This Brexit thing is a real debacle so far according to the latest figures from the Office for National Statistics. Especially compared to the continent.
UK incomes are rising faster than inflation. The highest proportion of Britons are employed since records began in 1971. Unemployment is at the lowest level since 1975.
The euro area’s unemployment is more than double the UK’s. In Greece, Spain and Italy, it’s over 10%.
The continent is swept up in eurosceptic populist movements, while the UK’s UKIP is in decline.
The number of EU nationals in the UK surged to a record high after Brexit. But this year, the disastrous exodus of EU workers began… at a calamitous rate of 1.2% of EU nationals working in the UK…
In fact, slightly more EU nationals are working in the UK than on the day of the referendum.
The Treasury is terribly busy dealing with this disastrous Brexit fallout. It’s working on proposals to launch commemorative coins for Brexit day…
After all, we got a commemorative 50p coin when we joined the EU. But earlier plans to issue Brexit stamps were not approved.
What about the UK stockmarket?
Well, the FTSE 100 is keeping pace with the Dax and Euronext since Brexit. It’s outperforming the Italian MIB index, as you can imagine.
With Brexit wreaking such havoc on the UK, imagine what the EU must be doing to places like Italy, Portugal and Greece. They’ve got actual crises on their hands.
It’s quite a surprise to see George Soros plans to launch his campaign to cancel Brexit in coming days. Just when the justification for leaving the EU is all over the news.
At least he is honest about the “existential crisis” facing the EU. He knows it’ll only get worse, so now’s the time to try and stop Brexit…
If you still haven’t looked into just how bad Italy’s crash is going to be, you can find out here. Keep in mind my predictions first launched back in April, when Italy wasn’t in the news. So far, things are going as expected.
On that note, the European Central Bank releases its Target2 balances for April tomorrow. It’s an obvious catalyst for the crash in markets to resume. I explain why here.
But enough about Italy’s mess.
There’s a particular EU drama which is about to become the poster child of EU mismanagement.
The EU’s dumbest law yet
The EU’s new General Data Protection Regulation (GDPR) is about to strangle internet commerce. The deadline for companies that do business in the EU to implement the rules has passed. The chaos has begun.
EU commissioner for justice, consumers and gender equality Vera Jourova supposedly claimed that complying with the GDPR was so easy that even she could do it.
Unfortunately, she didn’t. It took software engineer Matthias Gliwka five minutes to spot a violation of the new law on the EU Parliament’s website:
Google Analytics is being used to track the visitors without the neccesary anonymizeIP flag, which in turn causes Google to store the complete IP address without anonymizing the last octet.
This is a violation of the GDPR, since the personal data (IP address) in conjunction with analytics data is being stored on Google’s servers without consent or any other legal basis.
Oops.
On a more serious note, the law triggered an $8 billion lawsuit for Google and Facebook alone within days of coming active. The specific reason why is fascinating. It exposes the level of nincompoopery at the EU slightly surpasses that of the US government.
Under the law, you have to give “free consent” for your data to be used by a company. Fair enough.
But one interpretation of a specific section of the law is causing problems. Apparently, users of a site like Facebook cannot be given a “take it or leave it” choice. Companies can’t say to their users, “Agree to the terms or you can’t use the service.” Companies must still accept users who do not want to share their data.
This is a mind-numbingly stupid rule.
Imagine if other businesses were forced to provide you their services even if you don’t agree to their terms and conditions…
Try this one on your plumber: “I don’t want to agree to your prices, but you can’t prevent me from hiring you just because of that, so do the work for free or I’ll sue you under EU law.”
Remember, Facebook and many other online companies are specifically in the business of selling personalised advertising. Their users’ data is what makes them function. The price you pay for their service is to give them the information they need to cater advertising to you. If users don’t have to provide that data, Facebook effectively wouldn’t exist because it couldn’t sell targeted advertising.
Back when Facebook founder Mark Zuckerberg faced off with American politicians about all this, one asked him how his business could possibly be sustainable given his users don’t pay for the service.
This is like asking a sign maker how his business could possibly be sustainable given the people who look at signs don’t pay for them.
As Zuckerberg pointed out, “We sell ads.” But politicians don’t seem to know what that is.
This is, by the way, why the pictures of Zuckerberg which circulated in the media made him look so bizarre. He was utterly shell-shocked by how clueless the questions were.
Once the ramifications of the GDPR law become known, it might go down as the dumbest EU law yet. The bad news is that the UK has implemented it too.
But, strangely enough, the EU law allows each country to specify the specific rules it implements. Which of course leads to wildly different terms across the EU. Companies who want to sell EU-wide have a real mess on their hands.
It’s important to never forget that regulations like this do have effects. Especially over long periods of time.
As US secretary of commerce Wilbur Ross pointed out in the Financial Times, the costs of GDPR are going to restrict trade:
As currently envisioned, GDPR’s implementation could significantly interrupt transatlantic co-operation and create unnecessary barriers to trade, not only for the US, but for everyone outside the EU.
…
Complying with GDPR will exact a significant cost, particularly for small and medium-sized enterprises and consumers who rely on digital services and may lose access and choice as a result of the guidelines. US companies have already invested billions of dollars to comply with the new rules. But even as companies update their privacy policies to bring themselves in line, many uncertainties remain.
It imposes the same costs on EU companies too.
Bit by bit, piece by piece, the EU is destroying its own economy and restricting trade. GDPR shows it’s doing so in the strangest of ways.
Time to escape.
Until next time,
Nick Hubble
Capital & Conflict
Category: The End of Europe