Brexit What Happens Next Thread ---multiple merged threads.

[kzb]

Bit of a difference between 18.209bn euros and £3.5bn wouldn't you say?

BTW I think you've pasted in gross contribution.  You have to subtract expenditure in each nation and rebates to arrive at the net figures.  Our net figure is second only to Germany's, and then not by much.  For example, France receives a lot of agricultural payments.

[long time lurking]

1 hour ago, kzb said:

I'd like to know why this BBC chart is so clearly discrepant with the EU's own data on revenue and expenditure:

http://ec.europa.eu/budget/figures/interactive/index_en.cfm

On there the UK net contribution works out to about £11-12bn, but on the BBC chart it is only £3.5bn.  That is much lower than every other estimate I've seen.

I've found out that the UK contribution is denominated in pounds, not euros.  Each year, non-euro members have their contribution calculated in their own currency, based on the currency exchange rate with the euro at that time.

This means our contributions this year have fallen with the devaluation of the pound.

However, in the next re-evaluation, it is going to increase markedly, because we have to make up the euro contribution in pounds.  Plus the UK GNI is growing faster than the EU so the GNI-based contribution will presumably increase as well. 

 

 

 

Very good question that i have not got the answer to especially the currency part ,as we could be paying more or less because of exchange rates ....our is the "bill" denominated in euros which raises more questions 

But the chart was posted in response to Con Vi`s comparison of our contribution to the EU with the rest of the EU`s GDP which is comparing apples and oranges and very disingenuous 

AH..... net vs Gross currency part i`m not sure on 

Edited January 10, 2017 by long time lurking

[Sheeple Splinter]

13 minutes ago, kzb said:

Bit of a difference between 18.209bn euros and £3.5bn wouldn't you say?

BTW I think you've pasted in gross contribution.  You have to subtract expenditure in each nation and rebates to arrive at the net figures.  Our net figure is second only to Germany's, and then not by much.  For example, France receives a lot of agricultural payments.

Yes, 10bn euros net contribution.

Rebate(s) already subtracted in the chart to show Total contributions. As you say, subtract expenditure to arrive at net contribution. 

Contributions are low on my list for leaving though.

[rollover]

31 minutes ago, Sheeple Splinter said:

Yes, 10bn euros net contribution.

Rebate(s) already subtracted in the chart to show Total contributions. As you say, subtract expenditure to arrive at net contribution. 

Contributions are low on my list for leaving though.

The UK's EU membership fee. The UK pays more into the EU budget than it gets back. In 2015 the UK government paid £13 billion to the EU budget, and EU spending on the UK was £4.5 billion. So the UK's 'net contribution' was estimated at about £8.5 billion (€10 billion).

Edited January 10, 2017 by rollover

[OnionTerror]

Doesn't sound like in intentional hard Brexit to me..

https://www.thesun.co.uk/news/2572827/theresa-may-insists-she-doesnt-want-a-hard-brexit-and-blames-media-for-the-pound-slumping-after-misrepresenting-her-views/

Quote

“What we are doing is going to get an ambitious, good, the best possible deal for the United Kingdom in terms of trading with, and operating within, the single European market.”

...and this is what she said about Brexit at her maiden speech at the Tory party conference in October..

https://www.politicshome.com/news/uk/political-parties/conservative-party/news/79517/read-full-theresa-mays-conservative

Quote

"I want it to give British companies the maximum freedom to trade with and operate in the Single Market – and let European businesses do the same here."

I think the only way we'll get a hard Brexit, is if its an "accidental" hard Brexit...We try and negotiate a bespoke deal in two years (somewhat impossible), and run out of time....then we'd switch to WTO rules..If we want a deal within two years, we should have been on the phone to EFTA three months ago..

Edit: Even Norway are outside the customs union; and that is the only way we'll be able to formulate our own trade deals, as we would no longer be part of common commercial policy.

