How badly will the EU be hurt if Britain leaves?

Apologies to the mods if this is the wrong forum.

There have been threads about the pros and cons of the UK leaving, but what about the EU? If the referendum to leave is passed, would it be, economically speaking, a minor inconvenience to the EU, a huge blow, or something in-between?

Minor inconvenience I believe; I understand that something like 5% of the EU’s trade is with Britain, while close to 50% of Britain’s trade is with the EU. If they leave then the EU will have the whip hand in any argument and no particular reason to be nice about it.

Britain imports more from the EU than it exports to the EU. Thus as many or more Europeans would lose their jobs as the number of British losing their jobs if trade between the two were substantially reduced because of increased trade barriers. So in no sense does the EU have a whip hand.

The problems the EU will have is not because of Britain leaving, but because there is massive dissatisfaction toward the EU from many Europeans, because of the failures of the EU in dealing with European economic problems, the migration crisis, etc.

Nobody has the slightest clue.

Honestly, no-one knows. The very same people and organisations offering certainty are the ones who said joining the euro was a good idea and that there was no economic problem in the run up to the 2008 crash.

However, we can make a fairly decent prediction that, if we remain, there will be an even-increasing push for greater union and the UK will be financially punished for having the temerity to hold this referendum. The EU will take a “remain” vote as a green light to force the UK into further integration. Stronger demands of us will be made, along the lines of “OK, put your money where your mouth is”

A lot of individual people and a lot of governments will suddenly face renewed paperwork and a lot of uncertainty until what the heck to do about that is decided. But part of the issue is that the “lot of individual people” is formed by many smaller groups: “people spending their summer in Cambridge learning English” are different from “British expats in southern lands” are different from “team from country A working in country B during the time of a project”, but all three groups are affected and all three are perceived by the disaffected as “leeches” for lack of a better word.

Macroeconomically it’s probably not as big a deal as the Brits would like it to be.

And while it’s not asked, we need to clean up the house as it currently stands before we give the screw yet another turn. There are certain aspects which make “mobility of people” a blood-drenched joke, and I’m not talking about languages: I mean some country-level laws, or the way they are used. “Implement now, fix never” shouldn’t be the way to manage a continent-wide socioeconomicopolitical entity, even if it happens to be the smallest continent.

I don’t know about Europe but I reckon that if the UK vote to leave, in 10 years time the UK will wonder what all the fuss was about.

I have voted and expect Remain to win.

My biggest problem with the EU is that it only ever has one solution to any situation.
If things are going wrong, the solution is “greater integration” if things are going well the solution is “greater integration”.
I’d love an EU of far looser structure, it may take a country leaving in order to bring that about.

The UK does have a lot of outsized influence in the World due to the legacy of the British Empire. Te natural instinct of some up and coming parts of the globe, like the Gulf States, the Sub Continent, the Far East and to a lesser extent China is to invest in the UK. So, it might not affect the UK as much as predicted.

Moving to IMHO.

I know that non-monetarily Britain leaving could embolden other dissatisfied countries to leave.

If they did leave I’m guessing that current travel and trade agreements would hold until new ones could be ratified? Or would things like the open borders suddenly go away?

The deal is that if a member state wants to leave, the government of that state gives the EU notice that it wants out. That kicks off a period for negotiating the terms of exit, and the terms of any subsequent external relationship with the EU (dealing with trade, borders, financial contributions, etc, etc). While the negotiation period continues, the state concerned is still a member of the Union, with all the benefits and burdens of membership.

The negotations can continue for 2 years - more, if everybody’s happy to keep talking. All going will, the negiations end with agreement on a new relationship between the departing state and the rest of the Union, and on an agreed date the state leaves the Union and starts its new relationship on whatever terms have been agreed.

All not going well, the two years runs out with no agreement on a new relationship, and no agreement to keep talking. The departing member state is then slung out with no special rights as regards access to markets, free movement, etc, etc. They have the same standing as a country that has never been a member of the EU and has never negotiated a special relationship with the EU. They can, of course, try to negotiate a relationship from outside the EU.

It’s fair to say that the latter outcome would not be the favoured outcome of either the UK or the EU. The problem is that there’s probably a great gap between what would be their respective favoured outcomes, and if they can’t manage to bridge that gap in negotiations then they’re stuck with the default.

The fallacy here can easily be seen by taking counter-examples.

