Who's Going To Pick Up The UK Tab?

Tyler Durden's picture

Submitted by Jeff Thomas via InternationalMan.com,

Back in the late ‘90s, I began saying, “I’ll give the EU twenty years.” At that point, the EU seemed to be going great guns, but I believed that it was an ill-conceived concept that wouldn’t stand the test of time.

There were several reasons for my view.

First, I didn’t believe that those countries that were entitlement-focused, such as the Greeks, would ever be as fiscally responsible as, say, the Germans, so the Germans (and other countries where there was a responsible work ethic) would end up subsidizing the Greeks (and to a lesser extent, Spain, Portugal, etc.)

 

Second, culturally, there was so great a divide between, say, the Austrians and the French, that they could never substantially agree on the union’s laws and directions.

 

Third, the countries of Europe have been at war with each other countless times over the centuries. They might agree to trade cooperation, but they would never agree to having a former enemy dictate policy to them. And it was baked in the cake that some members would have a louder voice than others, and so, would seek to dominate.

In recent years, we’ve watched the EU stumble repeatedly. Invariably, Brussels has arrogantly assumed that it can dictate to all EU members, and offers few apologies for doing so. The individual countries’ leaders then do their best to explain to their own voters why Brussels should be able to behave like an oligarchy, and the voters understandably have become increasingly angry.

Eventually, the wheels were sure to come off the trolley and, with the UK Brexit vote, we’ve witnessed the first major blow to the survival of the EU.

Whilst the “leave” vote has been acknowledged, we should expect to see politicians placing stones in the road to Brexit, in addition to creating repeated delays. It would also not be surprising to see demands for a recall or even a nullification by the UK Supreme Court.

In the midst of this, we’re already seeing the predictable backpedaling by those politicians and pundits who, up until the vote, were warning that a Brexit would spell unmitigated disaster for Britain. Most of them are now speaking instead of “working on crafting a successful settlement.” (After all, when the sky has failed to fall, they won’t want the public to remember that they ranted like veritable Chicken Littles prior to the vote.)

But, in one sense, the Brexit will unquestionably spell disaster—not for Britain, as was claimed, but for Brussels.

Britain was never fully married to the EU; she was more a “woman on the side,” but in this case, it was the woman that was picking up the tab for the affair. In 2015 alone, the UK paid £13 billion into the EU budget, whilst EU spending on the UK was £4.5 billion. The UK's “net contribution” was therefore about £8.5 billion - a loss of 65% of its investment. Not money well-spent, considering the trade restrictions heaped on the UK by Brussels.

The £8.5 billion loss, of course, went to support the net-receiver members of the EU, such as the ever-unapologetic Greece.

Most of the above will be common knowledge, but here’s a few pertinent questions that no one seems to be asking—at least not publicly:

At what point does the UK cease to pay into the EU?

Well, Brussels and those UK politicians that support the EU oligarchy concept will wish to delay that eventuality as long as they can. Consequently, we shall witness a struggle within British politics as politicians attempt to appear as though they’re honouring the voters’ edict, whilst finding repeated excuses to delay the Brexit. On the surface, it might not seem that they’d receive significant pushback, but, for those Britons who voted “leave” and, indeed for many who voted “remain,” the idea of Brussels demanding continued annual payment, whilst kicking the UK for choosing to leave, will result in the great majority of Britons becoming more than a little cross. (If we’re going to split the sheets, let’s get on with it. Any discussion of alimony should be a non-starter to say the least.)

Who’s going to pick up the tab when that flow of revenue ends?

Well, now, that really is a puzzler. A large part of the reason why the UK had to be such a significant net contributor was that most EU members couldn’t scrape up their “fair share.” Even most of the larger members, such as France, are broke. They can no longer pay their domestic bills, let alone take on more major EU funding.

When all else fails, it typically falls to Germany (the country that was really responsible for the EU’s creation in the first place) to pick up the tab. And it wouldn’t be surprising if Mrs. Merkel were to attempt to sell the idea to the German people that her “Fourth Reich” must come up with the cash, or her dream will fall apart.

Interestingly, Mrs. Merkel enjoyed an increase in popularity after the Brexit vote, after having lost a great deal of support as a result of the refugee crisis. However, once the German people learn that they may be hit with yet another EU bill, her ratings may head south again. She’s up for a fourth term in 2017 and it’s uncertain whether the German people will know by that date how the EU hopes to share out the former UK portion of the EU tab.