Edited January 10, 2017 by Dave Beans

[kzb]

https://www.statista.com/statistics/572208/forecasted-eu-budget-rebate-to-the-uk/

This site claims exclusive content for a figure of £15.7bn contribution for 2016 (all the discussion above was about 2015).

The net contribution is stated to be around £10.8bn.

 

[Digsby]

On 09/01/2017 at 4:23 PM, cashinmattress said:

Brexit will do NOTHING to deter illegal migration which is a staple of our economy here... outside of putting swampy/ccc/sheeple splinter/redquat et al up at the Dover cliffs, set up on a platform facing the sea... armed with halbreds and telescopes.

As an aside, have you ever explored the bunkers within the cliffs of Dover? They are there, I don't know whether they are still accessible these days, they've never to my knowledge been legally accessible but in the past, if you know where to start, there are dozens of tunnels and turrets to explore, they are really interesting to walk and climb around. 

[Confusion of VIs]

8 hours ago, long time lurking said:

But the chart was posted in response to Con Vi`s comparison of our contribution to the EU with the rest of the EU`s GDP which is comparing apples and oranges and very disingenuous 

There was nothing disingenuous about my post. It was putting the Gardiner's contention about the impact on the EU of losing the UKs net contribution in its proper context i.e. its actual impact upon the EU's economy, which is about the square root of bugger all.

It also made the point that for both sides the contributions is a side issue that will be dwarfed by the secondary effects of the UK leaving. In the event of a hard Brexit these secondary effects could easily be more like £100bn a year and will impact on both sides.

However, as the remaining EU's economy is 6 times bigger than the UK we can expect the relative impact on the UK to be at least 6 times bigger than on the EU. I say at least six times because in trade disputes, which is what this effectively is, the impact almost always disproportionally falls on the smaller party.

This and the fact that the EU is primarily a political rather than economic project is why anyone looking at the trade balance and thinking we can use this to force the EU to agree a beneficial bespoke deal for the UK are deluding themselves.             

Edited January 10, 2017 by Confusion of VIs

[XswampyX]

On 09/01/2017 at 4:23 PM, cashinmattress said:

Brexit will do NOTHING to deter illegal migration which is a staple of our economy here... outside of putting swampy/ccc/sheeple splinter/redquat et al up at the Dover cliffs, set up on a platform facing the sea... armed with halbreds and telescopes.

Eh? I missed that! 

[Sheeple Splinter]

On 09/01/2017 at 9:45 AM, the gardener said:

The plan is that we are leaving the EU. The people who are most in need of a plan are the remaining members of the EU. How on earth are they going to take the hit of 1/6 of their budget disappearing and square the EU political need to punish the UK with the fact that it's a major export market for it's largest players. How will they keep the smaller EU nations onside when they have to pull them off the teat?

My plan? Get the popcorn in...

 

10 hours ago, long time lurking said:

...

But the chart was posted in response to Con Vi`s comparison of our contribution to the EU with the rest of the EU`s GDP which is comparing apples and oranges and very disingenuous  ...

 

2 hours ago, Confusion of VIs said:

There was nothing disingenuous about my post. It was putting the Gardiner's contention about the impact on the EU of losing the UKs net contribution in its proper context i.e. its actual impact upon the EU's economy, which is about the square root of bugger all.

It also made the point that for both sides the contributions is a side issue that will be dwarfed by the secondary effects of the UK leaving. In the event of a hard Brexit these secondary effects could easily be more like £100bn a year and will impact on both sides.

However, as the remaining EU's economy is 6 times bigger than the UK we can expect the relative impact on the UK to be at least 6 times bigger than on the EU. I say at least six times because in trade disputes, which is what this effectively is, the impact almost always disproportionally falls on the smaller party.

This and the fact that the EU is primarily a political rather than economic project is why anyone looking at the trade balance and thinking we can use this to force the EU to agree a beneficial bespoke deal for the UK are deluding themselves.             

That's your interpretation of the context but you are still comparing apples and oranges.

Sticking to EU budgets and Brexit the following quotes show that there is recognition of the financial costs to the EU.