“The UK imports less from Ireland than it exports to Ireland. Therefore, more UK workers than Irish workers would lose their jobs if trade between the two were substantially reduced. Therefore, in any trade dispute the UK would not have the whip hand.”

“The UK imports less from Switzerland than it exports to Switzerland . . . Therefore, in any trade dispute the UK would not have the whip hand.”

The fact is that the significance to the UK of UK trade with [any other country or region] doesn’t depend on how significant the same trade is to that other country or region; it depends on how significant it is the UK. Trade barriers to 50% of the UK’s current foreign trade would be a much, much bigger problem for the UK than trade barriers to 5% of the EU’s trade would be to the EU.

Sure, both parties would rather not have the trade barriers. But when it comes to negotiating on the terms on which trade barriers would be removed, the EU would be in a much stronger position to play hardball than the UK would.

Dissatisfaction which will be exacerbated if the UK is seen to leave, but to retain preferential access to EU markets on easy terms. Which is precisely why the EU will have an incentive to play the hardball in exit negotiations that it is so well-positioned to play.

You simply don’t realize how much influence European exporters to the UK have on EU policies (companies like VW comes to mind).

This is looking hugely like wishful thinking.

Of course the likes of VW would like a free trade agreement with the US. And, on that, they’ll be pushing at an open door. The EU will be keen to negotiate a free trade agreement with the UK; no doubt about it.

But the EU won’t be keen to negotiate free trade on any terms the British care to name. Specifically, they won’t be keen to grant the UK free trade on terms more favourable than those enjoyed by other the non-EU members. There are powerful reasons why they won’t want to do this. First, it will destabilise the EEA, since the EEA members won’t see why they can’t have the same terms as the UK. Secondly, it may destablised the Union, since other members states will think that if the UK can leave on terms of unprecedented generosity, well, why can’t they?

So, I think the EU’s position will be that there’s an established, working, tried-and-tested model for non-members to enjoy access to EU markets - the EEA - and the UK can have it. Those terms, however, are very much not a brexiter’s wet dream. Hence, we have the makings of some very tough negotiations, in which the EU will very much have the stronger defensive position. The notion that some VW executive fairies will descend on wires from the fly-tower and wave their wands to make the EU position go away is, I’m afraid, wishful thinking. VW has no interest in destabilising the EU and the EEA and, while they would like free trade with the UK, they have no particular commitment to seeing the UK get it on terms that the Brexiters fondly hope for. Why would they?

And, however much pressure EU exporters to the UK may be putting on the EU institutions, you can be sure that UK exporters to the EU will be putting an order of magnitude more on the UK government.

Speaking as an outsider, the EU seems to be sort of a neither here, nor there sort of body. What I mean is that it’s not a federal state with the sort of tight integration and very clear definition of where the spheres of control of Brussels vs. the member states are defined, along with single unified policies in terms of defense, financial policy, etc… I mean, the very existence of the Euro outside of the EU, and the Schengen agreement outside of the EU point this up, especially with respect to the UK.

But neither is it something more loose like a customs and/or monetary union either, where the individual states retain all their sovereignty and are choosing to be part of the union.

It seems to be something less than federal, but drastically more than some sort of looser union like NAFTA. And I can totally see how that would cause friction and confusion, and also why the hardcore EU types would want to push for a more formal federal type structure.

Actually, part of the problem is in having many items where the spheres of influence are defined as “Brussels gives the broad strokes, each country defines the details”.

IMO, the stuff where they actually get together to deal with a given issue specifically tend to work better. Bologna meant a redo of the educational systems (more in some places than in others), but now we have a system where there is a lot less doubt about whether a specific diploma from a country is equivalent to a specific diploma from another country than pre-Bologna. But we call it Bologna because that’s where the Big Meeting To Review The Tertiary Educational Systems took place. The little-meetings stuff that comes out of ordinary Europarliament or Council meetings tends to be a lot more broadly defined and then become a mess as you move down the tiers of government.

Sort of like having a federal government that says “schools must teach math” and then some states teach arithmetic, some geometry, some use roman numerals… hey, they’re all teaching math!

I’d rather stop growing what things are under the big umbrella, and define better those which already are. But I’m not a politician: like many economists (which many of them are by training), they tend to be obsessed with more and more and more even if that more is more shit.

I think the rest of the EU might actually benefit from it. The UK will still be forced to comply with any and all EU regulations if they want to keep the trade going, but we won’t have to listen to them piss and moan about 'em 24/7. It’s win-win.