Will that impact the continuation of the EU?

The bill will most assuredly go to the remaining net-payer members and, for whoever gets handed the tab, the voters in these countries will most assuredly be asking themselves whether they’re facing diminishing returns. Certainly, Germany, France and the UK are presently taking the greatest shellacking. Italy, the Netherlands, Sweden, Austria, Denmark and Finland are also net contributors. But all the other 19 members are net receivers.

Certainly, the politicians in these countries share in the EU power and will want to stay in, but their voters who, increasingly, are feeling the squeeze of the unacknowledged Greater Depression may assert themselves at the polling stations, demonstrating that they’re not willing to throw good money after bad.

In the end, the conceptual problems with the EU’s existence may be outweighed by the economic ones. But of one thing we can be fairly certain: should the EU bite the dust in the coming years, the demand for its demise will come from the bottom up, not the top down.

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RockySpears's picture

Still no:  Article 50

 

We may yet get shafted here.  But there will undoubtedly be consequences for that, undoubtedly,

 

RS

Bumpo's picture

Just tack it onto their Obamacare Premium! Or just don't sign up in the first place. The EU, just another failed Globalist scam.

Infocat's picture

Like all globalist scams, it will die! http://www.truthjustice.net

Temple of Truth's picture

Awkward stuff - David Cameron doesn't have a clue at the Brexit debate:

https://www.youtube.com/watch?v=BPAAarofEy4

Déjà view's picture

Draghi and Gutenberg fron here to infinitey...

max2205's picture

I am sure  IMF wants to help..... LOL 

Shemp 4 Victory's picture

 

Who’s going to pick up the tab when that flow of revenue ends?

The tab will be picked up by those who have been promised the most and can afford it least, economic hit man style via financial ass rape and asset stripping, like Greece, Serbia, Moldova, etcetera.

Hint: you can make a list of the targeted victims from the contents of the leaked Soros docs.

new game's picture

print euros, hello, hey author, print debt and heap it on the non-consenters, as ussual, by the ptb.

middle class serfdom will become a bloody blood bath eventually. history repeats, but add in some head chopping for excitement. keep em coming(the head choppers)...

Infocat's picture

THis is just the beginning, when the banks die the shit will hit the fan! http://www.truthjustice.net

myne's picture

Gotta say, it's starting to look like Atlas Shrugged might just work on the macro level.

johnrxx99's picture

The British like to play the game, even if no one else does. Brussels introduces a new regulation, say horse owners have to suck a stallions cock 3 times a week: the British will suck it 4 times, just in case, the other 36 members will try and interpret the regulation as meaning husbands get the goods.

Sandmann's picture

It is because the English Courts MAKE law whereas Continental Courts are strict interpretationists

quadraspleen's picture

Strictly speaking, Her Majesty's Government "make" the laws and the courts "enforce" them. The police in the UK are the "interpretists" over here

Vageling's picture

Yup that's how it should work in a 'democracy'. Trias politica. And they should be independant, meaning not intervering which each other. That as we know is not the case as politicians put pressure on police and judges for their political correct bullshit reasons.

Count Ayjin de le Verage's picture

... the difference b/n Common Law jurisdiction and Civil Law jurisdiction.  If one can prove there is no law for a certain matter, through argument and interpretation, etc, of what statutes are written... then there is no no law = civil law.

Common law is understood by all and need not be written.  Your neighbour will remind you!

Anglo Hondo's picture

If the UK government attempts to nullify the Brexit referendum, then surely all subsequent general elections can be nullified just as easily.  The voice of the people must be heard, or the consequences will be violent for all political parties.

I just hope it doesn't come to that.

 

Sandmann's picture

General Elections are purely advisory as the country is run by The Privy Council whose members include Front Benchers of ALL parties plus Judges and Generals. The Commons chooses the Government and the Queen appoints the Prime Minister

hooligan2009's picture

the queen INVITES the leader of the party with the most votes to form a government and act as prime minister..

new game's picture

there is that hope word - lol...

some cog dis goin on?

