How to prevent chaos after a Brexit-vote

It’s the last day of campaigning before the big vote on Thursday. Traders, bankers and money managers are already pretty nervous, judging by what they have done during the past days. Whereas last week saw a strong sell-off of all sorts of assets, particularly those with a strong UK-exposure, investors bought back heavily on Monday and Tuesday. Still, billions have been taken out of UK based funds in the run-up to the referendum. Last week, the FTSE 100 shed close to 100 billion pounds within four days. Banks, particularly Barclays, are deemed to be among those most affected by a vote for Brexit.

The losses have flavoured the debate, now that the vote is imminent. For some, they are an indicator for what might await them on Friday. Although most polls no longer see Leave in the lead – and the bookies just readjusted their odds towards a vote for Remain – many decision-makers working in the financial industry fear that the early morning hours on Friday might provide them with a surprise outcome.

Should there be a vote to leave, experts forecast a sharp decline in Pound Sterling between 10 and 20 percent, a move that could also drag down the Euro. British shares as well as European shares are supposed to tank, with a mark-down in the region of around 20 percent.

With the help of extra liquidity operations, the Bank of England has already provided banks with extra cash in case. Governor Mark Carney is said to be prepared to reduce base rates further, from the longterm historic low of 0.50 percent. In addition to this, the Bank of England could increase the amount of money it spends on asset purchases (currently at 375 billion pounds) and coordinate with other central banks such as the ECB in order to limit any impact on the overall financial system. As recently as Tuesday, the Executive Board of the ECB met in order to discuss potential scenarios after the referendum on Thursday.

Thanks to a number of swap lines between for example the Bank of England and the ECB, officials seem to be confident they are well-equipped for any sort of shock. That’s also what I took away from my recent interview with Andrea Enria, the chairperson of the European Banking Authority (EBA). According to him, national and supranational regulators have made sure that British and European banks are prepared for the worst.

Banks and funds have also taken measures. Depending on whether they are hugely exposed to the potential outcome of the referendum or not, they have hedged some of their positions, sold off risky assets and set up contingency plans should there be a vote to leave.

However, there are people who say that this might not be enough. On Monday, George Soros, the famous investor who successfully bet against the Pound Sterling in 1992, warned of a potential “Black Friday” should there be a vote for Brexit. Unlike in 1992, when the UK dropped out of the Exchange Rate Mechanism, there is not much scope for a cut in interest rates, Soros argued. Assuming that the Bank of England would not embark on a similar mission like the ECB to enter negative interest rate territory, there is obviously not too much room between 0.50 percent and zero.

This is also where it’s no longer just shares and currencies that are suffering. After a Brexit vote, a decline in Pound Sterling would impact ordinary citizens relatively quickly. “Too many believe that a vote to leave will have no effect on their personal financial positions. This is wishful thinking. If Britain leaves the EU it will have at least one very clear and immediate effect that will touch every household: the value of the pound would decline ­precipitously. A vote to leave the EU would also have an immediate and dramatic impact on financial markets, investment, prices and jobs,” Soros said, according to the Guardian.

So will it be all shock and horror on Friday? The first results are supposed to come in around 3 AM in the morning. That might be the time when the turmoil starts, first with money markets in Asia. Thanks to my editors, I will be watching this very closely: On Friday, I will be shadowing a trader at an investment firm here in London, from around 4 or 4:30 AM onwards, and see how he reacts to the outcome of the referendum.

I guess I will be more nervous than him.


Readers and the Referendum

In distant memory, there was a time when readers were unknown beings. They bought your paper, watched your shows. Some of them wrote to the editor, but unless you were the poor soul solely responsible for the readers’ letters, you rarely caught a glimpse of what they thought, liked or disliked.

But this was not meant to stay. With ReaderScan, newspaper editors got an introduction into what kind of stories their readers read, where they started reading a story, where they exited a story. Core to all this was a laser pen which traced the reading pattern of the reader and made it comparable to other readers and readers of other papers. I remember quite clearly that in 2005, when I interned at Koelner Stadt-Anzeiger, a local paper in Germany’s fourth largest city Cologne, there was a lot of excitement around ReaderScan and the ability to better understand, and, ideally, also better serve your readers, based on what you learned with the help of the laser pen.

The advance of the internet has exceeded our expactations by far. Not only can we now easily tell how much a story is being read, shared, liked and forwarded, we can also see where people enter a text and exit, whether a headline works or not, who tends to comment on what and also how long people tend to continue reading (something around three minutes is considered “good” these days). This has helped media outlets a lot in providing the content that people are interested in. One of the downsides though is that many editors tend to focus only on stories that they know will click well. A whole lot of what we would have reported on in the past – in our capacity as chronologists and gate-keepers – has now become obsolete.

