Mike: EU Debate: Brexit or Not?


[This article is simply Mike Ogilvie’s personal opinion, and is not the opinion of anyone else in OBC The Accountants or Eastbourne Chamber of Commerce, and DOES NOT CONSTITUTE financial or investment advice.]

BREXIT or not ? – That is the question!

Minds are concentrated on the coming referendum on 23rd June and whether or not Britain will vote to stay in or out.  Whatever happens we are in for one hell of a tough ride – in my opinion! 

I think I am like many British – we are generally happy to be part of the European community, but not at any cost – and that is the stumbling block.

The “little Englander” discussions about migrants and benefits that have received so much publicity in the popular press are, in my opinion, all relatively irrelevant in the wider scheme of things that we should be worrying about, although in the south east we are likely to be more affected by those crossing through the tunnel.

The decision will probably be a political one, but in my opinion it should be a financial one.

Apart from Germany, UK are the biggest net contributor to the EU block and my concern is that as the block gets bigger and bigger our contribution will continue to get larger and larger as we contribute to the cost of growing a European super state, with which most in UK disagree. In 2015, UK’s net contribution to EU was £8.5bn and it is forecast to grow to as much as £11bn.

I think we need to look at what is happening in the world and put a possible BREXIT into perspective.

Fundamentally, the world economy is in a mess, with China’s economic growth decelerating, America trying to emerge from recession but slowly, Japan failing to emerge from depression, Russia and Brazil in a terrible state partly because of the collapse of oil prices, and Europe financially desperate having to resort to printing “funny money” to avoid Europe suffering from the same disease as Japan has been suffering in the past
twenty years – Austerity and Depression.

The impact of all this funny money printing called “quantitative easing” means that we are seeing a more clearly defined society split into two – the “haves” and “have nots”, which will cause its own massive problems in our future. I just can’t see this being allowed to continue for much longer.


Whatever the size of the crash, there will be massive financial repercussions for us, and the question is – will UK be better off outside EU or inside EU?

I believe even worse – that the EU, the way it is set up, will implode sooner rather than later, and will disintegrate, perhaps into smaller units.

Look at EU – it has few leaders that the “general populace” appear to respect.  Angela Merkel looks like losing the popular support in Germany, and the French have little or no respect for their man Francois Hollande. The hard line right wingers are gaining support all over Europe, and it would be nice to think that we have a leader who could
exercise influence in Europe instead – unfortunately not!

Greece has been a fudge – everyone knows it cannot afford to repay its debt, but if it was seen to be forgiven its debt, Italy, Portugal, Spain and others will be quickly in the queue for similar support.

This is before the state of the new Eastern block member economies are considered with their massively ageing populations with little or no provision for pensions.

So we have impending CHAOS, and it is going to cost everyone a lot.

What does this mean financially to us?

Probably another credit crunch, possibly a collapse of one or more European banks, followed by a large dose of “protectionism”

So by staying in Europe – how would that help us? 

We will have unelected European bureaucrats imposing decisions about our trading and banking systems, as well as our legislative programme.

We are the world’s fifth biggest economy, and Europe sells more to us than we sell to them – the idea that we will be cast adrift by Europe or USA when they are discussing trade deals is ludicrous.

Whatever happens, UK is going to suffer pain.  So the question is - will we suffer less pain if we stay in Europe?

Personally – I do not believe so.

Everyone fears the unknown, but some of these estimates from so called experts about the cost to the UK of leaving are alarmist. As Mervyn King, the recently departed Bank of England Governor, reminded us – some of these experts quoted as telling us to stay in Europe advised us never to join Europe in the first place – we should not be worrying about what they say.

“The idea that somehow it’s either going to be bliss if we leave or a complete disaster...is a gross exaggeration,” Mervyn King was quoted in a recent interview with Moneyweek magazine

Similarly the recent OECD’s report that leaving EU would result in 3% lower growth than if we stayed in is ridiculous because the figures assume that the UK would not be able to secure any kind of trade deal by 2020, which has been slammed as “very implausible”.

I think we should ignore all the differing claims and assertions being made from both camps, and simply ask ourselves if we have confidence that the existing European leaders can trim down this massively “bloated, corrupt and hungry beast”, and reduce the unnecessary cost of excessive spending and waste to all EU member states.

Well I, for one, certainly do not have that confidence!

These 28 European leaders are all understandably going to be looking after their own self interests and, apart from the influence exerted by Germany where they need the financial assistance, they are not going to listen to anyone else and vote to do much different to change the current direction where Europe is headed.

In 2014, EU countries accounted for 53% of our imports and 45% of our exports. The world will continue to want to trade with UK.

London will continue to be the leading financial centre in Europe because of their expertise, not because we are in Europe.

I believe that there will not be massive changes either way, as Mervyn King has reiterated, but at least we will be in charge of our own destiny and be able to cut our cloth according to our means, without the legislative burdens and bureaucracy being imposed on us by Europe.

As I have said at the beginning of this article, I feel Europe is unlikely to succeed in its present form and is more than likely to break up into “smaller federations” possibly with different versions of the Euro to reflect the massive imbalance between Germany and the rest. The current structure cannot possibly succeed without complete fiscal harmonisation and I can't see the weak countries being prepared to accept that cost. It has to implode, sooner rather than later.

Whatever happens, in the short term it will cost all of us in Europe significant sums of money, but I believe in the long term our costs will reduce, and then we should try to create a trading community without having to be a federal community, as was always originally intended.

In the meantime, I believe you should prepare for another massive crash and credit crunch, and plan your affairs accordingly, and then hope and pray that this does not happen. At least you will have thought about it and taken precautions, unlike so many who are burying their heads in the sand and doing nothing other than simply keeping their fingers crossed.

THIS IS NOT INVESTMENT ADVICE but I am looking to reduce my risk of exposure to banks, and I am asking for advice to have my pension fund invested in areas other than banks and traditional investments likely to be significantly affected by a crash.

I believe in UK people and businesses and our ability to look after ourselves, but I do not believe we are big enough to be such a significant financier to the increasingly hungry EU as well.

I believe that unless the EU changes its structure to become more of a trading community, and that is unlikely, I cannot justify voting to remain in EU.

Mike Ogilvie


Read Christina's opposing article here. 


These articles are published here to invite a healthy debate from Chamber Members before the Referendum on June 23rd 2016.  This is such an important issue, please get involved and post your comments.

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