CHX's picture

Right now, IMHO, it is not Germany or any individual country financing the EU, it is the ECB by monetizing it's debt. Without the ECB doing what they are - and the same goes for the BoJ and the FED - the wheels would have long ago come off the waggon. This will end in terrible tears, but till then the party is still on.

Sandmann's picture

We still have the famed TARGET2 balances at BUBA to consider

Die Deutsche Bundesbank (BUBA) berichtete heute für den Monat April 2016 von einem Anstieg der Target2 Forderungen von +16,584 Mrd. Euro zum Vormonat und von +93,581 Mrd. Euro zum Vorjahresmonat, auf 625,774 Mrd. Euro. Dies ist der höchste Stand seit 37 Monaten!

Unholy Dalliance's picture

Yet another load of horseshit from a know-nothing ignorant American who thinks he knows about Europe! Fuck off, you idiot! It isn't the countries which cannot get on with each other! They can do that splendidly! The so-called EU was the brain child of the US govt. using the agencies of the CIA to 'tame' (control) Europe after 1945. This is well documented. Look it up. They used (i.e. brided) crooked politians to push the project in their parties and these people were/are basicallt traitos. They have no interest in the 'sanctity of sovereignity' in their countries: Edward Heath, for instance, was the architect for Britain joining the 'Common Market' in 1972. His Attorney General during his Tory Govt. (1970-1974) gave him written advice that joining was an act of treason - advice which Heath ignores. He ignored it because he was brided to ignore it! The key to it all is VAT which is what funded all of it. It is a most 'un-British' tax as it is highly regressive and therefore monstrously unfair! At first it was 10% reduced by a Labour govt. in the 1970s to 8%, then hiked (twice) by Thatcher to 17.5% and now, thanks to Clegg and his defunct Lib-Dems, 20%! That is where the money to fund the EU comes from - VAT! So, what the EU basically is can be described as a massive fifth column of traitors marching all the people of Europe to a despotic 'socialist hell' if the people of Europe let them. The individual nations get along fine with each other and they will not go to war again - EVER. Russia, and more precisely trade with Russia will prevent that which is why Brussels is so anti-Russia! If the individual nations (esp. Germany) turn to face East, the EU is done for! If European govts. withheld VAT receipts, the EU (in Brussels) would implode and no one would notice because everyone else would be far better off!

Jeez - save me from pig-ignorant Americans!

CarpetShag's picture

 

@Unholy Dalliance
Clocked in just to upvote your comment. I am also sick and tired of armchair anal ysts sitting multiple time zones away, polishing leather office chairs with ther asses and pontificating on issues of which they are totally ignorant.

Sandmann's picture

For factual accuracy labour had TWO rates of VAT under Denis Healey who held budgets every 3 months. He had a rate of 8% on "essentials" but 25% on "luxuries"  so an ironing board had 8% VAT but an iron had 25% as did electronic components. It became cheaper to buy a radio than to build one so offshoring became the way to have lower VAT on consumer electronics.

In July 1974, Labour Chancellor Denis Healey reduced the standard rate of VAT from 10% to 8% but introduced a new higher rate of 12.5% for petrol and some luxury goods.[5][8][10] In November 1974, Healey doubled the higher rate of VAT to 25%.[8] Healey reduced the higher rate back to 12.5% in April 1976

http://en.wikipedia.org/wiki/Value-added_tax_(United_Kingdom)VAT is currently levied on lawyer bills at 20% in UK

 

Cycle's picture

Please do not insult the pigs. In the wild, they can feed themselves.

BarkingCat's picture

Oh look a uppity Brit. Good job on the vote but don't you have a little boy to molest?

Nations of Europe might get along much better if you assholes did not stick your nose into everybody's business. You were doing it long before the US.

Now enjoy diversity.

Kokulakai's picture

Bush did it ?

Jeez, save me from pig-ignorant Europeans not willing to take responsibility for the actions of their politicians.

HenryKissingerChurchill's picture

I would like to add Germany never got any peace treaty nor borders back. Is STILL under allied military occupation and cannot move or say much while being economically gang raped by the allies.

Merkel is literally a sockpuppet.

