Bank of England Accidentally E-mails Top-Secret "Brexit" Plan To the Guardian

schwit1 writes: The first rule of "Project Bookend" is that you don't talk about "Project Bookend." In retrospect, maybe the first rule should have been "you don't accidentally e-mail 'Project Bookend' to a news agency," because as the Guardian reports, one of its editors opened his inbox and was surprised to find a message from the BOE's Head of Press Jeremy Harrison outlining the UK financial market equivalent of the Manhattan project. Project Bookend is a secret (or 'was' a secret) initiative undertaken by the BOE to study what the fallout might be from a potential 'Brexit', but if anyone asked what Sir Jon Cunliffe and a few senior staffers were up to, they were instructed to say that they were busy investigating "a broad range of European economic issues." And if you haven't heard the term before, "Brexit" refers to the possibility of Britain leaving the EU -- one of the possible outcomes of an upcoming referendum.

Comments

Yes to Brexit

[ThePhilips]

I think UK should leave EU completely. Sooner better.

P.S. I live in Germany.

Re:Yes to Brexit

[iserlohn]

If you support a strong EU (which is a necessary counterweight to the aggressiveness of Russia and the instability of the Middle East), then the UK should be in.

Unless you don't.

Re:Yes to Brexit

[Opportunist]

If the UK was actually more interested in ties with the rest of Europe than its ties with the US, I'd agree. In the current form I'd not expect it to be anything but a spy and tool to stop legislation that goes against the interests of the US.

Re:Yes to Brexit

[ThePhilips]

I want EU to be strong.

UK is pretty arrogant toward EU and showed so far no desire to integrate fully in long-term.

Them waving often their veto right (even if they are not part of some negotiations) also doesn't instill much trust.

I do not see the point in a larger but weaker union.

Re:Yes to Brexit

[ThePhilips]

Start with kicking out Greece. It's a money pit.

I also favor Greece exit.

It is very similar situation as with UK politically: EU is constantly used as a scapegoat to justify the crap they do internally. A point of time comes when population is simply way too alienated toward the EU.

IMO, Greece is long beyond the point and UK is just tipping over. Reading the UK newspapers, the amount of arrogant BS about EU is astounding. (I follow politics reluctantly, but even I know enough about EU organization to call BS literally 100% of what people say about EU in UK.) They are definitely on their way out of EU. It is not the question of "if" - it is the question of "when".

The EU itself has grown to a colossus of well-paid politicians striving for more power than they can get in their home countries.

That is inevitable. (Compare to Amis complaining about the Feds.)

But that's the price of making out of many different pieces something bigger and hopefully better.

So far, personally, I hadn't experienced anything EU did to affect negatively my life. That while there are some positives (like for example cheaper imports) which affect my daily positively.

Re:Yes to Brexit

[bkmoore]

The European Central Bank has already declared that they won't let any of their member states go under, which means they are committed to printing as much money as needed....

Mario Draghi said, "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."

Financing a member state via printing money does not exist within the ECB's mandate. So the ECB cannot legally do what you say they are doing. Greece is financing itself via ELA Emergency Liquidity Assistance, where Greek banks loan the Greek government money that cannot be repaid, then the ELA rescues the Greek banks from the bad loans. This type of back-door financing is not sustainable and will eventuall collapse under its own weight. OTOH, the ECB also lacks the mandate to kick a member state out of the common currency when they are unwilling and unable to meet the conditions for membership. Only the political leadership of the member states have the authority to either change the ECB's mandate, or to kick a member state out. How this will turn out is anybody's guess.

Re:Yes to Brexit

[DrXym]

Most rational people recognize Britain should be part of the EU. Unfortunately UKIP spooked the Conservative party and they made a bunch of promises about negotiations and a referendum to leave.

Leaving would be economic suicide so I expect Cameron will extract some concessions to persuade people to stay in and dodge that bullet. Because if he doesn't it's likely that the UK will leave the EU and Scotland and Northern Ireland would leave the UK. That would be Cameron's legacy and he knows it as much as anyone. It's probably why the Conservatives are already trying to take the bite out of some of the pro-exit talking points by tackling illegal immigration at the moment.