Still, I welcome the increase of knowledge that we have had, thanks to the web, Google analytics and other tracking tools. I also like that I am much closer to my readers now, that I know what they like and what not, that they send me messages on Twitter and Facebook, that they inform me in case I make a mistake. But – and this is key – the age of traceability and instant communication with your readers has also led to a lot of dissappointment on my side.

I am referring to those emails and tweets that start without a salutation but go straight to the point, exclaiming “Lügenpresse”, a term initially used in the Third Reich in order to defame journalists. These days, Lügenpresse (lying press/mendacious press) refers to everything with which readers disagree, whether it is the migration crisis, the financial state of Greece, the Euro or the impact that a Brexit would have on the British economy.

During the last three years, I have observed a strong increase of these written notes that not only disagree with a text that journalists have written but go on with insulting the author, discrediting their journalistic capabilities and skills. Often times, the verdict is clear: You, the author of a text that was written following strict journalistic standards (btw, a text that was published in a reputable national news outlet), are just a pen pusher, a scribbler, someone that deserves to be abused.

I have received a number of these emails and still, it hits me when one of these arrives in my inbox, not in my spam folder where it belongs. Monday was one of these mornings again. “Dear Ms. Trentmann”, the email read, “we regret to conclude that your credibility has now been used up.” The text went on, stating I was pretending to be a fact-checking journalist that failed to attribute more space to those entirely credible arguments that the Leave-side is known for.

I am not entirely sure what the reader was referring to. Maybe to one of the economic arguments according to which a Brexit would not hurt the British economy although almost every reputable institution in the world has said so? Or to one of the immigration arguments according to which there was “good”, e.g. German and French, immigration, in the EU, and “bad” immigration, e.g. Polish and Slovakian, immigration, leaving aside important findings such as those of the International Longevity Centre (ILC), a reputable British think tank, according to which the claim that Brits and European immigrants compete for the same jobs, is false? Or maybe another Leave-argument, perhaps the one about the UK sending 350 million pounds to Brussels per week?

Obviously, the friendly reader drew the only possible conclusion: That my reporting of the British EU-Referendum was hugely biased. It seems my thoughtful reader has missed some of my stories – I did investigate some of the arguments made by the Leave-side. But that’s not the point. The point is that journalists, like me, observe an ever-increasing amount of insults, provided by our readers that of course, know it all. Not just me, but also a lot of other colleagues find that quite distressing. Some of my colleagues at DIE WELT have published their favourite reader’s comments on Facebook and Twitter. Not that this would change anything. But of course it’s good to know that I am not the only one receiving these emails.

To me, this is not only a sign of the deterioration of manners when interacting with strangers. Of course, the internet provides a great shield for all those that would never have the courage to swear at you in public. But, it is also hinting at a bigger problem that Western societies face. The perceived lack of credibility of governments, central banks, international institutions like the IMF and the World Bank, journalists and politicains. Often times, public anger and aggression do not stop with emails, as we have seen last week, when Jo Cox, a Labour MP, was shot in her constituency in West Yorkshire.

I think that this tendency is deeply worrying. By categorically declaring that governments, journalists, central banks or politicians are untrustworthy, we undermine the very foundations that our Western democracies rest on.

Will the death of Jo Cox make a difference?

It’s been a quieter weekend than I expected. Before the death of MP Jo Cox on Thursday, I braced myself for a Saturday and a Sunday full of heated arguments, nastiness and more lies and half-truths. After the attack on Cox though, both campaigns cancelled their events for Friday and Saturday. Rallies were scrapped, battle buses stayed in their garages. Campaigning resumed mildly on Sunday, with Labour leader Jeremy Corbyn attending the Andrew Marr Show, as did Michael Gove. Prime Minister Cameron appeared on the BBC’s Question Time on Sunday, possibly one of his biggest TV audiences.

With the recall of Parliament on Monday, only Tuesday and Wednesday will provide the opportunity for both sides to try to convince the undecided – currently at 12 percent – and reassure their supporters ahead of the big vote on Thursday. The tone of the debate has become noticeably calmer, less aggressive and I assume that the last days before the referendum will not become as outrageous as they would have had Jo Cox not been killed on Thursday.

Since the attack, I have been asking myself whether this could potentially swing the vote. Will the more sombre tone harm the Leave side? Could the death of Jo Cox, a Labour-MP, lead to more Labour-voters showing up at the polling booth (assuming they registered beforehand)? Will it make Leave supporters think twice and ask themselves whether they really want to vote for a side that has stirred up so much hatred and anger in the run-up to the referendum? Or will it impact the Remain-campaign because it takes away several campaign opportunities for leading politicians to address the crowds? Or, another possibility, will it help Prime Minister Cameron to appear more as a unifying figure which might then lead voters to follow him?