Ipse Dixit's picture

Quote -

Socialist hell

I disagree on that description. If anything the European Union was and remains thoroughly capitalist and/or quasi-corporatist and, at best, was only ever social democratic in character, a trend that has more or less ended with the ascendancy of neoliberalism. Actually, I am of the opinion that it is precisely the loss of this social democratic aspect of the EU that is contributing to its unpopularity in some countries, especially among the young and university educated.

are we there yet's picture

On the bright side the golden EU has given Its members an endless supply of third world rejects they can smuggle up with for generations.

Dwardo's picture
Thank you Americans for sticking your nose yet again in the Middle East for Corporate/Political reasons and supplying Europeans with third world rejects. Thank you European politicians for spreading your legs and receiving the same third world rejects that should be on a boat on their way to Washington DC.
Panic Mode's picture

Juncker, who is going to fund your exotic brandy for breakfast?

Sandmann's picture

where there was a responsible work ethic

 

You really mean to say

 

where there was a responsible TAX ethic

51.9Percenter's picture

The UK will end up paying for it. Our politicians long ago agreed to financing of EU projects and that obligation doesn't change once we leave. 

Dwardo's picture

Where is the 13B and 4.5B data coming from? Im surprised how everyone in ZH believes the UK has made the right choice about leaving the EU.

Does anyone here live in London? Who sustains the local economy? When I go to the restaurant down the street the waiter is german and the cook is spanish; most of East Londoners paying rent are Europeans/Common Wealth. Who is going to pay the astronomical rents? Who is going to go to the thousands of restaurants in London. Lets not forget that plenty of British have mortages and businesses that depend on Europeans paying rent and consuming. Good luck finding a tenant to pay down that 700.000GBP mortgage for a two bedroom shithole. 

No one in London voted for Brexit. No one with a bit of common sense and knowledge of how a simple economy works voted for Brexit. What all of you assume is that the same amount of consumption and tax collection is going to be there when the Europeans leave.

Who is goign to pick up the UK tab? The same ignorant idiots that googled "what is the EU?" after they voted Brexit.

foxenburg's picture

London voted 40/60 to remain. A far cry from "No one in London voted Brexit". London is a centre of post WW2 immigration (ie black and Asian) and they don't see themselves in the same way that indiginous Brits do. You are typical of that minority who wished to remain in the EU - thinking that everyone else is an ignorant idiot. You, of course, are the holdrer of the truth. You lost the vote. Grow up get over it.

hooligan2009's picture

the London didn't vote logic is the smae logic that saw Obama elected (FSA benefit increases) and the logic behind a referndum - find a few hundred thousand idiots that want to rant about something stupid like banning Trump from coming to the UK and STOP ALL OTHER GOVERNMENt work while all of government (not) has to consider the stupid question - a legal question (not a political one).

Dwardo's picture

48.1%/51.9% to remain. A far cry from "being part of that minority who wishedto remin in the EU".

I am far from beingthe holder of the truth. I just told you what I see everyday in London, and how the city benefits economically from Europeans living here paying taxes, rent, consuming, and adding to the gross domestic product. 

Those are the results of the election and that is the path that the UK has chosen to move forward. Many companies that I am familiar with, based in the UK, have stopped CapEx in new and existing factories and are looking for car-assembly line aquisitions in mainland EU (same for companies in the food industry). 

The decision will have economic consequences for the Country like it or not. And people dont give enough arguments other than "we send 8.5B to crooked politicians in Brussels". How are those 8.5B of taxes collected? Are Europeans and businesses located in the UK not making a big chunk of that 8.5B in tax collection?

Anyway, lets see if the British government gives the people the job and affordable house they promissed when the dirty Europeans leave.

carambar's picture

Setting aside the economic impact of the  inevitable uncertainties due to the exit process  most EU politicians are extasic to get rid of the UK. Going forward no more never ending discussion to allow special accomodation, no more delays in policies implementations. The integration within the EU can really start now that the Brits have given up their right to annoy and fucked up the EU from the inside. As you said, more British have forgotten that their wealth came because they were attached to the EU.  Do you think Thatcher would have succeded in welcoming the Japanese auto plant in the UK (to avoid import taxes) if it wasnt part of the EU?    

carambar's picture

Setting aside the economic impact of the  inevitable uncertainties due to the exit process  most EU politicians are extasic to get rid of the UK. Going forward no more never ending discussion to allow special accomodation, no more delays in policies implementations. The integration within the EU can really start now that the Brits have given up their right to annoy and fucked up the EU from the inside. As you said, more British have forgotten that their wealth came because they were attached to the EU.  Do you think Thatcher would have succeded in welcoming the Japanese auto plant in the UK (to avoid import taxes) if it wasnt part of the EU?    

shovelhead's picture

Why are they going to leave?

