Sunday, June 26, 2016

Will the EU collapse after Brexit?

Now the UK has voted to leave the EU, the question arises which nation is next. Austria is a likely candidate as well as Denmark and the Netherlands.

The reason is simple. For the UK one of the main reasons to leave the EU is that it had become a transfer union, transferring large amounts of British pounds to southern and eastern member states. The UK was a large net-contributor to the EU. They demanded a reform. The EU rejected those demands. And the rest is history in the making.

Without the UK other states will have to contribute even more to keep the flow of money going. And without the UK there will be one large EU member less to vote against further increasing that flow of money.

Tensions have already risen about this before the Brexit referendum. Now the exit is open. Austria, Denmark and the Netherlands (Nexit) will leave sooner or later. The post-Brexit budget discussions are a likely trigger. And when it happens the pressure increases even more and even more countries will follow: Finland, Sweden. France has always been self-centered and won't hesitate to follow once it suits them. Germany will not be able to avoid the discussion once its direct neighbors start leaving. The EU will fold ... unless it manages to reform in time.

Get rid of the transfer union before it's too late.

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