After Brexit; ye ken noo, by Buttonwood

After Brexit; ye ken noo, by Buttonwood

Postby admin » Fri Jul 01, 2016 5:18 am

After Brexit; ye ken noo
by Buttonwood
Jun 10th 2016

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THERE is an old story that puritanical Scottish preachers used to tell their congregations about sinners cast into the fires of hell. The condemned call out to the Almighty for mercy who replies “Did I not tell you to abandon your lives of drinking, fornicating and sinning?” “Yes, lord” comes the pitiable reply “but we didna ken.”* “Well” comes the implacable reply “Ye ken noo.”

The British vote on the EU is remarkably close despite the parade of experts—the Bank of England, IFS, IMF and OECD, as well as the vast majority of economists—who have pointed to the potential adverse effects. The problem is that many voters simply don’t believe the experts, especially in the wake of the 2008 crisis. And the Conservatives in the Leave campaign, who cheerfully cite such experts when attacking Labour party policies during general elections, now disdain them altogether. Similarly when business leaders pronounce for Remain, their views are dismissed by Tories who normally treat the needs of business as pretty sacrosanct.

Cite those strategists who say that sterling or the markets will fall after a Brexit and people will say “The bankers got it wrong before”. Well David Bowers and Ian Harnett of Absolute Strategy Research are independent researchers and their view is

For sterling, the risk is revisiting parity vs the US dollar should the UK exit. For equities, investors might demand 100bp more yield, implying close to a -20% adjustment.


Of course, the markets are not the most important thing in life but the projected falls reflect the likely hit to confidence and thus economic activity that would follow a decision to leave. Can one prove this will happen? Of course not, just as those Scottish sinners ignored their preachers while they were alive. Is it all priced in anyway? It is hard to disentangle Britain’s market movements from the global trend; bond yields are plunging. The FTSE 100 is down 2% today with some citing the impending vote. If the gambling markets are anything to go by, investors still think Remain will win; a Leave vote is currently 11/4. Absolute Strategy, based on the betting markets, thinks the implied probability of Brexit is only 24%.

And what is the plan if we leave? As far as we can tell from Boris Johnson, who struggles with the facts, there isn’t one. He will mutter “Carpe diem” or whatever Latin phrase comes to mind (Festina lente? Sic transit Gloria mundi?). We don’t know if we will end up with a Norway-style link (in the single market, and still with freedom of movement) or with a Canadian style deal (no freedom of movement and restricted access for the services sector). Labour politicians are just waking up to the fact that a post-Brexit government led by Michael Gove and Boris Johnson will not be friendly to workers’ rights; those EU regulations they want to sweep away include labour market protections. Labour voters will only find that out, of course, if they vote Leave.

There was another example of the contradictions in the Leave camp yesterday when Tony Blair and John Major warned of the impact on Northern Ireland if Britain exits the EU. Currently there are no border controls between southern and Northern Ireland. So our options if we leave are:

1) continue with no controls (which Leave says will happen)

2) take control of our borders (which Leave also says will happen)

Both can’t be right. As far as I can tell, Leave claims that the Irish can be relied upon for our security, and that migrants won’t come across the border because they won’t have the permits to work. Your blogger is all in favour of immigration but this seems the flimsiest of arguments. If work permits are all we need to control borders, how come we have to stand in long lines at Heathrow? And if the Irish are in control of our borders, then Britain is not.

Anyway, the shoddy reasoning may win out in the end. And then people will complain later in 2016 when jobs are lost and the purchasing power of their pounds declines, and say that no-one told them such things might happen. And it will give the rest of us no satisfaction at all to say “Ye ken noo”.

* For those unfamiliar with the Scottish dialect, they are saying “We didn’t know”. And God replies “Well, you know now.”
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Re: After Brexit; ye ken noo, by Buttonwood

Postby admin » Fri Jul 01, 2016 5:24 am

U.S. bears some responsibility for Brexit
by Danielle Allen
June 24, 2016

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Image
Newspapers are pictured in London on Friday after the referendum. (Daniel Sorabji/Agence France-Presse via Getty Images)

Danielle Allen is a political theorist at Harvard University and a contributing columnist for The Post.