The idea has gained some traction. Some – mostly unnamed – campaign strategists and political scientists think that the murder of Jo Cox could actually “help” the Remain side. Honestly, I am a bit sceptical about this. Yes, maybe it might influence those that are still undecided. But those that already know which way they will vote?

I would like to believe it, yes, but I also have in mind what Andre Spicer, a Professor for Organisational Behaviour at Cass Business in School, explained some weeks ago: With issues as complex as the EU, people tend to make up their mind fairly early, on the basis of what they know at that point in time and what they are told by their peers and closest friends. Thus, the flurry of economic studies that has been published during the last couple of months did not shift the mood as much as one would have hoped.

My colleague Stefanie Bolzen, one of our politics correspondents here in London, visited Jo Cox’s constituency on Friday. According to her, the murder will not change people’s voting intentions on Thursday: “The emotional European idea that people will change their mind about voting Brexit is nonsense”, she wrote on Facebook. “European Wunschdenken. Brits far too pragmatic.”

I am thinking along similar lines. My base assumption is now that there will be vote for Brexit. Not because of the polls. I still don’t trust the polls, independent of which side they see in the lead.

It’s because a part of me has come to realise that a large part of the British population wants to believe in simple solutions for complex problems, irrespective of how unrealistic these solutions are and how far-reaching the consequences of those might be. To me, that’s not just a British problem but a problem that many other Western democracies such as Germany, the US and France face. Donald Trump, Marine Le Pen and the “Alternative für Deutschland”, the alternative for Germany, all avail themselves of this trend.

Somewhere along the line, we seem to have lost that stable majority that was endowed with reason and voted rationally. Looking at all those false claims that are being made by the Leave-campaign and the fact that they do resound with voters, I can only come to the conclusion that this is what people want to believe, independent of whether it is true or not. Leave-campaigner Michael Gove, the former education minister, hit the nail on the head when he – under huge applause – exclaimed that people in this country have had enough of experts”.

That is quite worrying to me. Are people really imbecile enough to think that the elites running the Bank of England, the IMF, the World Bank, the OECD don’t know what they are talking about? With a world that is getting ever more complex, I guess our Western democracies will hit a wall fairly soon, unless we rid ourselves of this narrow-minded attitude.

There are no easy solutions for difficult problems, full stop. I guess that Brits might have to go the hard way before they realise. How about if we have a third EU-referendum, in about 40 years from now?

Reporting the Attack on Jo Cox

For some time, I have not only been working with DIE WELT, the German newspaper, but I have also been working for N24, the national news channel that our holding company Axel Springer bought in December 2013. Mergers are never easy and so it has taken a while for the integration of DIE WELT and N24 to make some progress.

In Berlin, they are currently working on a new, joint website. My colleagues at DIE WELT often times comment on trending developments not only for our print and online edition, but also for N24. On Thursday, I received further proof that the integration has entered a new stage and that we are getting closer to becoming a truly multimedia outlet that provides content for all channels – print, online, mobile and TV. Unfortunately, it was a very sad incident that provided that insight.

Just after 4 PM in the afternoon, I was on the phone with an interview partner, when a colleague from N24 called and asked whether I could do a live on the attack on Labour MP Jo Cox? I hadn’t followed the story and had to get myself prepared within a very short amount of time. Some fifteen minutes later, the first live started. I answered the most pressing questions and thought I was done. But no. The phone rang again and again. In the end, I did five lives for N24 – an indication that the merger between WELT and N24 is not only working in Germany but also abroad.

The incident itself is really shocking. Apparently, Jo Cox, a 41-year old mother of two, was stabbed and shot when she interfered in a scuffle in her constituency in West Yorkshire. A 52-year old man shot her several times, reportedly at least once close to the face. According to witnesses, he shouted “Britain first” before that. Cox was known to be an ardent supporter of Britain’s continued membership in the EU. Only on Wednesday, she took part in a boat demonstration on the Thames, waving a flag for Remain.

At this point, we don’t know whether the attack was politically motivated or not and whether there is any connection to the upcoming EU-referendum. Both sides, the Leave- and the Remain side, cancelled their campaigning for the rest of the day. Also on Friday and Saturday, there will be no campaigning for the EU-referendum. Leading politicians, including David Cameron, George Osborne, Jeremy Corbyn and Nigel Farage, have taken to Twitter to utter their condolences and their sympathies for Cox’s family.

With only seven days to go, reporting the referendum is obviously getting much more difficult. It will be easy to draw the wrong conclusions after this incident. Let’s hope that journalists do their job properly and check the facts before they report.