Re:Yes to Brexit

[JaredOfEuropa]

Many of us who are labelled "europhobic" are actually in favour of a Union, even a strong one. The problem we see in the EU is that it has become a bureaucratic, intransparent, undemocratic monster with a far too wide mandate. And if you look at the people building the EU, that is no accident. Considering what this EU might turn into, I think it would be better to not have it at all.

What the EU lacks first and foremost is a proper constitution: a simple document that describes what the EU does and doesn't do, who does what, how, and under what conditions, and what the rights are it grants to its citizens and national governments. Since we don't have one, the EU can grow in any direction and in any way its architects desire. And that direction might not be what's best for Europe or its citizens, but for those running the show in Brussels. As Juncker once said: "When it becomes serious, you have to lie". And that is sort of what they did with the thing that is called the European constitution. It's a huge document and you have to be a legal expert to make any sense of it. And that too is by design: when several countries voted against the "constitution", they took out one part (making "An die Freude" the European anthem) and rewrote the rest in impenetrable legalese.

There are many good reasons for having *a* union. And there are many more for not having *this* one.

Re:Yes to Brexit

[Anonymous Brave Guy]

Most rational people recognize Britain should be part of the EU.

Why? I haven't made up my mind yet, but I'm erring on the side of leaving for entirely rational reasons.

In short, I think the UK and much of continental Europe have different long term goals. The Eurozone nations have opted for a degree of financial integration that the UK doesn't want or need. Obviously that hasn't worked out very well recently, at least for the economically stronger EU nations, so there is little reason for the UK to join in the foreseeable future. I think the wider EU is also heading for a more centralised, federalised system of legislation and broader government, which again the UK does not generally want to join. I suspect that in the long term these two fundamental types of integration will prove to be inseparable, and those who want to be part of the EU will increasingly lose sovereignty over things like taxation, weakening national governments in favour of ever-more-powerful central EU authorities. That's OK if it really is what they want, but I don't think it is what the UK is looking for in its relationship with its European neighbours.

On the other hand, the UK and many other EU nations are valuable trading partners for each other, so maintaining a liberal trading environment is in everyone's interests. This was what our previous generation actually signed up for by joining the predecessors of the current EU, of course. I think many in the UK also value things like the the European Convention on Human Rights (even if our current administration do not like it) and would be happy to remain a signatory, but that is a different European system, not part of the EU. Similarly I think those from the UK who often travel to Europe or vice versa would see merit in the UK joining the Schengen Area (even though again our current administration are probably strongly against it).

As things stand, it may be that the best way of everybody getting as close as possible to achieving their own goals is for the UK and EU to separate amicably, and then for the UK to establish alternative agreements for mutual benefit with the EU and/or individual member states in those areas where everyone's interests do align. It would no doubt be painful for everyone in the short term, but this might be a having to break eggs to make omelettes situation.

Re:Yes to Brexit

[antiperimetaparalogo]

I think Greece better fits as a province of Turkey.

I start from your last sentence because i don't think people should waste time reading my reply to a person like you.

Greece does not belong into EU either - what other EU country does have 10% of its population as civil servants? Even Bulgaria is better than that.

Based on OECD, Employment in general government as a percentage of the labour force:
Greece 7%,
Germany 11%,
USA 15%,
UK 18%,
France 22%
(note: i put USA in for our non-European friend in Slashdot to compare)
source

And why not? Greece does not belong into the Euro-zone because they have falsified their papers. Corruption, cheating, nepotism and tax evasion is Greek national past time after all.

I don't deny any of this accusations, and i can accept that we Greeks are the worste people on the world, BUT: don't believe everything you read.

Re:Yes to Brexit

[drinkypoo]

The Eurozone nations have opted for a degree of financial integration that the UK doesn't want or need. Obviously that hasn't worked out very well recently, at least for the economically stronger EU nations

There is a saying that goes "share your wealth with us or we will share our poverty with you". The whole point of the EU is that the stronger members bring up the poorer members so that they don't dissolve into financial chaos which tends to have other inconvenient outputs. The UK wanting to leave the EU is just the problem with capitalism writ large: The proponents claim it is good for everyone, but the moment it starts to actually be good for anyone else they do everything they can to change the game so that it's best for them and crap for everyone else again. That, in a nutshell, is the UK leaving the EU.

Re:Yes to Brexit

[Feral Nerd]

Most rational people recognize Britain should be part of the EU.

