David Cameron Aspires To Emulate The Image Of Neville Chamberlaine!

Dear Greg L-W.,

Lots of excitement this morning about the US elections.

Suddenly, Trump’s a nobody. On the Republican side, it’s all about Ted Cruz. Meanwhile, America’s answer to Jeremy Corbyn – Bernie Sanders – is properly challenging Hillary Clinton, the heir apparent.

We’ll have more on the implications of all this in the next issue of MoneyWeek magazine, out on Friday.

But for now let’s turn to a rather more important (and potentially fast-approaching) vote – the UK referendum on Brexit…

“I have in my hand a piece of email”

Of all the past prime ministers you might want to be compared to (ones from the last century at least), Neville Chamberlain is probably pretty near to the bottom of the list.

So it’s poor PR planning on David Cameron’s part that he left himself wide open to a situation where he returns from continental Europe, clutching a meaningless piece of paper and cheering inanely about victory.

That piece of paper should be published later today. We’ll get a “draft text” from European Council president Donald Tusk around about noon, apparently.

But whatever it says, I’m not sure it matters.

It won’t contain wide-ranging reform on anything significant. Gideon Rachman, writing in the FT this morning, notes that “one German policymaker fumed to me: ‘The European house is burning down and Britain wants to waste time rearranging the furniture’. ”

Rachman is, of course, arguing that we should stay in Europe. The new line from the europhiles is that Britain is being terribly ungentlemanly and a dreadful bore.

Poor old Europe is on the brink of self-destruction anyway, what with Schengen disintegrating under the weight of mass migration.

This is due to the EU’s utter inability to get a collective grip on the situation. Desperate people have been dying in the Med for years to get here – read any August slow-season newspaper from years gone past. Doesn’t that failure to get a grip suggest that something is hugely flawed in the EU as an organisational structure? Doesn’t it suggest that something more efficient and more able to respond rapidly to a humanitarian disaster might be a good idea?

But anyway. The argument goes that Britain should grow up. We should muck in and help the EU to hold together. Otherwise… well, we all know what happened last century. (Insert various dark mutterings about Europe’s grim and bloody history in here.)

The EU is not the only thing stopping us from ripping each other apart

There seems to be this sense that we’re all starring in Lord of the Flies and the EU is the conch, currently clutched in the slippery grasp of Piggy. One brisk shove is all it will take to tip us into the very depths of the human psyche.

This is nonsense. In the event of Brexit, Europe will not disappear off the map. Nor will Britain. We won’t suddenly stop talking to one another either, or buying and selling from one another. And no, Germany and France will not suddenly decide to go to war again.

How about we see this as an opportunity to re-organise? To all remain friends within a more suitable, flexible structure?

The EU as an entity has become bogged down due to an overly ambitious pace of expansion and hugely conflicting visions of what it “should” be. The euro really hasn’t helped matters, but then that’s because the euro was designed to be the doomsday lever that forced ever-closer integration. Greece amply demonstrates that.

But the EU isn’t Europe. We don’t have to tear the whole thing up and start again. No borders are being redefined. We can replace it with something better.

But nor is it OK to fiddle at the edges, because right now, this isn’t working. “Muddle through” is not an option. That’s why Brexit would be good for us, and it would be a good thing for Europe too. It would force everyone to revisit their assumptions.

Of course, this will have investment implications. There will be threats, but there will be opportunities too. My colleague Charlie Morris, investment director of The Fleet Street Letter, has been looking at all of this in far more detail. You should check out Charlie’s views here.

Until tomorrow,

John Stepek,
Editor, MoneyWeek