{"id":5810,"date":"2019-12-20T16:19:30","date_gmt":"2019-12-20T21:19:30","guid":{"rendered":"https:\/\/rixtrema.com\/blog\/?p=5810"},"modified":"2020-02-17T10:27:10","modified_gmt":"2020-02-17T15:27:10","slug":"boris-finally-birthed-his-brexit-baby","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/boris-finally-birthed-his-brexit-baby\/","title":{"rendered":"Boris finally birthed his Brexit baby"},"content":{"rendered":"\n<ul class=\"wp-block-list\"><li><strong><a href=\"#1\">Doctor, I can see the head<\/a><\/strong><\/li><li><a href=\"#2\"><strong>Another Brexit referendum is off the table<\/strong>\u00a0<\/a><\/li><li><strong><a href=\"#3\">What about Europe?<\/a><\/strong><\/li><li><a href=\"#4\"><strong>28 may be a crowd. 27 EU members is a party.<\/strong> <\/a><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"1\"><strong>Doctor, I can see the head<\/strong><\/h2>\n\n\n\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Residents and anyone visiting Ireland or the United Kingdom will be overwhelmed with news about Boris\u2019 burgeoning baby, BREXIT. It is everywhere, but who can blame Irish and British news media for relentlessly covering essentially the same story over and over and over? Just last month, when the Brexit baby seemed ready to breech, Ol\u2019 Boris decided to let go of his \u201cdo or die\u201d moment and permit every member of parliament to continue with their little <\/span><a href=\"https:\/\/www.reuters.com\/article\/us-britain-eu-idUSKBN1X70NT\"><span style=\"font-weight: 400;\">4-yr civil charade and continue debating Brexit<\/span><\/a><span style=\"font-weight: 400;\">. (Literally, it has never been easier to be a member of parliament).<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">All that aside, I flew from my home in Ireland to visit the stateside family and saw no less than half a dozen people watching Prince Andrew\u2019s BBC interview. For nearly an hour, people watched a member of the royal parliament \u201c<\/span><a href=\"https:\/\/www.youtube.com\/watch?v=QtBS8COhhhM\"><span style=\"font-weight: 400;\">categorically deny<\/span><\/a><span style=\"font-weight: 400;\">\u201d any illicit sexual behavior associated with Jeffrey Epstein because of a pizza party alibi and an inability to sweat. (How\u2019s that for inflight entertainment?) All to get out of the Brexit news loop. But, there is one major Brexit impact the media is not covering.\u00a0<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"2\"><strong>Another Brexit referendum is off the table<\/strong>\u00a0<\/h2>\n\n\n\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The elections this month proved that British resistance to Brexit crumbled to the media onslaught like a stale biscuit. Legacy labor voters threw the baby out with the bathwater by abandoning their party affiliation and turning the parliamentary elections into a single-issue election. They voted to get Brexit over with and finished in whatever capacity Johnson and the Tories can arrange. Now, the Conservatives hold the majority for what will, most likely, be another five years &#8211; the default next UK election is in 2024.\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Just today, Boris got the vote he expected from the new wave of conservative support &#8211; the three options Yon predicted <\/span><a href=\"https:\/\/rixtrema.com\/blog\/to-brexit-or-not-to-brexit\/\"><span style=\"font-weight: 400;\">earlier this year<\/span><\/a><span style=\"font-weight: 400;\"> narrowed to one. <\/span><a href=\"https:\/\/www.huffpost.com\/entry\/brexit-deal-approved_n_5dfcddd8e4b0b2520d09ded3\"><span style=\"font-weight: 400;\">The new Brexit bill<\/span><\/a><span style=\"font-weight: 400;\"> means Johnson\u2019s deal &#8211; which settles issues including citizens\u2019 rights, the \u00a339 billion \u201cdivorce\u201d bill, and the Irish border &#8211; can be ratified in the UK. Don\u2019t be fooled, though, because this deal just removes the UK from the EU more officially. It is <\/span><a href=\"https:\/\/www.washingtonpost.com\/world\/europe\/boris-johnsons-brexit-deal-set-to-sail-through-british-parliament\/2019\/12\/20\/60bcd0b4-2114-11ea-b034-de7dc2b5199b_story.html\"><span style=\"font-weight: 400;\">95% similar<\/span><\/a><span style=\"font-weight: 400;\"> to Teresa May\u2019s deal &#8211; Johnson conceded a customs border between the UK and Northern Ireland.