RUTHFULLY YOURS

Michael Kuttner is a Jewish New Zealander who for many years was actively involved with various communal organisations connected to Judaism and Israel. He now lives in Israel and is J-Wire’s correspondent in the region.http://www.jwire.com.au/state-of-the-union/#more-64484

By the time you read this, the results of the British referendum will be known…writes Michael Kuttner.Whether the UK remains or exits the European Union the repercussions of its decision will be felt by Israel and Jews in Europe alike. My observations are based on many discussions held with British Jews and observing past, current and potential actions emanating from the continent of Europe.

The EU was originally conceived as a free trade union known as the Common Market. Its original intentions were laudable and designed to benefit all members and create a strong and peaceful cohesive trading bloc on a continent which in past generations had been torn apart by nationalistic tendencies. The United Kingdom did not join at first because the British were suspicious of getting too tangled up with European problems. However it soon became apparent that in order to safeguard the UK’s trade relationships and guarantee future beneficial trading deals joining this venture would be advisable. Thus in 1973 it joined and this action was confirmed in 1975 by a referendum. I still remember the chaos this caused in New Zealand because at one stroke the country’s preferential trade agreements with the UK were ditched and instead of Commonwealth solidarity the long and slippery slope towards a continent dominated by Germany commenced.

It is safe to say that the British public at that time generally were not overly enthusiastic about abandoning a traditional wariness of Europe and embracing a love affair with a continent which had in the past caused so much death and misery. However the prospect of enhanced trading partners and a better economic prospect replaced any uneasy feelings as to where it might all lead. Inevitably the Common Market morphed into something much bigger and its advocates made plans for what they envisaged to be a union with enormous centralised powers which would inevitably supersede national parliaments and dictate policies.

The introduction of a common currency presented the UK with a challenge and in a move which in hindsight was brilliantly perceptive the British Government decided against adopting the Euro and instead to retain Sterling as its currency.

Over time, slowly but inexorably, the Common Market mutated into the monstrous union it is today with unelected officials based in palatial buildings in Brussels dictating policies to member States. National Parliaments now find themselves unable to enact legislation which can be challenged by an EU Court and deemed incompatible with EU laws.

Today we have the spectacle of a widely disparate union ranging from the economic powerhouse of Germany to the economic basket cases of Greece and Spain sinking deep into a gigantic sinkhole of debt where its banks are owed billions and where there is not the slightest prospect of any of this debt ever being repaid. Undeniably one of the gravest threats to the EU’s long term survival was the insane removal of national border controls which was touted at the time as the end of nationalistic tendencies and the beginning of an era of universal love, tolerance and mutual cohesiveness. Those who warned of the perils associated with a free flow of criminals were vilified as fascists in much the same way that today’s opponents are called Islamaphobes. Not many foresaw the mortal dangers posed by terrorists having unrestricted access across the continent but now that this has hit the fan it is all too obvious, except to those who continue to deny reality.

How does all this impact on Israel and Jews?

We’ve been hearing a great deal about how opening Cuba will bring in Americans with their dollars and democratic ways. Well, not all Americans are welcomed by the Castro regime, as The Hill reports:

“At a time when the Obama Administration is rolling out the red carpet for Havana, the Cuban government refuses to be open and transparent with the peoples’ Representatives,” McCaul said in a statement on Friday.

“Sadly, it appears to be easier for Cubans to come to the United States than for Members of the House Homeland Security Committee to get to Cuba.”

Other lawmakers who were planning to visit Cuba include Reps. John Katko (R-N.Y.), Martha McSally (R-Ariz.), Richard Hudson (R-N.C.) and Henry Cuellar (D-Texas).

“The Administration is eager to have as many people as possible visit Cuba — except for those who are attempting to examine Cuban security infrastructure,” said Katko, chairman of the transportation security subcommittee.

“We still don’t know if Cuba has the adequate body scanners and explosive detection systems in place, whether it has the technology to screen for fraudulent passports or ID, whether or how aviation workers are screened, and if Federal Air Marshals will be allowed to fly missions to Cuba on commercial flights.”

