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Why Britain Must Choose Brexit Despite the Economic Damage All Economists Say She Will Suffer

ElectionOracle / UK EU Referendum May 15, 2016 - 04:27 PM GMT

By: Submissions


Petros Diplas writes: Because Britain must maintain its current enviable and prestigious geopolitical position in the world and if possible to make it even stronger, not only for the sake of "History and the Empire" but also for an even greater future enrichment of herself. Because Britain’s area of interest is the entire world and not a subset which is Europe. Europe is good for Britain as long as it helps her in her global goals.

Then why the vast majority (over 85%) of all economists emphasize that the British economy will suffer damages by the exit.
Do the British want to undergo a financial loss just for the sake of the ‘Prestige’ of the kingdom?

Of course not.

Simply the British are the kind of people who prefer the “pounds of the future than the pennies of today”. In contrast with the vast majority of economists who are against (even to think of) anything that can reduce – even the next day, if not the next hour - the gains of the financial system. We all remember what they have reassuringly saying just before the outbreak of the great crisis of 2007-2008, in order to avoid anything harmful to the financial markets. This is why economists do not want to hear about Brexit.

Certainly, in the very short-term there will be negative repercussions. But only in the short term. 
For indeed if Brexit happens there will be turmoil, the Sterling will fall, some foreign investments which came to Britain with a focus on Europe will recede, the City will be shaken, shares will fall. But only initially.
But the British people must think of the future. And future-wise, Britain will not enjoy advantages as an EU member. On the contrary…

Should the EU integrate further and create the United States of Europe (USE, as USA) the center of United Europe will be the German-French-Dutch axis while Britain to become just an island at the edge of Europe.

Shifting from the role of a main actor in the global center of the economic, financial and education stage into an extra without any autonomous geopolitical weight. From an Empire to a Prefecture.

Today Britain is a large, autonomous, independent power among America, Europe and the Commonwealth, having 'affiliated' and privileged relations with the majority of the developed and the developing world, where it has given her own language. And these specifics are the ones supplying her with her wealth.

This unique great legacy is not possible for Britain to abandon just to become a small part of a family, with whom she always felt as second cousin but not a sibling.

It just seems like today when on 15 February 1930, Churchill commented: “We see nothing but good and hope in a richer, freer, more contented European commonality. But we have our own dream and our own task. We are with Europe, but not of it. We are linked but not compromised. We are interested and associated but not absorbed.”

And in 1953, speaking in the British House: "We intend to meld into a European federal system. We have a special relationship with Europe, expressed by the "with" and not with "the." We are with them but not of them. We have our own Commonwealth and Empire. "

I think that Churchill’s words apply more to today’s situation than ever.

If the EU does develop into USE, the independent course of Britain will be even more successful due to both future supergiants (today’s giants) China and India have and always will have a special relationship with the “Metropolis of the Empire”.

Britain due to the much friendlier entrepreneurial environment has achieved to lure the economic and financial elite of the world. In the last decades, all wealthy Arabs prefer to go to London than Frankfurt. After all Adam smith was British and Karl Marx, German (!). In the years to come all wealthy Chinese and Indians (nearly half of the world) will also come to London and not Frankfurt. Is this not the reason why high housing prices in London are real and not hot air? Is this not the reason why high real estate prices will be sustained because of constant world demand? 

To understand better the unique economic comparative advantages of Britain just compare how housing prices have evolved in London and Athens in the past 35 years. In 1981 (year when Greece joined the EU) you could have sold an apartment in Athens and buy with it 2 apartments in London. In 2016 you could sell one of these London apartments and buy 10 of those in Athens (!). 

The economic environment in Britain is much more liberal, pro-investment and pro-entrepreneurial compared to the bureaucratic and cumbersome European, which means that the negative situation caused by Brexit will quickly heal.

If after Brexit economic relations with the EU remain pretty much as they are (Europe has more or less accepted that), this will mean that Britain not only has been spared from the European limitations to her economic liberalism but also that the path to greater growth has been opened.  
And don’t forget the (hidden?) anti-British sentiments of the German-French-Dutch axle which do not help (as we say the feelings are mutual baby...).

However as a foreigner (and not a British) I have to wonder what will Scotland, Wales and Northern Ireland would do should the UK leave the EU? Will they want to stay in the EU finding this as an excuse to leave the UK? A British friend of mine told me that if Britain suffers severe aftershocks after the Brexit for a long time and on the other hand Europe does well, then it might be a possibility.

By Petros Diplas

Economist -

Financial Journalist, ‘Hellenic Broadcasting Corporation’ (ERT). (2014 – today). Graduate of the Economic School of the University of Athens. State scholarship (1981). Graduate (MA) of the ‘City University’ of London on International Financial Journalism.(1986). Postgraduate Thesis. “World Shipping Crisis 1981-1985: Its tackling by the Greek Shipowners’ (1986). (Praise of the ‘Financial Times’-The FT foreign affairs editor singled it out as ‘the best of the year’).

Copyright © 2016 Petros Diplas - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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