Thursday, March 30, 2017

Observation Over BREXIT

In recent days, with the BREXIT paperwork sent over to the EU, I've sat and noted a number of observations.

First, this talk from the EU of the UK owing around 60 billion Euro (more or less) to the EU, and it has to be settled as part of the 'divorce' process.  There's a two-year period written down into the EU rules about this 'divorce'....but no one has ever used the process before so, it's questionable about the nature of the process.

The 60 billion Euro?  If you walk into a Brit pub, I think a working class guy would stand there and call it a 'whore-tax'....meaning you can't quit working at the bordello unless you pay some debt that the pimp wants.  Working-class Brits are that direct in their commentary.  EU bureaucrats will get all sensitive about such language being used.

Where'd the 60 billion number come from?  Some budget guys at the EU have done some studies and reflect upon what they would have been paid over a certain period, and they have already built a funnel device or revenue pay-out device....requiring such funds.  A business would be laughed out of existence if they tried to someone over future services which have yet to occur, and there was no contract for such services.  But, in this case, the EU is NOT a business.

How this will work out?

My guess is that the Brit rep will walk in and offer 6 Pounds 60 or 250 Mongolian Tughriks (roughly 100 US dollars).  The EU guy won't be laughing.  So they will talk over this, and any chance of the UK getting a 4-star trade deal out of this whole treaty business....will revolve around the payment of this 60 billion Euro.

Talk will go on for two years, and then the UK will announce that it's done....they will exit, with no treaty.  Yes, the rules say a treaty must exist, but it's difficult to imagine the Brits being willing to pay more than maybe 5 billion in cash and maybe another five billion over five years.  The EU won't accept that, and so some massive negative trade situation will be triggered.

But here's the thing that should bother the EU.  Across the continent right now....probably 20-percent of the public (in Poland and Hungary, it might be sixty-percent)....are talking anti-EU sentiments.  In Germany, I'd take a guess that 10-percent of the public has negative comments about the EU.  

A number of nations would jump in and immediately sign trade agreements with the UK and unseat the power value of the EU headquarters.  For negative propaganda value, handling this in a bad way would be a bigger problem in the end.

The second issue, which few look this Scottish referendum to separate from the UK.  It will happen prior to the end of the treat talks with the EU.  The last vote?  Three years ago.....11-point difference, with NO winning.

This time around?  I think YES could take 50 to 52-percent at this point.  Scotland would then separate and likely try to enter the EU (don't expect this to be very quick).

It is very likely that the dozen districts of Scotland on the south side of the country....will then ask for a referendum separate from Scotland.  My humble guess is that this area (I'd call it New Caldonia), about the size of Belgium, would turn around and ask to join the UK.

Reason for this?  Go back 2014 and look at district by district voting.  This southern area was mostly 70-percent NO.  That kind of trend would be hard to overcome.

If this unfolds....London or at least the inner-city of London, would go and ask for it's own referendum to exit.  From the inner-city, it's a population of 3.2 million.  I think they could swing the vote to exit from the UK.  Although one major problem would exist....there's only one single airport serving the inner-circle of London.  The other five regional airports?  All well outside of the circle.

While the EU guys might be gleeful in the first couple weeks of this episode of the UK....other regions of the EU might find themselves with unhappy voters and asking to separate as well.  In five years, instead of 28 EU could be looking at 50 members, and a number of city-states trying to exist by themselves.  The formula for the EU wasn't built for a large scale group and so many diverse issues.

I point back to the 1970s and the 30-odd problems confronting various countries and individuals in Europe.  There were various repairs needed to fix what was a highly evolving economic sphere.  There was an absolute necessity for the EU to exist and fix those issues.

So here we are....forty-odd years later, and the thirty-odd problems mostly fixed.  The EU device now?  They want to continue on fixing things, which this remarkable list now include regulation over electric tea-pots, vacuum cleaners, and toasters.  Every month, people wake up and there's some rumor about some odd EU discussion underway, which wasn't discussed with the general public.  You can't do much to hinder them or to suggest to cut back the days of meeting.  In some ways, the EU has made itself into more of a problem now, than a solution.

I might suggest that you spend some fair time looking around Europe today, and the 28 members of the EU.  In a year or might be shocked over how the landscape looks, and start to wonder where it'll all end.

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