BREXIT vote aftermath

[BrendanT1993]

No one is wanting to invoke article 50 because it's political suicide. the leave campaign should have been clear that voting leave would result in a long recession but they weren't. So who's going to invoke article 50, leave the EU and lead the people through increased food prices, increased health care cost, increased cost of education, no changes to immigration all while going through a recession

[Guest]

They didn't compare Brexit to any regime

They said that populists who inspire fragmentation and use immigration as the excuse justification to do the bidding of those that would like to get even richer by only welcoming the advantages while not taking the downsides of further integration are trailing a path similar to the circumstances that led to the instauration of those regimes in history. Different thing.

So why post it in the BREXIT thread then?

[MeakMaker]

I truly don't understand this sense of confusion in our country's politics. According to the Brexiters as soon as the referendums results were in they would have triggered article 50 the day after in case they won. They did so how come no one is taking responsibility for it? I can understand the mess in the Labour Party but the Tories surely should have had a plan in place. They all wanted out expect for Cameron.. Who by the way always stated he would step down as prime minister if the Leave vote would win. Why did they even go ahead with this referendum if they were clueless about what to do after? I get it... This is a democracy. People voted Out! Going through the reasons why they did and all that talk makes no sense now as the damages been done but why this confusion? Why are the conservatives acting like headless chickens? All they ever wanted was to leave the EU... You got it now, bitches! Now do something for the country instead of playing power games inside your own party!

[MeakMaker]

French and Environment Minister Segolene Royal was interviewed by Stephen Sackur, the main BBC HARDtalk programme host

Royal says that the fundamental issue at play here is the fact that David Cameron's calling of the referendum not only was done without consulting anyone in Brussels but that it was also, in reality, based on a promise made in 2013, merely aimed at garnering more consent within his party but the consequences of it will now fall on all 28 EU members, not just British citizens and she continues saying that the squabbling and party shamble scenes taking place at the moment in national British politics are the transparet confirmation of that.

She speaks in French, her part is subtitled. Full interview at this BBC iPlayer link or in re runs on the BBC World News Channel: http://www.bbc.co.uk/iplayer/episode/b07htb52/hardtalk-segolene-royal-french-environment-minister

Here's a Youtube excerpt of the interview:

https://www.youtube.com/watch?v=AT5VKD-h9F0

France will not have a referendum on whether the country should leave or remain in the European Union, the French Environment and Energy minister, Segolene Royal, has told BBC HARDtalk.

Asked whether this was undemocratic, Ms Royal said the question should not be about whether the country should stay or leave the EU, it should be about what sort of Europe you want, what the values are and what it does.

"Then you could have a democratic debate in a country, to find out what citizens want from Europe," she said.

The UK's vote to leave the European Union has seen far-right parties demanding referendums in other member states. France's National Front leader Marine Le Pen has said that the French must now also have the right to choose, while Dutch anti - immigration politician Geert Wilders and Italy's Northrn League have also called for referendums.

Far right movements should have never been allowed in our countries! They are anti democratic. Their agenda is dark and terrified! I'm besides me why they were allowed in the first place. Giving voice to a bunch of racist bigots is very dangerous within a society which is known to be confused, ignorant or apathic when it comes down to politics. Some people might agree with their policies when it comes down to immigration but what about other policies like ban same sex marriages? All they want is to set our politics to the way it was post war world 2 which is scary. If we had a party pushing a paedophile agenda in their policy no one would accept that but how come racism and xenophobia is accepted?! All these far right movements reek of racism! I dont care how many times they say they're not because it's been proven time and time again many of their members are self declared racists! UKP has many people who have fascist ideas.. Same for the Marie Le Penn party. So happy Madonna pointed that out! The Italian northern coalition even want to divide their own country. EDL in the UK is openly racist. How come no one wants to talk about that? These parties are getting momentum and it's dangerous and anti democratic.