We think Brexit is a European story, but it’s not really. A stable world order is hard to come by, and the United States has done more than its fair share to generate this instability over the past two decades: Think of the Iraq War, all those junk mortgage-backed securities and the global financial crisis they generated, declining U.S. foreign policy engagement with Europe, even the invention of social media. We might not want to roll back every development, but we should understand how they all contribute to a more turbulent world. And we should take responsibility.

In Iraq in 2001, Saddam Hussein was performing a fiction of possessing weapons of mass destruction, in all probability to keep Iran at bay, thereby achieving some sort of balance of power between his minority-Sunni regime and Iran’s Shiite one. We upended that order and enflamed the region. As Charles Krauthammer wrote in The Post in 2005, the George W. Bush administration had achieved a “breaking of the ‘dictatorial stability’ ” in the region. From this, he argued democracy would flow, as people rose in the streets. Weeks after the first vote of the Iraqi people, the Lebanese ousted the Syrian-backed regime, and then the Syrian military in 2005, and that was the beginning of what came to be called “the Arab Spring,” a wave of revolutions in North Africa and the Middle East that were greeted initially with optimism but have now brought us civil war in Syria and Iraq. And a refugee crisis in Europe. Some of the most politically explosive images in news in Britain in the past few years have been photos of the hundreds of thousands of refugees struggling across the Mediterranean to reach the European Union. The rise of anti-immigrant sentiment in Europe, including in Britain, has been fueled by the Syrian crisis; the roots of the Syrian crisis can be traced back to our invasion of Iraq.

Then there was the global financial crisis of 2008. To be sure, bankers in London contributed their fair share to the speculation-driven upswing of leverage in the global economy. But at the end of the day, the massive increase of trade in mortgage-backed securities was driven by an overheated U.S. real estate market that took the controls off of lending. Bush wanted to push homeownership but generally steered away from regulation. Unscrupulous lenders, incautious home-buyers and greedy bankers, mostly in the United States, combined to generate conditions for a worldwide recession. One of the consequences of that recession? A turn to austerity policy in Britain, the first major push of David Cameron’s administration. He held out the prospect of Britain turning into another debt-broken Greece and began slashing budgets, restructuring welfare, immigration, education and health care to do so. The austerity effort deepened and prolonged the economic pain in Britain, compared with the experience in the United States. The threat to social benefits heightened tensions around immigration from both within and outside of the European Union. The “Leave” campaign in Britain plastered buses with advertisements reading: “We send the EU £350 million a week; let’s fund our NHS [National Health Service] instead.”

Bush-era policies are not the only causes here, of course. The Obama administration’s foreign policy has involved an important “pivot to Asia,” a “rebalancing” of U.S. attention and interests to East Asia from Europe and the Middle East. The United States hasn’t achieved stability in the Middle East, and it hasn’t been there for Europe through its recent crises — from the 2008 Great Recession through the Greek debt crisis to the Syrian refugee crisis. During the Greek debt crisis, I had the occasion to ask the president of the European Central Bank, Mario Draghi, whether the United States was making a difference to his efforts to stabilize Europe. I got raised eyebrows in response and little answer.

Then there is the impact of social media. Introducing Facebook in this context may seem like a category mistake, but it’s not. A great political and social invention, Facebook, along with other social media tools, has changed the world’s political dynamics, most importantly by making it possible for dissenting minorities within countries to cross an organizational threshold permitting them to convert mere voice into actual influence and to operate transnationally. Sometimes this is for good, but sometimes it is for ill. One of the most striking details in the story about last week’s murder of British parliamentarian Jo Cox was that her alleged killer, Thomas Mair, appears to be affiliated with the Leeds chapter of the National Alliance, a U.S.-based neo-Nazi organization. In February, when I wrote a column arguing that it was time for Republicans to join together to stop Donald Trump, I received a substantial amount of hate mail and hate tweets. When a friend did a network analysis of the sources, I was surprised to discover that one of the most aggressive tweeters appeared to be affiliated with the British National Party, using the handle BadboyBNP.