Let’s hope it turns out that way if more than 50% of the Brits believe the lies in their papers. If they do, we’re better off without them anyway.

I say we go back to 220 volts if they leave.

Trade will be fine after the adjustment.

The trouble is the uncertainty all of this will create. Uncertainty means people stop spending and investing. This can easily kill the minimal economic growth we’ve been enjoying recently.

What would suck for the northern/western remaining EU members is that they lose an ally. And of course once it has been shown that it can be done, others will want to leave, too. And we really don’t need the devision between leave and stay that has taken over the UK.

If the UK stays, they will have to toe the EU party line and forget about their earlier demands, let alone new ones. Which would probably be mostly a good thing.

I wonder how the EU would cope with not being able to sell in the UK.

Of course this will not happen, and no one should be deluded by it, you really think all the EU motor manufacturers are going to give up on UK markets, not a chance at all.

Same goes for many other EU products, they simply cannot walk away - as for 50% of our goods being sold in the EU, well its not the percentage, its the value of those goods that counts, we buy £68 billion more than we sell, so the rubbish about 5% of this and 50% of that is just what it is.

As for financiers leaving the UK, what, you means those financiers that had our banks over, that UK taxpayers had to bail out to the tune of, wait for it…£1200 billion, yes that’s correct, well let them all fuck off and screw up the economy of other nations.

Have you noticed how its always UK manufacturers that are ‘excess production’ and are subsequently closed down yet all the other EU nations seem to retain their bike, car, steel, coal and fishing industries, why is that? It’s because we tend to enact and enforce EU rules, try that in France or Italy.

Why should we restrict our trade and purchase of goods and services to a small part of the world economy? Maybe we need to look away from small Europe, maybe we should stop giving money and control of money to other foreign governments.

Who is actually going to fill the hole left by our withdrawal from EU finance?, not France, not Holland, and German taxpayers are fed up with bailing out Greece Italy and much of Eastern Europe.

We cannot rely on terms becoming more favourable, in fact we cannot expect our influence to impact on the many flaws in the EU. The reason we got little change out of paying benefits to non UK citizens, is that it this benefits other EU nations who would hate to see this free money stop flowing to their citizens.

The common agricultural policy would collapse, and those little weekend farmers would go out of business, the only reason we have it is to keep prices high enough that these uneconomic farmlets can keep going, and that is simply because EU politicians need their votes. Funnily enough, those EU politicians are buying those votes with UK money, not their own, strange thing that eh?

I have noted quite an number of extremely serious crimes committed by EU citizens, individuals who have absolutely horrendous criminal records, and we are not allowed to stop them coming in, nor can we deport them.

We literally are not allowed to decline entry to EU criminals, try getting a visa to enter the US when you have a criminal record - not going to happen. Is it really too much to ask any person entering the UK about their past, is it too much for us to decline the entry of known criminals?

As for the advice of our current government, well this one told us when they were originally elected that the austerity and the recession would last to 2015 and that spending might increase a little, then they said 2017, then 2019, some commentators are now predicting balanced books around 2022 - and yet you are inclined to believe their advice on finance?

If we leave the EU, it will demonstrate that the British largely do not think the EU flaws are fixable, and UK citizens are not the only ones to have criticisms. The risk is that other elements in other EU nations will become emboldened o to leave or renegotiate.

It is only when the EU has suffered this shock, plus the threat of other leaving that they will get off their complacent asses and actually address some of the problems.

An EU army, don’t make me laugh, from a continent of surrender monkeys, really?

Just what real world do we think we are living in when we look at an EU army? Who will control it? How will we ever take any action? If there is one thing to really be concerned about, it is the provision of any form of military oversight by the EU.

We are told that the EU is a bulwark against Russian excesses, recent history readily demonstrate that Putin give not one teeny tiny little fuck about EU military consequences.

If we leave the EU, no longer will we have to trade in captive price supported markets.

Not entirely sure if that is exactly 100% true, but yes, in principle we have free movement of goods and people. So English football hooligans get to rampage over here, too.

Obviously all other EU countries are fine with having foreign criminals come in and no way to kick them out, so there’s no way they’d agree to changing the rules in this regard. </sarcasm>

At least you guys have a border that is somewhat policeable.

One of the big issues with this referendum is that few people really understand the issues that both sides use to scare the voters.