And a basic lesson in human rights and freedom for people who voted or sympathises with the Leave vote:

Yes the UK doesn't want people to come into this country limiting their free movement.. But what about MY rights of freedom?! Why should I feel isolated and be forbidden of my free movements? Do British people think it would just work one way? Some people who voted out are still taking about moving to Spain or work in Ibiza.. I told them you shouldn't have voted out then and they looked at me as if I was telling them earth is round.. They thought Out would mean no people in but little thought they gave to the logic of no UK people out either by effect. Goes to show how clever they are....

[XXL]

So why post it in the BREXIT thread then?

Because it's pertinent to this thread. The three North American leaders weighing on what's going on in Europe and Brexit in particular. And they didn't compare it to a regime.

They are saying that isolationism triggered by populist forces may similarly favour the ideal conditions which gave rise to a very tense political European atmosphere in the 1920s and 1930s, ironically coinciding with the start of a similar difficult period for the world economy symbolysed by the 1929 Wall Street collapse.

And they are saying that Brexit is an isolationist move.

I have no problems in saying the EU is a disfunctional project the way it is now.

What bothers me is the arrogance of those that would love to have full single market access while at the same time expecting to have a completely different set of rules in regards to immigration, freedom of movement and refugee crisis and peddle that notion to their electorate.

Why should 27 other countries be happy about that? When they have the same exact issue to solve. Not fair and misleading from those politicians whose personal wallet bottom line wouldn't change much whether the country stays in or not. But for 500m people a lot can change.

Now the referendum was put on the table, the LEAVE vote prevailed and those that pushed for it the most are giving a sad clownish spectacle of themselves by not rising up to the validity of the claims they have made, even asking for more informal talk?? On top of trying desperately to dodge the hot potato of the premiereship. Meanwhile everything else is up in the air. How nice

[Guest]

Because it's pertinent to this thread. The three North American leaders weighing on what's going on in Europe and Brexit in particular. And they didn't compare it to a regime.

They are saying that isolationism triggered by populist forces may similarly favour the ideal conditions which gave rise to a very tense political European atmosphere in the 1920s and 1930s, ironically coinciding with the start of a similar difficult period for the world economy symbolysed by the 1929 Wall Street collapse.

And they are saying that Brexit is an isolationist move.

I have no problems in saying the EU is a disfunctional project the way it is now.

What bothers me is the arrogance of those that would love to have full single market access while at the same time expecting to have a completely different set of rules in regards to immigration, freedom of movement and refugee crisis and peddle that notion to their electorate.

Why should 27 other countries be happy about that? When they have the same exact issue to solve. Not fair and misleading from those politicians whose personal wallet bottom line wouldn't change much whether the country stays in or not. But for 500m people a lot can change.

Now the referendum was put on the table, the LEAVE vote prevailed and those that pushed for it the most are giving a sad clownish spectacle of themselves by not rising up to the validity of the claims they have made, even asking for more informal talk?? On top of trying desperately to dodge the hot potato of the premiereship. Meanwhile everything else is up in the air. How nice

You wrote this.

In the world were living, in different places, we have political leaders, political stakeholders that use demagoguery and have populist slogans that want to eliminate and destroy what has been built, he said. In the past, some leaders addressed their societies in those terms. Hitler and Mussolini did that and the outcome its clear to everyone it resulted in devastation.

Clearly linking the Brexit leave vote to Nazism. Despite it being ridiculous the whole post is more relevant to the American general election thread than this one.

[Kim]

He was quoting from the article. And it's absolutely spot on. You just need to look at the cretins blabbering on about "England for the English" etc all over the news . Completely oblivious to the shameful political MESS the whole country is is thanks to their stupidity. What a sad state of affairs this is. One for the history books for sure.

[XXL]

GU I didn't write that

It's part of the article quoting what's been said at that meeting. There was no comment of mine in the original post, just The Guardian article.