Quote

Britain's Departure Likely to Cost EU Billions

At a summit in Bratislava this week, the EU wants to set the course for its future without Britain. One important issue is likely to be ignored by European leaders: The fact that Brexit is going to be expensive for Europe, especially for Germany. ...

10 Billion Euros or Worse

Commissioned by the European Commission and the General Secretariat of the European Council, the first calculations on how expensive Brexit might be for the 27 remaining member states have now been completed. According to one paper, net revenues that flow into the EU from Britain each year range from 14 to 21 billion euros. If you subtract the money Britain gets back from Brussels, the EU budget would shrink by up to 10 billion euros per year. ...

But it could be even worse. The rebate to Britain's EU contributions negotiated by Margaret Thatcher has led to more than 110 billion euros in savings for the British over the years. Given that other net payers, including Germany, did not want to be made responsible for the additional costs this created, they were also given a rebate. In addition to Germany, the Netherlands, Sweden, Austria and Denmark also currently enjoy a reduction in what they must pay into the budget. After Brexit, this spat could intensify, especially given that France, which is also a net payer, doesn't get any rebate at all. ...

In 2015, the study found, Britain was in second place: The British paid 12.7 billion euros more than they got back from the EU. By comparison, Germany paid 15.6 billion. The paper also determined that the British paid more into the EU per capita than Germany did that year. "After this country's withdrawal from the EU, this net amount will have to be redistributed among the other member states," writes CEP report author Matthias Kullas. "The other major net payers -- especially Germany, France and Italy -- will be facing significant additional costs."

Brexit could also lead to painful shortfalls for the European Investment Bank (EIB), Kullas calculated. If the British were to withdraw their share capital in the development bank, it would result in a shortfall worth billions. The EIB would be forced to make fewer loans -- loans that are vital for infrastructure projects across the Continent.

According to Kullas, the British have thus far borne the greatest burden at the bank. Their share of total capital is 16 percent, but they only benefit from 8.8 percent of the loans. No other country has a larger imbalance.

http://www.spiegel.de/international/europe/brexit-to-cost-european-union-billions-a-1111724.html

Yet another set of contribution figures for 2015 too! 

edit: couldn't paste the chart 

Edited January 11, 2017 by Sheeple Splinter

[Confusion of VIs]

2 minutes ago, Sheeple Splinter said:

 

 

That's your interpretation of the context but you are still comparing apples and oranges.

Sticking to EU budgets and Brexit the following quotes show that there is recognition of the financial costs to the EU.

http://www.spiegel.de/international/europe/brexit-to-cost-european-union-billions-a-1111724.html

Yet another set of contribution figures for 2015 too! 

But it still boils down to the EU having to find around 10 Billion Euro out of a GDP of around 15 Trillion Euro.  I.e the square root of bugger all.

Of course there will be lots of noise about where to find it from, that's how the EU works, but in the end it will be found. 

Also don't forget the UK is on the hook for somewhere between £30-60bn as its leaving payment, so the other states have years to find the money. 

I am deliberately ignoring the apples with apples comparison because in the end it doesn't really matter. It's like stressing over an unexpected £100 bill when you earn £150k pa.

[the gardener]

6 hours ago, Confusion of VIs said:

But it still boils down to the EU having to find around 10 Billion Euro out of a GDP of around 15 Trillion Euro.  I.e the square root of bugger all.

Of course there will be lots of noise about where to find it from, that's how the EU works, but in the end it will be found. 

Also don't forget the UK is on the hook for somewhere between £30-60bn as its leaving payment, so the other states have years to find the money. 

I am deliberately ignoring the apples with apples comparison because in the end it doesn't really matter. It's like stressing over an unexpected £100 bill when you earn £150k pa.

By the same token, the financial benefit each individual EU nation gets from being in the EU is also the square root of bugger all. This way of analysing things doesn't provide any meaningful insight.

It's like saying we shouldn't bother trying to save the life of a patient because hey, he's only one person and there are 7 billion others so why bother?

