In economic terms, Brexit was always going to be a short and medium-term failure. How could it not, the UK depends for nearly 40% of its export markets on Europe while for Europe, the UK accounts for about 5% of exports. For Europe losing the UK was a small problem for the UK losing Europe was a massive one!
This was a given, and I assumed that Britons would understand that aspect. If 40% of your exports are now going to foreign countries there will be problems -- that's essentially why the European Union was created, but for most of the British population there was always a sense that the European experiment was about a take-over of the country by the Europeans and other rif-raff.
Politics had a lot to do with the lack of preparedness. Acquaintances involved in the perishable vegetable trade in Europe simply cut off the UK, too much trouble, too much paperwork, and too much time where their goods were at risk of damage and rejection by the UK buyers. That's what happened to the UK supermarkets, reject tomatoes from Spain twice and there is no third time. This acquaintance stated that they don't even answer telephone calls from UK buyers anymore, it's a waste of time and energy -- and eventually money. The UK will eventually figure it out and grow these things domestically (BTW the recent Jeremy Clackson thing on farming is an indication that the UK now understands) and that its domestic farms need to be more productive to meet the country's food requirements...it is no longer sufficient that farm land in the UK be cultivated as if we were in the 1950s with ancient technology and little or no capital. The government faced with shortages on supermarket shelves is now addressing the changes required -- you see not all hope is lost!
The other reason for leaving: The UK takes its sovereignty seriously. The UK has generally been a united front for the past 1,000 years (I exaggerate for effect...) their strong legal precedents and legal framework, were challenged by unelected bureaucrats in Brussels. That was a massive hit to the UK sovereignty.
In political terms the UK government failed to understand Europe's requirements: The UK government did everything it could to not prepare the country for real borders with Europe, thinking it could strike deals with individual states and bypass Brussels. That was, again, a massive miscalculation. It speaks of hubris for the Conservative party that ran the government, and in particular, if blame should be attributed to individuals, to Boris Johnson and Jacob Reese-Mogg.
Boris is a philandering borderline-alcoholic liar who got fired from almost every job he has ever held. As for Jacob, he thinks himself a titan of thought equal to his father, but in reality, a well-spoken lazy demagog who was for 24 months in charge of the Brexit process, and successfully did nothing.
For Europe, there was a lot at stake, first "discourage any other country from thinking of leaving", secondly, the innate dislike continental European hold for the "Beefsteak" as the Brits are famously known in Europe. Third the Brits were transparent in their attempt to chisel out specific countries but to no avail, most of Europe is less xenophobic than the Brits and applauded the concept of free movement of labor, goods, services, and the equal application of laws. Forth for many years, successive UK conservative governments used Europe to excuse their domestic failures, culminating with the stupid pro-Brixit declaration that more than STG 350 million per week would be returned to the NHS as soon as Brexit occurred. Instead, the UK had the pleasure of paying Europe Euro 35 billion as an "exit tax".
The British and their aversion to reality: Having been born there, and lived there as an adult for many years I can say that the Brits have certain characteristics that are equal to European royalists. In France, the "Comte de Paris" still walks around as if he was "royalty" and as if titles of nobility still persist, despite the revolution of 1789. The Brits are like those royalists they have this ability to see only what they want to see; how many times have the Brits done this before -- their history is littered with lost opportunities. The Brits dislike foreigners, it's pathological, and they really really hate foreigners of color; "Birmingham Jamaicans" that have been UK citizens and residents for more than 5 generations are still treated as outsiders. For those who thought that Megan didn't do enough to integrate the Royal Family, I will say it was an impossible task, she had three negative marks: She was black, she was American and she was a divorcee, and Queen Camila hated her guts!
Who did this? In about 18 months the Conservatives will be voted out of office and Labor will replace them. It should be made clear that Labor shares a lot of the blame for Brexit. During the Brexit campaign, Labor was strangely silent, mainly because many of its MP and members were pro-Brixit, including their then leader Jeremy Corbyn. Jeremy is not a drunk or a liar but he is a wimp and held few serious beliefs -- to the point that even Labor couldn't stand his evident stupidity. He held views that brought him few admirers and those who admired him generally could not be bothered to vote. No hero here either. Finally, the real culprits were the Brits themselves; they had two chances to get out of the Brexit scenario and both times they voted to go. Proof if any was needed that the Brits are bloodyminded.
The Impact: The segment of the economy that was the most affected was the automobile manufacturing business. In reality, the Brits just suffered a massive change ahead of the other countries that are about to face similar prospects. In the US, virtually, the only car company making money is Tesla -- it is unclear how long GM and Ford can last, especially since their electric vehicles are not only not very good, but they are very unprofitable, and Tesla is looking to cut prices of its vehicle by nearly 30% over the next three years (they've already cut prices by 10% in 2023). The shutting down of the automobile manufacturing sector is the biggest blow to the UK economy, but France and Germany are about to get the same treatment (don't forget the French car manufacturers have not made money for decades). Financial services remain an important source of revenues for the UK, but since 2008 globally the sector has been in decline with an ever-decreasing portion of global GDP. So the City was always heading for a world of hurt, Brexit accelerated what was already inevitable. So far Brexit has claimed about 4% of the UK GDP (in real terms and not monetary)
Population & Immigration: A few days ago, Nigel Farage (a very vocal pro-Brixiter) departed the UK for greener pastures having become persona non grata in even the most anti-European parts of the UK establishment. His departing shot to the press, while waiting for his flight to a new home, was that there were now more "foreigners" in the UK than ever -- once again proving what kind of racist pig he was all along. However, the UK reality is that real estate is more affordable people have moved out of overpriced London, and for most emigrants, English remains the preferred language of communication -- something you can neither do in Paris nor Berlin.
