I Just Don't Get the EU Referendum

Tomorrow (23/6/16) voters in the UK will go to the polls in a referendum to decide whether to remain as members of the European Union (EU) or to leave.

This represents one of the more important decisions in British history. Certainly the most important since the UK voted to join the EU back in 1972. As something of a political blogger you would expect me to have an opinion on the issue.

The problem is. Well the first problem is that I've been extremely busy at the moment. For pretty much the last six months I've been sitting there going; "I need to do something about that tomorrow." Right before another terrorist attack or some related crisis suddenly develops. The main problem though is that I simply don't understand what all the fuss is about.

What I would have liked to have done is discuss this renegotiation agreement that British Prime Minister David Cameron unveiled back in February 2016.

I would have begun by explaining that in order to decide whether any negotiation had been a success or failure you would first have to look at what the objectives were going into that negotiation. I would then explained that this is where I find myself stuck because I genuinely have no idea what the British government has been trying to achieve when it comes to the EU.

One thing we do know for sure is that if Britain votes to remain then things will remain exactly as they are now.

An area of EU policy I have been following extremely closely is the agreement between the EU and Turkey over the migrant crisis. One thing that is obvious to all on that issue is that the agreement that was published on March 18th (18/3/16) bears absolutely no relation to the plan that has been put into action.

For example the published agreement requires that all migrants on the Greek islands go through the asylum process. Those who are successful have to be relocated from the Greek islands before the EU can start sending those who failed back to Turkey. This was completely ignored and the EU started returning migrants just two weeks later.

Therefore I think it is safe to assume that Cameron's renegotiation agreement is not worth the paper that it is written on. As such it can be completely excluded from the discussion and if you look at the discussion it is clear that it already has been.

It is the migrant deal with Turkey that has really undermined my confidence in the entire discussion surrounding the referendum debate. A key part of the deal is that Turks are to be given visa-free access to the EU. Although it is being frantically debated as I write this is expected to go into force next week.

Throughout the referendum debate whenever the Remain campaign have been asked about this issue they've replied; "Turkey won't be joining the EU." That may be the case but that's not the question that is being asked. The question being asked is whether Turkish migrants will be able to freely travel to the UK. I'm still waiting for the Remain camp to answer that question.

It is of course much harder to predict what will happen if Britain votes to leave the EU.

Due to the way in which the World has become much closely interlinked and globalised a vote to leave does not suddenly mean that the UK will end its relationship with the EU. For example the British and French military's are very closely linked together under an agreement that has nothing to do with the EU. As such a vote to leave simply means that the UK will begin to renegotiate its relationship with the EU.

This is likely to be one of the most complicated political negotiations ever seen. It took the Czech Republic and Slovakia five years to negotiate their separation and that was two federal regions attempting to separate rather one nation trying the separate from 27 others. During these negotiations you will see various complex issued being leveraged against each other.

For example the EU might be prepared to take a very tough line on the UK agreeing to the free movement of people and increased workers rights in order to reduce the tariffs UK business will have to pay to export to the EU. However that almost laughably understates the almost infinite number of variables and possible outcomes that these negotiations will produce.

As with most divorces this division of assets and discussions of visitation and access rights is likely to take place in the acrimonious atmosphere of old scores being settled.

These negotiations that will last for an absolute minimum of five years will create a lot of uncertainty. It is for this reason that many business leaders are backing the Remain camp. It has long been said that business can cope with good news and it can cope with bad news. What it cannot cope with is uncertainty. What they seem to have failed to factor into their decision though is that it is extremely unlikely that the existing trade relationship will come to an end before the new relationship is agreed.

Also the UK seems to have quite a strong hand in these negotiations.

Although it's due more to mistakes made by the EU rather than the success of British government policy the British economy is in a stronger position than the Eurozone economy. Take for example the Greek bailout. If Britain leaves the EU and takes its prime AAA credit rating with it this will cause the EU's entire credit rating to fall. That will make borrowing more expensive and there the Greek bailout less likely to succeed.

Then there is the issue of the poorer, newer EU member states such as Poland and Romania. If you take away the UK's vast contribution to the EU development funds these nations receive at the same time taking away the remittances they receive from migrants working in the UK they more or less don't have economies. As such a British exit will plunge those nations into recession bringing down the Eurozone economy as a whole.

Obviously the UK exports a lot of goods to the EU. However the EU also exports a lot of goods to the UK. With the already weak Eurozone economy being plunged into further difficulties by a British exit it is likely that the EU is going to be a lot more desperate to trade with the UK than the UK is going to be desperate to trade with the EU.

However as always in economics there is no such thing as good and bad. It really depends on your individual circumstances and how they are affected.

Therefore it seems likely that I will be voting to Leave tomorrow. However I may still change my mind at the last minute and vote to Remain.

Alternatively I might just abstain and stay at home.

13:10 on 22/6/16 (UK date).