Tax Analysts Blog

Will the Adults in the Room Please Stand Up?

Posted on Jun 30, 2016

On the morning of June 24, Europe woke up with a bad hangover. The continent didn’t know whether the events of the previous day and evening were real, or just the remnants of a long, bad dream. Then, like on most post-binge mornings, the sun hit Europe in the eye, and reality began to sink in – the voters of Great Britain had decided they wanted to leave the European Union.

Reactions in the U.K. ranged from confusion to delight to resignation (literal and figurative). Some voters didn’t realize what they had done, apparently unaware that they were voting in a real election and not just writing a one-star Yelp review. The leaders of the “leave” campaign were happy at first and then strangely silent, as they began to realize that they could not possibly deliver on most of the campaign promises they had made to an angry electorate. Leaders of the “remain” side all quit – except Labour Party leader Jeremy Corbyn, who decided he would rather be tossed unceremoniously from his position than leave voluntarily. In a move that would have been statesmanlike under other circumstances, still-PM David Cameron told Corbyn that, while his presence might be good for the Conservative Party, it was bad for the country, closing with, “For heaven’s sake, man – go!”

Astonishingly, the man who would be PM, Boris Johnson, withdrew from consideration for the job less than a week after the vote. Apparently, the person responsible for bold bus adverts telling citizens that their National Health Service would be £350 million to the good every week if they voted to leave, realized that not even he could apply enough lipstick to make that pig a believable beauty contestant.

Johnson’s withdrawal was followed a week later by another stunning announcement, when Nigel Farage, a co-architect of the Leave campaign, resigned as leader of UKIP. His reasoning – “I’ve done my bit” – hearkened back to the ill-advised “Mission Accomplished” banner that haunted President George W. Bush, after he successfully toppled Saddam Hussein, but left Iraq a broken mess.

While chaos reigned in London, it devolved to the leadership of the EU to behave like the adults in the room. Their number one goal for now and until the breakup is concluded is to keep their oldest child’s temper tantrum from causing the other children to stop eating their vegetables. Just because the U.K. thought it could benefit from leaving, doesn’t mean it will benefit – in fact, according to the united voices of EU leaders, the U.K. could fare worse outside the union than inside.

More importantly, Brexit certainly doesn’t mean that a divided Europe is more secure, stronger economically, and stronger in terms of tax coordination than it is now. And while ultranationalist parties in Germany, France, and the Netherlands may be salivating at the thought of replicating what voters in the U.K. wrought, officials on the side of Europe that borders Russia fear that a mass exodus will only increase Russian influence and diminish their security and autonomy (remember Crimea?). The Baltic States, Hungary, and Poland have “been there, done that,” and it was not a good thing.

For now, the only thing that is certain is uncertainty and instability. As the world continues to recover from the global financial meltdown, neither helps Europe and its citizens. All one can hope for is that the adults exercise their influence and authority and bring this sorry chapter in European history to a prompt conclusion.

 

 

 

 

 

 

Read Comments (1)

Mike55Jul 5, 2016

.....the irony of course being that the paternalistic attitude of EU technocrats was the very thing that angered UK voters so much in the first place. As such perhaps it'd be wise for the "adults in the room" to keep a low profile for the time being, lest other countries get childish notions of self-governance.*

I more or less only follow tax policy once outside the U.S., but even within the confines of that esoteric realm it's easy to see why UK voters were so miffed. For example, supposedly the EC was going to look into whether the 130m GBP tax settlement the HMRC reached with Google following a lengthy, hotly contested audit constituted illegal state aid. If the same type of absurdity was occurring elsewhere, it's pretty easy to understand why UK citizens began to chafe.

*I appreciate that the Brexiters were guilty of exaggeration when labeling EC lawmakers "unelected," since there is nominally a popular election that occurs. However exaggeration is as far as one can take it..... the deep flaws of this so-called "election" are well documented.

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