The United Kingdom officially left the European
Union on 31 January 2020. Germany the
founder member of the EU cannot do the Dexit, meaning Deutschland exiting from
the Union. What prevents Germany saying bye-bye to her erstwhile Union Partners?
First and foremost, the Article 23 of the German
Basic Law (Grundgesetz), alternately known as the "Europe Article," mandates
compulsion over Germany’s participation in European Union. It requires Germany
developing a democratic, social, and federal European Union to which part of her
own sovereignty is transferred. Hence, there is an umbilical cord that binds the country with the
Union.
If an attempt is to be made by the people of
Germany upon departure from the EU, a resolution must be passed to this effect
with 2/3rd majority in both the houses of Parliament, Bundestag and
Bundesrat. Let me explain the
difference between these in the German bicameral legislature. The
Bundestag consists of members directly elected to the federal parliament numbering
736 who have responsibility for passing
federal laws, whereas the Bundesrat consists of members appointed by the 16
state governments to represent their interests, having a wide sway over passing new legislation or
annulling an existing one.
Even if this high
hurdle is crossed there hangs another Damoclean Sword.
The German Constitutional Court acts as the guardian of Basic Law and after
hearing the motion of any Dexit the Court can award a decision via majority
decision. If and when a counsel submits a secondary motion calling for unanimity
of decision due to the seriousness of the matter under discussion the Court
might opt for such a unanimous decision which could blow a death knell to the
attempted Dexit!
Findings
Geoeconomics is the biggest exit trap so to speak. I
furnish below estimated loss figures that could emanate from Dexit along with
the real figures experienced by UK during Brexit:
1. Cash outlay lost in a 10 year period: UK £ 140 Billion; Germany almost same figure in Euro
2. GDP loss percentage: UK 6% annually; Germany similar or slightly lower figure
3. Investment loss: UK 10% overall for 10 years; Germany over 15% for the next five years
4. Loss in employment creation: UK 1.8 to 3 Million; Germany less than 2.5 Million
5. Digital cash – flow loss: UK unknown; Germany more than € One Trillion
6. Pound sterling did not crash as
forecast; Euro as a currency would be decimated allowing Deutsche Mark to be
revived once again.
Overall,
the picture is not so gloomy for Germany as compared with that of UK.
My Advice
Navigating strategy amid geoeconomics, Germany must
take the plunge to leave EU to emerge as the Fourth largest Geoeconomics power
along with Iran her Aryan brother!
Cheers!
Muthu Ashraff Rajulu
Strategy Adviser
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Strategy Adviser
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