Also the increased contributions have to be funded from the Government coffers of each nation and not from a magic pot containing the entire GDP of the nation.

If it's such small potatoes then why don't they increase the EU budget by 20% (or even 200%) now? After all it's the square root of bugger all and they can afford it.

Edited January 11, 2017 by the gardener

[Confusion of VIs]

Now you are comparing apples with oranges. 

The financial benefit of being in the EU's single market will vary from state to state. Most estimates for the UK fall in the range of 4 to 7% which is a significant amount.

I don't agree with the parallel but it would be more like saying you can save this one patient at the cost of letting 10 or 20 others die.  

Yes the money will have to be found from government budgets rather than overall GDP, but again to put it in context it is similar to the UK having to find an extra £1.3bn to fund something in 5 maybe 10 years time.     

The rest of the EU does not want the UK to leave for other reasons which are way more significant than the UK's net contribution, such as the loss of prestige, the single market being significantly smaller and therefore less valuable without the UK, the loss of GDP arising from a reduction in trade with the UK. Estimates of the overall loss to the EU will be around 0.5% GDP or around £70bn a year.

For these reasons, it is still rumoured that EU will offer the UK the choice of a deal on FoM to stay or a clean break (their term for a very hard Brexit)..   

[Riedquat]

7 minutes ago, Confusion of VIs said:

I don't agree with the parallel but it would be more like saying you can save this one patient at the cost of letting 10 or 20 others die. 

A better analogy would be a business's turnover, and you're trying to compare profit with turnover. It doesn't matter how big the turnover is if there's no profit the business is on its way out. If it loses a customer that provides a good chunk of its profit then it's in trouble.

As far as the stuff the EU does the GDP of its members only matters indirectly, in that the more there is the more chance there is of there being a bit for the EU.

Edited January 11, 2017 by Riedquat

[kzb]

59 minutes ago, Riedquat said:

A better analogy would be a business's turnover, and you're trying to compare profit with turnover. It doesn't matter how big the turnover is if there's no profit the business is on its way out. If it loses a customer that provides a good chunk of its profit then it's in trouble.

As far as the stuff the EU does the GDP of its members only matters indirectly, in that the more there is the more chance there is of there being a bit for the EU.

That is my understanding also.  GDP is not profit, it is more akin to turnover.

If it were profit (circa £1.5 trillion p.a.), we'd have no problems.  But clearly we do have big problems, as do other large western economies.  Despite GDP being so high, governments are borrowing and printing money hand over fist.

[Confusion of VIs]

12 minutes ago, kzb said:

That is my understanding also.  GDP is not profit, it is more akin to turnover.

If it were profit (circa £1.5 trillion p.a.), we'd have no problems.  But clearly we do have big problems, as do other large western economies.  Despite GDP being so high, governments are borrowing and printing money hand over fist.

All true but it does provide a measure of total economic activity that provides a basis for assessing the relative impact of additional costs, and as we don't currently have a better overall indicator it will have to do for now.  

[Riedquat]

4 minutes ago, Confusion of VIs said:

All true but it does provide a measure of total economic activity that provides a basis for assessing the relative impact of additional costs, and as we don't currently have a better overall indicator it will have to do for now.  

Dress it up as much as you like but the organisation that is the EU is going to struggle with the loss of a significant chunk of its income. I agree that GDP is a measure of total economic activity but I don't see where your argument is coming from that that matters more. What affects the share price of a business, its turnover or its profit? High turnover and low profit just means a business operating with small margins (and / or an inefficient one).

Furthermore even though I obviously think that the EU has already gone too far down the federal attitude path it's not gone all the way. The vast majority of that GDP is entirely down to the individual countries, nothing to do with the EU.

And like I said if GDP is the important thing then you should be comparing the UK's GDP with that of the rest of the members. As it is it looks like you're trying to claim that the UK's contribution directly contributes towards France's, Germany's, Italy's, Greece's etc. GDP, but not the other way around.