\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The bill <\/span><a href=\"https:\/\/www.washingtonpost.com\/world\/europe\/boris-johnsons-brexit-deal-set-to-sail-through-british-parliament\/2019\/12\/20\/60bcd0b4-2114-11ea-b034-de7dc2b5199b_story.html\"><span style=\"font-weight: 400;\">no longer has the same commitments<\/span><\/a><span style=\"font-weight: 400;\"> on workers\u2019 rights and environmental standards or the guarantee that child migrants in Europe could reunite with family in Britain. Also, the meat of the arrangement &#8211; trade security and aspects of their new relationship &#8211; must be addressed during an 11-month \u201ctransition period\u201d. (Here, I thought the post-Brexit vote was the transition period.)\u00a0<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"3\"><strong>What about Europe?<\/strong><\/h2>\n\n\n\n<p style=\"text-align: justify;\">Yet, a change in perspective away from British naval-gazing and investigate the impacts on continental Europe is overdue. The UK government, itself, admits that Brexit is the biggest hindrance to growth; UK growth slowed from 2.4% in 2015 to 1.5% in 2018. It is well understood that the UK will suffer as its tariff-free trade status slips, or disappears, with its most significant trading partners. Higher <a href=\"https:\/\/www.thebalance.com\/what-is-inflation-how-it-s-measured-and-managed-3306170\">inflation <\/a>will lead to a <a href=\"https:\/\/www.thebalance.com\/standard-of-living-3305758\">lower standard of living<\/a> for UK residents. Coupled with percolating <a href=\"https:\/\/www.thebalance.com\/heat-wave-causes-list-effect-on-the-economy-4173881\">heat waves<\/a> and <a href=\"https:\/\/www.thebalance.com\/drought-definition-effects-examples-and-solutions-4157896\">droughts<\/a> caused by <a href=\"https:\/\/www.thebalance.com\/effects-of-global-warming-on-the-economy-3305692\">global warming<\/a>, tensions are turning more bitter than a 10-minute steep of earl grey. (last tea joke, I swear.)<\/p>\n\n\n\n<p style=\"text-align: justify;\">Brussels seems to be sticking to the same plan it conjured in Fall 2016 &#8211; making a break from the EU partnership a waking nightmare. While anti-immigration parties are stronger throughout Europe, remaining in the EU is more popular than ever (Figure 1). Almost <a href=\"https:\/\/www.pewresearch.org\/global\/2019\/03\/19\/europeans-credit-eu-with-promoting-peace-and-prosperity-but-say-brussels-is-out-of-touch-with-its-citizens\/\">75% say<\/a> the EU promotes peace, and <a href=\"https:\/\/www.pewresearch.org\/global\/2019\/03\/19\/europeans-credit-eu-with-promoting-peace-and-prosperity-but-say-brussels-is-out-of-touch-with-its-citizens\/\">55% believe<\/a> it supports prosperity.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"553\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-1-Remaining-in-the-EU-is-growing-more-popular-since-Brexit-EU-Poll-min-1024x553.png\" alt=\"\" class=\"wp-image-5813\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-1-Remaining-in-the-EU-is-growing-more-popular-since-Brexit-EU-Poll-min-1024x553.png 1024w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-1-Remaining-in-the-EU-is-growing-more-popular-since-Brexit-EU-Poll-min-300x162.png 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-1-Remaining-in-the-EU-is-growing-more-popular-since-Brexit-EU-Poll-min-768x415.png 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-1-Remaining-in-the-EU-is-growing-more-popular-since-Brexit-EU-Poll-min-500x270.png 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-1-Remaining-in-the-EU-is-growing-more-popular-since-Brexit-EU-Poll-min-800x432.png 800w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-1-Remaining-in-the-EU-is-growing-more-popular-since-Brexit-EU-Poll-min.png 1144w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Figure 1: Remaining in the EU is growing more popular since Brexit (EU Poll)<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"4\"><strong>28 may be a crowd. 27 EU members is a party.<\/strong> <\/h2>\n\n\n\n<p style=\"text-align: justify;\">Anyone who stays out past the tipping point in an English pub will hear, perhaps uninvitedly, about the significant cultural differences between the United Kingdom and continental Europe. The UK was one of the most reluctant, and last, major entrants to the EU with lingering cultural differences. So, with the buzzkill\u2019s departure, perhaps the rest of the party can continue in some fashion to piece together some pretty neat continental single-currency benefits. A continental welfare system &#8211; not a revolutionary idea &#8211; could alleviate the strains on weaker members who struggle to reap the benefits of scaled domestic public health programs.