Will it be an exit or an exodus?
Could the rumors be true? If the United Kingdom decides to leave the European Union, will it be an exit or an exodus? People who know the story of Moses are aware of the difference. He led the Israelites out of Egypt to escape from the cruelties of the pharaoh with the aim of finding the promised land in which to live in peace and prosperity. However, when they did not obey the rules imposed by God, He condemned them to remain in the wilderness, and it was only after many years that they were able to reach that land. And there is still the question mark of whether they found peace.
There is not, of course, a cruel pharaoh in continental Europe, but every day, bad and sad news is being announced. The eurozone economy shrank 0.1 percent in the third quarter, indicating that a new phase of the recession might have already begun. The European Central Bank is holding its key interest rate unchanged at a record low in order to prepare for a further stimulus attempt if the predicted recession really begins in earnest.
In addition, the central bank of the biggest economy in Europe, the Bundesbank, is only forecasting 0.7 percent growth this year for Germany and has cut its 2013 growth forecast to 0.4 percent. This means that the bank believes there is a risk of a recession for the German economy. Another bad piece of news was the announcement about the retail sales slump in all the eurozone countries. The central bank of the second largest economy in the eurozone, the Bank of France, expects a 0.1 percent reduction in the forth quarter as industrial output shrank unexpectedly.
At last one piece of good news: European Union finance ministers reached a deal which will bring banks under a single supervisor, the Central Bank of Europe. However, given the comments of some Britons at this “happy end,” it seems that they are not so happy, especially the mayor of London, who has asked for a new membership mode after accusing the governor of the Bank of France of “attempting to steal London’s financial crown.” Although the United Kingdom chancellor praised the banking union deal, other positive comments on the issue seem quite rare; on the contrary, voices clamoring for an EU exit have begun to raise their voices, and there has not been a strong reaction from business circles against the “exit” idea.
The British economy has its own problems that are largely similar to the European ones. Chancellor George Osborne recently said that Britain could only start reducing its debt-to-GDP ratio after four years. The reason is obvious: All projections about the economic indicators are drawing a grim picture, and Standard and Poor’s recently cut Britain’s outlook from stable to negative. A surprise rise in the employment figure is the only piece of good news, although this does not mean the risk of a second recession is disappearing.
Could abandoning EU membership solve most of these problems? To answer this question, it is better to first answer another question: Is the eurozone or the EU itself the main culprit for Britain’s economic problems? Giving a positive answer to this question is quite difficult. It is widely known that British business’ “single market” approach differs from Brussels’. For Britons, the single market means fewer rules and more freedom. On the contrary, Brussels’ approach is more rules to guarantee more freedom.
Last but not least: If Britain decides to leave the EU, will there be an exit or an exodus? There is an important difference between them if we remember what happened to the Israelites after the exodus. In other words, will the advantages of an “exit” be bigger than the disadvantages, or, if the main reason for leaving the EU is to disobey the rules, will Brussels condemn and try to punish Britain for the harm it will have dealt to the entire European economy?