The United States needs to wake up to its responsibilities in Europe. On this issue, too, our choice in the upcoming presidential election could not be more consequential. While Hillary Clinton bears significant responsibility for the pivot to Asia and the failure to pay sufficient attention to Europe, she has the knowledge and experience to correct course and help us recover our national capacity to support stability in the world order. Trump, like France’s Marine Le Pen, is celebrating Brexit. He is doing so in Scotland, the part of Britain that voted most strongly for staying in the union. There he is having staff at his Scottish golf resort wear “Make Turnberry Great Again” caps. His foreign policy is farce.
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Re: After Brexit; ye ken noo, by Buttonwood

Postby admin » Mon Jul 04, 2016 4:45 am

Brexit was fueled by irrational xenophobia, not real economic grievances
by Zack Beauchamp
June 27, 2016

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Just days after the results of Brexit, Britain’s vote to leave the EU, were announced, we’ve already begun to see some disturbing reports from Britain. Troubling stories about xenophobic incidents have been popping up across the country:

Heaven Crawley @heavencrawley
This evening my daughter left work in Birmingham and saw group of lads corner a Muslim girl shouting "Get out, we voted leave". Awful times
3:17 PM - 24 Jun 2016

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David Olusoga @DavidOlusoga
My home town of Newcastle. This afternoon. I feel like I am back in the 1980s.
6:27 AM - 25 Jun 2016


This isn’t surprising. The pro-Leave camp claimed that Britain needed to quit the EU to close its borders to more EU migrants, that the country had reached a "breaking point," and that it needed to shut its doors. Pre- and post-election polling suggests that this was the pro-Leave argument that most resonated with British citizens, and was in large part responsible for Leave’s victory.

Now some pundits are suggesting that the real lesson of Brexit is that ordinary Britons are bearing an unacceptable economic cost from immigration, and that elites should heed that lesson and think about restricting immigration to other Western countries to prevent a similar populist backlash.

There’s just one problem: This narrative isn’t actually true. Data shows that Britain wasn’t suffering harmful economic effects from too many new migrants.

What Britain was suffering from too much of, however, was xenophobia — fear and hatred of immigrants. Bigotry on the basis of national origin.

That’s not something you give into and close the borders. It’s something you fight.

British xenophobia is not rational

Immigration has surged in the UK in recent years. The number of foreign-born people living in the UK has gone from 2.3 million in 1993 (when Britain joined the EU) to 8.2 million in 2014. This is a new thing for the UK, as you can see on the below chart:

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(Office of National Statistics)

The surge was a result (in part but not in whole) of EU rules allowing citizens of EU countries to move and work freely in any other EU member country.

Pro-Leave campaigners, and sympathetic observers in the media, argued that this produced a reasonable skepticism of immigration’s effect on the economy — and Brexit was the result.

"The force that turned Britain away from the European Union was the greatest mass migration since perhaps the Anglo-Saxon invasion," Atlantic editor David Frum writes. "Migration stresses schools, hospitals, and above all, housing."

Yet there’s a problem with that theory: British hostility to immigrants long proceeds the recent spate of mass immigration.

Take a look at this chart, from University of Oxford’s Scott Blinder. Blinder put together historical data on one polling question — the percent of Brits saying there were too many immigrants in their country. It turns people believed this for decades before mass migration even began:

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(Scott Blinder)

Brits believed there were "too many immigrants" even when there were too few to have appreciable effects on the British economy. If Britain’s backlash to immigration was really about immigrants taking their jobs, then you’d expect hostility about immigration to be correlated to the actual level of immigration. But it’s not.

