Brexit economics part 1- the EU is stealing from you

For many people, Brexit is mainly a political decision, However the debate over it happens mainly in the economic realm, and yet few people understand what actually is at stake here.

Contrary to what you might believe, the Brexit discussion is not about the UK versus the EU, or to be precise not as much as you’d have thought. Much as the EU has become a political union, in truth the stakes here are mainly economical. The politics are just a tool to serve certain economical interests.

In the Brexit debacle, it is important to understand the main actors who are not, as you might have thought, the Brits versus the Eurocrats.

The main conflict is actually a capitalist structural issue, namely a fight between the manufacturing/trade sector and the financial/banking sector.

The discussion is about whether Britain should be a manufacturing economy or a service one. It is a long standing economic debate, ad much as I am not an economist I will still endeavour to explain what’s happening behind your backs.

The trade/manufacturing sector has been the engine of western progress for centuries. I’s about real work with tangible results that creates real progress, real money, real jobs. Because it is a real sector, however, it has drawbacks, namely that it requires tools, facilities and people in order to achieve success and create profit.

Which means that it’s expensive, and since it is based in real world, it is also uncertain.

In the Brexit debacle, the manufacturing/trade sector is the engine behind the Leave campaign.

This is because it is actually better for Britain from an manufacturing/trade POV to be outside of the EU. Why, you ask?

Because the EU is a stifling mechanism whose purpose is to create a prisoner market for the non global competitive economies of the original members. The purpose of the endless regulations and rules and tariffs is to ensure only certain countries and companies can make a profit, at the cost to the European taxpayer’s pocket and well being.

British trade and manufacturing have been shackled by European regulations for 40 years, because the needs of the German and French economies are more important to the EU than those of any other country, and significantly above the needs and interests of the European citizens.

This actually means that progress and wealth have been siphoned out of the European taxpayer’s pockets and the non original 6 members’ economies to prop the otherwise shabby German industry and French agriculture.

Example: Solar power cells are an easy to use mean for the average citizen to reduce their electricity bill while maintaining their standard of living. So why, will you ask, doesn’t everybody have solar panels on their house?

That’s very simple- because the power cells are expensive. Too expensive to actually be accessible to the average Joe.

But why are they expensive, you ask? Because the EU imposed onerous tariffs on Chinese made power cells, so as to not be able to compete with the German made power cells.

So you can’t buy affordable power cells because the EU decided that the interests of the ailing German industry are more important than your prosperity. The average Joe won’t get solar panels on their house. He will pay extra every month for his electricity consumption which feeds both the utilities companies and keeps in business the German producers.

Who loses here? Absolutely everybody- the European taxpayer, the environment and the global trade. We are talking money stolen out of your pockets to keep the German industry going, which allows Germany to claim the preeminent role in the EU’s decision making chambers and as such continue to pass economic measures that every day siphon money from your pockets to pay the wages of Guy Verhofstadt, Schauble and Juncker, and ensure no country will be able to progress enough to overtake and overturn the German grip on Europe.

In the automotive sector, we see clearly how the EU manipulates the market to serve the German auto industry.  This is being achieved by the following means:

1.    EU regulations and standards who are written for the purpose of protecting the French and German auto industries.

These standards are written in such a way that it is almost impossible for a non German/French automotive company to compete with German/French cars.

Any automotive producer who wants to compete on the European market will have to obey the stringent EU regulations and standards- so they will either have to make huge investments in the necessary infrastructure- which will bring the prices up and thus make them uncompetitive.

2.    Import tariffs that make it very inconvenient to import non EU made vehicles, thus giving the EU the advantage on the market.  The best selling cars in the EU are all EU made- because it is impossible to get inside the EU market from outside.

Most big automotive companies circumvented this by establishing manufacturing facilities in the EU, but the result is that there is a certain price level that is being maintain by everybody.

Which means you the consumer will pay what you’re told although there are cheaper cars out there that would make your life easier, but you don’t get access to them because you have to feed the German/French car industries.

3.    Prohibitive eco regulation to prevent the import of cheap/ old cars.

This is especially nasty to the poorest consumers on the market- especially the working class. The EU regulations ensure that unless you buy an EU made car you will be taxed to high heaven for the privilege. This has little to do with environment concerns but a lot to do with protectionism- again at the cost of the European taxpayer.

The list could go on, but hopefully this will explain the stranglehold the EU has on its member economies. While the newer smaller members make a certain bit of profit from this – of course, after they sold their national industries to German/French corporations, a trading and manufacturing economy like Britain will suffer from these shackles.

Furthermore, we have seen that the EU has actually been taking active steps to steal British jobs and ship them abroad. While the practice of buying companies just to close them down to reduce the risk to German/French fields is well known- see the Ebb Vale case in which the local coal plant was bought by a French company in the aughts only to be immediately closed down and leave a whole region without its main jobs source.  Ebb Vale continues to remain in the 10 poorest regions of Western Europe.

The EU effectively murdered the British coal extraction industry condemning whole regions to poverty. It did the same to the Dutch coalmining industry and is in the process of killing the mining industry of Romania as well, albeit the large coal deposits in the Carpathians could easily support Europe, still largely depending on coal, for the next few centuries.

Forty years after the coal mines in the south of Limburg were closed, Heerlen and its adjacent areas are still suffering economically. The EU who is very good at closing companies down, only cares about creating new jobs in Germany, France and Eastern Europe, and it wouldn't really care about Eastern Europe if work there wasn't so much cheaper.

While the EU is very keen on reducing the coal extraction in the EU for “environmental” reasons, these reasons don’t seem to apply to the German mining field in the Ruhr and the German owned coal mining sector of Poland.

It’s almost as if you’re only allow to exploit your country’s resources if Germany gets to profit from it, and fuck you if you don’t like it.

The need for coal continues to exist. It is arguably worse for the environment to import coal from outside the EU, but as it happens the main importers are German companies… and nobody cares about the coal mining regions that are still suffering from the massacre inflicted upon them by German interests.

Here’s a very important phrase you need to remember in all this discussion- per Wikipedia

When disregarding subsidies and externalities, coal has the lowest average cost in EU. Coal has the highest external cost.^[5]

So the actual costs of importing coal are being passed upon YOU the consumer. The jobs loss are burdening communities all across Europe. Who profits?

Germany of course, who has no problem using coal and extracting it, as long as other countries obey the rules Germany is too good to follow.

Think about that.

The technology to capture the pollutants resulting from coal burning exists, but has been stalled and repeatedly defunded by the EU for decades. As an effect of the EU stepping in and taking over the funding on any non corporate R&D, they get to decide what gets researched and what doesn’t.

The aggressive policy of closing down the coal mines across Europe has led to loss of jobs and poverty for millions of people. Funny how the Dutch, British and Romanian miners can be left to starve, but not the German miners.

Europe continues to use coal as its main source of energy. Importing coal from outside increases the costs exponentially, creates bigger long term environment problems and costs millions of Europeans their jobs.