The Single Market is vital to Scottish companies

Since June 2016 most Irish people have been thinking what happens if Scotland remains in the EU by leaving the UK. Like Scotland, the majority in Northern Ireland voted to remain in the EU. Not surprisingly, Northern Ireland may become an independent state of the EU in its own right, considering that its territory is larger than some existing EU members states, such as Luxembourg and Malta. 
With regards to Scotland, three out of four its international trading markets are in the EU (Germany, France, Netherlands, etc.). On June 23, 2016, Scotland voted "Remain" by 62% to 38%, while 55.8 in Northern Ireland voted to stay in the E.U. and 44.2 % "Leave". People who live in those peripheral countries of the UK disagree with the exit from the custom union, as traders fear Brexit will see Scotland and Northern Ireland lose access to the EU Single Market.

With food and drink exports reaching £ 5 billion, Scotland's products are in demand in the world over. As a matter of fact, Scotland is the third largest producer of farmed salmon in the world. Scotch whisky accounts for almost 80% of Scotland's food and beverages export market, not to mention Scottish sales of oil, gas and refined products to the rest of the world.

Scotland voted to stay in the UK in 2014, but against Brexit in 2016, and will probably be driven out of the EU against it will. Of course, most Scottish people think the European association of countries trading with each other without restrictions or tariffs is vital to Scottish economy. For this reason, Scotland should hold another referendum to leave the UK.

As already mentioned by many experts, as soon as the UK leave the EU, British economy will slow sharply, as the country will pay tariffs on goods and services it will export into the EU. For this reason, since June 2016 British business leaders have been afraid the UK will not be an attractive place to do business. According to figures, almost half of UK's exports are to the EU, therefore it's easy to know the impact of Brexit on the UK's economy. For instance, British car makers, who are the UK's biggest exporters, have warned that the UK's departure from the EU Single Market poses the "biggest threat in a generation".

European policy makers have been underlining that whoever decides to leave the European association of countries, which are trading with each other without restrictions or tariffs, cannot expect all obligations to be omitted while keeping its privileges. According to the domino theory, other Members States would follow the UK with the aim to leave the EU. Not surprisingly, things in the EU may get a little out of hand, considering that many anti-europeanism leaders face important elections in the course of this year. Meanwhile, after the House of Commons had rejected the withdrawal agreement, the European Council proposed a one-year flexible extension, with the aim to allow the UK to exit as soon as possible.  

New meaningful vote

On 12 March UK's lawmakers will vote a new meaningful vote: if Theresa May's deal were to pass, the UK would leave the EU with a deal.

On the contrary, if the new meaningful vote were to fail, MPs would vote on no deal on 13 March. And if, as expected, the UK parliament votes against leaving the EU without a deal, then there would be a third vote on whether to have a short delay to Brexit. Probably about three months. 

In this perspective, Labour  MPs want a new referendum, and other politicians in the UK think the same.

Chinese President Xi Jinping visits Italy later this month

Italy's Government is negotiating a preliminary deal to become part of China's "Belt and Road" infrastructure plan. It would be a non-binding initial framework, which will be signed when Chinese President Xi Jinping visits Italy on 22 and 23 March.

With the aim to link China by sea and land with South Asia, Central Asia, Middle East, Africa and Europe, the "Belt and Road"  initiative will boost trade and investments through an infrastructure network on the lines of the old silk road.

Job seekers' allowances. Unemployment expected to fall in Italy

This month Italian lawmakers issued, for the first time, a law which provides for a social security benefit. It will help people who are out of work and are seeking jobs.
Economic development needs the strenght of aggregate demand, which consists of public expeditures, such as investments, and consumer spending. The latter is strictly related to the change in demand for goods and services, which may be the main result of a rise in wages, benefits,  etc.

The relationship between consumer spending and income has always been of interest in the history of economic thought. According to classical economists, the wealth of nations in 1700s was related to aristocracy consumers in luxury commodities, such as tea, coffee, silk, cotton, gold, sugar, and so on. On the contrary, Marxian economists asserted that liberal economy systems need inequality: the more consumers spending the more socio-economic inequality. The experience of 1900s socialist systems by countries around the world showed the social and economic effects of  low consumer spending. 