[Sheeple Splinter]

8 minutes ago, Confusion of VIs said:

All true but it does provide a measure of total economic activity that provides a basis for assessing the relative impact of additional costs, and as we don't currently have a better overall indicator it will have to do for now.  

Apples: EU budget and member contributions.

Oranges: EU28 GDP and member countries' GDP

There are several links between the two, the main one being member country's GNI based contributions i.e. if member countries' GNI falls then so do contributions to the EU.

The fact is the EU elite don't share your EU GDP indicator of UK insignificance:

Quote

...

The German Finance Ministry paper also provides another example: a so-called "Lowering of the Ceiling program." Schäuble's ministry believes it possible that the EU would undertake significant fiscal belt-tightening once Britain stopped paying into the EU budget.

...

In order to reduce the shortfall, other member states are likewise looking at ways to reduce EU spending. The main area under review by the fiscal experts is agricultural aid which, at around 55 billion euros each year, is one of the largest line items on the budget. The direct payments received by every European farmer for each hectare of land they own without any stipulations, for example, has come under criticism.

 http://www.spiegel.de/international/europe/brexit-to-cost-european-union-billions-a-1111724.html

1 hour ago, Confusion of VIs said:

...

The rest of the EU does not want the UK to leave for other reasons which are way more significant than the UK's net contribution, such as the loss of prestige, the single market being significantly smaller and therefore less valuable without the UK, the loss of GDP arising from a reduction in trade with the UK. Estimates of the overall loss to the EU will be around 0.5% GDP or around £70bn a year.

...

Agreed, plus the 'end of the EU project'.

[Confusion of VIs]

38 minutes ago, Riedquat said:

Dress it up as much as you like but the organisation that is the EU is going to struggle with the loss of a significant chunk of its income. I agree that GDP is a measure of total economic activity but I don't see where your argument is coming from that that matters more. What affects the share price of a business, its turnover or its profit? High turnover and low profit just means a business operating with small margins (and / or an inefficient one).

Furthermore even though I obviously think that the EU has already gone too far down the federal attitude path it's not gone all the way. The vast majority of that GDP is entirely down to the individual countries, nothing to do with the EU.

And like I said if GDP is the important thing then you should be comparing the UK's GDP with that of the rest of the members.

As it is it looks like you're trying to claim that the UK's contribution directly contributes towards France's, Germany's, Italy's, Greece's etc. GDP, but not the other way around.

The EU is just a function carried out on behalf of the member states, if they want to they can afford to fund it at whatever level they feel is appropriate.   

I have already said that this discussion about contributions is pretty irrelevant and that the far more important factor is the secondary losses arising from trade losses. This is where the total GDP's become relevant and why the relative impact on the UK (at 13% of the total) will be at least 6 times that on the remainder of the EU.

No, my argument is that contributions are a pretty negligible factor for both sides, or at least they are for the richer states.

 

 

 

 

[Confusion of VIs]

40 minutes ago, Sheeple Splinter said:

Apples: EU budget and member contributions.

Oranges: EU28 GDP and member countries' GDP

There are several links between the two, the main one being member country's GNI based contributions i.e. if member countries' GNI falls then so do contributions to the EU.

The fact is the EU elite don't share your EU GDP indicator of UK insignificance:

 http://www.spiegel.de/international/europe/brexit-to-cost-european-union-billions-a-1111724.html

Agreed, plus the 'end of the EU project'.

That's certainly a possibility. However, as you earlier quote demonstrates that Germans and definitely the French, if Fillon wins, will take Brexit as an opportunity for major reform.  

It would be ironic if UK leaving is the catalyst for the EU turning into something we would like to join. 

[Riedquat]

50 minutes ago, Confusion of VIs said:

The EU is just a function carried out on behalf of the member states, if they want to they can afford to fund it at whatever level they feel is appropriate.  

Oh really? We could just decide to not contribute at all if we feel like it? Sorry, that's not true. The EU over-rules its member states and treats them as being there for it rather than it being there for them. That's a big part of what makes it so objectionable.

