Brexit Falls Behind Again

An economic reason for Why Britain must exit: Britain's membership of the EU is systematically undermining the foundations of the City's success

The result is research published in my booklet Risk and Reward – explaining why the EU separates risk from reward and what this means for the City.

...The great Austrian economist Ludwig von Mises emphasised that, in a market economy, it is the consumer who is sovereign. But the president of the EU Commission recently pointed out that “there can be no democratic choice against the EU treaties” – in the EU it is not the consumer but the EU treaties that are sovereign.

To protect its single currency, the EU disregards both democracy and market economics. In my research I show how this has been done, revealing the EU’s problems to be systemic – coded into its DNA at conception.

You may have noticed that the EU is obsessed with appearing to abolish risk – the very commodity from which the City earns its living – and that the euro has managed to survive longer than many expected. The two thoughts are not unconnected because the continuation of the euro requires misallocation of risk, and with it the misallocation of capital.

In this way, membership of the EU systemically undermines the foundations of the City’s ability to facilitate the allocation of risk to those willing to shoulder it.

It is hard for some to admit, but companies arguing to remain in the EU do so because EU regulations either allocate their risk to others or add costs that prevent small businesses from competing with them.