Tag: United Kingdom

Be Wary of the Return of Big Government

Nick Ottens
Union Station Washington DC
South Front Entrance of Union Station in Washington DC, July 4, 2019 (Unsplash/Caleb Fisher)

Big government is back.

Massive rescue programs have prevented business failures and unemployment on the scale of the Great Depression, even though last year’s economic contraction was nearly as bad. The European Union agreed a €750 billion recovery fund, financed, for the first time, by EU-issued bonds. The money comes on top of national efforts. The United States Congress passed a $2.2 trillion stimulus, worth 10 percent of GDP, in March and added another $484 billion in April. An additional $900 billion in relief was included in this year’s budget.

Joe Biden, the incoming American president, wants to spend $2 trillion more over the next four years to transition the United States to a greener economy and create a public health insurance program. Corporate tax would go up from 21 to 28 percent.

In Spain, a socialist government has introduced the biggest budget in Spanish history — partly to cope with the impact of coronavirus, but also to finance digitalization, electric car and renewable energy subsidies, infrastructure and rural development. Taxes on income, sales and wealth are due to increase.

In the United Kingdom, the ruling Conservative Party is building more social housing and it might renationalize rail. Unlike during the last economic crisis, it does not propose to cut spending even though tax revenues are down.

Same in the Netherlands, where all the major parties agree the government needs to do more to reduce pollution and prevent people at the bottom of the social ladder from falling through the cracks.

I’m not opposed to more government per se. I’ve argued that the United States should imitate countries in Northern Europe to improve its public services, particularly child and health care and housing.

But let’s be careful not to throw “more government” at every problem. Sometimes government is the problem. Read more “Be Wary of the Return of Big Government”

Gibraltar Brexit Deal is Victory for Spain

Nick Ottens
Gibraltar
View of the Rock of Gibraltar from the territory’s airport, September 29, 2015 (Shutterstock/Nigel Jarvis)

Gibraltar is joining the Schengen free-travel area and will accept European border guards in its ports.

The agreement, reached shortly before New Year’s between the governments of Britain and Spain, avoids the need for a hard border and pulls the Rock closer into the European Union than it was before.

It is a victory for Spanish nationalists, who have long dreamed of regaining a foothold in Gibraltar after three centuries of British rule.

Accomplished, ironically, by a left-wing government. Read more “Gibraltar Brexit Deal is Victory for Spain”

What to Make of the EU-UK Trade Agreement

Nick Ottens
United Kingdom European Union flags
Flags of the United Kingdom and the European Union outside the Berlaymont building in Brussels, January 29, 2016 (European Commission)

I haven’t read the 1,246 pages of the EU-UK trade agreement, so I’m going to rely on trusted sources to make sense of the accord.

First, a couple of notes on terminology.

This treaty, the EU-UK Trade and Cooperation Agreement, governs the future cross-Channel relationship. It is due to go into effect on January 1, although it will still need to be ratified by the parliaments of the European Union and the United Kingdom as well as the European Council.

Last year’s withdrawal agreement regulated Britain’s exit from the EU. It provided for a one-year transition period, which expires on December 31, and included a protocol for Northern Ireland, which keeps the province in the European single market for goods and effectively (but not legally) in the EU customs union to avoid the need for a border with the Republic of Ireland.

Both treaties have been unhelpfully referred to as “the deal” in the English-speaking press, but only the withdrawal agreement was crucial. The trade agreement, while good to have, since Britain does most of its trade with the EU, was always optional. Read more “What to Make of the EU-UK Trade Agreement”

Britain Still Won’t Accept Tradeoff at Heart of Brexit

Nick Ottens
Boris Johnson
British prime minister Boris Johnson chairs a cabinet meeting in London, England, September 30 (The Prime Minister’s Office/Andrew Parsons)

Britain is still trying to have its cake and eat it too.

  • It doesn’t want to lose access to the European market, but it doesn’t want to follow EU rules and regulations either.
  • It doesn’t want a border in Ulster, but it doesn’t want to keep Northern Ireland in closer regulatory alignment with the EU than the rest of the United Kingdom.
  • It doesn’t want a customs border in the Irish Sea, but it doesn’t want regulatory divergence between Northern Ireland and Great Britain.

And it still thinks it can spook the EU into relaxing its red lines by threatening to exit the transition period that ends on December 31 without a trade deal when the absence of a trade deal would hurt the UK far more than the EU. Read more “Britain Still Won’t Accept Tradeoff at Heart of Brexit”

Statism Makes a Comeback in the United Kingdom

David Downing
London England
The British flag flies over the Cabinet Office in London, England (Shutterstock/Willy Barton)

Two months ago, I argued Britain was once again the sick man of Europe. It had the second-highest per capita COVID death rate among major countries. Economic output had fallen 20 percent from the year before.