Obama, Pena Nieto and Trudeau made a point about Brexit and Trump, saying how both are the fruit of populism. So it's actually pertinent to both threads. The underlying implication is that Johnson, Le Penn and Salvini are populists who are exploiting people's fears in order to tarnish a project that's been long in the making, in this case the EU. They didn't say Brexit is a regime which is what you wrote in your first post quoting the article. They said Brexit could favour the spread of more intolerance, which in its extreme manifestation can lead to the formation of regimes, the way it happened in the 1920s and 1930s, leading up to the perfect toxic recipe for the second global conflict.

Oh dear. Why I still bother it's beyond me. You love going in circles endlessly, don't you? Pretending you didn't get the article and how it belongs in this thread in the first place

[XXL]

Far right movements should have never been allowed in our countries! They are anti democratic. Their agenda is dark and terrified! I'm besides me why they were allowed in the first place. Giving voice to a bunch of racist bigots is very dangerous within a society which is known to be confused, ignorant or apathic when it comes down to politics. Some people might agree with their policies when it comes down to immigration but what about other policies like ban same sex marriages? All they want is to set our politics to the way it was post war world 2 which is scary. If we had a party pushing a paedophile agenda in their policy no one would accept that but how come racism and xenophobia is accepted?! All these far right movements reek of racism! I dont care how many times they say they're not because it's been proven time and time again many of their members are self declared racists! UKP has many people who have fascist ideas.. Same for the Marie Le Penn party. So happy Madonna pointed that out! The Italian northern coalition even want to divide their own country. EDL in the UK is openly racist. How come no one wants to talk about that? These parties are getting momentum and it's dangerous and anti democratic.

And a basic lesson in human rights and freedom for people who voted or sympathises with the Leave vote:

Yes the UK doesn't want people to come into this country limiting their free movement.. But what about MY rights of freedom?! Why should I feel isolated and be forbidden of my free movements? Do British people think it would just work one way? Some people who voted out are still taking about moving to Spain or work in Ibiza.. I told them you shouldn't have voted out then and they looked at me as if I was telling them earth is round.. They thought Out would mean no people in but little thought they gave to the logic of no UK people out either by effect. Goes to show how clever they are....

I think any type of political extremism should be banned. Far right or far left. No difference. And therein lies the problem. In the past 15 years centre left and centre right parties all over Europe have become increasingly more and more indistinguishable. I.e. They have favoured banking policies rather than worrying about investing in education, integration, infrastructures, social services and most of all injecting fresh life into the real economy, jobs, pensions, housing, credit to small and medium businesses.

The poisonous magik words have instead been austerity, higher taxation, and printing money like there's no tomorrow. Saving banks with taxpayers' money while our single national debts continued to spiral out of control. People like Le Pen and Johnson have obviously been quick to intercept that and to leverage those issues to further their own interests and their own "political" careers.

The fact that those who voted LEAVE have told their voters, the people who pay their salaries, "don't worry it's perfectly fair and possible for us to continue having access to the zillion benefits of a 500m people common market while at the same time tell the other 27 member countries they cannot expect us to share with them the same immigration procedures" is shameful enough but that after having gotten what seemed to have been their number one priority for years, those LEAVE campaigners are now showing their true colours is truly an abhorrent sight to behold, from any possible angle.

Where has the proverbial British pragmatism gone to? We need it back asap. Otherwise those dreadful "leave England to Englanders" slogans that not even a 5yo could come up with will destroy far beyond the EU project or Europe itself.

Since you mentioned the Northern League party in Italy, you rightly pointed out that not only they are against the Euro and the EU project but also that their early 90s raison d'etre was the idea that the North of Italy doesn't belong with the rest of the peninsula and the islands.

Funny how at any political election they always go campaigning in the South as well Isn't that absurd?

It's like Farrage's speech a few days ago in Brussels: "there's no reason why we cannot continue our long standing friendship, have a tariff-free commercial agreement and still let Britain's be in charge of its own borders" OK then. Sounds fair to the other 27 member countries NOT!