When Lord Cornwallis surrendered to George Washington following the decisive American victory at Yorktown, the British military band retreating from the scene played an old drinking song The World Turned Upside Down. That may be a myth; the story was originally told by someone who hadn’t been at Yorktown. But it’s a myth that has lasted right down to the present (being referenced most recently in the Broadway hit musical Hamilton) because it captures the widespread and serious consequences of Cornwallis’s defeat.

Well, it’s a bigger world today, but Brexit looks to be turning pretty much all of it upside down. Just consider some of the leading players and institutions hit by it:

David Cameron: He had been walking a tightrope as the Europhile leader of a Eurosceptic party who hoped to finesse the issue of Europe indefinitely. In order to fend off UKIP and a Tory rebellion, he promised a referendum, hoping that his coalition partners, the Liberal Democrats, would nix it in the next coalition. But he won an outright majority and had to keep the promise. Then, wanting the referendum out of the way, he held quick talks with the EU, asked for little, got less, and returned to London boasting of trivial concessions. Finally, he fought a tough campaign against half of his own party and lost it. It turned out that his Eurosceptic Tory opponents had a better sense of the Tory faithful (and U.K. voters generally) than he did. He fell off the tightrope with dignity, however, and will resign to allow a Eurosceptic to be elected Tory leader and prime minister who can conduct Brexit negotiations more plausibly than a Europhile.

Angela Merkel, Jean-Claude Juncker, and the European Commission: If the European leaders negotiating with Prime Minister David Cameron over his package of concessions had been only slightly more generous, he might well have won yesterday’s referendum. A reformed Europe or a Europe à la carte was acceptable to many Brits who disliked an over-centralized and undemocratic one. Such a looser Europe would also have solved or ameliorated their other problems such as the euro. But the Eurocrats calculated either that Mr. Cameron was bluffing or that the Brits would always halt at the brink of withdrawal. As a result Britain will soon be out of the EU, other euro-problems are growing worse, and the “contagion” of Euroscepticism has been given a boost throughout Europe.

Chancellor George Osborne, (Canadian) Governor of the Bank of England Mark Carney, the Lords of H.M. Treasury, the IMF, OECD, etc., etc.: Both men and institutions (and Christine Lagarde for the IMF) made extravagant predictions of the economic and financial disasters that would descend upon Britain following Brexit. One Tory commentator described Mr. Osborne as the first Chancellor to try to spook the markets. The financial markets were duly spooked – as always happens in response to a major uncertainty – but they seem now to be stabilizing. The reputations of institutions and their leaders are now on the line, however. If their long-term predictions (which were widely derided as simply made up) prove false, exaggerated, or misleading, they may need to follow Mr. Cameron into other professions.

President Barack Obama and the U.S. State Department: Pressure on the U.K. to participate in an integrated European political entity has been a sustained theme in U.S. foreign policy since the early 1950s. Much of the time the Brits were reluctant or even hostile; Washington kept pressing. This time Mr. Obama made it personal. But the implied deal – you surrender your independence in order to advance our interests within the EU – is obviously a tad one-sided. And the referendum result is now an insuperable obstacle to Washington taking it up in future. Mr. Obama will simply have to learn several European telephone numbers – if only to ring more than one of the EU’s five presidents.

The fact of the matter is that Britain contributes around 21% of EU net receipts. In other words, membership has been a drain, never a gain. And in the unlikely event that an independent Scotland were to rejoin Europe, that would be one more burden off the Exchequer’s books.
In the aftermath of the Brexit referendum the usual suspects were out in full force. The United Kingdom would be the big financial loser. Its economy would shrink. And yes, the financial markets were in turmoil. The big financial houses had bet the wrong way. But did you observe some figures at the close of trading in major European stock markets on Friday?

The London FTSE 100 index was down 3.15%. But across the channel, the German DAX index was down 6.82% and the Paris CAC index was down 8.04%. The EURO STOXX 50 index was down 8.62% and the EURONEXT 100 index was down 6.72%. In other words, the percentage drop of leading stock indexes in the rest of the European Union was, on average, more than double that of the London index. In passing, we might observe that the Swiss stock index dropped by 3.4%. It so happens that Switzerland, shortly before the Brexit vote, formally withdrew its application to join the European Union.