Why? I haven't made up my mind yet, but I'm erring on the side of leaving for entirely rational reasons.

In short, I think the UK and much of continental Europe have different long term goals. The Eurozone nations have opted for a degree of financial integration that the UK doesn't want or need. Obviously that hasn't worked out very well recently, at least for the economically stronger EU nations, so there is little reason for the UK to join in the foreseeable future. I think the wider EU is also heading for a more centralised, federalised system of legislation and broader government, which again the UK does not generally want to join. I suspect that in the long term these two fundamental types of integration will prove to be inseparable, and those who want to be part of the EU will increasingly lose sovereignty over things like taxation, weakening national governments in favour of ever-more-powerful central EU authorities. That's OK if it really is what they want, but I don't think it is what the UK is looking for in its relationship with its European neighbours.

On the other hand, the UK and many other EU nations are valuable trading partners for each other, so maintaining a liberal trading environment is in everyone's interests. This was what our previous generation actually signed up for by joining the predecessors of the current EU, of course. I think many in the UK also value things like the the European Convention on Human Rights (even if our current administration do not like it) and would be happy to remain a signatory, but that is a different European system, not part of the EU. Similarly I think those from the UK who often travel to Europe or vice versa would see merit in the UK joining the Schengen Area (even though again our current administration are probably strongly against it).

As things stand, it may be that the best way of everybody getting as close as possible to achieving their own goals is for the UK and EU to separate amicably, and then for the UK to establish alternative agreements for mutual benefit with the EU and/or individual member states in those areas where everyone's interests do align. It would no doubt be painful for everyone in the short term, but this might be a having to break eggs to make omelettes situation.

Somebody has been attending UKP rallies, "...separate amicably..." that is has to be one of my favourite Nigel Farage quotes. In other words you want the UK to enjoy all the economic advantages of EU membership without any of the burdens and preferably outside the EU? The Americans have a saying: "There is no such thing as free lunch". What motivation would the other EU nations have to give Britain all the economic advantages it used to enjoy once Britain leaves the EU without any of the perceived shortcomings such as political and economic integration? At the very least:

1) Giving a Britain outside the EU a 'special deal' would be opening the door to every eurosceptic wing nut and velvet fascist in the EU to demand the same special treatment. That would be worse than the Brexit alone since it would effectively be the end of the EU and exactly the effect that the likes of Putin would like to see. Which is also why the Russians support parties like Front National and the Party for Freedom in one way or another. The smart machiavellian thing to do is let Britan Brexit if it really wants to and then give them a rough time.
2) There are plenty of countries willing to fill the political vacuum that Britain leaves in the EU, first among them being Poland. It is pretty revealing that when the Ukraine crisis hit it was German France and Poland that took centre stage when a decade ago it would have been Britain, France and Germany. If Britan Brexits in some fit of nationalistic intoxication Britain would to a large extent be an overseer in the decision making process that will determine the political and economic future

Re:Yes to Brexit

[AmiMoJo]

Britain is one of the few countries within the EU that exports more to countries outside it than to ones in it, albeit by a small margin. One of the arguments for leaving is that the regulations required by the EU (which may have protectionist origins) make it harder to compete outside of it with faster growing world economies.

It does make it harder to compete, but let's be absolutely clear why. It's things like employee rights, environmental protection rules, anti-monopoly rules, data protection rules and the like. Basically stuff that benefits the citizens but slightly reduces corporate profits.

How do you think they will compete with "growing world economies"? By paying you growing world wages, and paying growing world levels of tax.

Don't think for a moment any of it will benefit you. It will benefit corporations and the already extremely rich people who own then or have large interests in them.

Re:Yes to Brexit

[AmiMoJo]

Yes. That's what we signed up for: economic and trade relations. Everything that has come after that has never been asked for or voted for here (or in many other EU member states, for that matter).

People who voted in the referendum tell me that it was made clear at the time that it wasn't just a trade agreement, it was a larger project. That was in fact one of the main points of the "no" campaign, particularly emphasised by the Morning Star newspaper and Tony Ben MP.

Why is this a problem? It worked fine for years, and good trade relations are mutually beneficial.

If it is working well why quit?

