Friday, 1 July 2016

Gove: Things that matter more than mere economics

Michael Gove
Michael Gove: Things that matter more than mere economics.

What became immediately evident in conversations with Michael Gove is that this is a Cromwell-like politician. Remembering debates in times of Oliver Cromwell, Oliver Cromwell was much less accommodating than other Members of Parliament when dealing with Charles I.

Oliver Cromwell gave options to Charles I to come to an agreement but in the end the actions of Charles I led to his decapitation in Banqueting House. Oliver Cromwell has a certain degree of flexibility but when the King waged war on his own subjects using German mercenaries that meant having crossed a red line.

My first impression - and everything is a matter of perception - is that Michael Gove is more about certain fundamentals indicating that the EU market is important insofar certain principles like legislative powers, border control and immigration are non negotiable. There are red lines. David Cameron had an open agenda to negotiate and went into negotiations wanted to get something that in the end he did not get. Michael Gove knows what he wants and if he doesn't get it then there is no point in any kind of negotiation.

What transpires is that with or without Common Market, countries in Europe will continue trading and that the actual costs of trading will be determine by a give and take process. Seven hundred thousand jobs in Germany depend of exporting cars to Britain. Any additional trading costs will hit both British consumers and German car factories because the said trading costs will reduce German competitive advantage by raising the cost when importing and buying German cars, something that German obviously does not want.

Angela Merkel's more conciliatory approach means one thing: Angela Merkel was seriously undermined in recent elections with Alternative für Deutshland making big gains. The news that the European Union will require Germany to increase its contribution to the European Union Budget and that the immigrant business will cost Germany not less than 72 billion Euros will not improve Angela Merkel's popularity with German voters and the country faces elections pretty soon.

Add to this the fact that not less than seven countries could end up having Referenda on EU membership within two years. The prospect of losing more members within two years starting a domino effect is very much in the minds of those running the European Union including Angela Merkel.

Only today it was revealed that the Austrian Constitutional Court has indicated that there must be a re-rerun of the recent Austrian Presidential Election. Geert Wilders heads the biggest party in Holland. Front National has a very serious chance of getting Marine Le Pen elected President of France. At this point in time, the European Union and those running would not be in a position to be harsh in any way, shape or form. Those who don't want to leave want changes that the EU might not be able nor willing to deliver.

So this is the political environment in which Michael Gove has decided to stand to lead the Conservative Party. Can Britain afford to ask for more concessions? Well, the EU's position is extremely shaky. As a matter of prided, the EU could decide to be harsh on Britain. As a matter of practically and pragmatism it is a vital interest for the EU to reach an agreement before a domino effect brings down the entire edifice with more countries joining Britain on the way out.

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