That’s not the only reason to believe Brexit was about xenophobia.

Torsten Bell, director of the UK economic think tank Resolution Foundation, set out to test the hypothesis that "areas hardest hit by the financial crisis, or those where migration is said to have held down wages, voted heavily to leave."

In other words, he tested the exact argument the pro-Leave camp is making: that people who voted to leave made a rational decision based on the real economic effects they’ve suffered from the rise in immigration. If that were the case, you’d expect places that have gotten poorer in the past decade (when mass migration took off) would have been the places that voted most heavily to leave the EU.

But that’s not what Bell found. In fact, he found no correlation at all between areas where wages have fallen since 2002 and the share of votes for Leave in the referendum:

Image
(Torsten Bell)

"Some areas with big pay boosts voted to leave (such as Christchurch in Dorset)," Bell writes. "Some that have done very badly out of the last decade and a half still voted to stay in the EU (such as Rushcliffe in Nottinghamshire)."

Another point. Support for staying in the EU was concentrated among the UK’s young, whose wages were hurt most by the 2008 recession. Support for leave was concentrated among older Britons, who had less reason to fear wage competition from immigrants.

So there are lots of reasons to be skeptical that British voters’ concerns about immigration are a rational response to the effect immigration is having on the economy. Instead, it seems, British opposition to immigration stems from a long-lasting, deep-seated hostility towards new people coming into their country.

The word for that is xenophobia.

Immigrants didn’t hurt native-born Britons

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French Border Police Ban 250-Vehicle Aid Convoy To Calais
(Jack Taylor/Getty Images)
Pro-migrant activists in London.

The key assumption of the "rational concern" thesis is that immigrants are actually hurting the British economy. It only makes sense to see hostility to immigration as rational if immigrants are actually harming native-born Brits.

But this isn’t the case. Take Frum’s core claim — that immigration was ruining the British housing market. "The median house price in London already amounts to 12 times the median local salary," Frum writes. "Rich migrants outbid British buyers for the best properties; poor migrants are willing to crowd more densely into a dwelling than British-born people are accustomed to tolerating."

The logic of Frum’s argument is directly contradictory. He seems to be arguing that rich migrants are raising British housing costs, while poor migrants are lowering it by living in higher-density housing.

But setting aside this weirdness, the truth is that migrants aren’t transforming British housing in any meaningful sense. Most of British housing demand is domestic; foreign born-residents only make up about 13 percent of Britain’s population. And while migrants may live in different kinds of housing early on, that changes quickly. "The longer they stay," a 2011 London School of Economics study finds, "the more their housing consumption resembles that of similar indigenous households."

If anything, migrants have a positive effect on the UK housing market — specifically, because they’re both capable of doing critical construction work and actually willing to do it. "The Chartered Institute of Building points out that any caps on immigration will harm house-building rates, as not enough British-born nationals are either trained or interested in construction careers, and migrants have been filling the gap," the Guardian’s Dawn Foster writes.

The debate over housing mirrors the broader debate over migration’s effect on Britons. Leave campaigners, for instance, frequently argued that migrants were taking British jobs. Nigel Farage, head of the far-right UK Independence Party, once infamously proposed a law that would legalize discrimination against foreign-born workers in favor of hiring out-of-work British citizens.

Yet when a 2016 study, also from the London School of Economics, analyzed this specific claim using new data, it found, conclusively, "that the areas of the UK with large increases in EU immigration did not suffer greater falls in the jobs and pay of UK-born workers."

What about wages? Is Britain being flooded by low-skill workers from EU countries, willing to work for low pay and thus undercutting native-born Brits?

The new LSE study looked at that as well. "There is also little effect of EU immigration on inequality through reducing the pay and jobs of less skilled UK workers," the LSE authors write. "Changes in wages and joblessness for less educated UK born workers show little correlation with changes in EU immigration."

