Should I Stay Or Should I Go? Brexit, Extortion And The Path To Reform

There is a Mafia-like quality to the threats emanating from EU officials, who are acknowledged to be contemplating how much punishment they can mete out to the UK if the people should dare to vote the wrong way. "Vote Remain, and nobody gets hurt." Or, as the New York Times headline today put it, "E.U. Countries Warn Britain on 'Brexit': You'll Pay if You Leave Us."

It is reminiscent of the European authorities' threats, and ultimately the ECB's shutdown of the Greek banking system, in an attempt to force Greeks to vote yes in a referendum last July 5 on further austerity. The defiant Greeks voted no with a 62 percent majority, but their government was subsequently beaten into submission.

So EU officials are demonstrating once again not only their contempt for democracy, but their shamelessness as extortionists. "This is how democracies die," writes Ambrose Evans-Pritchard in an eloquent explanation of his choice to vote for Brexit. The Guardian's economics editor Larry Elliott notes, "The eurozone is economically moribund, persists with policies that have demonstrably failed, is indifferent to democracy, is run by and for a small, self-perpetuating elite...."

However, as these and other thoughtful observers acknowledge, the question is not an easy one. On the one hand, in the UK the movement to leave is led by the right -- with a generous sprinkling of racist elements -- and a Brexit victory would likely strengthen their hand. On the other hand, the EU has increasingly become a neoliberal project and -- partly because neoliberalism generally requires it -- an anti-democratic one.

The creation of the euro has clearly been a terrible mistake, and has inflicted mass unemployment and unnecessary suffering for what is about to become a "lost decade," along with "structural reforms" that have hacked away at European economic and social rights. The UK, of course is not part of the eurozone but the whole EU project has been deeply influenced by the eurozone and the neoliberal ideology that is baked into it. The misnamed European Stability and Growth Pact, for example, applies to the whole EU, not just the eurozone. It builds on the mistakes of the Maastricht Treaty, and is likely to result in more fiscal austerity when the region really needs fiscal expansion to recover; and this at a time when public borrowing is free and the Central Bank can create money without fear of inflation. This op-ed was originally published by The Hill on June 21, 2016. Read the rest here.

Mark Weisbrot is Co-Director of the Center for Economic and Policy Research in Washington, D.C., and the president of Just Foreign Policy. He is also the author of the new book "Failed: What the 'Experts' Got Wrong About the Global Economy" (2015, Oxford University Press). You can subscribe to his columns here.