end of the day and the Euro is not actually improving the lives of the majority of the people, what is it for? That’s the question that they’ve brought no answer to.

“…I’m very pro-European, but I’m against the euro, so if I still lived in the UK I would have an interesting choice. Now if you look at Larry Elliott in The Guardian, he thinks he should vote for exit because this might be the existential crisis that blows up the euro. Now why would you want to blow up the Euro, because “that would be terrible etc etcetera”. Because the long-term effect of the euro is going to be to drive Western European wages down to Eastern European levels in global competition for export share with the Chinese.

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Immigration: a cause of Brexit, denied by the Left

Summary: The EU’s own polls show that immigration is the top concern of its people. Unless they change course, Britain might be just the fist to leave. Also, after declaring its supporters to be racists, now some on the Left adopt the Brexit vote as an expression of their views and policies. They ignore the paramount role of massive immigration. Their blindness to this is logical, since it is one of their top priorities — and deeply unpopular with the public. Here is some evidence about its role in Brexit, data you will probably not see elsewhere.

One sign of the changing political dynamics in the West is the number of issues which have supporters and opponents on both Left and Right. America’s foreign wars are one example; Brexit is another. The Right more easily claims Brexit as their own, having long-held suspicions of the EU.

The Left also does so, but requires more contortions. Before the vote they described Brexit supporters as racists. But everybody loves a winner, and now some on the Left claim it as their own — for two reasons. First, as a rebellion against the establishment (although co-rulers of Europe, they effortlessly don the robes of outcasts). Second, they attribute Brexit to stress from rising inequality and dislike of the 1%. A good example of this is Glenn Greenwald at The Intercept in “Brexit Is Only the Latest Proof of the Insularity and Failure of Western Establishment Institutions”. I am a fan, but he imposes his values and concerns onto those of the British “leave” voters, without much evidence.

Another example is “Inequality not personalities drove Britain to Brexit” by Matthew Goodwin (prof politics at U of Kent) at Politico — “Angst, alienation and resentment fueled the vote to leave the EU.” At least he mentions immigration, but only mixed in with traditional leftist causes.

These stories do not well match the facts. Most importantly, they ignore the large role of immigration. Greenwald never mentions it. This blindness is understandable. Support for mass immigration is a defining characteristic of the Left today. Greenwald cannot fairly speak of it, so he closes his eyes and pretends the issue doesn’t exist.

Politico gives a more detailed and well-supported analysis: “The behind-the-scenes story of a failed campaign to keep Britain in the European Union”. Note the large role of immigration. For more evidence of this see “Why Immigration Pushed Britons to Brexit” by Reihan Salam at Slate.

For stronger evidence about the key role of immigration in Brexit — and why other nations might follow the UK’s example — see the most recent of the EU’s extensive public opinion surveys: the Autumn 2015 report of the Standard Eurobarometer conducted during 7 – 17 November 2015 in the 28 Member States of the EU. The results tell us much, for this was a significant period for Europe.

“The refugee crisis entered a new phase in summer 2015, when more than 100,000 people a month entered Europe by sea in August, September and October. This means that almost 900,000 refugees and migrants entered the EU by sea in 2015, compared with 216,054 in 2014. During his State of the Union Address on 9 September 20155, Jean-Claude Juncker emphasised the crucial importance of this issue for the EU: “The first priority today is and must be addressing the refugee crisis”. …On 13 November, Paris suffered the most deadly terrorist attacks in France since the Second World War, in which 130 people were killed. Islamic State claimed responsibility.”

The poll clearly shows that people in the EU are very concerned about immigration, and becoming more so: “Immigration is now the main concern at national level…”.

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The reactions to Brexit show its true significance

Summary: The two previous posts brought us to the edge of analysis about Brexit, beyond which lies guessing. But there are sparks by which we can see what might happen in the next few months. I’ve gathered some of them here for you.

Sunrise or sunset for Britain?We make it sunset or sunrise.

Elites & their courtiers consider it foolish to allow a vote by peons on their fate.

“Why did he do it? Why take such a needlessly cavalier risk with the country’s future and his own?”
— The Honorable David Runciman (Prof Politics at Cambridge) in “Why did he do it?” at the London Review of Books.

The contemptuous reaction to the Brixit vote shows with rare clarity the desire of Europe’s elites to roll back the past century’s shift to democratic institutions. Why should the peons have a say in their fate, interrupting the smooth government by their betters?

“IYI”: intellectual yet idiots. It is often falsely used to describe powerful people (and their courtiers) acting in their own interest — usually successfully so.

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An anthropologist looks at Brexit: The World Changed Overnight

Summary: Anthropologist Maximilian Forte looks at aspects of Brexit seldom mentioned by the news media, and its long-term significance (beyond the immediate tantrums by institutional investors and traders). This is a follow-up to yesterday’s Brexit was logical, neither racist nor irrational.

EU flag burned


The World Changed Overnight

By Maximilian C. Forte
From Zero Anthropology
Posted with his generous permission.

The European Union is now to be written as a postscript. Thanks to British voters, who were given an extremely rare chance to have a say on one of the biggest issues affecting their lives, who were allowed a rare vote on the fate of globalization and neoliberal practice, we are treated to the celebration of a world where sovereignty still matters. Far from a thing of the past, self-determination will now remake the world of the immediate future. The stern advice, dire warnings, commanding lectures, and even threats offered by a plethora of financial elites, economists, a whole range of academic experts and European and US political leaders, came to naught.

When it comes to taking back local control, for citizens to decide on which systems should be allowed to determine their life chances, when it comes to self-determination the UK has now gone to the front of the queue.

The status quo is the status quit. The key words are: out, leave, exit. Globalization’s tense is increasingly becoming past tense.

Convention has been up ended, and what was deemed unlikely, even impossible, just a few short months ago has instead come to pass. Elites, experts, commanders, and opinion-shapers of the ruling strata have all failed. They have been rejected. What was presumed to be inevitable about a global future, has now been proven false. The distrust and disdain of disillusioned voters, long sold false promises and told to suck it up when bitter reality struck, has finally taken the form of a decisive counter punch.

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