<\/p>\n<p style=\"text-align: justify;\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Any EU policies, though, will depend upon the long-term health of its strongest economies and Brexit seems to threaten that the most. Ireland stands to lose the most to Brexit (10%) while the strongest EU member, Germany, may lose a 5% share of GDP to Brexit (Figure 2). While the current agreement doesn\u2019t affect any foreign UK or EU workers in either place, Brexit will create some job constraints for younger workers. Employers are <u><a href=\"https:\/\/www.cipd.co.uk\/Images\/lmo-survey-summer2018_tcm18-45850.pdf\">already having a harder time<\/a><\/u> finding applicants and Germany will be <u><a href=\"https:\/\/www.thelocal.de\/20170830\/germany-could-lack-33-million-skilled-workers-by-2040-study\">short 3 million skilled workers<\/a><\/u> by 2030.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"827\" height=\"779\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-2-Share-of-GDP-exposed-to-Brexit-min.png\" alt=\"\" class=\"wp-image-5812\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-2-Share-of-GDP-exposed-to-Brexit-min.png 827w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-2-Share-of-GDP-exposed-to-Brexit-min-300x283.png 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-2-Share-of-GDP-exposed-to-Brexit-min-768x723.png 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-2-Share-of-GDP-exposed-to-Brexit-min-500x471.png 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/Figure-2-Share-of-GDP-exposed-to-Brexit-min-800x754.png 800w\" sizes=\"auto, (max-width: 827px) 100vw, 827px\" \/><figcaption>Figure 2: Share of GDP exposed to Brexit<\/figcaption><\/figure>\n\n\n\n<p style=\"text-align: justify;\">Brexit is fundamentally a slap against globalization, and, with relative parliamentary unity, we will see just how isolationist the Conservatives want to be over the next year. The most significant Brexit economic risk is uncertainty, so Boris\u2019 deal will certainly push more stability to the markets. Yet, long-term costs of sticky employment and trade barriers may remain growth constraints to the UK and the major EU economies. Perhaps, this is the first waypoint towards the <u><a href=\"https:\/\/rixtrema.com\/blog\/podcast-growth-is-precarious-at-best-says-the-imf\/\">IMF\u2019s assumption<\/a><\/u> that global growth will come from outside Europe and North America.<\/p>\n<p style=\"text-align: justify;\">It remains to be seen how the Tories will raise their baby. Meanwhile, you can learn about our financial planning and retirement risk software <u><a href=\"https:\/\/rixtrema.com\/blog\/\">on our blog<\/a><\/u>. There, you can follow our evolving analysis of the economy and all things nightmarish. Reach out to our client success team at clientsuccess@rixtrema.com to request a demonstration or learn about our software features like <u><a href=\"https:\/\/rixtrema.com\/blog\/category\/case-studies-portfolio-crash-testing\/\">Portfolio Crash Test\u2019s risk scenarios<\/a><\/u> and retirement simulations.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Doctor, I can see the head Another Brexit referendum is off the table\u00a0 What about Europe? 28 may be a crowd. 27 EU members is a party. Doctor, I can see the head Residents and anyone visiting Ireland or the United Kingdom will be overwhelmed with news about Boris\u2019 burgeoning baby, BREXIT. It is everywhere,&#8230; <\/p>\n<div class=\"clear\"><\/div>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/boris-finally-birthed-his-brexit-baby\/\" class=\"excerpt-read-more newsstand-button\">Read More<\/a><\/p>\n","protected":false},"author":9,"featured_media":5811,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[216,239,192],"tags":[295],"class_list":["post-5810","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-article-review","category-investing","category-risk-management","tag-boris"],"jetpack_featured_media_url":"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2019\/12\/shutterstock_1496429489-min-scaled.jpg","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.9.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Boris finally birthed his Brexit baby<\/title>\n<meta name=\"description\" content=\"Residents and anyone visiting Ireland or the United Kingdom will be overwhelmed with news about Boris\u2019 burgeoning baby, BREXIT. 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