Brexit and gold prices

It’s not your normal type of shop that Ross Norman operates, at least for British standards. The tall Brit resides in Mayfair, close to the Ritz Hotel, only a few meters away from Jermyn Street where they sell tailored shirts, handmade cheese and luxury shaving cream. But Ross Norman has something different on offer: Gold, in the form of bars, coins and jewellery. The whole shop is gold-coloured. Norman has golden showcases, a golden chandelier as well as a golden vault behind the cashier. A big screen on the wall shows the most recent development of the gold price. The red line, not a surprise, has gone straight up only.

Ross Norman’s portfolio is a very special one. Contrary to Germany where retail investors have been buying gold for decades, the investment is relatively new to Brits.”My customers are still surprised that they can actually buy gold here”, Ross Norman said when I visited the shop on Tuesday. For decades, gold has not really been a focus for British retail investors. “The reason for this is simple: The Pound Sterling has been around for 680 years, and we have never had hyperinflation like Germany”, Norman explained. Because Britain did not have the same traumatic experience of a near total loss of savings as Germany had, the attitude towards gold is different.

However, this seems to have changed rapidly. Sharps Pixley Ltd., a subsidiary of Degussa from Germany, started offering gold to retail investors in London in January. Until then, British customers could only buy gold online. Up until April, demand tripled, every month. Now, just a week before the British EU-referendum on the 23rd of June, with heightened market volatility and fears of more to come, Ross Norman has observed a surge in demand for his products. “There was a tsunami”, the 56-year-old said. “Within a week, we ran out of Britannica coins three times.” These coins are, besides one kilo bars (currently trading at around 28.000 pounds), the preferred item for Norman’s customers.

Heightened uncertainty in the UK, but also in other markets in the world, has led to gold reaching a 12-month-high. Most recently, gold traded for 911 pounds per ounce (31,1 gram). On the futures exchanges, the precious metal has jumped the psychologically important threshold of 1300 dollar per ounce. Still, Brits buy comparatively little amounts of gold. According to the World Gold Council, British demand for bars and coins reached 9.4 tonnes last year, compared to 113.8 tonnes in Germany. However, “the amount of people who have lost trust in the current financial system is rising”, said Ross Norman.

He expects that the demand for gold in his Mayfair shop will increase, the closer we get to referendum day. In order to be prepared, he has already ordered his staff to store more large gold bars. So is he satisfied, now that it seems he picked the right time for opening his shop? Norman shrugged when I posed that question. “I actually don’t like the current gold price”, he stated. “There is a lot of fear, an inherent weakness.” According to him, there are too many people speculating on gold these days which leads to a rising but unstable gold price.

“Brexit to my thinking is still a lot of noise”, Norman said. Let’s see whether he is right.




What companies hate most pre-referendum day

Uncertainty. It is the keyword best describing the state of the British economy in the run-up to the referendum on the 23rd of June. With regards to GDP, the fact that companies don’t know whether they will soon find themselves outside the EU or not, has already taken its toll. In the first three months of this year, gross domestic product expanded only 0.4 percent, down from 0.6 percent at the end of 2015. Compared to the growth levels observed in 2014 and early 2015, that’s a significant reduction in growth.

Likewise, the amount of mergers and acquisitions has gone down (39 percent compared to the same time last year), as has foreign direct investment into the UK. Overall uncertainty has also left its mark on the real estate industry, one of the core pillars of the British economy, especially in London. Buyers have put their decisions for residential property on hold, as have tenants when renting commercial property. According to the Bank of England, mortgage approvals for house purchases fell back appreciably to an eleven-month low in April.

This is likely to continue, should there be a vote for Brexit: “A vote to leave the EU would be liable to see a marked hit to UK economic activity over the rest of this year and in 2017 amid heightened uncertainties, which would likely weigh down heavily on the housing market”, commented Howard Archer, Chief UK and Europe economist at IHS, a market research institute.

The latest victims of uncertainty are the stock market – the FTSE 100, the leading British index, shed 100 billion pounds in just four days – and the pound sterling which trades at eight week lows and is forecasted to decline further in the remaining days before the referendum.

“Wait and see” also seems the option of choice for employers. The labour market has slowed down, there are less new jobs being created. As the Morgan McKinley employment monitor shows, there were five percent less jobs available in the financial industry in London in May compared to April. “The performance of many institutions has not been encouraging”, said Hakan Enver, Operations Director at Morgan McKinley Financial Services. “We still see uncertainty due to the upcoming June referendum.”

Not surprisingly, the confidence of British firms is, according to the FT-ICSA Boardroom Bellwether survey, at a four year low. Only 12 percent are expecting an improvement over the next 12 months, down from 40 percent in December 2015 and 74 percent in July 2015.

