Tag Archives: Brexit

In defense of referenda

GIS statement by Prince Michael of Liechtenstein

Many well-meaning people around the world – especially those in the media and politics – have been shocked by three referenda that have not brought the results they had hoped for. The series started with Brexit. A slight majority in the United Kingdom voted, against the recommendation of their government and advice of European and world leaders, to exit the European Union.

In the second referendum, Hungarians voted to amend their constitution to block EU immigration settlement plans, against some rather strong requests from other European governments. The pressure included threats: Luxembourg Foreign Minister Jean Asselborn said Hungary should be “excluded” from the bloc. The government-sponsored proposal was overwhelmingly accepted by those who voted. However, the turnout of just 40 percent made the result void under Hungary’s constitution.

The third plebiscite resulted in the people of Colombia rejecting – by a tiny majority – a peace agreement that the government negotiated with FARC rebels.

referendum_colombia_farq

All three referenda were initiated by governments. The UK government wanted confirmation that the country should remain in the EU, while the Colombian government wanted its peace agreement sanctioned. Both failed.
Hungary’s case was different. The widely desired outcomes were for the proposals from the UK and Colombian governments to be approved, but for the Hungarian government’s proposal to be rejected. Just the contrary took place, although the Hungarian government failed to mobilize enough voters.
This has led many to question both the legitimacy of referenda in democracies and the system of direct democracy as such. Also, doubt has been cast on the people’s judgment when it comes to major issues.
It is true, as critics suggest, that in these three cases the governments’ main motive may have been to transfer responsibility for such decisions onto the people. However, the critics of referenda miss that the idea of direct democracy is not for governments to initiate such votes. Plebiscites usually bring excellent results if they are brought about by groups of concerned citizens. The problem in most Western democracies is that citizens are frustrated – and they are using these votes to voice their dissatisfaction.
A system of strong local autonomy and direct democracy using referenda initiated by citizens brings superior outcomes and normally shows the people’s sound judgment. Obviously, there must be a certain hurdle for such initiatives, such as a petition with a large number of authenticated signatures.
Switzerland has such a system, and it produces plenty of sensible decisions. For example, the Swiss voted by a big majority not to reduce time spent at work. They also rejected an initiative to increase the Swiss National Bank’s mandatory gold reserves.
In the United States, referenda do not play a role at the federal level. This reflects the fear of populism held by some of the framers of the constitution. They are also less necessary, because the main purpose of the constitution was to create a system of checks and balances and to provide for the protection of the freedom of the individual against the state.

Read the original GIS statement here ->
In defense of referenda


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defense, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyze the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyze and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Making Lemonade out of Brexit Lemons

GIS Statement by Prince Michael of Liechtenstein

brexit-shock

Doom and gloom! Voters in the United Kingdom have decided to leave the European Union. Markets are tumbling, Prime Minister David Cameron has announced his resignation and politicians around the globe have expressed deep worry.

Leaders of the various EU countries, as well as those in Brussels, have voiced their regret and warned of Brexit’s dangers. Some have also pointed to damaging consequences for the UK, sounding very much as if they are making threats.

Prime Minister Cameron has been criticized for initiating the referendum. However, the vote was necessary to clarify the UK’s position in the bloc. Holding it took courage on his part.

The next move for the UK is to formally notify Brussels of its intention to leave the EU; the exit would become effective after a statutory period of two years. For the time being, the UK is still a member of the bloc. Notification does not have to be issued immediately.

The UK is an important trading partner for the rest of the EU. It is therefore in the interest of both sides to reach free trade and other agreements over the next two years. This should be feasible, assuming both sides go about the negotiations pragmatically.

Risks and opportunities

The largest danger is overreaction by the EU and the remaining members. This includes any attempt to make an example out of the UK with some sort of retaliatory “punishment.” Motivation for such a move comes from hypocritical self-righteousness, opposition to reform and centralizers’ fear that other members might follow the UK’s lead.

