The EU will treat Britain like Greece

[OnDoutside]

Inadvertently I put this in LBN instead of General Discussion. I think it's an important article which gives a good idea of the EU thinking on how they will treat the UK's exit.

http://www.telegraph.co.uk/news/2016/06/26/the-eu-will-treat-britain-like-greece/

Source: Sunday Telegraph

By Matthew Holehouse, Brussels


I arrived in Brussels as the Daily Telegraph’s correspondent in early June, 2015. A fortnight later, Alexis Tsipras snubbed Brussels, and called a referendum on the third bailout that was designed to save the Eurozone from collapse.

The terms he was later given - €50bn of assets sold and a de facto control of economic policy surrendered - were so harsh they were later denounced as a "coup".

It taught me two things: that in the cause of its salvation the European Union can be profoundly flexible and exceptionally brutal, and that events can swiftly take a momentum that is hard to control.

Nothing of that experience gives me hope for the years that now await our country.

[TubbersUK]

1. Well that's a sobering read n/t

[OnDoutside]

2. Yes, I've forwarded to my British friends. It's an eye opener, and makes me worried about my own

situation, where I do a lot of my work at UK clients. How is that going to work, as a non-British worker ? Will there even be work there, because surely British companies will now put a sudden halt on any new expenditure until they see where this goes ? And not only British companies, companies from other countries who sell into the UK, and depend on those sales, will now also tighten their budgets too.

Another recession is surely on the cards ?

[enough]

3. They treated Greece like Greece without waiting for Grexit. (nt)

[OnDoutside]

4. For many reasons they had no choice but to come down hard on Greece.

[enough]

9. Nice to be able to believe your masters. (nt)

[OnDoutside]

12. Even better to believe the facts.

[roamer65]

5. At its worst, you will end up like Norway.

But in no way will this end up like Greece.

You are not in need of bailout and you still have your national currency. The Greeks would give their left nut to be in Britain's situation.

[OnDoutside]

7. I think the point is that the EU will take a hardline with the UK, as they did with Greece. nt

[modem77]

15. Then the EU fails. That is what people are worried about. Hence the market turmoil.

[msongs]

6. the TPP/EU gang will punish the brits mightly for daring to question the overlords nt

[OnDoutside]

8. No, it's simply that the EU must do its best for the remaining 27 members, and that means taking a

tough line with the UK, so other EU members won't be encouraged to jump ship either. TPP has zero to do with this.

[cherokeeprogressive]

11. I can't figure out whether this is circular or spiral reasoning...

"the EU must do its best for the remaining 27 members" followed by "taking a tough line with the UK, so other EU members won't be encouraged to jump ship".

Seems to me you're thinking the UK should be flailed in front of the other hostages so they are afraid to unlock the door holding them in.

[OnDoutside]

13. It's quite simple that the EU has a duty towards its other members and keeping the European

project on track. It does not have to give really soft terms to the UK and in fact it is in its interests not to do so. The European project is bigger than any one state.

[marchellojones]

10. Uk has

the second biggest economy in Europe and fifth in the world. when all the dust settles, is business as usual.

[bhikkhu]

14. Paradigm shifts do happen

As the UK economy is built on trade, and about 50% of that has been with the EU, a change in trade could lead to a long term shift in economic trajectories. As well, about 50% of UK capital financing comes from the EU region.

http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/international-transactions/outward-foreign-affiliates-statistics/how-important-is-the-european-union-to-uk-trade-and-investment-/sty-eu.html

I don't know enough to predict anything really, and you may be right, but nations do go up and down based on their economic decisions. More often in my lifetime they go up, as it typically doesn't take much economic pain from a bad decision to collapse a boneheaded government and change course. But its hard to say how easy that would be in this case...it might be years of dithering uncertainty (which the markets tend to punish), by which time things could be very different in the UK.

[n2doc]

16. Except they don't control the currency in the UK

Now, I have no doubt that the bankers will try to inflict maximum misery on the UK and encourage Scotland and other parts to leave. But they can't pull most of the same stuff that they did with Greece for the simple reason that Britain controls its own currency.

[jimmy the one]

17. minor mandate was needed

Cameron should've made the referendum subject to a 'minor mandate', since belonging to the EU was such an entrenched & historical british policy for 40 years. Leaving the vote to a simple majority made it susceptible to whims & caprices of an angered electorate, which was likely just temporal.
A minor mandate of 52.5% to 47.5% would've kept UK in EU (21 to 19 votes); Even 52 to 48 (26 to 24).
A minor mandate of 5 out of 9 is better imo, or 55.55% to 44.44%, to overturn an existing policy on a referendum. It's not a popularity contest, when it comes down to overturning existing policy to the whims of a momentary lapse in judgement.