This is consistent with international studies on the effect of migration on wages in other places. "Most of … the literature suggests that the effect on native workers' wages is neutral or positive," my colleague Dylan Matthews explains.

"The Mariel boatlift, when Cuba unexpectedly sent 125,000 people to Florida, did not hurt employment or wages among native workers in Miami at all. A huge spike in Russian immigration to Israel in the early 1990s appeared to give existing workers a nearly 9 percent raise."

Finally, Brexit supporters argue that migrants are taxing UK social services. EU migrants were coming to the UK to take advantage of its generous public benefits, they argued, and over-stretching the system. "EU migrants’ access to the UK’s welfare state has dominated debates about the EU membership," a paper by the Migration Observatory at the University of Oxford, notes.

That same Oxford paper actually examined some of the claims — and found little evidence that EU migrants were coming over to take advantage of British benefits.

"EU migrants are less likely to claim out-of-work benefits, such as Jobseekers’ Allowance and incapacity benefit, compared to their UK counterparts," the Oxford scholars write. "In February 2015, people who were EU nationals when they registered for a National Insurance Number made up 2.2% of the total [Department for Work and Pensions] working-age benefits caseload, but were about 6% of the working-age population."

The bottom line, then, is that there is no good evidence that immigration was doing serious harm to native-born Britons. British attitudes towards immigration once again appear untethered to a rational assessment of the costs and benefits of migration.

Brexit is xenophobia, and we should react as such

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Political Leaders Respond To The UK's EU Referendum Result
(Mary Turner/Getty Images)
UKIP leader Nigel Farage.

Over the past 20 years, the percentage of Britons ranking "immigration/race relations" as among the country’s most important issues has gone from near zero percent to about 45 percent. Today, 77 percent of Brits believe that immigration levels should be reduced.

The best explanation is that Britain’s xenophobia over immigration is being activated. They see immigrants around them, and they start looking for ways to prevent more from coming in. It’s not about assessing the harm immigrants are doing to Britain; it’s about being terrified that they’re changing the "character" of Britain to be more "foreign."

You can see this fear in the the language of anti-immigrant campaigners like Farage. Much of it is downright bigoted against immigrants of all kinds, from Muslims to Eastern Europeans.

Farage has called some Muslims a "fifth column living within our country, who hate us and want to kill us." He once warned Britain of a "Romanian crime wave" sweeping the nation. His party officially debuted this poster to warn of the dangers of letting in more migrants, which was actually reported to the police for resembling Nazi propaganda:

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(UKIP)

This is not the language of a rational immigration skeptic. It’s the language of a fearmonger.

The rhetoric became so heated that some native-born, nonwhite Britons are now worrying that xenophobia whipped up by Farage and others will end up targeting them.

"After an appalling referendum campaign, dominated by daily front-page scare stories regarding immigration, we’re wondering if people will again be questioning if we should be going back to our ‘own country,’" Joseph Harker, the Guardian’s deputy opinion editor (and a black man), writes. "It seems only a matter of time before the intolerance that has been unleashed, reinforced and normalised, looks for the old, easy targets of people who look different. People like me."

Its perhaps understandable why xenophobic rhetoric appealed to some Brexit supporters. Resolution’s Bell found that even though pro-Brexit voters weren't from places that had ​recently gotten poorer since the mass immigration wave, they were from places that had ​historically been poor — going back to the 1980s. These people have good reasons to be angry about the status quo. They’re looking for someone to blame, and immigrants are an easy scapegoat.

But the fact that their bigotry is comprehensible doesn’t make it any less bigoted. Nor does it excuse the politicians who catered to it — nay, encouraged it — over the course of the debate over Brexit.

Understanding this as bigotry matters. If the issue were that immigration hurt native-born populations, then it might make sense to talk about restricting immigration as a way of preventing this kind of destructive sentiment from rising to the fore again.

