After Brexit--------Can the EU Survive as a Prison?

In the wake of Brexit, the EU and German Chancellor Angela Merkel responded to the UK with spite and vengeance.

Merkel insists that if the UK pursues a Norway-style solution, it will have to accept the EU’s migration rules along with it.

Ironically, had the EU’s migration rules been more sensible, the UK would not have left in the first place.

Following a close election in which there were voting irregularities, Austria’s Constitutional Court Orders Rerun of Presidential Election.

Citing serious irregularities in the counting of postal votes, Austria’s constitutional court issued an unprecedented rule mandating a rerun of the presidential election in which Green party candidate Alexander Van der Bellen narrowly beat Freedom Party and anti-immigration candidate Norbert Hofer

Hofer was ahead before postal votes were counted. Perhaps he wins the second chance election.

Hungary Announces Referendum on Migration

Hungary is so fed up with EU’s refugee policies that it announced an October Referendum on EU Migrant Plan.

“Is it the goal of European policy to stop migrants at the borders, to keep processes under control, to conduct procedures outside our borders and to then decide on admitting certain individuals? Is it our goal to let them in and to redistribute them later?” Hungary’s prime minister Viktor Orban said in Brussels last month.

Four Countries Fed Up With EU

Poland, Hungary, Slovakia and the Czech Republic issued a joint statement “The genuine concerns of our citizens need to be better reflected. National parliaments have to be heard.“

Poland’s deputy prime minister Mateusz Morawieck said “The British voice was the voice of reason.”

For details, please see Four Countries Blame Jean-Claude Juncker for Brexit, Two Seek His Ouster.

The EU Prison

Financial Times writer Martin Wolf asks “Is the best way to preserve the EU bloc to make it a prison, rather than a desirable place of refuge?”

Other than a stray sentence here and there, I seldom agree with Wolf on anything.

This time, he generally gets things correct in his article How Europe Should Respond to Brexit.

The UK is leaving. That has to be the assumption of its EU partners, particularly if free movement of people remains an inviolable principle. So how should the rest of the bloc respond?

The UK’s almost certain departure is a threat to the EU on two dimensions.

First, the UK is a neighbour, a market, a financial centre, a security partner and a link to the wider world. It is in the EU’s interest to achieve a mutually satisfactory relationship, however infuriating the UK must be. This argues for the pragmatic position taken by Alain Juppé, frontrunner in the race for the French centre-right presidential nomination. He even suggests that restrictions on free movement of people should be negotiable. If so, that would surely have obviated Brexit.

Second, Brexit is a precedent. The first country to leave the EU is, inevitably, an example to those that wish to follow suit and a warning to those who oppose it. It is natural for the latter to seek to undermine the appeal of the former by punishing the UK. I sympathise. The question they must ask themselves, however, is whether the best way to preserve the EU is to make it a prison, rather than a desirable place of refuge.

The paramount example of recent failure lies inside the eurozone. That has nothing to do with the UK. The sad truth is that, far from launching a period of prosperity, the euro has delivered a lengthy period of stagnation and massive divergences in living standards. Between the first quarters of 2008 and 2016, aggregate eurozone real gross domestic product rose by a mere 0.5 per cent, while real aggregate demand fell by 2.4 per cent. This is grim enough. Even worse, between 2007 and 2016, real GDP per head is forecast to rise 11 per cent in Germany, stagnate in France and fall by 8 per cent and 11 per cent in Spain and Italy respectively.

The core challenge for the EU is to make it work — and be seen to work — for the benefit of the great majority of its citizens. Germany has done well out of the euro. Its principal partners have not.

Separate Ways

Separate Ways

Who Has the Keys?

Jean-Claude Juncker and Angela Merkel want to make the EU a prison. The Eurozone was designed as a prison from the beginning.

But like Otis on the Andy Griffith Show, voters have the key.

Otis was the town drunk. He frequently locked himself in jail to sober up. Otis had access to the courthouse keys and could come and go any time he wanted.

Voters too have the keys. The UK has had enough of the EU prison and wants out.

The more the EU responds by cramming absurd rules down the throats of citizens, the more likely it is for voters to demand the prison key.

Once again, it is Angela Merkel is the Person Most Responsible for Brexit.

Her policies on migration rules led to the UK voting to leave.

The cat is finally out of the bag. And voters know they have the key.

Mike “Mish” Shedlock

David Stockman's Contra Corner is the only place where mainstream delusions and cant about the Warfare State, the Bailout State, Bubble Finance and Beltway Banditry are ripped, refuted and rebuked. Subscribe now to receive David Stockman’s latest posts by email each day as well as his model portfolio, Lee Adler’s Daily Data Dive and David’s personally curated insights and analysis from leading contrarian thinkers.

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