[XXL]

According to the Brexiters as soon as the referendums results were in they would have triggered article 50 the day after in case they won. They did so how come no one is taking responsibility for it? I can understand the mess in the Labour Party but the Tories surely should have had a plan in place. They all wanted out expect for Cameron.. Who by the way always stated he would step down as prime minister if the Leave vote would win. Why did they even go ahead with this referendum if they were clueless about what to do after?

They don't have a plan because they weren't expecting a LEAVE result. And sadly they all had everything in mind but to actually give the opportunity to British citizens to choose for themselves on the issue and obviously promising the immediate triggering of Article 50 in case of a LEAVE outcome was the second lie.

[XXL]

No one is wanting to invoke article 50 because it's political suicide. the leave campaign should have been clear that voting leave would result in a long recession but they weren't. So who's going to invoke article 50, leave the EU and lead the people through increased food prices, increased health care cost, increased cost of education, no changes to immigration all while going through a recession

This, sadly

[Kim]

In all fairness (not that there's much that's fair about this whole shitheap) who exactly is meant to trigger Article 50 right now? Of course Cameron was never going to take on that responsibility. His resignation speech was already sitting there ready for this possible outcome. His future of after-dinner speeches and playing cricket is secure as he washes his hands of this whole mess. It's up to the mug who accepts the poisoned chalice next, to take that step, and I really can't see what else they can do. The EU will NOT give concessions, they'll be even more resolute and stubborn than they've ever been with the UK negotiations, sending the clear message of "look what will happen if you try it too!" to the rest of the member states.

So the UK either meekly accepts whatever scraps it's given from the table, or they go it alone which will result in nothing but economic and fiscal chaos for the foreseeable future, not to mention the break-up of the UK too. Somehow I don't think that the power-hungry dogs fighting and stabbing each other right now @ Westminster even care about that though.

Shame on them (and YOU if you caused this!)

[karbatal]

Maybe some politicians there think that if they let time pass they can vote against brexit in the parliament with the new government in October

[karbatal]

Nowadays I noticed that people, like masses, forget much easily. Scandals come and go, things are so temporary. And some politicians are already using it.

[Kim]

Maybe some politicians there think that if they let time pass they can vote against brexit in the parliament with the new government in October

From what I understand, there's no legal requirement to consult parliament before triggering Article 50, the political ramifications of not doing so though would be immense. As it stands, a parliamentary vote (still) wouldn't result in a majority for leave, but that would be ignoring the wishes of the majority who actually voted in the referendum. So parliament will probably need to be presented with a plan of action for the upcoming negotiations that it may or may not get behind depending on a number of factors including single market access, free movement, Scotland etc. The whole thing is a legal and bureaucratic mess.

What I'm wondering is: if after Article 50 IS triggered, is there any going back after that? Which I suspect there will be, So negotiations will commence, THEN the PM will take those negotiations back to parliament to be ratified.

Because there's no precedent for any of this, it's all uncharted territory.

[Apples388]

It would cause public outrage if Article 50 is not triggered. It is simply undemocratic. Small majority or not, it would be absolutely outrageous to block it at that stage.

[sotos8]

It would cause public outrage if Article 50 is not triggered. It is simply undemocratic. Small majority or not, it would be absolutely outrageous to block it at that stage.

First they will ''work'' the public and then they will block the referendum's result .But then again Britain is unpredictable

[Apples388]

First they will ''work'' the public and then they will block the referendum's result .But then again Britain is unpredictable

Absolutely not. It is already emerging that some of the pre-referendum nightmare scenarios were lies (hello George Osborne). Cameron patronised and alienated the public. British people are so mistrusting of politicians at present that every single move counts.

Article 50 will be triggered and yes, whoever does it may perhaps be a scapegoat for what happens next but it is a small price to pay in the grand scheme of things. And in many respects that is why Theresa May is obviously the best person to be the next PM. Everything can still be deflected back to Cameron. At the end of the day he'll go down in our history books as the pig fucker that took us out of the EU; she'll be collateral.