"Is it possible that leaders and elites had it all wrong?" Frum asks, rhetorically. "If they’re to save the open global economy, maybe they need to protect their populations better against globalization’s most unwelcome consequences — of which mass migration is the very least welcome of them all?"

But if the Brexit vote was rooted in xenophobia, rather than rational opposition to immigration, then the conclusion should be very different.

Civil rights prompted a racist backlash from Southerners, yet nobody seriously believes the 1964 Civil Rights Act or the 1965 Voting Rights Act were mistakes. You don’t give in to bigoted pressure to restrict people’s rights — in this case, the right for people to live where they want. You fight it.

That, not Frum’s kowtowing, should be the real response to the Brexit vote. British voters made an unjustifiable and irrational decision, grounded in fear of people who spoke different languages or whose skin was darker than theirs. The response shouldn’t be to restrict immigration further. It should be to figure out how better to make the case for the fundamental human right to migrate.
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Re: After Brexit; ye ken noo, by Buttonwood

Postby admin » Fri Oct 21, 2016 2:50 am

Will Hungary Be Next to Exit the EU?
by F. William engdahl
17 Aug 2016

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Will Hungary be the next nation to exit the dysfunctional European Union? The question isn’t at all as far-fetched as it might seem. On October 2, voters in Hungary will participate in a nationwide referendum to vote whether they agree to the forced settlement of migrants in Hungary by the EU or not. It’s a major issue in Hungary, a land of proud and staunchly independent-minded people who have endured 150 years of Ottoman rule; wars with Habsburg Austria until the Austro-Hungarian Compromise of 1867 created a peaceful coexistence under the dual Monarchy of Austria–Hungary. After that, Hungarians were subject to the Soviet Union since 1945, initially under the dreaded Mátyás Rákosi, until it became the first Warsaw Pact communist country to declare a constitutional republic in October, 1989 and open its borders to Austria, setting in motion the domino fall of East Germany and then of the entire Warsaw Pact and, ultimately, the Soviet Union. Like every nation, they have a very special history

It might well be said that Hungarians, always an ethnic melting-pot population whose parliament enacted the first laws of ethnic and minority rights in the world in 1849, are not a passive people when they sense something is wrong in the way they are being treated. So it is today regarding the Brussels proposal that Hungary and other EU member states must accept a Brussels-determined number of political war refugees from the Middle East and pay for all their costs whether they want them or not. Countries that refuse to take their quota would face severe financial penalties. In 2015 some 400,000 refugees arrived in Hungary in 2015 before a four-meter high razor wire fence was erected on the border with Serbia.

About half, or 200,000, attempted to gain asylum in Hungary, and after government procedures, only 264 refugees were granted political asylum. Since the erection of the fence the inflow via the so-called Balkan Route has all but stopped. The Austrian government has also decided to cooperate with the Orban government in jointly patrolling their common border.

Hungary is joined in opposing the Brussels mandatory refugee quota proposal by the Czech Republic, Slovakia and Poland–the so-called Visegrad Four group. So far only Hungary has decided on a national referendum on the issue. Polls show well over 66% opposed to the mandatory quotas, including Orban, who has urged a No vote.

Hungary’s outspoken Prime Minister, Viktor Orban, the only prime minister since 1989 to serve a full term and be re-elected, is very popular among Hungarians for speaking his mind against what he feels are wrong policies coming out of Brussels. Many Hungarians see him as a modern David pitted against the far larger Goliath, the faceless, unelected EU Commission.

On October 2 Hungarians will vote on a single question in a special national referendum: “Do you want the European Union to prescribe the mandatory settlement of non-Hungarian citizens in Hungary even without the consent of Parliament?”

Orban: ‘terror risk…’

On the war refugee issue Orban minces no words: “Hungary does not need a single migrant for the economy to work, or the population to sustain itself, or for the country to have a future,” he said in a recent interview. On the contrary, he stated, “Every single migrant poses a public security and terror risk. This is why there is no need for a common European migration policy.” Whoever needs migrants can take them, but don’t force them on us, we don’t need them.” As far as Hungary is concerned, he stated in an interview with RT, “migration is not a solution but a problem…We don’t need it and won’t swallow it.” The Hungarian government insists that the right to decide refugee issues should be reserved exclusively for national governments.

