“Nobody’s going to be better off with Brexit”

Even on its own, Brexit would be an economic and political subject of interest for the Hay Festival. But it became especially relevant when the comments were coming from Peter Florence, director of the Hay Festivals, which he founded with his father, Norman Florence.

This was doubtless a complex subject to be dealt with in a presentation lasting just an hour. But Florence and IE professor Fernando Fernández, an expert in macroeconomics, were able to select the key elements of the subject for an interested audience at the Hay Festival in Segovia.

Reasons for leaving the EU

Florence began his talk with the calmness of a man who has absorbed the bad news and the closeness of one who does not assume that his audience has any prior knowledge of the subject. He chose to explain the reasons for Brexit by means of a practical example: a real conversation that he had on a train with an elderly couple about the subjects that most concerned them about Britain staying in Europe.

He asked them if they thought that leaving the European Union was going to solve their problems, and they answered with a resounding ‘yes’. But when he cited the statistics about the benefits to the UK of immigration, they looked the other way, considering that those statistics were not correct.

“I tell this story because we are dealing here with some of the most abhorrent aspects about the Brexit matter. Over the last twenty years there has been a great wave of disinformation in the UK about everything that came from outside,” Florence lamented. “One of the most curious things about the British situation is the alarming level of ignorance with regard to the European Union.” Indeed, on the day after the referendum Google noted that the question most asked was, “What is the EU?”. People didn’t know what they were voting about, and that is the principal vulnerability of democracy: that it accepts cynicism.”

This unusual result thus has to do with economic development and a generational question. “Young people who emigrate to the city do want to stay.” It also has to do with “the narrative of the right wing,” which wants to have control of the country. “For future generations, migration will no longer be a source of income. But the feeling that ‘we don’t want foreigners’ is perverse. It’s not real, these are just clichés. In reality, the greatest part of the migration that reaches Britain comes from India, not the European Union.”

But professor Fernando Fernández pointed out that that the problem “is not that those in favor of Brexit are crazy. We can’t just say that they’re stupid and have been duped. Countries have to recognize that migration is a problem that matters to people and one that these countries have to deal with.”

Apart from this disinformation, another explanation for the result of the consultation is, according to Florence, because the middle class feels threatened: “The working class feels abandoned because it sees more and more younger and more qualified people who are coming from the rest of Europe.”

Fernando Fernández adds another reason: he thinks that the European Union “didn’t know how to explain itself.” And he says it’s not a question of the newspapers not informing people well, but of problems with the governments. “The national governments have systematically blamed the European Union for their problems.” If there were budget cuts, these governments sent the message that “it’s because of the Europeans, they’re imposing this on us.” And then, logically, people began to hate the European Union, saying “they live so well, they don’t do any work…” Faced with this situation, Fernández asked a question that couldn’t be immediately answered: “How could we make the different national governments assume responsibility for their decisions without blaming someone else?”

Another large part of the objections to Britain staying in the EU has to do with the regulations that come from Brussels, according to Florence. “But that legislation they wanted to escape from is supranational and is binding should they sign any agreement with the European Union. Besides, jurists are going to have to draw up very similar rules for the UK. It’s very ironic and even amusing,” this expert said with resignation.

“The amount of work that’s necessary to leave the European Union is tremendous,” added Fernández. “Some British lawyers have estimated it will take forty years.”

The consequences

“Brexit is bad news and not only for Europe but for the whole world. It’s a step backward,” says Fernández, who says the UK has no viable negotiating option with the EU once it has left it. “Negotiating a better free trade agreement than the one with the European Union is just not going to happen. The UK market is a small one compared to the 500 million people who live in the European Union,” adds Fernández, who very much doubts that there now exist the elements of mutual confidence necessary to make this exit work economically. “You can’t have access to the market without having freedom of movement at the same time. Thais isn’t going to work. It does away with the basis for the European Union treaties, which are based on the free movement of goods, services, people and capital. I don’t think the European Union is going to negotiate something that sacrifices that freedom without radically changing the European Union itself.”

Another of the interesting consequences these experts noted was the loss of importance of the City, London’s financial district, with respect to other European hubs. The City, which is so international that it as unpopular among those who voted for Brexit as are the foreigners, will be one of the big losers. “There is something in the City that cannot be maintained without being a member of the Common Market: the capacity to recruit the best workers.”

The consequences of Brexit are already being felt, and not just by the people who work in politics or the economy. Foreigners who are working or studying in the UK are suffering: their companies or universities can’t guarantee them anything about their future, even though they would very much like to. “So there are going to be many changes,” predicts Fernández, just in case anyone had any doubts. And he adds: “I’m worried about people.”

Peter Florence is also concerned. “Nobody’s going to be better off with Brexit. Thousands of people are going to be worse off,” he says flatly. “There’s no logic to Brexit. It’s an extraordinary situation and, I hope, the only one of this kind. It’s as if you have a headache and you shoot yourself in the foot: it makes no sense. It’s one of the few occasions in which nobody benefits.”


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