EU In Disintegration Mode

by Martin Armstrong, Armstrong Economics:

The EU leadership is really trying to make Great Britain pay dearly for voting to exit the Community. Like the socialists in American, it’s our way or no way. The left may call the right the “deplorables” but the left are the “intolerables” who refuse to ever consider they might be wrong.

The EU think that is they can make it so bad for Britain, nobody else will leave. They refuse to examine why there is rising discontent within Europe. They refuse to let go of this dream of a federalized Europe to eradicate national identities along with sovereign rights.

The EU intend to be it a mistake that the British will regret and fall to their knees. This attitude is consistent with the constant endeavor to explain all the shortcomings of the EU as insignificant and irrelevant, thereby closing their ears and mind to any possible reform. The EU constantly repeated motto of a federalized Europe will less the risk of war but nobody else takes this seriously outside of Brussels. The “European Project” is creating the resentment that fuels war. With this policy in place, the Community has refused to listen to anyone but themselves. This has led to small issues festering and creating resentment which grows into a huge problem and Brexit that has spun Frexit and all the rest.

The EU refuse to even listen to the British and chose to ignore the speeches of the British Prime Minister, Theresa May. The PM May has announced a clear separation and rejected all interim solutions by the EU, which ultimately would still lead to a dependency upon Brussels. Britain demands that each nation must decide for itself who can immigrate. Just because Merkel allowed the refugees in to help her polls should not subjugate other nations to have to endure a vast influx of something they never voted for.

Britain is not willing to surrender all domestic law to that of the EU. Indeed, EU law is no longer to be applied in Britain. Here we have the EU demanding Ireland retroactively charge Apple taxes simply because their tax rate is less that the highest EU member. That is surrendering everything sovereign to Brussels. Laws are only to be decided by the British parliament – not Brussels. Jurisprudence is a matter for the British courts not the European Court.

Britain is to leave the EU internal market and the EU Customs Union and seeks a free trade agreement to be concluded between the EU and Great Britain. The EU seeks to punish Britain for rejecting its dream. The EU forgets that Trump is now in and a trade deal with Britain will no longer be at the back of the cue as was the case under Obama.

Free movement of people, together with the free movement of goods, free movement of services and the free movement of capital, are the four fundamental freedoms which are regarded as the foundation of the EU. The free movement of persons justifies the right of all EU citizens to settle in the Union and to accept work. However, this has not worked as smoothly as presumed. The cost of living is significantly different throughout the EU. Eastern Europeans, mainly from Poland, have infiltrated Britain working for less money creating competition for domestic workers while foreign companies use cheaper labor in the East to undercut domestic companies on their home-turf.

As the economy turns down and deflation prevails, the threat of foreign jobs is being addressed throughout Europe. Add to this the refugee crisis and you have a power keg throughout Europe waiting to go off. In view of the high unemployment in almost all countries, domestic citizens have ALWAYS turned against foreign workers as the easy scapegoats for the economic decline. This only merges with the high taxes reducing disposable income.

The EU leaders have nothing to say about the criticisms. They have no clear statement to challenge what is going on. The regulatory nightmare and outright rage that is rising among the people is simply ignored by Brussels. The legal uncertainty with the British exit on the banking system is something nobody even wants to speculate about. How do bail-ins works in Europe if abandoned in Britain? So while the EU thinks by punishing Britain they will discourage others from leaving, they are seriously mistaken. The dream of the EU is dead. It should have remained just a trade union – that was it.

What the Trump Administration is clueless about the ability of the EU to hold it together, they fail to grasp that talking the dollar down will just not work if the political structure of the EU is breaking up.

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