But the UK isn't asking for a free lunch. It's suggesting that if, say, Germany makes good bread and the UK farms good cows, they trade so everyone can enjoy a tasty burger-in-a-roll for lunch. Plenty of nations outside the EU have this kind of relationship with plenty of nations within the EU today. The UK has, and wants to develop, these kinds of relations with other global trading partners as well.

That isn't correct. Such free trade agreements only work if both countries are on an equal footing, otherwise there will be conditions to keep things fair. For example, Sweden has to abide by most EU rules even though it isn't in the EU, because it wants a free trade agreement. If it didn't abide by those rules it would be free to, for example, treat employees significantly worse and thus give companies an economic advantage, or have the government support failing industries which EU governments cannot. Thus there would be conditions to enable EU businesses to compete fairly and not be undercut.

So our choice would be to either accept most of the EU rules without having any say in them, and thus not be able to get rid of one of the most hated (and also beneficial) aspects of membership, or to forget about free trade and pay duties on products and services exported there. UKIP kind of acknowledges this and claims that the benefit of being able to trade with fewer restrictions with other countries would make up for it.

Note also that when people say the UK wants to develop relationships with other global trading partners, what they mean is that they want to reduce conditions and wages for employees to the same levels as those economies. Why should they pay you more than some guy doing the exact same job in China? How can they compete with that?

The UK is a net importer with most of its major trading partners within the EU. Financially speaking, there is probably more benefit to those nations if they preserve good trade relations with the UK than the other way around, but both sides benefit greatly.

Doubtful. There is the matter of principal, but more practically other countries will see it as an opportunity to improve their own positions. That's what the UK wants to do, it should expect the EU to do the same. Clearly there won't be a simple continuation of the existing arrangement because as you point out, the UK wants to ditch many of the rules on which that arrangement is reliant.

Re:Yes to Brexit

[Cederic]

The amount of my money subsiding the EU gravy train is working against me. My health services being overloaded due to EU migrants is working against me. The rapid drive towards reducing the sovereignty of member states continues to reduce my ability to influence the direction of the country in which I live.

The whole "Make Ireland hold a second referendum" on the Lisbon Treaty shows you how utterly undemocratic the whole process is. Shit, the rest of us didn't even get a referendum.

Ironically the biggest cock-up of the EU hasn't hurt the UK, because even Gorden Fuckface Brown wasn't stupid enough to join the Euro. Lucky escape there.

Overblown

[pjt33]

The headline exaggerates, anyway. The e-mail doesn't contain a Top-Secret "Brexit" Plan: merely the top-secret fact that the bank is going to be working on a "Brexit" plan. It's neither a surprise that they're doing this, nor a surprise that they want to keep it secret: the finance ministers of certain other European countries were already offended by the Bank of England having a Grexit plan.

Re:Overblown

[peragrin]

exactly. I bet they also had all sorts of contingency plans, and meetings if Scotland voted to leave the UK too.

The USA has military plans to invade Canada, and the UK. and they keep them updated. it is war game scenarios just in case and it makes for easy test cases for new people to think about.

Re:Overblown

[Anonymous Brave Guy]

I bet they also had all sorts of contingency plans, and meetings if Scotland voted to leave the UK too.

They did. In fact, none of this is really a surprise to anyone involved, because this kind of contingency planning is part of the Bank's official responsibilities.

As far as I can see, the only problem here is the premature release of information that could be politically/diplomatically sensitive via an inappropriate channel and at an awkward time for the government. It doesn't look like this exposed any wrong-doing, and it's not like the other EU leaders our Prime Minister is starting to negotiate with wouldn't have expected it, even if it's not great PR given the delicacy of those negotiations.

Re:Overblown

[Kjella]

And yet it's an obvious case for cheap political rhetoric, "What do you mean that's never going to happen? You're sitting there making plans for it right now!" I don't think you should underestimate the explosive power of contingency plans. For example in a supply chain you might have a contingency plan in case your business partners, vendor or distribution network turn shit but nobody's going to like that you have a plan to stab them in the back. And there's always those who willingly or unintentionally confuse planning in case of failure with planning for failure.

TL;DR: Some things you should just keep your mouth shut about, even if makes sense.

Re:Whistleblower

[ironduke-particle]

Yup. Remember the irregular verb:
I give confidential briefings
You leak
He is breach of Section 2a of the Official Secrets Act