Sunday, July 24, 2016


Crises normally throw up a bunch of new words. Brexit has spawned many of which Brexcitement, Bregret and Neverendum are more colourful. 'Neverendum' is already known to Canadians.

Brexcitement means excessive excitement over any event. Brexit qualifies for this because it is a story that is a heady cocktail of historical recidivism, political tantrums, economic misinterpretation and bureaucratic bungling. Each of these four misadventures is capable of landing us in immense trouble. Together they can result in a disaster.

Europe has been repeatedly torn asunder by wars, major and minor. The Religious Wars of 1618-48 proved that religious differences could destroy societies. Desire to bring about sustainable peace resulted in the Treaty of Westphalia which brought to the fore the concept of nationhood to enfeeble religious movements. First half of the twentieth century saw two World Wars with European roots caused by the urge to uphold the superiority of one nation over others. Emotive nationalism proved cataclysmic and self-defeating.

In 1951, Europeans understood the need for uniting as a group to counter the business competition from the American behemoth and also to avoid internecine conflicts among the nations in the Continent. Thus were born the European Coal and Steel Community, European Economic Community and the European Union. The EU enabled maintenance of political independence of 28 European countries even while reaping the benefits of economic union.

Globalisation was an inexorable consequence of  the realisation that nations could achieve more through cooperation and by forgoing political sovereignty over rules of trade and investment. EU facilitated growth of globalisation which inevitably led to weakening of sovereignty of nations. Dani Rodrik, a Turkish economist with Harvard University, captured this situation beautifully when he said "societies cannot be globally integrated, completely sovereign and democratic at the same time".

Something had to give way. Some EU members started wondering if they must not reemphasise the priority of national sovereignty over the spirit of globalisation. In other words, they started going back in history to recapture the Westphalian essence. This recidivism was the foundation for Brexit.

The Telegraph captures the chronology as follows:

·         1957
Treaty of Rome is signed
France, West Germany, Italy, Belgium, Luxembourg and the Netherlands, six founding members of the European Economic Community, sign the Treaty of Rome, but Britain withdraws from early talks.
With its economy flagging, Britain makes its first attempt to join the Common Market but is vetoed by Charles de Gaulle. The French President accuses Britain of a “deep-seated hostility” towards the European initiative.

·         1973

Britain joins EEC

With de Gaulle out of office, Britain is allowed into the European Economic Community at last, but within a year calls for major reform of Common Agricultural Policy as well as changes in way the budget is financed.

1975: EEC Referendum
Harold Wilson’s Labour government holds a referendum over EEC membership, which splits the party but results on two thirds of British voters saying they want to stay in.

·         1983

Michael Foot defeated

Labour leader Michael Foot promises withdrawal from EEC in his election manifesto, but his party is heavily beaten by Margaret Thatcher’s Conservatives.

1984: Thatcher wins rebate
A key victory for Mrs Thatcher sees her win a “rebate” from Brussels. She had threatened to halt contributions because Britain was receiving far less in agricultural subsidies than some other members, notably France.

·         1990

Britain joins Exchange Rate Mechanism

Britain joins the Exchange Rate Mechanism, 11 years after it was set up to harmonise European countries’ financial systems before the creation of a single currency.

·         1992

Black Wednesday

In what became known as Black Wednesday, Britain is forced to withdraw from the European Exchange Rate Mechanism, after failing to stem intense currency speculation.

·         1997

Single European Currency

Britain declares it will not be joining the euro for the duration of that parliament, after the single currency fails Gordon Brown’s ‘five golden tests’.

1999: British Beef Row:
Tensions rise over France’s ban on British beef during the “mad cow” disease outbreak. France given an ultimatum from Brussels but the ban is not lifted until years later.

·         2007

The Lisbon Treaty

Gordon Brown misses a televised ceremony of leaders signing Lisbon Treaty, which hands greater powers to Brussels. The controversial treaty took two years to negotiate, after plans for an official constitution were abandoned.

·         2011

Bank levy clash

David Cameron clashes with Europe over plans to introduce a levy on banks and restrict London’s financial sector. The Prime Minister promises to bring back powers from Brussels.

·         2013

Cameron makes referendum pledge

David Cameron promises an “In-Out” referendum if he wins the 2015 general election, which he does. He reiterates his manifesto commitment to hold a referendum before the end of 2017.

2016 Feb:
EU Referendum deal:
David Cameron negotiates “new EU deal” for UK after 30 hours of talks but has to make series of concessions. The Prime Minister then announces the referendum will be held on June 23.

2016: June 23
In a close-run vote, the British public decides to exit the European Union. An emotional David Cameron resigns as prime minister the next day.


No comments: