‘Chaos’ If UK Leaves EU‏ – Blair Warns of BREXIT
April 7, 2015 by The Doc

The systemic contagion of a GREXIT would likely pale in comparison to that of a BREXIT…
Submitted by Mark O’byrne, Goldcore:

- Ex-Prime Minister warns uncertainty would hit UK economy and cause ‘chaos’
- ‘BREXIT’ would cause the “most intense period of instability” since WW2
- Seeks to portray Tory policy as disingenuous and cynically putting economy at risk
- Uncertainty caused would have negative consequences for British economy and sterling

Tony Blair has entered into the British election campaign debate in support of David Miliband on the issue of what he regards as the Tories reckless attitude to Europe and the potential ‘BREXIT’.

Blair will address his former constituents in County Durham today strongly urging them to support Miliband, who he praised for his “real leadership on the EU” while portraying David Cameron’s EU policy as disingenuous and reckless.

“There is, in my view, a complete under-estimation of the short-term pain of negotiating exit. There would be a raft of different treaties, association agreements and partnerships to be disentangled and re-negotiated. There would be significant business uncertainty in the run-up to a vote but, should the vote go the way of exit, then there would be the most intense period of business anxiety, reconsideration of options and instability since the war”,

Blair will say in the well flagged speech which has been trumpeted in the pro-Labour UK Guardian and of Miliband he will say, “he is own man with his own convictions and determined to follow them, even when they go against the tide”. On the other hand he accuses Cameron of not even believing in a necessity for Britain to exit the EU.

“The oddest thing of all about David Cameron’s position [is the] Prime Minister doesn’t really believe we should leave Europe; not even the Europe as it is today,” he will add, according to London’s Independent. “This was a concession to party, a manoeuvre to access some of the UKIP vote, a sop to the rampant anti-Europe feeling of parts of the media.”

He makes fair comment on the uncertainty that would stem from a Tory victory and the prospect of a referendum campaign and potential British exit. “Think of the chaos produced by the possibility, never mind the reality, of Britain quitting Europe,” he will say. “Jobs that are secure suddenly insecure; investment decisions postponed or cancelled; a pall of unpredictability hanging over the British economy.”

He disagrees with Cameron’s contention that he will receive various concessions from Europe prior to the proposed 2017 referendum. “The rest of Europe will be vigorous in ensuring Britain gets no special treatment. This will be a horrible process. Don’t be in any doubt about that …” he will say, according to the left leaning Guardian. He will add, “If I was leading a business dependent on access to the single market or, more important, employed in such a business, then the issue of Europe and the risks of this would be a big decider in my vote.”

BREXIT poses risks to free trade and indeed the free movement of people, goods and services. An example of this is the return to borders. Indeed, a physical border between the Republic of Ireland and Northern Ireland will be re-imposed if the UK decides to leave the EU, a director of the British Irish Chamber of Commerce warned last week.

Such uncertainty would not be good for the vulnerable UK economy at this time due to it’s massive and unsustainable levels of total debt. While all the focus is on the government or national debt which is currently 81.58% of GDP, total debt levels including private debt – are much, much higher and have fallen little since the debt crisis in 2008.

Together, families and non-financial firms’ debt is still over 200 per cent of GDP and is merely back to levels last seen in mid-2007, a time when leverage was already utterly out of control. Current debt levels remain much higher than they were a decade ago (170 per cent of GDP) and even just 15 years ago at the turn of the millennium when they were 128 per cent of GDP.



These massive debt levels are serviceable providing the UK economy continues to grow and interest rates remain near all time record lows at 0%. However, even a slight uptick in interest rates could pressurise the debt laden UK economy. Interest rates are set to rise – the question is when not if.

Unless the next government becomes serious about tackling private and public debt, the next crisis, when it eventually comes, will be devastating and on a scale far worse than the first financial crisis.



Regardless of the long-term rights or wrongs of Cameron’s proposed EU referendum, in the short term it may indeed cause problems for UK businesses – particularly exporters and the financial sector – and debt-mired workers. Potential mortgage defaults would have a knock on effect on the banking system and the property bubble in Southern England. A recession at this time would likely lead to another round of QE – the only policy open to central banks – and a consequent depreciation of the pound. Gold tends to come into its own as financial insurance in an environment of uncertainty and an allocation to physical gold is advisable to offset and hedge the potential risks posed to the UK economy by a ‘BREXIT.’

Source

Traduction

Itiz meutche tout longue ine inegliche for mi.
What ail retiens, is if England leaves the RU the continent will be alone and isolated. Sob...