Because of its nature, the uncertainty for businesses goes beyond their day to day activities. It remains to be seen whether we will really know much more on the 24th, as a vote for Brexit would trigger a long and difficult phase of renegotiations. Thus, the much hated uncertainty may last way longer than companies might want to think. “With a vote for Brexit, the outlook remains unsure”, John Hammond, a partner at CMS Hasche Sigle, told me on Friday. “There will be more wait and see, companies will delay their decision making even further.”

Both British and German firms have been feeling the effects of uncertainty for a couple of months. Nevertheless, many businesses are not prepared for the impact of a Brexit-vote, with the exception of the financial industry. As the FT found out earlier this week, only a few businesses have taken adequate precautions to prepare for a British exit from the EU, despite the fact that the polls are suggesting a very tight race. Several polls now see the Leave-camp ahead, in some cases with a margin of seven or even ten percentage points.

This lack of seriousness when thinking about Brexit is also indicated by a recent study by the Global Counsel that stated that just over a quarter of FTSE 100 firms identify it as a concern for their performance in 2016. John Hammond, the lawyer at CMS Hasche Sigle, sees his German clients only now waking up to the possible reality of a Brexit vote: “I am telling people that their previous attitude – Brexit will not happen because it does not make economic sense – is complacent”, he said. “German companies are not particularly well prepared.”

The same goes, I fear, for a majority of not only British but also French, Dutch and Belgian companies. At the same time, some of Hammond’s clients chose the other extreme: “Some have been asking whether they can still sign contracts under British law or whether they should wait”, recounted the lawyer.

Ironically, his profession might actually be one of the few winners after a vote for Brexit, during an extended period of uncertainty. Lawyers, management consultants and tax experts are expected to see a surge in demand for their services, as companies struggle to cope with the levels of uncertainty.

But, at least John Hammond would be happy to forgo that business: “It’s not what I would hope for”, he said with a grave tone. “I would not want to benefit from a Brexit.” Unfortunately, there are others, especially on the politics side of things, that don’t have this issue but that will be quite happy to benefit from vote for Brexit.


Brexit – The Norwegian model

One of the frequently discussed post-Brexit models is the “Norwegian solution”. The oil- and gas rich, but sparsely populated country in the North is not a member of the EU, but of the European Economic Area (EEA), similar to Liechtenstein and Iceland. Technically, it is as much a part of the single market as France, Germany or the UK.

Norways is a regular contributor to EU budgets: It pays into the EEA and Norway Grants scheme (388 million Euro anually) and into a number of other EU programmes like Horizon 2020, Erasmus+ and Galileo. According to the Norwegian mission to the EU, the second amounts to 447 million Euro per year, plus nearly six million Euro for the participation in the Schengen agreement as well as 25 million Euro for the European Territorial Cooperation Interreg. In total, Norway, on average, contributes 866 million Euro per year to the EU budget.

Under the EEA arrangement, Norway has to adhere to part of the existing regulatory framework of the EU. Some areas, for example the fishing and agricultural industry, are excluded from that. Nevertheless, Norway has to accept the European freedom of movement which leads to Norwegians working in the EU and EU citizens working in Norway.

On the political level though, Norway is much less involved than a full EU member. Although it can influence new laws and directives in the early stages by trying to work with the respective EU bodies, it is not involved in drafting new regulation nor in decision-making. As the government in Oslo concludes, “Norway is in practice bound to adopt EU policies and rules on a broad range of issues without being a member and without voting rights”. According to, new EU rules are passed through a committee before they become Norwegian law. Only in significant cases does the Norwegian parliament consider them.

For those in Britain arguing to “take back control”, one of the core straplines of the Leave-campaign, this cannot be the most attractive route to take after a vote for Brexit. Still sending money to Brussels, still introducing EU laws, but having no real say at all? To me, that does not sound too convincing. If we take immigration into consideration, the Norwegian model appears even less attractive, given that immigration is one of the most important arguments cited by the Leave-side.

Under a Norwegian style EEA-agreement, the UK would still have to allow EU-citizens to come and to work here. Assuming that years after a Brexit vote, the economy would finally recover, there is not much that would keep European workers coming to Britain in similar or even bigger numbers than now. The Norwegian solution hence does not solve the immigration dispute.

Regardless of all these objections, the majority of Brits seems to favour this option. 54 percent of those questioned by YouGov for the Adam Smith Institute would support a Norway-style trade deal in case of a Brexit. Among Brexit-supporters, the figure is even higher (79 percent). Just 25 percent of those surveyed would oppose such an arrangement.