Hungary and three other central European states that constitute the Visegrad Four group, which includes Czech Republic, Slovakia and Poland, have been opposing the mandatory quotas the EU wants to impose on each member state. Last December Hungary filed a lawsuit with the European Court of Justice to thwart the EU’s attempt to redistribute incoming arrivals across the European Union. A decision could take years. The referendum is intended to give a broad popular mandate against Brussels’ forced quota attempts.

First step to EU Exit?

Clear to all from Brussels to Berlin to Budapest is that Hungarians will vote an overwhelming No to refugee forced quotas. At that point the real question will be will Hungarians hold a second referendum, as the British did recently, to vote on leaving the EU or not when it becomes clear that Brussels will ignore the Hungarian vote with their usual deafening silence. The idea of a Hungarian EU exit is not unthinkable at all at this point now that Britain has become “first out the door,” establishing the precedent exit is possible.

The Orban government to date has moved with a certain directed caution to test the limits of EU rules. Far from a “right-wing tyrant” as Brussels bureaucrats and politically-correct mainstream EU media have portrayed him, the Oxford-educated Orban is a highly-sophisticated, apparently not corrupt (a real novelty in today’s politics if true) genuine democrat who always turns to his voters on key policy decisions to be sure he has them with him, something anathema to the unelected Brussels oligarchy.

Viktor Orban’s views on the current refugee crisis, which media deliberately misnames the far more benign-sounding mass migration situation of the EU, he outlined in detail in his February 28 annual State of the Union address to the nation, midway into his third term as (elected) Prime Minister.

Referring to the country’s recent experience extricating itself from the destructive decades of communist rule, now as an EU member state since 2004, Orban notes, “we are concerned as to how we should protect our national interests within the European Union.” This sounds reasonable enough unless one realizes that the aim of the EU as an institution is precisely the opposite–to ultimately destroy any and all national interests in favor of a top-down Brussels-centered autocracy of the unelected.

Real accomplishments

As so much about the true Hungary and Orban’s actual accomplishments is either ignored or distorted by mainstream non-Hungarian media, it’s first useful to note some of what Viktor Orban has accomplished in the first term from 1998-2002 when his Fidesz Party won in a coalition with the Hungarian Democratic Forum (MDF) and the Independent Smallholders, Agrarian Workers and Civic Party (FKGP) and in his sole majority government since 2010. After 8 years out of office, Orban’s Fidesz Party won an overwhelming popular mandate of 53% of the vote and two-thirds of Parliament seats in 2010 and re-election in 2014 to the present.

As Orban notes in his February address to the nation, “within three years we had consolidated the budget, stabilized the economy, avoided bankruptcy, curbed inflation and reduced unemployment – the latter not marginally, but from 11.5% to 6.2%. We sent the IMF packing, repaid our loan ahead of schedule, and this year we shall also repay the last blessed penny of our debt to the European Union. All in all, in 2014 we rounded off this period of stabilization with economic growth of 3.7%, and opened a new chapter.”

In addition, under Orban’s term, the government managed “in five years to reduce personal income tax from 35% to 15%, and in five years we have left 1,300 billion forints in the pockets of families. We have reduced household utility bills by 25%, and in five years the minimum wage in Hungary has increased by 50%. We have achieved this together: the state and the market; the Government and the business sector; employers and employees; Hungarian micro-, small and medium-sized enterprises and the local subsidiaries of global conglomerates…Compared with 2010, we have allocated forty per cent more funding to health care. We have halved waiting lists. We have allocated more than five hundred billion – more than five hundred billion forints – to the development of our hospitals.”