But the vote offers the opportunity to make reforms, such as increasing subsidiarity (where the EU performs only those tasks that cannot be performed at a more local level) and encouraging competition between members to improve efficiency. This would mean going back to a simple system that grants the four basic EU freedoms (the free movement of goods, services, people and capital).

‘The most important reform the EU should make is discontinuing the transfer union'

The most important reform the EU should make is to discontinue the transfer union – by which financial transfers are made from richer to poorer regions. Short-term transfer payments can make sense to develop certain regions, but a permanent transfer system is self-destructive. GIS warned of this more than a year ago, when observing that Europe was accepting Brexit in order to avoid Grexit.

But it is not Brexit that endangers EU cohesion. Instead, it is the transfer union and an exaggeration of so-called “solidarity.” Any over-generous solidarity will be misused.

Hopeful developments

Looking at the gloomy post-Brexit news is depressing, full of predictions of disaster. But this overshadows a lot of good news. Colombia has finally achieved what appears to be a robust peace agreement in a bloody terrorism-infused civil war that lasted decades. The Panama Canal expansion has been completed, which should give an enormous boost to global trade.

So Europe should not paralyze itself in a hysteria of whining, but grasp the opportunities. The referendum and its long-term outcome, despite the immediate result, could yet prove to be a net positive.

Read the original GIS statement here ->
Make Lemonade out of Brexit Lemons


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defence, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyse the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyse and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.

Don’t blow Brexit out of proportion

GIS Statement by Prince Michael of Liechtenstein

brexit

   For weeks, the United Kingdom’s referendum on whether it should leave the European Union, a scenario known as “Brexit,” has dominated discussion in the media. The ups and downs of the debate have had a corresponding influence on financial markets.
The excitement generated can produce shudders as strong as a Hollywood thriller might. But the threat of the UK leaving the EU is being used to distract the public from other issues.
Worrywarts furrow their brows. Know-it-all Euroskeptics – from within the EU and without, and on both sides of the Atlantic – as well as good-old nationalists, hypocritically express concern. Their schadenfreude and hope for the demise of the bloc is thinly veiled.
For many reasons, I hope that the British remain in the EU; and I think it is likely they will.
Should a Brexit occur (the referendum would have to be followed by an act of parliament), it is likely to be damaging, but it will not be the downfall of either the EU or the UK. Nor will it cripple the global economy or financial markets.

Brexit could become an opportunity

   It will be very important to see how the various institutions responsible for managing a Brexit react. Revenge would be harmful. If they analyze the situation dispassionately, other EU members are likely to realize the necessity of, and implement, reforms that would take the bloc in the direction of more decentralization and subsidiarity. Under such circumstances, the UK would take on the role of a close neighbor. Brexit could become an opportunity.
On the other hand, a referendum result that legitimizes Britain remaining in the EU will reinforce the UK’s position within the bloc. That would put it in a strong position to support the very decentralization and subsidiarity Europe needs.
Whatever the outcome of the vote, that it is taking place is a positive thing – it will clarify the UK’s role in Europe.

Read the original GIS statement here ->
Don’t blow Brexit out of proportion


*GIS is a global intelligence service providing independent, analytical, fact-based reports from a team of experts around the world. We also provide bespoke geopolitical consultancy services to businesses to support their international investment decisions. Our clients have access to expert insights in the fields of geopolitics, economics, defence, security and energy. Our experts provide scenarios on significant geopolitical events and trends. They use their knowledge to analyse the big picture and provide valuable recommendations of what is likely to happen next, in a way which informs long-term decision-making. Our experts play active roles in top universities, think-tanks, intelligence services, business and as government advisors. They have a unique blend of backgrounds and experience to deliver the narrative and understanding of global developments. They will help you develop a complete understanding of international affairs because they identify the key players, their motivations and what really matters in a changing world. Our experts examine the challenges and opportunities in economies old and new, identify emerging politicians and analyse and appraise new threats in a fast-changing world. They offer new ideas, fresh perspectives and rigorous study.