Interestingly enough, the Norwegian model is also the one which would cause the least economic damage, compared to other options such as the Swiss model, the Turkish model or the WTO-model, as the London School of Economics, the National Institute of Economic and Social Research (NIESR) and the Treasury have found out in their various Brexit studies. Nevertheless, the economists at NIESR expect that cost for exports will rise ten to 16 percent, compared to today’s levels, as will prices for costs for imports (eleven to 17 percent).

So how does that work? Why would the majority of Leave-supporters vote in favour of a Norwegian-style model, given that immigration is one of the core concerns for why the UK should leave the EU? For me, this is another strong indicator of the lack of coherence on the Leave-side. If European immigration is really the reason for why people think the UK should leave the UK, a continuation of the freedom of labour can obviously not be what people want.

Even if this might be the most economically feasible option on the table (which remains to be seen), it seems quite daring for any politician to negotiate a Norway-type treaty with the EU after a Brexit-vote. That’s why David Cameron has already signalled his opposition to a Norwegian solution should there be a vote for Brexit. The Prime Minister told the BBC’s Andrew Marr show during the weekend that it would be impossible to follow the Norwegian model by remaining inside the single market despite being outside the EU because that would mean accepting freedom of movement and trade legislation made in Brussels. “What the British public will be voting for is to leave the EU and leave the single market”, he said. Were the British public to vote for Brexit, he would take the country out of the single market, the Prime Minister pledged.

But that, of course, remains to be seen as well. I would be very surprised to see David Cameron lose the referendum and still be Prime Minister for long enough to pull the country out of the single market. It might very well be his successor trying to convince voters before the next general election in 2020 that pulling out of the EU was a good idea, even if the immigration issue is – thanks to a Norway-style EEA-agreement – still unsolved.

Labour and the referendum

The British EU-referendum is, as I explained before, the consequence of a continued rift within the Conservative Party. The ambiguous feeling towards Europe that the Tories nurture has been around for a number of decades and is one of the core reasons why the UK will hold a referendum on the continuation of its EU-membership on the 23rd of June. It is, to put it briefly, a party issue that became a national issue.

Less than two weeks before the referendum, the debate within the party resembles a civil war. The division lines between Brexiteers and Bremainers are all too obvious. On Thursday, we saw Amber Rudd, the energy minister, take off her gloves and furiously attack Boris Johnson, the former mayor of London and one of the prime advocates of a British vote to leave the EU.

The aggressiveness of the debate has raised a number of concerns among party members but also observers. How can the Tory party reunite after June 23rd, given that at least half of its members will not like the end result? I am not sure whether it will be, as Iain Duncan Smith, the former labour minister and himself a Brexiteer, put it, be “business as usual” soon after the referendum. According to him, the party would bury its hatchet, independent of the result. At least, that’s what he said in mid-May at the Institute of Directors.

That’s all well and makes interesting reading, watching and thinking. The real question though is – where is Labour? With all these prominent Tories tearing each other to pieces in the final weeks of the referendum campaign, we haven’t really heard that much from the Labour party at all.

The issue here is Jeremy Corbyn, the backbencher that became party leader after the demise of Ed Miliband after the election defeat in 2015. Corbyn, a candidate deemed to be “unelectable” as a Prime Minister by wide parts of the establishment and the press, but also his own party, has his very own agenda.

On top of the list are topics such as nuclear disarmament, an end to austerity and the introduction of an NHS-style National Education Service. In March, Corbyn staged a huge anti-nuke demonstration at Trafalgar Square; as if the UK has nothing else to worry about than the question of whether it wanted to dispose of its nuclear fleet that’s been a source of great national pride for decades.

Some days later, I listened to Corbyn give a speech at the Annual Conference of the British Chambers of Commerce (BCC). That event itself is kept in remembrance, but not because of the speech of Jeremy Corbyn. It is kept in remembrance because of the confession of John Longworth, the then director general of the BCC who indirectly recommended a vote for Brexit and who had to resign soon after, given that the BCC wants to stay neutral in this debate. At least, Longworth got the topic of the event right.

Corbyn in contrast gave his audience a full ride through his political universe. He touched upon nuclear arms, equality, justice and austerity, all in great length. Only towards the end of his speech did the Labour leader mention Europe though. It was not a huge statement,  merely three sentences that closed with a cold-blooded endorsement in favour of remaining. Since then, it hasn’t gotten much better. Corbyn is either absent or not enthusiastic, a fact that friends of mine (members of the Labour Party) have nailed to his unofficial support for Brexit.

The Tories would love Jeremy Corbyn for this, but his party doesn’t. Quite the opposite, Labour voters tended to be strong supporters of the EU. Until now. “It’s devastating”, a friend said to me the other day, “you know, I voted for this guy.” Needless to say that this person is in favour of remaining and would want his party leader to be more present and vocal about the support of the continued membership in the European Union.