That is the background of Hungary’s present economy under Orban’s term and the background to understand why the population supports his call for a no to mandatory refugee quotas. Now his remarks on the refugee crisis are relevant.

‘name of this danger is mass migration…’

Orban continues, “I would now like to explain why I have said all this. In summary, it is because all of this is now in danger. The financial stability we have worked so hard for is in danger…Our nationally-oriented foreign policy – which has been built with such painstaking attention to detail – is in danger. Restored public order and public security free of terrorist threats are in danger. And our national culture…is also in danger.”

He gets precise: “The name of this danger is mass migration…The year 2015 brought to an end an age in which, believing that it was under Europe’s control, we took the protection and safety of our continent for granted. One year ago, on this same occasion, we were already warning that a new age of mass migration had begun. We were mocked mercilessly, and insulted by friends, allies and rivals alike…The reality is that those coming here have no intention whatsoever of adopting our way of life, because they see their own as more valuable…And why, indeed, would they give it up? The reality is that they will not provide the supply of labor needed by the factories of Western Europe. Facts show that, across entire generations, the unemployment rate is much higher – sometimes several times higher –among those born outside Europe. The reality is that the European nations have been unable to integrate even the masses who arrived from Asia and Africa gradually, over a number of decades. How could they succeed in doing so now, so rapidly and for such large numbers?”

All those statements can be argued. But here is the core point on which Orban bases his strategy of Referendum, and the ultimate reason he will next be forced after October 2 to begin preparing a ‘Huexit’ from the EU for Hungary:

“…it is hardly the migrants whom we should be so angry with. The majority of them are also victims: victims of their countries’ collapsing governments, victims of bad international decisions, victims of people smugglers. They are doing what they see as being in their own interests. The problem is that we Europeans are not doing that which would be in our own interests. There is no better word for what Brussels is doing than “absurd”. It is like a ship’s captain heading for collision who, instead of wanting to take avoiding action, is more interested in deciding which lifeboats should be non-smoking. It is as if, instead of repairing the leaking hull, we are arguing about how much water should flood into which cabins…”

Orban then continues:

“It is a big enough problem that Brussels is not capable of organizing the defense of Europe, but it is an even bigger problem that it lacks the intent to do so. In Budapest, Warsaw, Prague and Bratislava it is difficult for us to understand how we have reached a point at which it is even possible that those wanting to come here from other continents and other cultures can be let in without controls. It is difficult to understand the weakening of our civilization’s natural and fundamental instinct for the defense of ourselves, our families, our homes and our land… This is Europe. Europe is Hellas, not Persia; it is Rome, not Carthage; it is Christianity, not a caliphate. When we say this we are not claiming that we are better, but that we are different. To point to the existence of an independent European civilization does not mean that it is better or worse; it only means that “we are like this, and you are like that.”

This move by Hungary, its Prime Minister and its population is no superficial political ploy to bargain for a better deal from Brussels as David Cameron intended with his Brexit fiasco (seen from Cameron’s view). It’s a fundamental drawing of a line in the sand of the entire European Union between countries who believe in a dissolved national sovereignty in favor of a supranational Brussels-based United Europe, and those countries who fiercely intend in the wake of this refugee crisis and all its ramifications, to demand essential national sovereign rights.

Brussels, and clearly Merkel’s Berlin, will oppose Hungary tooth-and-nail to defend their supranational concept. They will do that with the backing of George Soros and his European Council on Foreign Relations think tank. Not surprising, Viktor Orban has repeatedly openly opposed Hungarian-born billionaire speculator George Soros and his NGOs for trying to destabilize Hungary. Soros money also funded the document known as the Merkel Plan, which is the direct opposition to Orban’s defense of national sovereignty over the admission of refugees.

At this point the unfortunate experiment known as the European Union is flying apart in every direction. Hungary may well be forced to rethink its EU identity after October 2 if not well before as events are going, and that will ineluctably feed the forces of dissolution in the EU, perhaps a not at all bad consequence.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”
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