(In English for once). The economics student association from Nijmegen invited me to speak today at their annual conference, this year on the causes and consequences of the Brexit (they had read these posts on this blog about the Brexit). It had to be in English, so I decided to type out my talk beforehand (to not waste time looking for words during my talk). Here’s the tekst of my presentation (pdf) including a lot of graphs, footnotes and links to more interesting literature, for whoever is interested. It was titled: “Winners & losers from EU integration: How the European Single Market and the Monetary Union lead to divergence, polarization, crises and euroscepticism”. I intended to show that there are legitimate reasons, also for progressively minded people, to be eurosceptic.
And I learned some things from the interesting talks at the conference.
In one talk from Atradius (a company providing trade credit insurance) they (2 speakers) said that research showed how regions in the UK suffering “import shocks” from China were more likely to vote Leave (in favor of the Brexit). That’s in line with the argument in my presentation that widening gaps caused by trade (both between and within countries) can partly explain the level of euroscepticism among certain groups. I found the article here on Vox: “Globalisation, and in particular the Chinese import shock, was a key driver of the vote for Brexit.”
I also learned about a positive side-effect of the Brexit. Even though it was explained by the speaker as a negative side-effect.
This was explained in another presentation by Paul Hilbers, director of Financial Stability at De Nederlandsche Bank (DNB) and professor at the Nyenrode Business Universiteit. He commented on the Brexit and reflected on the possible outcome of the current negotiations. As an economist from these circles (previously working for the IMF, now the DNB) he was, not surprisingly, very pro-market (Italy needs “structural reforms” and needs to “modernize their economy”, etcetera. Well, we know what that means) and anti-Brexit.
So the negative side-effect of the Brexit according to him (which is, I believe, a positive side-effect) is that with the UK leaving the pro-market camp within the EU will be weaker. How’s that? According to Hilbers, the Netherlands, Scandinavian countries and the UK often agree with each other inside EU politics; they’re all very pro-market. In contrast, middle-Europe (like France) and other countries are more in favor of government interventions and less in favor of laissez-faire. So with the UK leaving the EU, the pro-market camp inside the EU will be weaker, to the regret of Hilbers.
If that’s true, that’s good news I believe, not bad news.
What’s more: I believed Central Banks are supposed to be politically neutral and only focus on monetary issues like inflation-targeting (which of course, is not politically neutral, but that’s the story we’re told). It was interesting to hear a high Central Bank official openly express his pro-market views. But it’s not too surprising as, especially among Dutch policy makers, pro-market (and pro-austerity) views are considered to be neutral, across the political spectrum. Unfortunately.