The EU is not based on pure direct economical interest, it's also based on a dream. That dream really helped Germany during the reunification, helped some small countries in the east, and that dream did not really help Greece. But it's more than a pure cold economic union.
Which is exactly why I didn't much like Juncker's agressive reaction to the Brexit vote. "This is not going to be an amicable divorce" was pretty much the first thing he said. This kind of hostility towards the result of a democratic referendum is totally uncalled for, especially if the EU wants to pretend to be a promotor of pacifism in Europe.
I have the feeling you are not from Europe. GB had the best deal possible with lot of pre-exemptions. GB profited from the EU, but with their special veto-rights and the cold stance towards EU they were also a source of frustration for the countries that worked hard to make the EU work. GB has always made clear it didn't love the EU but wanted to reap profits from market access, and it was nonetheless welcomed by countries as The Netherlands which have lobbied for GB's membership.
Therefore you can't blame Juncker stating the fact that the marriage between GB and the rest of the EU was a somewhat cold love.
The very fact that risking (domino-effect) the future of the EU via this referendum just for some political self-interest (internal power struggle Conservative Party ) illustrates this use-at-will mentality.
I read the British press closely and am astonished by the amount of classlessness many people have regarding this issue. It is in the interest of Europe to not let the trade block crumble. GB knew this was at stake with a brexit.
Now the EU needs to (even if it wouldn't want to) give GB the finger just to make sure this will not become a precedent for many other countries (eg. NL, FR). GB has to pay, even if no one wouldn't want to harm GB.
The risk of a collapsing EU market with investments and trade drying up will have severe consequences world wide.
From a purely rational perspective this was the most stupid action for GB.
I'm sure the EU wants to make the UK pay, but it can't afford to.
The EU is too reliant on exports to the UK to play hardball.
I think you and the UK public are mistaken. The cost of another country leaving the EU far exceeds the cost of punishing [1] GB.
Think about it. What if GB gets nice deals for nothing? I assure you that within two years the EU is over. There are many countries with a large fraction of people that are anti-EU. I think the EU will rather loosen sanctions on Russia than giving the UK a good deal. Im wondering how the US government is thinking at this very moment.
One lesson we can draw is that the EU should advertise their benefits in a better manner. And "wir schaffen das" is a sure way to blow up the continent.
1. actually punishing does mean nothing more than to give no special benefits to the UK. They had it, they will loose it.
The cost of another country leaving may indeed be higher, but the EU simply can't afford to punish the UK, even as a deterrent. They're all talk and no trousers on that front.
I'm not sure what you mean by "special benefits". Yes, the UK negotiated the rebate and certain special conditions of membership, but fundamentally it was a net contributor to the EU.
I think the current EU is toast either way, so the argument of what deal the UK negotiates with it may end up being moot.
The cost of another country leaving may indeed be higher, but the EU simply can't afford to punish the UK, even as a deterrent.
You keep mentioning the EU can't afford it, but why do you think it can afford to let the EU explode?
I'm not sure what you mean by "special benefits". Yes, the UK negotiated the rebate and certain special conditions of membership, but fundamentally it was a net contributor to the EU.
That is not relevant. Access to the market will have to be paid for, so they still need to be a net contributor. Maybe even more than they did so previously.
> The very fact that risking (domino-effect) the future of the EU via this referendum just for some political self-interest (internal power struggle Conservative Party ) illustrates this use-at-will mentality.
If the EU is really that unstable why blame the British for it?
And if the British were holding back the EU, maybe we should be happy that they finally got off the fence.
I think this response is mainly to discourage other countries from organizing a referendum soon... UK hasn't been nice in the past and they shouldn't come out of this better than when they were in, because then the EU would fall apart.
UK industry needs the EU market far more than the EU industry needs the UK market, simply due to the size disparity.
Not to mention that while indisputably the UK currently is a net payer into EU funds, if they don't pay money anymore they will get less benefits out of the deal too.
It would be delusional to assume that they will keep all the benefits while ridding themselves of most of the obligations.
That's just not going to happen, something will have to give.
Another point is that the EU has all the incentives to not give the UK a sweet deal, because that would otherwise encourage other countries to exit as well.
The UK will obviously lose the "benefits" of EU membership, but it was a net contributor in financial terms. All else being equal, the UK could replace all EU funds spent in the UK, and have cash to spare.
In trade terms, the EU faces a prisoner's dilemma. It may be beneficial for them as a whole to play hardball with the UK, but major exporters to the UK (e.g. German car manufacturers) won't accept it. There'll be some diplomatic bravado, some tense negotiations, and the UK will be granted access to the common market.
Nope, as I previously commented [1], there is no room for giving new benefits for free as it will cost the EU its existence.
I think a consequence might be that trade with Russia will be reopened. The US influence in Europe has been lessened with the departure of the UK.
Also, did you think about the buying power of the UK? The mortgages stand, but the prices will going down as the pound looses it value. In periods of uncertainty trade will fall as will investments. Those we can afford quality goods from EU might still want to buy it (eg. luxurious cars from Germany).
If the pound loses value in the medium-run, foreign investment in the UK will increase.
Brexit, if negotiations are acrimonious, will be worse for the EU than it will be for the UK, so I don't expect much of a long-term shift in the GBP-EUR exchange rate.
Outside the EU, the UK can make itself an even more attractive place to do business, no longer hampered by EU laws and regulations.
In any case, I think Brexit will be curtains for the current incarnation of the EU. It will either have to reinvent itself significantly, or collapse and be replaced by a new union.