Military leaders warn against Brexit: The government is pulling in its patronage and its pay-roll vote. Yesterday we saw the letter from FTSE-100 CEOs – though against the promised eighty, in the end only thirty-six signed. Today it’s the turn of the military. They say that Britain is better able to deal with threats like ISIS while we remain in the EU. They don’t explain why.
After Brexit, Anglo-French military cooperation (which is outside the scope of EU institutions) will continue, as the most significant military relationship within Europe. Our NATO membership will continue, and is the guarantee of our joint security. By contrast, the EU makes very little contribution to security – indeed it undermines it, for example by deliberately provoking Russia in the Ukraine. It is difficult to think of any circumstance where the EU itself has contributed to security. Its impotence in the face of the immigration crisis is a case in point.
We have other cooperation in Europe, including sharing of intelligence, and police cooperation. This however will continue on an intergovernmental basis where it is beneficial to both parties.
Exchange rate turbulence: There has been some recent softening of the Sterling exchange rate, and there is little doubt that Brexit and Boris Johnson’s declaration for Brexit are factors. Markets are notoriously driven by sentiment and the herd instinct, rather than by logic. Much of this can be blamed on the scaremongering of the Remain camp, and their grotesque exaggeration of the supposed risks. There will certainly be some market turbulence – perhaps some buying opportunities – associated with the UK’s departure from the EU. But stability will return as soon the doom-mongers notice that the sky is not falling.
After Brexit, the British economy will perform strongly, markets will recover, and indeed we can expect other member states to demand referenda and seek to follow the UK’s example.
It is ironical to reflect that Central Banks around the world are today looking for ways to bring down their currencies in the interests of competitive devaluation. Generally they have great difficulty doing so, since with interest rates at rock bottom the primary tool for bringing down a currency’s value is denied them. In this context, the softening of Sterling can be seen as a blessing in disguise. It should certainly help the UK’s balance of payments.