The next hit will be de-globalization: The Americans have left the theater and have already hailed their cabs and are on their way home. Since the fall of the Berlin Wall, America's military has changed the nature of its operations -- America's peace dividend was not a smaller navy it was a conflict-driven one. Where once America was the policeman of the sea, the Americans have given up this role. Instead, they have created 14 battle groups with few frigates and fewer destroyers -- the latter two types of vessels are essentially the police cars of the world's oceans. A few weeks ago, Iran seized tankers and America sent a "strongly worded letter". The world is changing, the US doesn't need the rest of the world, and they can manage their own affairs. America will keep a few friends, the Brits may make it, Australia (and New Zealand) is a sure bet as is Japan which has pledged fielty to the US. In Europe, America has few friends and needs fewer allies -- that's the peace dividend for the Americans!
The UK is been forced to internalize processes ahead of other European countries, and the UK is already less dependent on trade than many other European countries with about 30% of its GDP trade related. The UK never purchased fuel from Russia, and most of its energy is either self-produced or imported from Norway and the Middle East -- where the Brits can do some force projection.
How is this good in the long term: The UK's future is bright, sure there are still some shocks to the system, and it is more than likely that its politicians will once again prove their incompetence or further demonstrate their inability to plan using realistic assumptions. Certain things just don't change! Eventually, the UK will get its export business working properly. It will take a while but it will happen -- The UK has talent, and the ability to attract talent, they've now figured out that leaving Europe was a big mistake, but there really is no going back there, because Europe has massive problems of its own and will be too pre-occupied to discuss anything else.
The problem is Germany: Germany's 30-year success is based on exports and cheap energy, in addition, Germany has a population timebomb; a rapidly aging population. The Americans have abandoned their historic role as policemen of the seaways, and have left a protection vacuum, those highly dependent on trade will either take over the policing of the ocean or will have to review their options. Germany has a coastal navy. The courageous stance that Germany took in the Russia/Ukraine conflict meant the end of cheap energy from Russia. This was always temporary -- Russia was eventually going to use its economic tools to affect European policies. The departure of the Americans, the ending of cheap energy, and Germany's population aging mean that Germany's position as a manufacturing powerhouse is coming to an end. Germany is the only financial backer of Europe, without its financial support the rest of Europe vanishes. It is the wealth of Germany that keeps Europe going. Germans have the capital to sustain their population, but that will soon stop at the borders. When it becomes a choice between Bavaria and Greece, the German government will choose Bavaria...without a wealthy and powerful Germany, there is nothing for the UK to rejoin.
The long-term prospects are good: As Twain said, "In the long run, we are all dead", but nations survive. The UK is sufficiently diverse and economically secured with its own currency and very competent monetary authorities, it therefore had the money and the population to take care of business. Brexit has forced the country's hand in that regard, and that's ok. Such a massive shift was always going to have short and medium-term negative implications. The government failed its people and will pay the price, but all the political class in the UK had a similar sickness -- to blame the conservative is to absolve the others. The entire country made a badly informed decision, with real-life consequences, so assume your responsibilities and move on.
It will take serval years for the UK government to realize that there is no going back to Europe, and in fact, the UK will have found a number of ways to protect its own interests. It will on-shore several aspects of economic activities (agriculture) that it had given away to Europe. That's fine, food security is important, moreover, the UK can produce the vast majority of its needed agricultural inputs, including equipment.
The reasons for a unified Europe are less prevalent today than they were a decade ago, language and demographic shifts are benefiting the UK. A large bluewater navy will ensure that the UK can protect its interests, it still has some friends in America, and to some extent market symmetry that is profitable to both, but the reality of the UK is that it will be a little poorer but will determine its own future, and that's not nothing.
Note on the end of Globalization: (got a lot of pushback on this comment) There is a strong view that the Americans will remain engaged in Europe and will continue to ensure that the trade routes remain open. Over the past six months, this has definitively not been the case. The Americans have stayed away from Iran and Saudi Arabia, leaving the space to China -- which is the major beneficiary of Middle Eastern oil (with others of course). Battlegroups are NOT conducive to "policing activities". American politics is 100% domestic, the last three American Presidents have been domestic populists. Both Trump and Obama warned Germany to stay away from Russian gas, and the Germans told the Americans to go and pound sand (or words to that effect). Americans love to visit Europe but have no appetite for staying there. They've won the cold war. Russia as an effective conventional military force is a shadow of a shadow of its former self, and is no threat to America. There is no reason to pay for a continuation of the PAX Americana -- for decades Americans have asked the Germans to take control of their own defenses -- the Germans decided to ignore the Americans...they are now going home.
Biden continues to make happy sounds about NATO and everything else, but the actual support is shrinking. Over the past decade America has become a net energy exporter, and with the assistance of Canada will remain so for the next 100 years. America no longer needs the Atlantic Alliance. As for the Chinese threat, with a small coastal navy, the worse it can do is invade Taiwan.
Without PAX Americana global trade is a far more expensive proposition, a return to the pre-WWII world of state-sponsored piracy. Amerca is too far away and generally can do without the rest of the world.
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