Nowadays Keynesian economists, who recognize the "dark side" of liberal economy, think that aggregate demand have to be increased through public spending in education, healthcare, infrastructure projects, and sewage systems. These policies are strictly related to the Welfare State, which may increase public debt.

As above mentioned, Italian lawmakers are trying to implement a policy based on unemployment benefits, considering that the rise of jobless rate generates spending decline and a need for liquidity.
Since the early 1970s, successful public programs of unemployment compensation and job seekers' allowances have been designed to offset income shocks in some Anglo-Saxon countries, such as the UK and the US. That's why those countries haven't seen huge consuption losses in the last thirty years, compared with South Europe countries. In Italy and Spain the Welfare State have failed to mitigate the consequences of important labor income shocks, like those arising from the rise of unemployed people.

In Italy, unemployment benefits and job seekers' allowances are guaranteed by the Article 38 of the Constitution. Although Italian Government is still defined as "populist" by the establishment of the EU, the new decree in the field of job seekers' allowance, which had been issued in Italy this month, may help young people to successfully move from education  to employment.

Realistic alternatives to Brexit

As mentioned in my previous post, Brexit is a watershed moment for the UK, as the leader of the major opposition party, Jeremy Corbin, recently said the Parliament "must get on with the vote and move to consider the realistic alternatives".

On December 11 Brexit vote was postponed, and since then the agreement on the UK's withdrawal and future relations had been unchanged. In this perspective, the British Prime Minister promised a "meaningful vote" will take place in the second decade of January 2019. Mrs. May also underlined that a hard border on the island of Ireland will be avoided, as the Prime Minister won "fresh guarantees" at last EU summit.

Meanwhile, the Electoral Commission is focused on the role played by Russia through social media, which are considerd a powerful tool to affect public opinion. As it is know, more than 80 Million Facebook accounts had been illegally harvested by Cambridge Analitica, a British political consulting firm, that targeted people with messages to modify their voting choices. 

There are evidences that Russia is responsible of  80% of disinformation activities in the EU, as Russian interfereces in the Brexit referendum campaign had been detected. Brexit is obviously viewed as a  weakening of the EU, which is one of Russia's interests.

That's why politicians in the EU should focus on preventing this from happening in the future.

Pressure for a second EU referendum

On December 3rd, Mrs. May's Spokeman made clear there will be no new referendum while she is Prime Minister. Notwithstanding the Prime Minister publicly ruled out another vote on Brexit time and time again, since January 2018 we have seen a build-up of pressure for a second EU referendum. The Prime Minister's deputy David Lidington, and Justice Secretary David Gauke, have been in talks with labour politicians to see if there is support for a second vote or a Norway-style deal. Norway, which is not member of the EU, has a high level of access to EU market and almost the same level of tariff and trade barriers with EU countries. On the other hand, Norway accepts a relevant amount of EU regulations and directives, which include the "four freedoms", the free movement of  goods, services, people and capital.

The British Prime Minister knows that her proposal on Brexit, which has been agreed by 27 EU countries, hasn't the votes needed to get a majority in Parliament. The vote on Mrs May's deal will return to the House of Commons by the end of January 2019. 

If she were to fail to secure the votes required, then a second Brexit referendum could be on the table. Meanwhile, the Scottish National Party and a number of conservative Members of Parliament would back a people vote. At the moment we can still see three scenarios for the future of the UK-UE relationship: accept a negotiated Brexit, stay in the EU or leave with no deal.   

Calling for a second Brexit referendum

There is a growing chorus of voices calling for a second Brexit referendum in the UK. They are related to the ongoing criminal investigation conducted by the UK's Electoral Commission, which is an independent body set up by the UK parliament. It oversees elections, and its investigation includes illegal overspending and illegal use of data during the EU referendum.

It seems that some money which supported the former leader of the UK Independence Party (UKIP), Nigel Farage, was supplied by Arab banks and Russian multimillionaires. Actually, according to the UK's Electoral Commission, there are criminal level of proofs which show that, in the months before the 2016 EU referendum,  Arab banks were invited by the Russian ambassador in the UK to meet a Russian businessman. Consequently, the Electoral Commission is looking at Russian interference and illegal campaign spending during the EU referendum.