It remains to be seen whether other Labour figures such as Sadiq Khan, the new mayor of London, can pull the cart alone. If not, Jeremy Corbyn will be one of the people to blame for a British vote to leave. “I was a Jez fan initially, but ten months in it is clear Corbyn is doing Labour and the country no favours at all. If the Brexiteers get their way, his shameful non-leadership will be a big reason why”, another friend of mine posted on Facebook on Friday, obviously very disappointed.

The other day, a fellow journalist mentioned an interesting thought to me. Would Corbyn be doing what he does in order to get rid of David Cameron and thus increasing the likelihood for making some ground at the next general election in 2020? I shook my head in disbelief. Would you do that, as a national politician who feels a sense of responsibility to his country, his people and his party?

Which brings me back to the Tory party. I still struggle to believe that people such as Boris Johnson and Michael Gove are willing to see their country break into its constitutent parts, suffer a severe recession and be trapped in political limbo for five, maybe ten years, just to become Prime Minister?

I have been trying very hard but so far, I simply cannot get my head around it.


What a Brexit could mean for Ireland

So what is the British EU-Referendum? A British issue? A European issue? Or a global issue? Depending on where you come from, you might say its the one or the other or all three of them. Actually, there are more geographies that might have an issue with a British Brexit. One of them, as I learned on Thursday, is Ireland.

That’s not just because of the strong trade relationships between the two countries – although that is not to be underestimated. According to Daithi O’Ceallaigh, a former Irish ambassador to the UK, goods and services worth 1,2 billion pounds are traded every single week between the UK and Ireland. The UK is Ireland’s most important European export market. Entire supply chains rely on the continuation of existing trade patterns between the UK and Ireland.

But this is not the only reason why the Irish fear the potential outcome of the referendum. The main issue, leaving the economy aside, is the relationship between the Republic of Ireland and Northern Ireland, a constituent unit of the UK. “The consequences of a Brexit for Ireland will be entirely negative”, said O’Ceallaigh at an event of the Federal Trust in London.

He fears that the relationship between the protestant North and the catholic South will worsen, should there be a British vote to leave the EU. “We need another two to three generations before the peace process is completed”, he said. A Brexit could, according to him, hinder or even stop the continuation of the peace process – a point that both former Prime Minister Tony Blair and former Prime Minister John Major made on Thursday when visiting Londonderry.

Once governed by the UK, Ireland declared itself independent on December 6, 1921, ending a five year long struggle that had begun with the Easter Rising. The North however, remained part of the UK. Over decades, it experienced violent clashes between Catholics (supporting Ireland) and Protestants (supporting the UK).

That’s where the economy comes into play again. One of the drivers for the convergence between the South and the North over the years has been trade, the open border and the single market. Today, there is a common energy market between the South and the North, products are manufactured in one part of the country and sold in the other.

After Brexit, the whole arrangement could be put into question, as the border between Northern Ireland and the Republic of Ireland would become part of the external border of the EU. “Just image if there were customs posts again at the border” said the former ambassador,” the police would hate it.” He believes that anything that would underline the fact that there are two sovereigns sharing one island could stir up past tensions.

That’s a view that is shared by John Palmer, the former Political Director of the European Policy Centre. According to him, there would need to be some form of passport controls between Northern Ireland and the Republic of Ireland, should the UK leave the EU. This could also affect the Common Travel Area that exists between the UK and Ireland.

“This is highly explosive territory”, he said, “I see an immense amount of minefields.” Sinn Fein, one of the main parties in Northern Ireland, has already announced a potential referendum after a British exit. Not only could Scotland leave the Union with England and Wales, but so could Northern Ireland.

That, argued Mary Murphy, a lecturer at the University College Cork, could then result in new tensions between Unionists and Nationalists in Northern Ireland. Over 80 percent of Nationalists support a British remain-vote, whereas only 18 percent of Unionists do, she said. “Northern Ireland will be the worst affected after a British exit”, she said.

Thus, the “British question” not only affects the UK or its relationship to Europe, but also its relations with its constituting territories. Already in July could we see tensions rising, when the traditional marching season takes place. During that time, members of the Orange Order and their opponents march the streets of Belfast and other Northern Irish cities.

Now, is anybody in London paying attention to this? Mary Murphy shakes her head, as if she wanted to say, not really. There seem to be more important topics to talk about.

I sometimes wonder whether David Cameron knew what he was getting himself into when he promised to hold a EU-referendum. Is he prepared to see his country not only suffer a severe recession but possibly break up in several parts? I really doubt that.

