Here's a somewhat optimistic report following Britain's vote to leave the European Union:
- "The financial system overhauls introduced in the United States and Europe since the 2008 crisis, and the willingness to provide emergency support to the banks right now, will most likely stop the financial system from imploding."
- - Peter Eavis, What to Watch for in Trading After Shock of ‘Brexit’, NYT, June 24, 2016
Eavis points out that the world financial system has survived several jolts without collapsing:
- The global financial system has in recent years managed to absorb rolling debt crises in Greece, military clashes in Ukraine, down-to-the-wire budget fights in Washington and a shock currency devaluation by China.
And though some say it was a close call, the financial system survived the Great Recession.
As a man advised his daughter during her first year of driving, close calls should be recognized as an indication there's a high probability of an eventual accident. Only when you're driving forward without any close calls, without the odds being better than just "most likely" that there won't be a catastrophic crash; only then can you consider yourself a good driver, with reasonable confidence of avoiding a premature accidental tragic end.
Eavis's conclusion is not entirely reassuring:
- People who have bet on the world ending in recent years have lost a lot of money. But be very open to the notion that Brexit could be the event that finally makes them rich.
- According to Brexit’s leading advocates, the United Kingdom’s withdrawal from the European Union was going to be simple. Striking a free trade deal with the EU should be “one of the easiest in human history,” International Trade Secretary Liam Fox told reporters in July 2017. “The day after we vote to leave, we hold all the cards and we can choose the path we want,” Environment Secretary Michael Gove promised voters on the campaign trail in April 2016. Overall, Brexit would result in “a better deal for the people of this country, to save them money and to take control,” vowed leading Brexit ideologue Boris Johnson in the run-up to the 2016 referendum—a “deal that is exhilarating for this country, that is a massive opportunity and that liberates us to champion free trade round the world.”
- Few of those heady promises have survived contact with reality. ...
- Both ardent supporters of leaving the EU and those passionate about remaining agree—May’s deal offers something considerably worse than Britain’s current full membership of the EU, with none of the promised upsides. ...
- Furthermore, despite May’s explicit promise in October 2016 that “the authority of EU law in this country has ended forever … We are not leaving only to return to the jurisdiction of the ECJ. That’s not going to happen,” the draft agreement says just the opposite. In Article 158, it stipulates that the European Court of Justice’s authority will remain supreme until eight years after the end of the transition period. Currently, that transition period is set for two years—but the Withdrawal Agreement states clearly that the permanent deal that replaces it will be made on Europe’s terms.
- The draft deal is “actually rather grimly comic. It’s worse than membership in every possible way,” complained the British official with knowledge of the negotiations, who was not authorized to speak on the record. “There’s literally no visible upside.” The proposed arrangement—effectively membership in all but name—not only prevents the U.K. from striking its own trade deals with outside countries but also binds Britain to accept all future EU trade deals and legislation without having any say in them. ...
- So far, the most likely outcome of the Brexit deal is the one outlined in the Withdrawal Agreement: Brexit in name only, on the EU’s terms, with Britain unequivocally forfeiting control to Brussels. In other words, more or less exactly the opposite of what the Brexit campaign promised its voters.
- - OWEN MATTHEWS, Divorced, But Still Living Together, Foreign Policy, NOVEMBER 21, 2018