 

Sandmann's picture

Do check which boroughs voted which way

hooligan2009's picture

hmm..seems like you are a politically correct dumbass who has no concept of either government, budgets or trade - in short an PLONKER.

did it ever cross your mind that house prices are now ten times the average wage because of socialist policies and the replacment of high income capable brits LEAVING compared with the vast majority of go nowhere, do nothing two bob jack shit immigrants?

take a walk down to hackney, tottenham southall and istead of going to your pink pussy parties, walk in the ghettoes and the ghettoes that will be ade in the next ten years.

for you, the point that britain is paying a net 8.5 billion a year for a club it doesn't want to belong to is nothing - well for those kids that don't get the chance for a better education, prompt health treatment and safety playing in the streets - that is a lot of money.

europe is bankrupt and socialist nancy boys like you are the largest part of the problem - fo take a nice big cup of "STFU".

Dwardo's picture

I am far from a Socialist. Infact the complete opposite.

You are one of those "hooligans" that thinks that by leaving the EU, the British government is going to instead spend those 8.5B/year in better education and health treatment for kids in ghettoes; get back to me in 10 years when that money has gone to where your politicians have promised. Let me remind you of there were slums and guettos in London previous to the creation of the EU, and you had British politicians enjoying their tea & scones.  

Who are the vast majority of European "go nowhere, do nothing two bob jack shit immigrants" that you are refering to? The Germans, Italians and Portuguese that work alongside the smartest Brits in the Banks/Consultancy firms? The French and Germans working in advertisement? The Spanish and Italians that work as bartenders and cooks because no Brit wants that job? or the Polish immigrant that fixes your kitchen?. All of them are paying taxes, rent and spending on consumption.

Please enlighten me with your knowledge of budget, trade and government policies, rather than using "pink pussy parties" and "nice big cup of STFU" in your sentences. You are one of the thousands of entitled socialist Brits that want free education, housing and healthcare and assume that every other European is here to steal from you. Would you like to see the thousands of retired British living in southern Spain and Frane being denied of healthcare and put on a plane back home because Europeans started to think like hooligans like you?

The UK is not what it was not because of Europeans working in the UK, but because of want-it-all do-nothing ignorants like you.

hooligan2009's picture

the immigrants i speak of are all Moslem or from the middle east - shit, you aren't an ANTI_SOCIALIST - you are an APOLOGIST - write your comments down on a piece of paper and send it to the editors of the Economist and that pinko rag - the FT

Dwardo's picture

And how is Brexit going to solve the problem of Muslim and Middle East migration to the UK?

The EU provides freedom of movement for European country members, which are not muslim. The Muslim migration that started in the 1960's and is still going on in the UK does it through Pakistan thanks to your wonderful CommonWealth agreement you have. Go to the boroughts of Redbridge, Waltham forest and Newham and ask all the Muslims you encounter how they and their parents made it to the UK (if you have the balls), 0% of them did it through a EU passport. Blame your British compatriots and politicians for that.  

HAHAHAHA this is wonderful. In two years you'll have no Europeans in London and still have all the Muslims you tried to get rid off by leaving the EU.

 

 

hooligan2009's picture

there are ZERO english people living in central london now,m which is what you seem to prefer.

moslems come from all of north africa, the middle east and pakistan/bangladesh.

try getting your hair cut in brick lane and asking for it to be cut IN ENGLISH.

seems to me you should go live next to the mosque in tooting with the new mullah of london

Sandmann's picture

and you had British politicians enjoying their tea & scones. 

 

Aren't they "your" British politicians ?

Sandmann's picture

All of them are paying taxes   ROFL

Sandmann's picture

The Germans, Italians and Portuguese that work alongside the smartest Brits in the Banks/Consultancy firms? 

 

didn't the banks cause this mess ?  Still I understand Eduardo why you don't want to work for Banca Monte dei Paschi di Siena S.p.A. when Deutsche Bank has a slightly longer shelf life