My #Remainer’s Diary Day 373: after the Florence speech US ratings agency Moody’s downgraded the UK’s long-term issuer rating to Aa2 from Aa1. It cited a recent weakening in public finances and “the erosion of the UK’s medium-term economic strength that is likely to result from the manner of its departure from the EU”.
Moody’s said it “believes that the UK government’s decision to leave the EU single market and customs union as of 29 March 2019 will be negative for the country’s medium-term economic growth prospects. Aside from the direct impact on the UK’s credit profile, the loss of economic strength will further exacerbate pressures on fiscal consolidation.”
Moody’s also downgraded the UK’s senior unsecured bond rating to Aa2 from Aa1.
Against this background the fourth round of negotiations began in Brussels.
Paul Krugman, the Nobel prizewinning economist, talking to a reporter for the Independent in London, said of Brexit: “It’s essentially zero chance that it’ll be beneficial on the trade front… I don’t think there’s any plausible case that Brexit is a good thing for the British economy as a whole.”
He went on: “The invisible benefits of being part of the EU, the lack of friction, seems to have had a significant impact on trade patterns. You’re reversing that, so that’s a cost. That’s much more tangible than any pipe dreams about big gains elsewhere.”
The Centre for European Reform published a report by Sir Philip Lowe called “Brexit and Energy: time to make some hard choices”. It concluded: “The government must decide whether the desire for sovereignty expressed in the Brexit referendum outweighs the economic arguments in favour of integration in the European energy market. If Brexit means the UK leaving the EU’s single energy market, it will have to invest more in new electricity generating capacity, pay higher prices – arguably with less security of supply – and accept a bigger role for the state in the energy sector.”
So not a day of cheering news.
In Brighton, at Labour’s conference, Keir Starmer made a speech on Brexit of the have cake and eat it kind.
The Irish Times reported that writer Frances Coppola, addressing an economics workshop in Wexford, said the Brexit process had been so toxic that it had fractured relationships, not just between Britain and Europe, but within the UK itself, and even within families in the UK, and that this “tarnishing of relationships” might get worse when the UK left in 2019.
At least she gets it.
Ms Coppola said Europeans were casting the UK in the role of Ozymandias, “Shelley’s poetic metaphor for a doomed empire”. That is so right.
“”Look on my works, ye mighty, and despair!”
Nothing beside remains…”
The train crash metaphors for Brexit evoke moving towards an immovable object, but the UK is not really moving, and Brexit is not really immovable, nor an object. The UK is disintegrating. The ageing, crumbling and collapse of a colossus from the effects of time captures something else and bigger about this whole sad saga: the fact that the UK’s empire is over.
Time to stop humming Kipling and start reading Shelley.
The UK itself is slipping into increasing disorganisation and chaos. This is entropy, which only human endeavour to rebuild and repair can counter. Entropy gets everything in the end.
Ozymandias was an ancient Greek version of the name Rameses. Shelley’s “colossal wreck” was originally a fallen statue of a pharaoh. The pharaoh never knew his kingdom would vanish, but it did. His statue is the monument of every doomed empire now.