Immigration & the EU-Referendum

Immigration, it has turned out, is one of the hottest topics in the run-up to the referendum. With Prime Minister Cameron having promised a reduction of net-migration to under 100.000 per year, the reality looks a bit different. According to new statistics from the Office of National Statistics, net-migration into the UK stood at 333.000 in 2015, the second highest on record. Out of those 333.000, 184.000 Europeans came to live and work in the UK, under the freedom of labour movement.

For Brexiteers, this is just what they have been waiting for. Both Boris Johnson and Michael Gove, two of the leading voices of the Leave-campaign, have called for a reduction in European net-migration into the UK and for the introduction of an Australia-style points system. This, they argue, would help the UK make sure that only high-skilled, high-earning foreign workers would enter the country.

Economists however are not impressed. “Under the current system, the UK is mostly attracting the right kind of immigrants from the EU already”, a report by Berenberg Bank in London finds. An Australia-style system would create extra administrative costs and would rely on government or some other central agency to identify supply gaps in the labour market and then allocate foreign workers accordingly in a more effective way than the current market based system. “It makes little sense to risk introducing a government failure where a market failure doesn’t exist”, the analysts conclude.

Still, Johnson and Gove pretend to have a case in point. And yes, on a superficial level, you could argue that large amounts of European workers end up in low paid, low skilled jobs in Britain. According to a recent study by the Migration Observatory at the University of Oxford, a majority of Europeans currently working in the UK would not meet Tier 2 visa criteria, were they obliged to apply for a work permit in order for them to work here in the UK. A Tier 2 visa requires, among other criteria, a university degree and an annual salary of at least 20.000 pounds.

But, this does not come as a surprise, as large parts of the British food manufacturing, fruit picking, plumbing and building industry are desperate for workers, independent of where they come from. Eastern Europeans come here because there is plenty of work for them and wages are higher than in their home countries. They also come because British companies cannot find enough Brits who want to work as plumbers, fruit pickers, waitresses or builders.

Still, Vote Leave argues, Poles, Bulgarians and other EU-nationals should not be allowed to come here for work. The argument is similar to what you hear in Germany when discussing the asparagus industry: These people are taking away our jobs, our future, our prosperity.

A pretty one-sided argument, both with regard to the UK economy as well as the German economy. So what do firms do if they cannot find domestic workers for their jobs? Not only the builders, but also food processing firms, the hotel industry and even tech firms fret about the possibility that they would soon be restricted in hiring EU-nationals instead of Brits. Obviously, this cannot be good for their business.

As Taavet Hinrikus, the co-founder of TransferWise, one of the fastest growing London fintech firms, put it, a Brexit would be “a complete disaster for the tech scene”. According to him, tighter labour laws could lead to TransferWise opening an office in Germany, maybe in Berlin. “If the movement of people gets restricted, we would need to make changes”, Hinrikus said. Not only professional changes, but also personal changes: “I don’t know whether I would still want to live here.”

Like me, Hinrikus is a foreigner. He comes from Estonia but has lived in the UK for many years. Limitations to European immigration after a Brexit would not just make things harder for TransferWise here in London where a third of their 100 employees come from other EU-countries. It would also create an additional emotional barrier between Brits and other Europeans, a feeling that I share.

As do many other fellow Europeans here in the UK: 40 percent of EU-nationals working in the UK say the referendum has negatively affected the opinion of the country, a recent study by Totaljobs has found. 87 percent of Europeans living in the UK are worried about the potential impact of Brexit. Still, 76 percent hope to stay even if Brexit becomes a reality. “Maybe even the Brits will leave”, Hinrikus joked when I spoke to him on Tuesday, “who wants to work in a UK that suffers a huge economic crisis?”

The anti-immigration attitude here in the UK strikes me as odd, given that the UK prides itself on having had one of the biggest empires in the world, with citizens in the remotest places on earth. Many of those people came to live in the UK after the liberalisation of the colonies, a welcome stream of immigration. Since 1991, EU migrants have accounted for just over a quarter of total net migration into the UK and thus, for only a small portion of the growth in the UK population, the Migration Observatory has found.

Of course, Vote Leave-campaigners still have one argument in reserve. Because of European immigration into the UK, public services and housing have come under severe strain, they claim. Both for schools as for flats, the economists at Berenberg flatly reject this argument. EU migrants make a net-contribution to the UK budget, the study finds, thus enabling more, not less funding for public services.

The same goes for the housing market: “The UK housing market suffers mainly from a lack of supply than excess demand”, they conclude, “less than 10 percent of Britain is urbanised, it does not lack space.” Comparing the country to Germany where you have thousands of little towns dotted around the countryside instead of one big centre like London, I definitely agree. “Better land and planning laws to make the supply side of the market more responsibe to changing demand conditions are badly needed”, the report reads.

So let’s see what June 23rd brings. I hope I won’t have to apply for a visa any time soon.