January 21. 2017

Theresa May

This week, British Prime Minister, Theresa May, gave a speech to the nation regarding Brexit, the country's exit from the European Union. May indicated she shall pursue a "hard Brexit" meaning a thorough and complete departure from the European Union, a bloc of 28 nations. This means Britain is on track to leave what is known as the Single Market, which is a fast track system of selling goods and services to the European Union at favorable rates and vice versa.

As stated on the site a week prior (Labour Politician Jeremy Corbyn Provokes Criticism In Britain With His Wage Cap Proposals And Unfettered Immigration Policies) the Judiciary Report is of the belief it is best for Britain to remain in the Single Market. However, May is indicating her government views leaving the European Union as one that must be a complete departure of all existing arrangements.

I can understand Britain wanting to make its own laws and have controlled immigration with quotas (most nations want the same). However, Britain should try to trade with as many nations as possible and as freely as can be done under law. There are 500 million consumers in the European Union. There are 65,000,000 consumers in Britain. It is wise and beneficial that both parties continue to trade with each other. Not to mention, they are neighbors with shared history.

In what is being viewed as promising news, Germany, via its finance minister, Wolfgang Schauble, has indicated his nation is willing to make "a quick trade deal" with Britain. Germany is a large and prosperous nation. This is in Britain and Germany's best interest. There is much they can trade.

On another note, Holland is indicating they seek to punish Britain for leaving the European Union. Prime Minister of Holland, Mark Rutte, stated regarding Brexit, "Theresa May faced up to reality in her speech, but it also means that the UK is now making a choice to control migration. And they are paying a huge price because the economic growth rate of the UK will be impacted negatively by the fact that they will leave the biggest market in the world. So they are willing to pay the price, but this has consequences for the rest of Europe and particularly for the UK. It is the price between wanting to control migration and accepting the fact that it will have a huge impact on the economic growth rate..."

If Holland tries to punish Britain, May will reciprocate. Therefore, it is best to remain on civil terms and work out a trade deal profitable to both sides. Britain and the European Union do not need to end up on bitter, acrimonious terms.

The issue was a chunk of Britain's economic growth that stemmed from the European Union was present from the uncontrolled migration, but so were the debts/liabilities,  namely the National Health Service (NHS), overcrowding in (free) schools and the benefits system that includes cash payouts and housing, being stretched to breaking point. The NHS isn't incapable, but if you have been serving a population of 15-20 million for decades and in a matter of a few years the numbers have grown to 65,000,000, resources will be stretched.

Some who participated in "freedom of movement" under EU rules, moved to Britain, got on the dole (benefits via cash payouts) but did not work. Freedom of movement is a major sticking point. As stated in past columns, there needs to be a quota for each state of the European Union, lest Germany and France will begin to experience the same issues Britain was overwhelmed by, which led to the Brexit vote.

It's best to be frank about what happened. The following is how it was being viewed by people in EU states with lower wages, who were seeking a better life. If you live in another part of the EU, such as Romania, Hungary or Bulgaria, among others, where at best the average worker makes €300 (approximately £260 pounds) per month and you discover another nation in the European Union, Britain, has a minimum wage of £6.70 per hour, which can reap £1,110 per month in wages (€1,270  Euros), three times the money in wages, would many in that situation not deem it a better economic situation and try to immigrate there.

And so, many EU citizens went to Britain and became employed. However, many who left other EU states and were not gainfully employed when they arrived in Britain, were able to get council housing, cash benefits and free healthcare, paid for by the British taxpayers. This created a huge financial obligation for Britain, who took in a significant amount of immigration (this includes from non-EU states such as African nations and the Middle East), as immigrants deemed it the most desirable spot in the European Union based on standard of living, quality of life and local attractions. A mainstream article recently revealed immigrants from foreign nations branded Britain "El Dorado."

Australia has also indicated it is willing to work out a trade deal with Britain. America stated the same. China is also a strong market of consumers. There are existing trade deals that could be strengthened. This week, Prime Minister May touted what she refers to as a "Global Britain" and she will truly have to make it so, circling the globe cutting trade deals. The British pound rose after May's speech, as it had experienced a decline of 25 pence of its former value prior to Brexit.

People want to live well. As such, they used the "freedom of movement" to do so when the opportunity presented itself. Although all 28 member states financially contribute in the European Union, it is evident Britain, Germany and France have shouldered significant financial responsibilities. Logistically and financially, there should be an even load.