Boris Johnson joins Brexit. Most commentators attribute his decision to the need to assert himself in the race for the leadership of the Tory party against the Chancellor George Osborne, but nobody has reflected yet upon the true economic and political significance of Boris Johnson’s move. As the major of the city that harbours the biggest financial centre in the world, and a declared supporter of its financial industry, it would be have been inconceivable for him, and irresponsible, not to have, at least, gauged the mood amongst the leaders of the City’s institutions before making his mind up. Can anybody imagine a conservative major of London standing against the City of London?
In my view, Johnson’s support for Brexit needs to be interpreted in the light of one of the deals achieved last weekend by David Cameron in Brussels: The British Government will be able to object, and delay, the implementation of measures by Eurozone Governments on Monetary Union matters that affect the rest of members of the Union, but will have no right to veto them.
The ability to block Eurozone integration is something that the financial industry had defended for years and the British Government has tried its best to achieve. The Eurozone, as it has become evident following the Great Recession, requires a revamping of its institutional architecture and a more effective, and far more democratic, governance. There are a number of ideas, more or less developed as specific proposals, that could help the Eurozone to address the political and functional shortcomings of the Monetary Union, bringing prosperity and jobs to the Euro countries and, by extension, to the EU as a whole, including Britain. However, some of these ideas might reduce the ability of many London financial institutions to continue working in the way they have done since the European Monetary Union started. Additionally, the City could be affected by any agreement within the Eurozone that touches, directly or indirectly, upon the question of debt (our public and private debt, which is immense. Remember that in our new world order, money is just debt and debt is a powerful political tool. If you need proof of it, watch 4 Horsemen, Boom, Bust, Boom or read the latest work of any alternative economist).
So, in what way could many operators of the City of London benefit from Brexit? Britain’s departure would make the European Union far more unstable and force everybody to rethink their priorities; the question of regulating the activities of the institutions who brought about financial chaos in 2008 will be left in the back burner. Brexit would certainly bring monetary instability for the euro, and the pound, that many will be already betting for and benefiting from. The turmoil caused by the shock of a victory of the No Campaign would prevent the still immature Monetary Union to advance in the direction it needs.
One may argue that Brexit may be detrimental for the city (no capital) of London, but that would not be so much the case for its financial operators. Severing the links with the EU will no doubt force London-based institutions to redeploy parts of their operations in the continent before Brexit is consummated legally, but with state of art technology and the best paid lawyers, it would be easy to minimise the cost of any relocation. At the end of the day, money, as opposed to people, does not have any national feelings.
Meanwhile, it appears that the big industrial corporations of the U.K. are showing their desire for Britain to remain in the EU. Up to 80 of the FTSE100 companies are reported to support Britain’s membership of the EU. For them, the benefits of sharing a common market and being part of a greater economic entity in today’s world are indisputable. For them, migration has brought about the labour they needed to and migrants are seen as an asset, as they are net contributors to the economy who generate more taxation and more consumption. For them, there is no evidence whatsoever that Brexit would generate more investment and more trade to the country. It is a big gamble. The EU “regulations” that so many people complain about would have to be complied with anyway if these corporations want to continue selling good and services to the continent. And, personally, I think Britain, as much as I love it, is one of the most regulating societies in the world. Leaving the EU would not liberate us from suffocating rules, nor make the rules better, believe me. Look at any other aspect of our life and society (Education is a good example) and tell me hand in heart if we don’t have too many rules, protocols, reports, procedures and measurements of our own creation that have nothing to do with the EU.
I am sure plenty of noble ideological and political reasons will be provided by Johnson justifying his stance in no time (today at 10.00 am in the Telegraph, apparently). Well-known anti-EU conservative discourse is widely available in the shelves of Tesco and other major suppliers in all colours and sizes. It is not that Boris does not have the capacity to elaborate his own narrative, but why bothering reinventing the wheel if the pre-packed patriotic democratic neo-romantic stuff is as good as any? Besides, loads of effort has been put in producing the arguments for Brexit by many politicians and commentators, including himself, over the years. Embracing the collective work, using the words and emotions that best resound in our hearts would bring Boris closer to the common man and woman and facilitate his harmonious contribution to the campaign.
However, no matter how appealing his arguments may appear to be, the decision of Boris Johnson to support Brexit reveals the widening gap between the real economy, the one that produces goods and services, which supports overwhelmingly EU membership, and the financial elites, who have decided to rock the boat, using the British people and sectors of the media as a proxy, in order to maintain and improve their position of dominance over States, industries and people across Europe.