Comic: As its ratings crumble, the Brexit saga heads to a grim conclusion


By Geoffrey Smith – Once upon a time there were exciting sagas, exaggerating and immortalizing the heroic feats of Viking warriors, slaying monsters, winning demigoddesses as wives and whatnot. But there was a catch. Given the general lack of entertainment during the long nights of the North in the Dark Ages (other than drinking and brawling), there was no pressure on writers and performers to keep them short. Over time, as audiences grew more demanding, the saga came to represent something bleak, repetitive, and seemingly endless.

This is why the term fits so well with Brexit. After bursting onto the international news scene in 2016 as a boisterous, populist rebellion against consensus thinking, it has evolved into an appallingly boring brawl of bureaucrats vying for mutual recognition of regulations, government aids. State and – God help us – fishing rights.

Fishing, which accounts for around 0.05% of eurozone GDP, would be the last big stumbling block to a deal on a trade relationship worth $ 1 trillion a year and many more – such as freedom of movement and security cooperation – which cannot be reasonably priced.

Neither the hyperbolic nationalism of the UK government nor the self-righteousness of the European Union can disguise this as anything other than a piece of political theater that has become insane and painful that most people would rather forget. A YouGov poll released on Tuesday showed Britons, who voted 52% -48% to leave in 2016, now believe with a 51% -40% margin that it was a bad idea.

Too late. The end is in sight. The 11-month transition period that allowed both sides to claim the UK did not leave the bloc in January ends in nine days. After that, in the absence of an agreement, both sides will have to apply tariffs and quotas to each other’s products, whether we like it or not: the rules of the World Trade Organization do not allow anything to happen. other.

For nearly half a decade, foreign exchange markets have worked on the assumption that: 1) erecting trade barriers where none previously existed would be inconvenient for both parties; 2) The UK would not be able to keep the Brexiteers’ promise to bring back the glory days of the UK economy (what kind of glory has never been fully spelled out, but the chances of a new one godsend of using gunboats to blow up the Chinese Indian opium market must in any case be quite thin); 3) The high costs of No Deal would ensure that common sense prevails to get the most out of a bad job.

Little has changed these calculations during this time. As such, the applied haircut has been relatively constant: it still trades about 10% less against the euro and the dollar compared to its pre-2016 referendum level. On both sides In the Channel, there are governments determined to spend hugely to get the economy going, and central banks determined to welcome them with equally important bond buying programs.

If – IF – common sense can prevail and No Deal can be avoided, history would suggest that the British Pound is now somewhat undervalued against the Euro. Bank of America Merrill Lynch’s regular surveys of fund managers certainly suggest that UK assets – starting with the pound itself – are ‘under-held’ and technically ready for a rebound. However, for this to be sustainable, the UK must prove that the Brexit process has not permanently damaged UK productivity relative to that of the Eurozone. The burden of proof will be heavy.


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