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Brexit Vote – Why Great Britain will vote ‘Yes’ and stay in Europe

May 28, 2016
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28/05/2016

Most political leaders, dare I say it, ‘most leaders’ are driven not by the love for their country and its people but by gains in personal power. Their long held beliefs, when on the rare occasion they have them, are compromised on their journey to grab power. We observe that there are very few principled politicians.

George W Bush, Tony Blair, Nicolas Sarkozy, Silvio Berlusconi, and now Donald Trump are all examples of self-absorbed leaders for whom the self is far more important than the collective. The previous leaders of Greece, who syphoned public money into their own pockets, didn’t care about the Greek people. Argentina has similarly played a repeated game of roulette with its own citizens. In Britain Boris Johnson, Nigel Farage, and members of the cabinet who are support the Brexit campaign don’t care about Britain. They care only about their narrow vision of a Britain that is no longer viable or is potentially only viable for the few. One can argue that in order to appease discontent among his peers, David Cameron has compromised the greater good of the British people by calling for a referendum. Was it all to do with power retention?

The old British establishment has never cared for the people of Britain. They have always ruled by creating divisions in our society. Their sole aim has always been control over the Treasury and personal elevation. In their ideal world they would like to make all spending decisions without giving a toss about the environment, public education, climate change, national health, social security, foreign aid. Their preference has always been ‘a few masters and many slaves’.

The strange thing is that they feed the poor some convoluted message to do with the fear of foreigners, threats to sovereignty and outdated notions of greatness, which don’t at all help the deprived in our society. They get the ignorant among us to support them through emotional blackmail. They then start their circus, which is covered by the media and, before one can blink, it becomes the biggest news event for months. But what is at stake is the security of a whole nation and how the citizens of Great Britain define their place in the world and how they are then connected to it. It is about our future.

The benefits to Britain remaining in Europe

It is a pity that Britain didn’t whole heartedly participate in the European Project from the beginning. In Europe, the combination of Germany, France and Italy is sufficient to forge a union. Britain is not necessary for economic collaboration. Britain is essential for Europe’s defense. Europe in turn safeguards Britain. Without Britain, France will win most of Europe’s defence spending.

The City of London, if prevented from distributing financial products into Europe, will suffer enormously. Modern power is increasingly about finance and financial services. Take away equity, foreign exchange; bond trading and loan syndication to Paris, Frankfurt and possibly to Zurich, London loses its place. Legal services in London are largely supported by this sector.

As part of Europe Britain can play its strengths and with a prominent role, can reinvigorate its manufacturing sector.

Creative Britain

The British are very creative. We are creative in the science, arts as well as in communications of all types. In Europe our creativity would only flourish because Europe is rich in history and culture. Exposure to diversity is the key ingredient to a creative mind. In sciences Britain can’t do it alone anymore. The biggest challenges require big funding and collaborations. The energy, communication, environmental infrastructure of tomorrow will not be defined by lines on a map.

What if GBP becomes a Safe Haven Currency?

A Safe Haven Currency does not at all mean a currency that is safe from an economic growth perspective. The Japanese Yen has been a strong currency for many years. That hasn’t been good for Japan’s growth. The Swiss Franc was always a currency of choice in heightened global risk. That hasn’t been good for Switzerland. Will the Bank of England be able to cope with the increased volatility resulting from large inflows and large withdrawals in GBP? The answer is no. Just as Japan is not coping and Switzerland has not been able to, Britain will put its economy at risk by isolating itself.

The ECB may not come to the rescue of GBP in a British currency crisis.

We need a safe and economically strong Europe for our economy to be safe. Britain outside the Eurozone will have a more isolated economy and currency that is less traded. But GBP will be vulnerable to rapid flows in and out when there is a crisis.

Britain (GBP) is not in a position to cope with capital flight from USD or EUR, let alone a synchronised sell off in the Emerging Markets. BoE needs the ECB.

British Politics

There is hardly any area, other than perhaps the NHS, where Britain leads European nations. The whole of Northern Europe, German speaking part of Europe, and one can argue that the French, Italians and Spaniards have a better quality of life compared with Middle England. Britain doesn’t have so many reasons to shout about its greatness. There are many things that we can learn from Europe and reprioritize our spending for the greater social good.

Education and health services in Switzerland, Austria, Germany is superior to the United Kingdom. Their roads and bridges are in better shape. Their cities are cleaner. There is less income inequality and thus a greater sense of security.

Likely outcome

The great thing about Britain is that there is much debate that goes on every day. The majority of the people who dwell on these islands are a thinking people. Many more are educated now compared with fifty years ago. They can see through politics. They can measure self-interest.

Britain will vote to stay in Europe because we need Europe more than Europe needs us. Our future is tied to Europe more than ever before. Our history demands that we play a bigger role, rather than become recluse. Britain is great only when she leads. There is much to be done in Europe, where Britain can lead.

What if there is a No Vote?

A Britain that is similar to Hong Kong, Singapore or Switzerland would be very sad indeed. A Britain with a diminished voice will no longer be great. It will remain a fine country to visit and shop. Exit won’t ruin the country. But it will make it less relevant.

Impact on GBP and Stock Markets

GBP and FTSE have already been rising, in part possibly because a Yes vote is more likely. Leading into the vote GBP will remain somewhat volatile. There is not a huge upside even with a Yes vote for GBP. The economy has to start performing for that. For a sustained long term upside, Britain has to start participating in Europe and shaping the destiny of 350 million people. When we see an engaged Britain, then the future will be bright both for the GBP and FTSE.

The Banking and Insurance sectors in particular should do well with a Yes Vote. These sectors in particular have much to lose from a No Vote.

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