Amidst all the hyperventilation from financial pundits, what might these figures be suggesting? Contrary to the propagated bunk that Britain would suffer economically from withdrawal from the European Union is the simple fact that Britain is a net contributor to the European Union. According to published figures, it appears Britain contributes around 21% of European Union net receipts. In other words, membership of the European Union is a net drain on British finances. Could the markets be telling us that it is the Eurozone, not the United Kingdom, which is facing a financial crisis?

One should not have to spell out the bleeding obvious: where was the benefit in being shackled to a sclerotic, economically comatose bloc which appears unable to conclude a trade agreement with the United States? By contrast, Britain will be free to conclude trade agreements with the US and East Asian countries, as well as renewing relations, both political and economic, with countries such as Australia and New Zealand.

As for the push by the Scottish National Party Government, led by Nicola Sturgeon, for a second independence referendum, a reality check is in order. First, Scotland’s solvency is dependent on continued subsidies from the British government in London. In the aftermath of the British withdrawal, it is hard to imagine the European Union welcoming a new member which, from day one, would be net dependent on subsidies from Brussels. Under the rules of the European Union, Scotland would have to make a fresh application for membership. Second, any application for membership has to meet with the unanimous consent of all existing member states. Would Spain agree to an application from a breakaway state, thereby ceding legitimacy to the Basque claim for secession from Spain? I suspect that moves for any Scottish breakaway from the United Kingdom will suffer a similar fate as those moves, some years back, by French-speaking nationalists in Quebec.

It would have been understandable if Boris Johnson had allowed himself a celebratory fist-pump when he appeared before the press in London on Friday morning. After all, the former London mayor was the de facto leader of the Out campaign, which against all odds had just won the U.K.’s referendum on the European Union.

Yet he looked shocked and ashen-faced. Not because he was now regretting his decision to campaign for Brexit, but because a short time earlier David Cameron had announced that by October he would step down as Britain’s prime minister. Plenty of people thought his resignation was inevitable, given how vigorously Mr. Cameron had fought to stay in the EU. But not Boris. He was one of 84 Conservative members of Parliament who had written a letter to Mr. Cameron on the eve of the referendum saying he had a “mandate and duty” to stay in post whatever the result.

But Mr. Cameron didn’t relish the prospect of being in charge during what will be a dangerous passage in the history of the British Isles. There is a mighty prize to be had—a new settlement with the EU that preserves access to the world’s largest single market and restores sovereignty to the British Parliament—but the risks are formidable, including the breakup of the U.K. England and Wales voted to Leave, but Northern Ireland and Scotland voted to Remain, and separatists in both are already using the skewed result as a pretext to agitate for independence. It will take Disraeli-like political guile, as well as Stakhanovite hard work, to guide the U.K. safely through this period.

For the 52-year-old Mr. Johnson, the crown he has been reaching for all his life is finally within his grasp, but the contest he will have to win has come sooner than he would have liked.

One happy result of Britain’s historic vote to leave the European Union is some belated signs of seriousness from grown-ups in the Labour Party. Witness this weekend’s rebellion against the party’s far-left leader, Jeremy Corbyn, in a move for new leadership in a turbulent time.

The putsch against Mr. Corbyn started on Friday when two Labour members of parliament formally sought a no-confidence vote against their leader. It gained momentum Saturday evening when Mr. Corbyn fired Hilary Benn, the party’s spokesman for foreign affairs, for disloyalty. Mr. Benn’s sacking led 11 (as of this writing) of Labour’s leading members of parliament on Sunday to resign their posts in the shadow cabinet in hopes of forcing a leadership election—an astonishing scale of rebellion in British politics.

Their complaint is that Mr. Corbyn didn’t campaign hard enough for Remain ahead of last week’s referendum. Remain was the party’s official position, held by many of its leading politicians, its financial backers among trade unions, and a large majority of the party’s young, educated and cosmopolitan supporters.

Instead, Mr. Corbyn followed his own pro-Brexit instincts, widely shared on the radical left, that the European Union is a free-trade, pro-deregulation vehicle for imposing “neoliberalism,” whatever that is, on Europe’s working class. He stumped for EU membership half-heartedly at best, and he refused to appear alongside Conservative Prime Minister David Cameron in the campaign’s last days to make a united case.