[Guest]

GU I didn't write that :electropop

When I said write I meant type. I know you didn't create the copy but as you had it in bold and huge letters I assumed you had read it (even if it was just a copy and paste job). It was a not so subtle inference that to leave the EU is the sort of thing that will lead to Nazism.

[elijah]

After triggering Art 50 there is no going back. Even if by 2 years time no deal has been reached with UK after those 2 years the EU legislation WONT apply on UK territory: UK would be taken out of the union and the single market. That is UNLESS UK and all the other EU countries decide they ll extend the negotiations. I don't see that happening so its important when the Art 50 is triggered.

[XXL]

Someone should make a gif of the blonde lady's reaction

[XXL]

[XXL]

https://www.youtube.com/watch?v=5aAuknEdaIE

[Guest Mauro]

[Guest CzarnaWisnia]

How can the UE accept the UK's condition of free-market participation without the counterpart of the immigration policy? If they do, why would any reluctant UE member want to stay in the UE ?

[XXL]

http://blogs.barrons.com/focusonfunds/2016/06/28/george-soros-passed-on-sterling-but-set-up-a-whopper-bet-against-deutsche-bank/

George Soros Passed on Sterling But Set Up A Whopper Bet Against Deutsche Bank

Billionaire hedge fund investor and philanthropist George Soros keeps making news. This just in: he shorted Deutsche Bank (DB) on Friday.

Soros sent a shiver through the marketplace earlier this month when news outlets reported that he was personally pulling the trigger on Soros Fund Management’s whopper options trade against the stock market and new positions in precious-metal miners such as Barrick Gold (ABX) and a one million-share chunk of Silver Wheaton (SLW). Then, last week, Soros was out predicting catastrophe for the U.K.’s sterling currency should voters opt to leave the European Union. Brexit arrived and, sure enough, the pound has plunged to its lowest level in more than three decades.

But financial media was atwitter Monday after reports that, no, Soros did not in fact bet against the sterling this time, as he had in 1992. A spokesperson for the firm said that this positioning provided profits during Friday’s turmoil even without shorting the pound.

Bloomberg reports that Soros sold about seven million shares in Deutsche Bank short on Friday, while global financial markets were in their post-Brexit swoon. Impossible know Soros’ entry and exit points, but Deutsche Bank’s shares ended 14% lower on Friday.

https://www.youtube.com/watch?v=a5Q7heLA_q8

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http://finance.yahoo.com/news/full-text-of-soros-speech-to-eu-parliament-115156180.html

Here's the chilling speech George Soros gave to European Parliament

Billionaire hedge fund manager George Soros, known as the man who "broke the Bank of England" for his 1992 short bet against the British Pound, gave a speech to the European Union Parliament in Brussels on Thursday following the United Kingdom's decision to exit the EU.

Ahead of the vote last week, Soros had warned that if the British left the UK it would have effects on the British pound more disruptive than "Black Wednesday."

The Brexit may now be a "greater calamity" than the refugee crisis, he told the EU Parliament. He added that the UK's shocking decision has "unleashed a crisis in the financial markets comparable in severity only to that of 2007/8."

He continued: "This has been unfolding in slow motion, but Brexit has accelerated it. It is likely to reinforce the deflationary trends that were already prevalent."

Transcript

When I was invited to address this joint hearing, the refugee crisis was the greatest problem Europe faced. Since then it has played a crucial role in what could prove to be an even greater calamity — Brexit.

The vote for Brexit was a great shock to me and, I imagine, to most people in this room. Last Friday morning, the disintegration of the European Union seemed practically inevitable.

But as the initial disbelief wore off, something unexpected happened, and the tragedy no longer looks like a fait accompli.

Over the past week, buyer’s remorse has begun to set in, as the hypothetical became very real: sterling plunged, Scotland threatened to break away, and some of the working people who supported the “leave” campaign started to realize the bleak future that both the country and they personally face. Even the champions of leave are retracting their dishonest pre-referendum claims about Brexit.

