European Jewish Congress
EJC President Dr. Moshe Kantor on Brexit and the Jewish question
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EJC President Dr. Moshe Kantor on Brexit and the Jewish question

In March earlier this year, my family and I visited the beautiful surroundings of Devon and Bath.

It was was quite exciting for me to see provincial Great Britain for the first time - towns and villages dating back to over 1,000 years ago, where people are so happy to enjoy tradition and modernity simultaneously, with comparatively modest spending.

Some of the people we met had never been outside the UK or even to London.

The harmony was spoiled by only one thing. I was really surprised by the answer to one question. The vast majority of people told me that they were going to vote “for” Brexit on June 23rd!

The upcoming referendum on whether or not the UK should stay in the the European Union will impact more than just the future of one country – it will determine the future of the entire European Union and the world.

The British have split. There is a real war raging in the media between those who are “for” and “against” the exit. The British want to make their own choice, and this is the reason why, as polls show, they reacted negatively to President Obama’s advice during his visit in April. Since the matter concerns the country’s sovereignty, British voters want to decide in a sovereign way, independently.

Still, as President of the European Jewish Congress, I must voice my opinion. Voters in Britain may choose whether or not to heed it.

I am unequivocally against the exit because of three serious concerns: my love and care for the UK, where I currently live and raise my three sons; my worry about the united Europe; and finally, the obligation vested in me to fight for the wellbeing and security of Jews in Europe. I also believe my opinion is worth hearing because, as a businessperson, I understand the logic of investment decisions. I see that Brexit-related structural and legal uncertainty has been blocking both business decisions and household spending.

So why am I against Brexit?

First, the UK

Brexit will have a strong and long-lasting adverse effect on the UK economy and its standard of living. Here, I completely agree with the vast majority of British economists and experts from the World Bank and IMF. My personal estimates as a stakeholder practically are the same as of HM Treasury. British voters and I need to think about the future of their children and grandchildren. If the UK leaves the EU, they will experience a 6.2% decrease in GDP growth rate by 2030, and the annual losses of each household will reach £4,300. People with lowest incomes and those working in mechanical engineering and the steel industry will suffer the most.

Public revenue will decrease by at least £36 billion; social spending will decline accordingly. Because of the exit, the UK may lose £100 billion and 950,000 jobs.

After more than four decades of life in the EU, the British have started to take for granted the many benefits of EU membership! British farmers and depressed regions receive benefits and subsidies provided by the mechanisms of the Common Agricultural Policy – these will be taken away from them. The EU has financed hi-tech programmes that will be shut down, and the UK will lose ground in innovative development. The free movement principle allows 2.2 million British people to study, work and take vacations in other EU countries, enjoying low-fare air tickets and European medical insurance. All this will be gone after the exit from the EU. In exchange for what? A VAT refund on purchases within the EU, like Chinese and U.S. citizens get. But if you don’t visit London often, would you even take advantage of these benefits?

The EU is immensely important for the British economy. It accounts for 45% of exports and 53% of imports, excluding services, and specifically financial ones. Brexit will most likely lead to a decline in foreign trade, since the UK is unlikely to have all the existing free trade terms with other EU members. At the very least, the UK will get dragged into long, difficult negotiations on tariffs and other limitations with 27 countries. It will also need to conclude free trade new agreements with 60 countries, a function currently performed by EU agreements. Among them is the separate bilateral EU-US free trade agreement President Obama expressed concern about. That said, such negotiations are unlikely to start soon. At the moment, the United States are focused on signing TATIP with the EU. The UK will inevitably find itself at the end of the line.

If Brexit becomes a reality, foreign direct investment (FDI) in the UK will scale down. Currently, the EU accounts for over 40% of all FDI in Britain. Mainly due to EU membership, the FDI inflow to the UK in 2014, according to UNCTAD, was equal to 78% of the FDI to the United State and 56% to China, whose economies are much larger. In terms of FDI per capita, the UK is 3.9 times ahead of the United States and 12 times ahead of China. In absolute figures, it was $1,129 per British, $288 per American and $94 per Chinese. The FDI inflow is a very good indicator. The City of London will lose its importance as the premier European financial centre. More than 100,000 people may lose their jobs in the British financial sector.

Taking into account the scale of the issue, I support the position of top Jewish business leaders including Lord Sugar, Sir Martin Sorrell, Sir Philip Green and Sir Victor Blank who say they would vote for the UK to remain in the EU in June's referendum. Uncertainty of Brexit would be bad for business, they say - and I fully agree with them!

