Brexit, The Economy and House Prices (Part 2)

TrickyTree83

always_sunny wrote: »

You keep going on as if money is the only thing that matters and the same argument works for the UK.

For the UK being in the EU it makes more financial sense. But as we keep hearing that for Britons, losing wealth, jobs, etc is a price worth paying for Brexit.
For the EU, losing the [money from the] UK is a price worth paying for future cohesion and integration by getting rid of a 'difficult' member.

The flaw in your argument is believing that the UK holds all the cards and that this logic only works on the UK side, but it's not the case at all.

I don't believe that at all.

I've not put forward that the UK holds all the cards at all, so why would you say that?

You are repeatedly doing down the position of the UK whilst exaggerating the position of the EU. Both stand to lose in the event of a bad deal. However the UK will have the money back from paying into the EU and it will have the ability to forge new relationships quickly. The ability to circumnavigate the issues caused by no deal is far greater for the UK than that of the EU bloc. They are notoriously slow and need majority and sometimes unanimous agreement to move forward.

What I'm taking issue with is this picture painting of the EU as some juggernaut that will remain completely unaffected by losing it's 2nd largest net contributor, a market that is in the top 5 of all net contributors, who are all expected to be paying more into the EU budget to prop up the net beneficiaries. That's just not the case, they will be affected and badly.

TrickyTree83

Herzlos wrote: »

And the EU will just have to reduce it's expectations regarding budget until it recovers. You are assuming though, that somehow we'll pay in less than we used to. It's entirely plausible that we'll pay in as much (give or take) than we did before. Plus their costs will presumably go down a bit by the reduction in size - they've got less MEPs to pay for (salary, expenses, accomodation), for a start.

IF we leave the EU, stop contributing anything, and stop buying anything from the EU, they'll have a hard few years until they readjust. But is any of that actually likely?

But if we're paying, then there will be a deal in place, no? Or do you think we'll pay just to exist on their doorstep? Come now...

mayonnaise

I remember the usual suspects pontificating on here how the EU would unravel after the brexit vote.
And here we are, 1 year later, and the EU is more unified than ever, with their economies powering ahead while the UK is stuck in anemic growth.
As for our contribution, 8bn is small change in the grand scheme of things. The EU is a 20tn/year economy. You can rest assured that a solution will be found, despite what the Express and Daily Mail tell us.
Some countries will need to increase their contribution or the EU will have to tinker on the spending side. Probably a combination of the two.

Really, we are not that important. (*)

(*) Disclaimer: This is not a UK-disparaging nor unpatriotic comment. Just a matter of fact.

Herzlos

Tromking wrote: »

Wage suppression due to unlimited cheap labour seems to be easing partly as a result of UK's decision to leave the EU.
A key motivation for many a leave voter I recall.

http://www.bbc.co.uk/news/business-40853467

Earnings are now only 1.8% higher than a year ago - the slowest rate of increase since late 2014 - which has contributed to a cut in real incomes because the rate of inflation has been higher.

So we're still not keeping up with inflation and starting to have a staffing shortage (since employment is apparently as low as it can go) before we lose FoM. Good stuff.

Herzlos

TrickyTree83 wrote: »

But if we're paying, then there will be a deal in place, no? Or do you think we'll pay just to exist on their doorstep? Come now...

Exactly. We'll only pay as part of a deal, and we really need a deal. I never said we wouldn't pay without a deal, just that it's almost certain we'll have a deal that involves paying in. We've already backtracked on the divorce settlement before negotiations have really started.

I did think that'd we'd still pay in via tariffs, but I can see UK->EU sales dropping pretty significantly if that was the case, and thus any customs takes would be fairly low.

Herzlos

TrickyTree83 wrote: »

You are repeatedly doing down the position of the UK whilst exaggerating the position of the EU. Both stand to lose in the event of a bad deal.

Indeed, we both stand to lose. "losing" is not equal though.

However the UK will have the money back from paying into the EU

Potentially the UK will have the money back (£150m/week) , but how much money will we lose due to the bad deal?

and it will have the ability to forge new relationships quickly.

Having the ability to forge new trade deals quickly is only as useful as the trading deal is. Will we gain enough from these deals to offset any losses from the EU? Will we get a good deal as the smaller party?

What I'm taking issue with is this picture painting of the EU as some juggernaut that will remain completely unaffected by losing it's 2nd largest net contributor, a market that is in the top 5 of all net contributors, who are all expected to be paying more into the EU budget to prop up the net beneficiaries. That's just not the case, they will be affected and badly.

I don't think anyone has claimed the EU will be completely unaffected. We all know it'll be affected. The contention here is that some of us think the EU is big enough to recover fairly easily, and is willing to endure the short term pain to do so, whilst others think the EU will fall apart without giving the UK a good deal.