The crisis wasn’t lost on policymakers. The dual shock of coronavirus and Brexit — Britain formally left in 2019 but still applies EU rules and regulations this year — has led to something of a quiet revolution in Whitehall: the potential rebirth of the interventionist state.

There is still much wrong with how the British government has handled both events, the poster child for COVID being the decimation of the British aviation and travel industry as well as the arts. Not since the closing of the coal mines has an entire industry shrunk so dramatically.

Yet the seeds of a new statism have been sown — by a Conservative government. Read more “Statism Makes a Comeback in the United Kingdom”

British Conservatives Shouldn’t Root for Trump

Nick Ottens
Donald Trump
American president Donald Trump gives a speech in Paris, France, July 12, 2017 (DoD/Dominique A. Pineiro)

Like in 2016, there are those on the British right who are rooting for Donald Trump’s reelection.

Like in 2016, they are deluding themselves if they think the Republican will be better for Britain than his Democratic challenger, Joe Biden. Read more “British Conservatives Shouldn’t Root for Trump”

Johnson Puts British Diplomacy, Internal Relations at Risk

Igor Dordevic
Boris Johnson
British prime minister Boris Johnson listens to a reporter’s question in Brussels, October 17, 2019 (European Commission)

British prime minister Boris Johnson has been accused of “legislative hooliganism” and running a “rogue state” for bringing forth legislation that would breach international law.

The Internal Market Bill, which Johnson’s government is planning to enact in order to establish the legal framework for Britain’s internal market following the end of the Brexit transition period, would contravene the withdrawal agreement Britain has negotiated with the EU.

The withdrawal agreement subjects Northern Ireland to EU rules on exports and state aid in order to avoid the need for a border with the Republic of Ireland. The open border has helped keep the peace between Catholics and Protestants in the region for twenty years.

The Internal Market Bill gives UK ministers the power to opt out of those rules. Read more “Johnson Puts British Diplomacy, Internal Relations at Risk”

Spain Proposes Schengen Membership for Gibraltar

Nick Ottens
Gibraltar
Bay of Algeciras seen from the Rock of Gibraltar (Unsplash/Freja Saurbrey)

Politico reports that Spain has proposed to include Gibraltar in the EU’s passport-free Schengen Area to facilitate cross-border travel.

The arrangement would be similar to Liechtenstein’s, which is not in the EU but a member of Schengen. Andorra is negotiating a similar status. Monaco, San Marino and Vatican City are in neither the EU nor Schengen but maintain open borders.

The proposal is backed by Gibraltar’s chief minister, Fabian Picardo.

96 percent of his citizens voted to remain in the EU in the 2016 referendum, but they were overruled by majorities in England and Wales.

Although Britain formally left the EU at the end of 2019, the bloc’s rules and regulations still apply until the end of 2020.

Gibraltar, like Britain, was never in the Schengen Area, but it was in the EU single market, allowing it to trade freely with the EU’s 27 other member states. Before the pandemic, commuters were typically waved through by Spanish border police. Read more “Spain Proposes Schengen Membership for Gibraltar”

Britain Still Thinks It Can Bluff Its Way to a Better Deal

Nick Ottens
United Kingdom European Union flags
Flags of the United Kingdom and the European Union outside the Berlaymont building in Brussels, January 29, 2016 (European Commission)

What do you call doing the same thing over and over again and expecting a different result?

Brexit.

I’ve also called it the Tsipras approach to negotiating with the EU, after the Greek prime minister who thought he could get his way by threatening to blow himself up.

It didn’t work for Alexis Tsipras, and it hasn’t worked for the United Kingdom. Despite threats to walk away without a deal, Prime Minister Boris Johnson last year agreed to essentially the exit agreement the EU had proposed all along.

Now his government is unhappy with the agreement it made and, once again, threatening to walk away. Read more “Britain Still Thinks It Can Bluff Its Way to a Better Deal”

Singapore-on-Thames Is Unlikely

Igor Dordevic
London England
The sun rises over London, England (Uncoated)

With the Brexit transition period ending in just four months, concern is rising that the United Kingdom might crash out of the EU’s common market and customs regime without a deal.

Not everyone is worried. Prime Minister Boris Johnson’s predecessor, Theresa May, argued it “wouldn’t be the end of the world” if Britain left without a deal. Right-wing economists are looking forward to setting “attractive tax rates” once the United Kingdom is free of the EU’s grasp. The UK, they believe, could become a “Singapore-on-Thames”, gain a “competitive advantage” over the EU and draw businesses and investment away from continental Europe.

That is unlikely. Read more “Singapore-on-Thames Is Unlikely”