Quote

I have already said that this discussion about contributions is pretty irrelevant and that the far more important factor is the secondary losses arising from trade losses. This is where the total GDP's become relevant and why the relative impact on the UK (at 13% of the total) will be at least 6 times that on the remainder of the EU.

No, my argument is that contributions are a pretty negligible factor for both sides, or at least they are for the richer states.

In terms of their overall cost to the states they might not be all that great, in terms of their impact on the EU - as opposed to its members, it's big. You cannot lose one of your most significant players and pretend it has negligable effect, and one that will be felt more in some countries than others. How much impact it will have on everyone depends on where trade is, where it will be etc. etc., a simple comparison of GDP is meaningless. And it's not as if it'll be a case of "no dealing with the EU whatsoever".

Remove a key player from a football team and the effect isn't just 1/11th of the ability of that team to win gone.

edit to sort of quoting

Edited January 11, 2017 by Riedquat

[Sheeple Splinter]

2 hours ago, Confusion of VIs said:

That's certainly a possibility. However, as you earlier quote demonstrates that Germans and definitely the French, if Fillon wins, will take Brexit as an opportunity for major reform.  

It would be ironic if UK leaving is the catalyst for the EU turning into something we would like to join. 

Definitely, the positioning of other EU members in the event of Brexit began before the referendum. Fillon & Macron are both talking about reforms; le Pen's policies are well known already. I can't see the EU surviving unless it reforms and, once again, the Flexcit,plan for Europe is compelling i.e. UNECE etc.

Macron today:

Quote

The euro may not exist in ten years’ time if Paris and Berlin fail to bolster the single currency union.

....

“The truth is that we must collectively recognise that the euro is incomplete and cannot last without major reforms,” Macron said in a speech at a university in Berlin.

“It has not provided Europe with full international sovereignty against the dollar on its rules. It has not provided Europe with a natural convergence between the different member states.” ...

http://www.euronews.com/2017/01/11/macron-the-euro-may-not-exist-in-ten-years

Also today, Fillon:

Quote

French conservative presidential candidate François Fillon, who is favourite to win this year’s election, will lay out on Wednesday (11 January) his proposals to cut immigration to a “strict minimum” through the use of quotas, an aide said on Tuesday.

Fillon, who is seen beating far-right leader Marine Le Pen if they meet in a runoff in May in the presidential election, will also urge the European Union to tighten its asylum and immigration policy to counter threats from Islamist militants.

http://www.euractiv.com/section/elections/news/french-presidential-candidate-fillon-to-propose-immigration-quotas/

Edited January 11, 2017 by Sheeple Splinter

[kzb]

Maybe this discussion brings us back to the fact that the EU budget is relatively small.

EU budget of 145bn euros is only about double the revenue of Tesco group (both 2015 figures).

EU budget is less than 0.9% of total EU GDP (nearly 17,000bn euros).

Also, we seem to be assuming that trade will markedly reduce when we leave.  The loss of 70bn certainly seems to imply a massive reduction. 

[kzb]

Fillon seems to be promising things he is in no position to promise whilst France remains in the EU.  Where have we heard this before?

[Sheeple Splinter]

2 hours ago, Riedquat said:

Oh really? We could just decide to not contribute at all if we feel like it? Sorry, that's not true. The EU over-rules its member states and treats them as being there for it rather than it being there for them. That's a big part of what makes it so objectionable.

In terms of their overall cost to the states they might not be all that great, in terms of their impact on the EU - as opposed to its members, it's big. You cannot lose one of your most significant players and pretend it has negligable effect, and one that will be felt more in some countries than others. How much impact it will have on everyone depends on where trade is, where it will be etc. etc., a simple comparison of GDP is meaningless. And it's not as if it'll be a case of "no dealing with the EU whatsoever".

Remove a key player from a football team and the effect isn't just 1/11th of the ability of that team to win gone.

edit to sort of quoting

+1