Finance: Research, Policy and Anecdotes

As I am spending a few days in Northern Ireland during half-break term, it might be time to catch up a bit on Brexit, given that this part of the Irish island continues to be at the centre of the ongoing conflict between the UK and the EU. As widely noted, Northern Ireland has not suffered from the same food and fuel shortages as Great Britain (and yes, I can confirm this from own experience), given that it is still integrated into the Single Market. East-West trade has become more difficult and North-South trade has therefore increased significantly, a not surprising consequence of the Irish Protocol that the UK government had signed up for, as part of the Withdrawal Agreement, in 2019. The controls envisioned by the European Commission might initially have gone beyond what was strictly necessary; after extensive consultations with Northern Irish businesses, the Commission has now made proposals to ease these controls. The UK government, on the other hand, is looking for symbolic fights, such as the right to exclusively use imperial measures.  Most importantly, and impossible for the European Union to accept, the British government wants to eliminate the role of the European Court of Justice, in the name of complete sovereignty, even though this seems to have no importance for businesses on the ground in Northern Ireland. There are now indications that even if the British government will eventually back off, they do not consider this issue settled but will bring it up again in the future. Thus, a continuous conflict with the European Union, something that Brexiters promised to end after Brexit, but seemingly cannot let go.

In this context, the government has now all but officially confirmed that it signed the Withdrawal Agreement in bad faith, never planning on complying with its part of the Northern Ireland Protocol. Perfidious Albion is raising its ugly head!

And as the problems in Brexitland are mounting, the argumentation by the government that labour shortages (i) do not exist, (ii) do exist, but have nothing to do with Brexit, (iii) are actually caused by Brexit but are a benefit of Brexit is becoming more and more absurd; not sure whether to call it Orwellian or Trumpian. And the itching of some right-wing media figures for a trade war with the EU to rekindle the Blitz spirit of World War II stands in odd contrast with the fear of government to impose any Covid restrictions as the population will not be able to take it.

As ridiculous as Brexiters look from outside the UK, as naïve looks the ‘re-join’ the EU movement. Completely illusionary, they imply that all they need is a majority in parliament or some referendum to re-join the European Union in a few years. Well, the 27 member countries of the EU beg to differ. While careful with predictions, I would dare to predict that I will not see the UK re-joining the EU in my lifetime (and I currently have no indications nor wishes that I will pass on shortly 😊). All 27 current members of the EU have to agree and many of them will have their specific demands and objections. More importantly, the absence of the UK might have facilitated recent movements towards a fiscal union. And the looming conflict with Poland will make the EU even more reluctant to let back in a country that is not exactly known for its constructive role during the last decade of its membership. So, EU membership is off the table for the next couple of decades, at least with the current structure of the EU. The best the re-join movement can hope for is a Swiss-style alignment with the EU that re-establishes closer links between the UK and the EU in specific policy areas. Even Single Market membership is far away and not easy to achive, as explained here.

So, both Brexiters and the re-join movement are stuck in their respective bubbles, with one trying to divert attention from the damage Brexit is doing to the UK by fuelling constant conflict with the EU and the other blaming any problem on Brexit and promising the end to all problems once the UK re-joins the EU (sounds familiar?). Being in Northern Ireland, one is reminded where ideology and religion-like purity tests can lead to, with the two camps living in their own world; while in Northern Ireland they are also physically separated, in England, they live intellectually in their own respective bubbles. With calls that certain positions in the BBC have to be occupied by pro-Brexit journalists, the UK is moving closer and closer to the US model where the two bubbles no longer talk with but only at each other.

Overview