Friday, 24 June 2016

Welcome to the 1930s

For years, we thought it would be Greece that would trigger Europe's collapse. It turns out it is England that has brought us to the edge of the abyss.

The world woke up to terrifying news this morning. Against the recommendations of nearly all experts and world leaders, against the expectations of the financial markets and the bookies, England has voted to leave the European Union.

As expected, the world's financial markets went into panic mode. The pound lost 8% of its value, hitting a low not seen since 1985. Continental European markets have lost about 8%, US markets are currently down 3%. Analysts expect further losses on Monday. 

It is all reminiscent of the panic after the Lehman Brothers collapse in September 2008, or perhaps more relevant to Europe, the height of the Greek debt crisis of 2011 and 2012.

But this feels bigger. Because Greece never actually defaulted. Because the "too big to fail" banks were rescued. Who is going to save the UK now from itself? And who is going to save Europe and keep it from falling apart as a result of this earthquake?

Needless to say, it's a moment of extreme political and economic instability the likes of which has not been seen in Western Europe since the second world war. 

It feels like we are on the edge of something cataclysmic. I've seen more than a few people say today on social media that it feels like we are living in the 1930s. It seems an apt comparison.

What comes next, we don't know. But there is now a power vacuum in the UK. Prime Minister David Cameron, who called the referendum in a bid to quell an internal dispute in his Conservative Party, resigned this morning in disgrace after his gamble backfired. Scottish first minster Nicolas Sturgeon said today that it would be unconstitutional for the UK to pull Scotland out of the EU against the will of a majority of Scottish voters (England voted to leave, but Scotland, Northern Ireland and London voted to remain). 

Northern Ireland's deputy first minister said today the referendum result means that the North should hold a referendum on leaving the UK and either joining the Republic or creating an independent state. In any event something will have to be done because once the UK leaves, it will have to set up a border control between the North and South for the first time in history as long as the North remains in the UK.

As The New Statesman put it today, "Never mind the European Union. The UK is over."

Indeed, it is the British union that seems in more immediate danger of falling apart than the European one. But what about the long term? Though the UK has always been the most eurosceptic member state, others have some degree of euroscepticism as well, notable Sweden, Denmark and the Netherlands. The current governments in Poland and Hungary are extremely hostile toward the EU, though they have never advocated leaving the bloc. 

Will Brexit start a domino effect leading to the break-up of the union? And if that happens, will it shatter the 60-year peace on the European continent?

Personally I think the Leave campaign's harping on the "EU has brought peace to Europe" line is a bit silly. After all, it was really the Pax Americana and NATO that brought about this peace and enabled the European project. The EU is the architecture that was built as a result of this peace dividend.

But NATO is looking like an outdated institution these days, and the US does not have the same interest in guaranteeing peace in Europe that it had during the Cold War. President Obama has time and time again tried to make this clear to Europeans, admonishing them for their low military spending and dependence on American military protection. But Europeans have not been listening.

I do not believe that the EU is the only thing standing between Europe and World War III. This was a silly argument during the campaign. But this crisis comes in the context of global unrest. The United States is also coming apart at the seems, and the rise of Donald Trump has exposed that for the world to see. Western democracy is failing. Citizens are no longer taking it seriously, as shown by the votes for Trump and Brexit. 

I consider UKIP to be a far-right nationalist party, and UKIP may now be brought into future Prime Minister Boris Johnson's cabinet. Today's result was cheered by far-right parties across Europe, some of whom may be poised for their own victories next year (it's conceivable that the Front National could win the French presidency). The far-right is growing across Europe, and xenophobic nationalist sentiment is on the rise. We've been here before.

Western democracies do not seem to have the tools to fight this rise. The media reports today about English people who voted leave now regretting their vote because they didn't understand what it meant (or asking Google the day after the vote what the EU is) makes you realize that something has gone terribly wrong in our Western democratic model.

Not that things are very good outside the West either. The Middle East is in a period of unprecedented turmoil and Europeans are living with theconsequences in the refugee crisis. 

Even the rising star 'BRICS' are in trouble. Russia has devolved into an erratic dictatorship. Brazil has collapsed under the weight of endemic corruption. China is seeing its explosive economic growth come to a screeching halt.

It feels as if we are living in a tinder box.

And yes, we may have been here before. One thinks of the Cuban Missile Crisis and students in the 1950s hiding under their desks in nuclear drills. Or one thinks of the uncertainty created by the break-up of the Soviet Union in 1991. I was either not alive or very young during those incidents. But speaking to those older than me, they say this feels different. The world is in a dangerous place.

In the 1930s not everyone would have realized where the world was headed. But plenty of people did. Perhaps we, as individuals, need to start thinking like our grandparents did during that time. Let's stay smart, let's watch what's happening, and let's remain agile enough to move to safety quickly if needed.

I will be watching closely what happens over the next year, particularly in the US in November. I feel it is more and more likely that I will move back home next year, or even earlier. Europe is starting to feel very unsafe. 

The world feels unsafe, really. But I will have to make a calculation about where the 'least unsafe' place is. 

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