In a spontaneous response, over four million people petitioned Parliament to hold a second referendum. By the time the Parliamentary debate on this petition takes place, it is not inconceivable that more people will have signed the petition than voted for Brexit.

Just as Brexit was a negative surprise, the spontaneous response to it is a positive one. People on both sides of the referendum, and most importantly those who did not vote—particularly young people under 35—have become mobilized. This is the kind of grass roots involvement that the European Union has never been able to generate.

The referendum has highlighted for people in Britain just what they stand to lose by leaving the EU. If this sentiment spreads not only in Britain, but also in the rest of Europe, what seemed like the inevitable disintegration of the EU could instead create positive momentum for a stronger and better Europe.

The process could start in Britain. The popular vote cannot be reversed but a signature collecting campaign could transform the political landscape by revealing a newfound enthusiasm for EU membership. This approach could then be replicated in the rest of the European Union by forming a movement that would seek to save the EU by profoundly restructuring it. I am convinced that as the consequences of Brexit unfold in the months ahead, more and more people will be eager to join this movement.

What the EU should not do is penalize British voters while ignoring their legitimate concerns about the deficiencies of the European Union.

European leaders should recognize their own mistakes and acknowledge the democratic deficit in the current institutional arrangements. Rather than seeing Brexit as the negotiation of a divorce, they should seize it as an opportunity to fundamentally reform the EU. Their goal should be the creation of a reinvented EU that the UK and other countries at risk of exit would want to join.

Will disaffected voters in France, Germany, Sweden, Italy, Poland and elsewhere see the EU benefitting their lives? If the answer is yes, the EU will emerge stronger. If the answer is no, it will eventually blow apart.

Unfortunately, Brexit has not only created an opening to reinvent the European Union, it has also aggravated two looming dangers.

First, it unleashed a crisis in the financial markets comparable in severity only to that of 2007/8. This has been unfolding in slow motion, but Brexit has accelerated it. It is likely to reinforce the deflationary trends that were already prevalent.

The Eurozone has been lagging in the global recovery because of restrictive fiscal policies; now it has to contend with an impending slowdown. The orthodoxy of the German policymakers stands in the way of the only effective response: having a Eurozone budget that could adopt counter-cyclical policies.

Meanwhile, the banking system of continental Europe has not recovered from the earlier crisis; it will now be severely tested. We know what needs to be done. Unfortunately, political and ideological disagreements within the Eurozone have stood in the way of using the European Stability Mechanism (ESM) as a backstop for banks as well as sovereigns.

Second, the EU faces growing military threats. Our external enemies have been emboldened. They pose new, as-yet unfathomable dangers in various parts of the wider region that are also liable to aggravate the refugee crisis.

It is against this background that I propose to discuss the refugee crisis, with special emphasis on the financial needs it presents.

The European response to the refugee crisis was riddled with flaws even before the present turn of events.

Chancellor Merkel showed great moral leadership when she opened Germany’s doors wide to refugees. Unfortunately, her initiative was not well thought through; it ignored the pull factor. When the sudden influx of migrants overwhelmed the capacity of the authorities, public opinion turned against her. That is when she struck her ill-fated deal with Erdogan.

I have identified the flaws of that deal in detail.

First, it was not truly European; it was imposed on Europe by Chancellor Merkel.

Second, it was severely underfunded.

Third, it was not voluntary: it imposed quotas that many member states opposed and required refugees to take up residence in countries where they were not welcome, while forcing others who reached Europe by irregular means to be returned to Turkey.

Finally, it transformed Greece into a de facto holding pen with inadequate facilities.

Since then, the situation has only deteriorated. Member states have become increasingly unwilling to cooperate with one another, and are pursuing discordant policies. While migrant flows to Greece have eased considerably, they have surged in the Central Mediterranean.