Second, Europe

While the effect of Brexit on Britain has been thoroughly analysed, there are no reliable financial and economic estimates of what Brexit would mean for the EU. Obviously, the biggest blow for the EU would come if Brexit triggered a domino effect, with other disaffected EU member states choosing to follow the UK. This is a very real scenario. According to a recently released Ipsos/MORI poll, nearly 50% of respondents in Belgium, France, Germany, Italy, Poland, Spain, Sweden and Hungary find this scenario probable. The percentage of Brexit supporters, however, is smaller (Italians 48%, French 41%, Germans 34%, Spanish 26%). Fifty-three per cent of Europeans still believe that the UK will remain in the EU. Nonetheless, Europeans are attracted by the very idea of referendum. Twenty per cent of respondents think that the Commonwealth will become more integrated by 2020, and twice as many – 40% – believe that the ties between EU members will loosen.

I admit that Brussels has made many mistakes; that many decisions made by the EU bureaucracy annoy the British, who prefer to stay in their comfortable little national world while enjoying all the economic, social and other benefits of EU membership. I see a similar mentality in my home country, Russia, where many people want to work like they did under socialism while enjoying the benefits of capitalism.

I would like to put a question: will this small national world remain comfortable? I’m afraid it will not. Simply put, everything that will happen to the UK if it exits the EU will eventually happen to everybody else. While the UK economy is very strong, the same cannot be said about all other EU members. This means that the consequences of the Commonwealth’s collapse will be even more dramatic for them. If the integrated EU is having a hard time coping with the migrant crisis, individual countries will never be able to handle the wave of refugees, even if they build high fences along their borders. It will also become that much more difficult for them to stand up against the threat of terrorism. The British need to understand that the exit of the UK from the EU would mean its withdrawal from common cooperation arrangements existing between police (Europol), counter-terrorist organisations and a uniform system protecting the EU external borders (Frontex). This would obviously weaken their security.

Looking further, right-wing and left-wing nationalist parties use social, economic and financial woes to gain even more popularity. Nationalists will inevitably be followed by extremists and radicals of all kinds. Europe will find itself back in the 1930s, if not in the Middle Ages. Do we remember what happened after the 1930s - World War II and Holocaust?

Third – the future of European Jews

I think the above reasons explain my extreme concern about the situation in the UK and the EU in general. It’s true that the situation of Jews in the UK is relatively good. There is no tradition of anti-Semitism in the country. Jews feel safe. This explains the position of many British Jews, who assume that democracy and tolerance will continue to prosper in the country post-Brexit, and that political extremism and anti-Semitism are other people’s problems.

However, I would like to remind you that we have been living in the 21st century for the past 16 years, at a time when the idea of an “island state” with all of its benefits has long lost its meaning. The wave of nationalism sweeping over Europe and the world does not set aside such realities as the global economy and global information space. Even if the UK manages to hold back the wave of xenophobia, extremism and anti-Semitism, Jews in continental Europe will not escape it. For Jews, today’s Europe is Titanic, a sinking ship, and Brexit is a SOS signal for European Jews. For several years already, I have been witnessing an alarming rise in anti-Semitism in Europe. Jews are losing patience. Jews are being attacked more often; fearing for their lives, Jews are leaving Europe in larger numbers. What we are seeing can be named a new Exodus. The most law-abiding and active diaspora is fleeing Europe. 

 There is no doubt that if the EU gets weaker or collapses under the weight of social, economic and financial troubles, anti-Semitism, one of the most detestable manifestations of xenophobia and extremism, will escalate to the level of regular pogroms, if not to the level of Nazi persecutions. Europe has no comprehensive solution to the issue of anti-Semitism. Although the number of anti-Semitic incidents decreased nearly twice over the past few months, it is only due to additional armed police protection of the places where the Jewish diaspora lives and has its institutions.

You don’t need to be a visionary to state that Jews are sensitive to rising structural, institutional anti-Semitism, when the entire nation and the State of Israel are being blamed. The remaining Jews are starting to flee Europe to save their families and children. When they leave, Europe will lose a considerable part of its intellectual, moral, ethical, value, and eventually financial potential. Europe will become poorer for centuries. This is an undebatable fact. This is what the world history teaches us.

Will British Jews and the UK manage to escape this destiny?

Much depends on the decision British voters make. I hope to see a victory of traditional common sense, rationality, good judgement and a sense of responsibility to Europe and the entire world.

Sources:

  1. www.gov.uk
  2. unctad.org
  3. The Jewish Chronicle,  February 25, 2016 

Thursday, May 19, 2016
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