To Brexit or Not To Brexit... (#8)
In the last few weeks, the international media has been inundated with news, opinions, predictions, discussions, pronouncements, polls, and increasingly dire warnings, from other governments, international agencies and of course UK’s government itself, about the impending Referendum (Thursday, June 23rd, 2016) on whether Britain should stay or leave the European Union (EU), in its present form. And, most tragically, that heated debate in Britain resulted in the cowardly murder of a Member of Parliament, Jo Cox of the Labour Party (who was passionately for Britain staying ‘In’ the EU), by a deranged and ignorant member of the ‘Leave’ campaign.
Up to last week, the many and frequent polls taken on the subject seemed to indicate the British population pretty much evenly divided between the choice, and in fact as the Referendum drew closer, the ‘Leave’ side seemed to be gathering some steam, in spite of an increasingly strident tone being adopted by the ruling government and its supporters, within the country and without.
But, after the tragic murder of Jo Cox, the more recent polls seem to indicate a shift in sentiment in the public for staying ‘In’.
Now, whether the shift in sentiment is permanent and real, or a ‘sympathy’ shift due to the murder of Jo Cox, remains to be seen, but we think it is probably due to the combination of: the shocking murder of a rare, committed and admired MP (we can’t imagine any benefits in a debate to the side whose members would act with such horrific stupidity and cruelty); and the louder, expanding chorus of international opinion, warning of the dire consequences facing British and the global economies, upon Britain’s exit from the EU.
At the end of the day, especially in this obviously fragile global economic environment, no population of any country can be oblivious to the obvious dangers of rocking an already swamped boat, or, to continue in the use of mundane clichés, upsetting the apple cart.
In spite of the edging forward of the stay ‘In’ side, the ultimate result is by no means certain, even at this late stage, it’s still too close to call. But it is quite clear by now, just what the World thinks the British population should do on the day of the Referendum, ‘Please Stay In’!
Under more normal global economic and political circumstances, the rest of the World would have been mildly interested in the internal angst and struggles of the British people and their lingering self doubts and conflicts about their sovereign pride, about charting an independent economic course, independent and formerly glorious currency, the Sterling, and the issues about cross border migrations. But these are quite extraordinary times, and in these times what one nation does, especially in such a circumstance, will have an over-sized effect on Europe and then by its sheer mass of collective developed economies, on the rest of the economies of the World.
In fact, this time of economic weakness is so sensitive, even China, which usually bristles animatedly over anyone’s even mild suggestions as to what it should do internally, as a policy, got nervous enough to step into the debate, and had President Xi Jinping offer his opinion that Britain should stay ‘In’ the EU.
China is struggling with massive internal economic problems that are the legacy of the last global financial contagion, of 2008. Its loss of the endlessly growing, rich export markets of the EU and the United States hurt the Chinese economy badly, as the markets post the 2008 crisis contracted sharply, and have remained much diminished ever since. The last thing China needs is the exit of Britain from the EU, resulting in - the best case scenario, an additionally weakened European market - or in the worst case scenario, Brexit triggering the next global financial crisis which would pummel China to further economic depths.
And so it is with the rest of the major global economies. In normal times, British angst stemming from its relationship with Europe would have been of mild distracted-fly-swatting type of interest, but in these highly charged and vulnerable times, the World’s major economies, so hip-tied, are collectively holding their breath, chewing their nails, in fearful anticipation of the consequences of the Brexit referendum, and a possible ‘Leave’ vote. Britain’s leaving the EU would have immediate and far reaching affects and none that would be good collectively. That’s why, a slight gain in the ‘In’ campaign is triggering such giddy euphoria in the financial markets, albeit a bit prematurely.