Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Might Be on the Verge of Another Political Crisis

Politics / UK Politics Nov 18, 2016 - 02:24 PM GMT

By: John_Mauldin

Politics

BY GEORGE FRIEDMAN : It’s the season for amazing electoral events.

On November 3, the High Court of England and Wales ruled the Brexit vote does not let the prime minister officially notify the EU of the UK's intent to withdraw. Rather, Parliament must authorize the prime minister’s actions.

This raises the possibility that Parliament might refuse to authorize notification. More likely, Parliament could choose to oversee the terms the UK offers and agrees to.


Regardless of any previous ambiguity, members of Parliament are expected to ratify a final proposed agreement. So they could refuse any deal’s terms.

Parliament authorized the Brexit referendum and former Prime Minister David Cameron pledged to abide by it. But the vote was not legally binding. Still, Parliament’s authorization and the prime minister’s assurance gave the vote significant weight.

The ruling doesn’t reverse the Brexit vote. It does raise an interesting question because Parliament is divided on this issue.

Falling in Line

For Americans, it is important to understand the European parliamentary system. When it functions properly, the prime minister has more control over policy than the US president.

The president’s party does not nominate candidates to the US House of Representatives or Senate. Therefore, US politicians may like the president or party leaders, but they utterly depend on their constituents.

They welcome money from national parties, but usually it isn’t enough to win an election. More importantly, a congressman isn’t going to commit political suicide by supporting policy that constituents oppose just to please party leaders.

In Europe, political parties have a great deal more power. Most importantly, leadership in Parliament and in the parties has tremendous say over who represents the party in a district.

Normally, if a member of Parliament crosses the prime minister on an important vote, there will be consequences. Of course, party splits and revolts against leaders sometimes exist, but decisions by the prime minister are followed.

Because Prime Minister Theresa May announced her commitment to Brexit, normally this should be the end of the issue. But it isn’t.

Divided We Stand

First, Parliament is divided into three factions and not along party lines. Some support Brexit. Others oppose but reluctantly affirm the legitimacy of the vote. A third group opposes Brexit despite the vote.

Though the first two hold the majority, the latter would like any excuse to sink Brexit.

A vote against the referendum is unlikely. Opponents of the results point out that the people who voted for it, didn’t understand it or were misled.

That may or may not be the case, but in the last YouGov poll in the UK, 45% remained committed to Brexit and 44% were opposed. That means that ignoring the vote would alienate almost half of the population, and some opponents who see the vote as legitimate might join them.

This would force a new election, and along with it, a revolt in the Conservative Party.

Assuming the vote will affirm Brexit, this ruling creates two other possibilities. May assumed that as prime minister she was free to negotiate with Europe based on a Parliament-approved referendum. But since Parliament must approve Article 50, it’s logical that Parliament would have a voice in negotiations.

So, May must negotiate to the satisfaction of parliamentary majority. Because her party is divided, May’s ability to get a majority who wish Brexit would go away is uncertain at best.

The second possibility is that Parliament could delay a vote on Article 50 and negotiations. The date was vague to begin with, and if Parliament has a voice, it will have to study the matter.

May’s only option would be to call a new election without any idea of possible results. A Conservative victory would be likely, but not a parliamentary vote for Brexit. Parliament might have the option to delay Article 50 ad infinitum without rejecting the referendum.

It could delay now, during, and after negotiations.

Anti-Establishment Vote

The Supreme Court still must rule. If it upholds the High Court vote, the UK will face a major political crisis. Half of Britain supports Brexit and won the referendum. They are now being told they are too simple to understand the complex issues facing them. In effect, their betters should be trusted. Half of the British public will take the position that referendums count only when the establishment wins.

A great deal of the movement supporting Donald Trump is rooted in the sense that the elite treat with scorn those who disagree with it. They also see the self-satisfied establishment as incompetent.

Similar movements exist throughout Europe. If parliamentary delay reverses the Brexit vote’s outcome, two things will happen.

First, the Brexit movement will broaden. It will question the basics of British democracy.

Second, the parliamentary system will break down. This kind of government, with small parties and weak coalitions, is the worst of all worlds. It has rigid party lines, but a weak executive—a recipe for paralysis.

Winning the battle over Brexit, I suspect, would cause far more serious problems for the UK than leaving the EU would.

Prepare Yourself for Tomorrow with George Friedman’s This Week in Geopolitics

This riveting weekly newsletter by global-intelligence guru George Friedman gives you an in-depth view of the hidden forces that drive world events and markets. You’ll learn that economic trends, social upheaval, stock market cycles, and more… are all connected to powerful geopolitical currents that most of us aren’t even aware of. Get This Week in Geopolitics free in your inbox every Monday.

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in