In these circumstances, a comprehensive and coherent European asylum policy is not possible. The trust needed for cooperation is lacking. It will have to be rebuilt through a long and laborious process.

This process should start by addressing the dire lack of financial resources.

Without sufficient funding, the EU cannot perform the functions it was designed for nor meet the expectations of the European people. And because it fails to achieve the objectives it has set for itself, the Union loses its legitimacy and the support of its citizens.

The refugee crisis illustrates the problem. At least €30 billion a year will be needed both inside the Union—to build effective border and asylum agencies, to ensure dignified reception conditions, fair asylum procedures and opportunities for integration—as well as outside its borders—to support refugee-hosting countries and to spur job creation throughout Africa and the Middle East. This does not include the costs borne by member states, which are on track to spend upwards of €200 billion between 2015 and 2020 on refugee reception and integration.

The refugee crisis should not pervert our relationships with neighboring countries as it has with Turkey. I am concerned that in its latest communication on migration and external relations, the Commission calls for making development funds contingent on the implementation of migration controls by African partners. This violates decades of practice in development funding and risks a race to the bottom in the treatment of migrants and refugees. The grand bargain with African and other countries cannot simply be that, if you stop migrants from coming to Europe, you will receive financial aid. A meaningful grand bargain would focus on real development in Africa that over a generation would actually address the root causes of the crisis. This means free trade, massive investment, and a commitment to rooting out corruption. Leaders in Europe have called for a Marshall Plan for Africa. This is an admirable ambition. But when it comes to the details, Europe is a far away from such a vision. The United States invested 1.4% of its GDP to help rebuild Europe—every year for four years. An investment on the scale of the original Marshall Plan would require around €271 billion a year for the next four years.

The political and economic costs of inaction would be even greater. Brexit is the starkest example of these consequences. But we also have compromised the Schengen system, driving up the economic costs.

Given that its very survival is at stake, the EU should be putting all of its available resources to use. And yet the triple-A credit of the Union has barely been deployed. This is the height of irresponsibility.

The current approach is based on reallocating minimal resources from the EU budget and then asking Member States to contribute to various dedicated vehicles, such as the Turkish Facility and the Trust Fund for Syria. This can only be a temporary solution, as it is neither sustainable and nor large enough to finance efforts that must grow in size and scope (such as a European border force). These trust funds are powerful instruments in the short term to redeploy resources and allow member states to commit more resources to a particular endeavor, but they also illustrate the fundamental deficiency of the EU budget, i.e. that it remains dependent on the good will of the member states at each step.

In order to raise the necessary funds in the short term, the EU will need to engage in what I call “surge funding.” This entails raising debt by leveraging the EU’s relatively small budget, rather than scraping together insufficient funds year after year. During the financial crisis, the EU has repeatedly put its borrowing capacity on display, establishing financial instruments capable of quickly borrowing tens of billions of euros on attractive terms. Once Europe’s leaders make a political decision to act, they can move quickly.

There is a strong case to be made for using the EU’s balance sheet. Tapping into the triple-A credit of the EU has the additional advantage of providing a much-needed economic stimulus for Europe. With global interest rates at historic lows, now is a particularly favorable moment to take on such debt.

In the short term, reforms of the EU’s existing instruments would allow a far more effective mobilization of resources than the creation of new ones. Two sources of money in particular—the European Financial Stability Mechanism (EFSM) and the Balance of Payments Assistance Facility (BoP)—should be put to the task. These sources complement each other: the EFSM was designed for loans to euro-area members, whereas the BoP is for EU members that do not belong to the Eurozone. Both kinds of loans will be necessary for a comprehensive approach to the crisis. Both also have similar institutional structures, and both are backed entirely by the EU budget—and therefore do not require national guarantees or national parliamentary approval.

The Macro Financial Assistance facility (MFA) is yet another source of borrowing specifically designed for actions outside of the EU. It has proven an important instrument in countries like Ukraine but it needs a new framework agreement. (This is urgent because a framework agreement takes a long time to enact and the current Ukrainian government deserves more support than the EU is currently able to offer.)