Brexit is going to be bad for everyone, but I know which entity I'd put my money on recovering first.

always_sunny

TrickyTree83 wrote: »

I don't believe that at all.

I've not put forward that the UK holds all the cards at all, so why would you say that?

You are repeatedly doing down the position of the UK whilst exaggerating the position of the EU. Both stand to lose in the event of a bad deal. However the UK will have the money back from paying into the EU and it will have the ability to forge new relationships quickly. The ability to circumnavigate the issues caused by no deal is far greater for the UK than that of the EU bloc. They are notoriously slow and need majority and sometimes unanimous agreement to move forward.

What I'm taking issue with is this picture painting of the EU as some juggernaut that will remain completely unaffected by losing it's 2nd largest net contributor, a market that is in the top 5 of all net contributors, who are all expected to be paying more into the EU budget to prop up the net beneficiaries. That's just not the case, they will be affected and badly.

If the UK GDP declines/contracts, the UK will have less money to spend [what you call money back], compare it to money a trader pays to use a platform, what you believe is, the trader can go and trade elsewhere but other platforms do not have access to the same deals.

Look at the size of the EU, then look at other markets out there and how many you will need to replace the EU.
Even if the EU is crashing or declining as we keep hear from DE fans, reality is wealth in the EU is still better than other markets.

The position of the EU is not exaggerated, it's the largest trading bloc and even after the UK departure, the agglomeration of the remaining EU member states will still be a huge trading bloc.

It is not that the EU is notoriously slow, is that you don't understand how continental) Europeans do business. You may also think that Japanese or Chinese are slow compared to say Americans or Australians.

Go to the United States, go to Australia, India, and the like and see what business you can get.

mayonnaise

Brexit caused by low levels of education

Britain would have likely voted to remain in the European Union were its population educated to a slightly higher level, a new study has found.

http://www.independent.co.uk/news/uk/politics/brexit-education-higher-university-study-university-leave-eu-remain-voters-educated-a7881441.html

Discuss.

TrickyTree83

mayonnaise wrote: »

I remember the usual suspects pontificating on here how the EU would unravel after the brexit vote.
And here we are, 1 year later, and the EU is more unified than ever, with their economies powering ahead while the UK is stuck in anemic growth.
As for our contribution, 8bn is small change in the grand scheme of things. The EU is a 20tn/year economy. You can rest assured that a solution will be found, despite what the Express and Daily Mail tell us.
Some countries will need to increase their contribution or the EU will have to tinker on the spending side. Probably a combination of the two.

Really, we are not that important. (*)

(*) Disclaimer: This is not a UK-disparaging nor unpatriotic comment. Just a matter of fact.

Except when you look at the data, and not at media headlines, it is quite clear that we are particularly important despite your protestations to the contrary. You say that out of a belief, whereas I've shown you before that the data says otherwise.

Being in the top 5 export destinations for nearly all of the EU net contributors means a bad deal hurts the net contributors twice and they'll be passing some of this hurt on to the rest of the members. So to think that the likes of Bulgaria don't have skin in the game is wrong. To the Bulgaria's, Latvia's, etc.. the UK leaving does have an economic impact, just by proxy.

TrickyTree83

always_sunny wrote: »

If the UK GDP declines/contracts, the UK will have less money to spend [what you call money back], compare it to money a trader pays to use a platform, what you believe is, the trader can go and trade elsewhere but other platforms do not have access to the same deals.

Look at the size of the EU, then look at other markets out there and how many you will need to replace the EU.
Even if the EU is crashing or declining as we keep hear from DE fans, reality is wealth in the EU is still better than other markets.

The position of the EU is not exaggerated, it's the largest trading bloc and even after the UK departure, the agglomeration of the remaining EU member states will still be a huge trading bloc.

It is not that the EU is notoriously slow, is that you don't understand how continental) Europeans do business. You may also think that Japanese or Chinese are slow compared to say Americans or Australians.

Go to the United States, go to Australia, India, and the like and see what business you can get.

Where did I talk about being slow at business? I thought it was obvious that I was talking about being slow at forging new trading relationships.

When out of the customs union the UK will only need 2 parties to agree to forge new trade deals. The EU will require 28 (27 members + the other party).

The position of the EU is constantly over exaggerated by people on this forum. Constantly.

During the 2008 crash our exports to the EU were declining, our exports to the rest of the world were increasing and yet we weathered the storm with higher growth than any of the other G7 nations during that period. The current stagnation is purely down to uncertainty, which we are being told but to those with an agenda it's being blamed on leaving the EU rather than the uncertainty around doing so. Once the terms are known we'll see business leaving the UK and also business coming into the UK as a result.