Thursday, 23 June 2016

EU Referendum: Stay or Exit, underlying problems will remain

Rain falls on Londoners this morning (Thursday 23 June) as we cast our votes in what is billed as the ‘most important ballot of a generation’.
We're being asked: ‘Should the United Kingdom remain a member of the European Union or leave the European Union?’
A vote today in favour of British exit from the European Union might adversely impact the UK economy in the short-term and bring down the government.
And a vote to remain – the status quo – might provide a short-term boost to share prices and the pound.

But whether ‘Brexit’ or ‘Remain’ triumphs, the bigger structural troubles for the UK, European and global economies will still be there on Friday morning – unemployment, a lack of investment, low or no economic growth, massive banking and corporate leverage and increasing delinquency, rising private householder debt, prohibitively expensive housing markets, creaking public services and austerity, and ever-widening income inequalities.

To some extent, the likely political fallout from the UK’s EU referendum distracts from weak economic growth and perverse asset markets, such as London real estate.
A ‘Remain’ win might rally markets and the pound.
But this rally won’t alter the status quo nor change the structural faults that undermine the UK and European political economy.
We’ll still be in debt and bubble territory.
We’ll still be mired in Austerityville.
EU, stay or go, there is no exit from these immense problems.
They will still remain with us.

© Paul Coleman, London, June 2016

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