The Bankruptcy of Brexit
The main cause of the British recession is common to those of other European countries, but the reason for its particular gravity lies in the particular fragility of an economy that has ceased to have a horizon.
It is no coincidence that the collapse of the British economy in the second quarter of the year (a 20.4% drop in GDP) was the most pronounced among developed countries, and the lowest in Europe. Including Spain, France and Italy, the tourism-focused economy of which explains a good part of their misfortune.
To add to the concern, the fall mainly affects the services sector, the locomotive of the island economy – it accounts for 80% of its GDP – which has registered the largest quarterly historical decline: a sector that in other comparable countries has suffered less than the industrial, affected by the crisis of presence.
The main cause of the recession is common to those of other European countries: the paralysis and production distortion caused by the coronavirus pandemic.
But the reason for its special gravity lies in the special fragility of an economy that no longer has a horizon. Because it lacks – at least, for the moment – a fluid fit in the world economy, because of its orphanage of complicities, and because of its attraction of uncertainties. In other words, because of Brexit and a probable definitive exit from the EU without an agreement.
A comparison is enough. Spain has just asked the European Commission for a transfer of 20,000 million in charge of the SURE program – unemployment reinsurance – to finance temporary Employment Regulation Files (ERF).
Well, Boris Johnson’s finance minister, the submissive Rishi Sunak, is reluctant to prolong the British equivalent of ERF because that mechanism “is not sustainable indefinitely.”
The United Kingdom cannot face them, because although Brexit will not destroy its economy, it already represents a bankruptcy in its sustainability line. Let’s note that in the first quarter of the year, with hardly any impact from the pandemic recession yet, GDP already fell by 2.2%.
And all of us who have lamented the British flight now have the consolation of some beneficial impact of its absence: the transcendental European reactivation package would not have been possible had it co-decided the Eurosceptic London: which is an asymmetrical reason for its disconsolation at not being able to prolong the ERTE.
The bankruptcy of the rising British economic curve correlates with a serious break in political perception.
Today, the majority group of its citizenship (32%) blames its Government for the deaths due to the coronavirus; 38% believe they use scientists as an alibi; 55% consider that their management has worsened; a more than an absolute majority, 62% support the free entry of medications and health equipments into the country, and two-thirds, 66%, believe that the pandemic shows that greater international cooperation is needed. Therefore, the virus has also infected the ideological bases of isolationism.