The combined gross borrowing capacity of the EFSM and the Balance of Payments assistance facility is €110 billion. The borrowing power of the latter is almost completely unused. The EFSM has made some €46.8 billion worth of loans to Portugal and Ireland and its spare capacity grows each year as those loans are repaid.

All the instruments mentioned add up to a substantial unused borrowing capacity.

Spending a large amount at the outset would make it much easier to manage immigration and will allow the EU to respond more effectively to some of the most dangerous consequences of the crisis.

These include the kind of anti-immigrant sentiment that fueled Brexit and is poisoning other states; support for authoritarian political parties; and despondency among those seeking refuge in Europe who now find themselves marginalized in Middle East host countries or stuck in transit in Greece.

Making large initial investments will help tip the economic, political, and social dynamics away from xenophobia towards constructive outcomes that benefit refugees and host countries alike.

Of course, raising more debt with the current budget will eventually pose deeper questions in light of the limited revenues of the EU budget. The situation has gotten worse over the years as the real own resources of the EU budget (such as customs duties) have shrunk. It is now time to drastically reshape how the EU’s own resources are raised.

The reduction of the EU’s resources in 2014 to 1.23% of GDP was a tragic mistake and we are paying the price for it now. The EU cannot survive with a budget of this size. I was greatly encouraged last year when Minister Schauble raised the idea of a pan-European gasoline tax. The European Parliament should seriously consider this idea.

The proper route for such a tax increase would be for the European Commission to propose new legislation to be adopted with the unanimous support of all members. This would likely fail, given unanimity rules in budgetary matters. But if a “coalition of the willing” of at least nine countries could be assembled, the Commission could act without unanimity. The proposed European financial transaction tax (FTT) sets an important precedent even if it is still a work in progress. A stable source of revenues would greatly increase the amount that the EU can borrow and would allow it to finance new initiatives.

In any case, the EU and its member states must find new sources of tax revenue. Another approach would be to levy special EU-wide taxes. The new tax revenue could come from a variety of sources, including the existing EU-wide VAT; or a new tax on travel into the EU and on visa applications, which would shift some of the burden onto non-EU citizens wishing to travel to the EU.

I accept the difficulty of raising additional tax revenue but there are encouraging precedents for instance, the Single Resolution Board that raises a levy on the banks could in principle borrow money against that levy. There are many instances where, despite institutional obstacles, the creativity of lawmakers and the Commission has allowed new instruments to emerge.

The euro area also needs a budget of its own, as a subset of the European Budget. The European Stability Mechanism created during the crisis can be seen as the embryo of such a budget but it is an intergovernmental construct subject to the vetoes of national parliaments. Member states should be encouraged to bring the ESM under the control of the European Commission and the European Parliament. In practical terms, this would amount to a transfer by the member states of the €80bn of paid-in capital they have invested in the ESM. This would also allow extending its use to other purposes like the creation of a European unemployment scheme.

Finally, I come to the legacy expenditures that have crippled the EU budget. Two items stand out: cohesion policy, with 32% of expenditures, and agriculture with 38%. These will need to be sharply reduced in the next budget cycle starting in 2021.

With these changes related to its finances, the European Union would be much stronger. It would be in a position to respond to a destructive economic slowdown, it would have the means to address the corrosive consequences of the refugee crisis both in Europe and abroad and finally it would recognize the institutional existence of the euro area and its specific fiscal and financial needs.

To sum up, the refugee crisis poses an existential threat to Europe. As I said before, it is the height of irresponsibility to allow the EU to disintegrate without utilizing all its resources.

Throughout history, governments have issued bonds in response to national emergencies. When should the triple-A credit of the EU be put to use if not at a moment when the European Union is in mortal danger?

[Gaudet]

[Gaudet]

[XXL]

VS

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[Guest]

Is this the new Alejandro Guzman thread?