The UK's EU referendum. Brexit or stay in?

After Greece has failed to claim their independence from the EU currency, another problem has emerged: the United Kingdom wants to leave the EU. The secession of the United Kingdom from the European Union, often shortened to Brexit will have consequences not only for the island nation: the whole world economic growth is in danger now. Only Britain itself will face budget deficit more the 30 bln. euros for next 5 years if vote to leave and GDP growth expectancy will be cut by 1% for the next years. Why it's so important for Britain to leave? Let's look closer

Payoffs

During the last decade Britain is suffocating of migrants. Being a rich country, it's become the most popular destination for the migrants from Baltic region and Eastern Europe (particularly Poland).

A8 coutries - Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia

The number of non-UK citizens living in UK hits 5 million. Because of the EU laws all of them are eligible to apply for any kind of financial help from GB government. This means that country faces growing pressure on public finance system as a whole. 

But at the same time, there are more than 1,3 mln. UK citizens living in EU countries.

All of them facing uncertainty if the Brexit will come true. We can expect them to appeal for citizenship in the countries they are residing now.

Attempt #2

Is this the first time Britain wants to leave? No. Once the nation decided to join the ECC in 1973, then the referendum of leaving the ECC was held in 1975. That time British people decided to stay within the EEC (more the 67% of votes were in favor of  EEC). 

What is the possible turnout for the 2016 referendum? 
As we see of the left, remain and leave campaing are like a rollercoaster with its slides. No one can now predict the possible outcome. But all the voices in EU are united at if UK will vote to break from EU, there will be no chance for Britain to enter the union again.

Losses and casualties

       It's been 4 days since Joe Cox, British MP was stabbed and shot dead. She was just 41 years and also have 3 children. The incentives for a such harsh crime are still unknown. But she openly supported the remain campaign and this fact has dramatically changed the situation: polls following after this accident shown that remain campaign is slightly ahead.

       Another loss for British economy is the exange rate of their currency. English pound hits in lowest since the 1985 and possible secession can cause further decline of the british pound by 20%. But because of the latest polls, pound risen up to its highest since the referendum was announced.

Cameron and supports "StrongerIn"

       Amid fear of further political integration with EU, Britain was concerned of its independence. That's why Cameron came to Brussels to sign a deal for a special status of UK in EU. If this deal was not signed by EU President, this would mean the Cameron would be a leave campaign supporter.
What advantages are provided for UK after the new deal will come into force? (the new deal will come into force only if Britain will stay in)
1. UK is recongnized as an independent country is not commited to further political integration
2. UK is to limit the access of newly arriving EU workers to non-contributory in-work benefits for a total period of up to four years from the commencement of employment
3. Feasible burden reduction targets in key sectors, with commitments by EU institutions and Member States
4. Britain will not be required to fund euro bailouts and will be reimbursed for central EU funds used to prop up the euro
All of this makes Britain a special member. The main problems are now eliminated. But no one could prevent the referendum on 23th of June, 2016.

Weak Europe is an advantage for Russia

        As tention is high caused by sanctions imposed on Russia, the government of Russia is more likely to see the leave decision of british people. Firstly, this will impact on other countries which cannot agree with european migration politics and harsh economic policy (it's a common rule for all Eurozone countries to have no more than 3% of  budget deficit). Some indebted countries like Portugal and Greece can hold the next leave campaign if UK will succeeded to dissociate itself from EU.
       All of this and the disputes on Russia's sanctions will weaken Europe giving Russia a chance to use its influence to reach the goal of lifting sanctions, but not by all countries. The key problem is that the success of such sanctions is that whole Europe is unted in terms of sanctions and the consequences for russian economy is significant. 

Bright future within EU

If Britain will vote to leave, the economic uncertainty will be very high. Treaties adopted by UK as a EU member then should be resigned. But anyway, they will stay the same in order for Britain to be a trade partner of EU. Then, british goods and services will face additional charges and taxes making them even non-competitive. It's a lose-lose game for Britain and EU. According to the latest polls, the remain supporters are now in majority. Hope this trend will remain. It's just 1 day before the referendum. Let me express my political views:

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Uber versus government. What will win?

What is Uber?

Being founded in 2009, after 6 years of expansion, Uber application has become one of the major world taxi providers. The principal distinction from traditional taxi drivers and taxi companies is that Uber mobile app allows consumers with smartphones to submit a trip request which is then transfers to Uber drivers who use their own cars. So we see that this service has no mediator between client and taxi driver. All of money is processed through credit cards avoiding use of cash.
This scheme is set to automatically take charge for every trip an uber driver has accomplished. Uber is regulating its pricing automatically considering all the aspects of territory. Price depends on time, season, traffic jams and even weather (when it was a snowstorm in New York in January 2013, the price for 1 trip goes up to $200). This means that Uber is trying to sit on two chairs: from one point it wants to help drivers to earn more money; from another point Uber is set to be a taxi discounter with the lowest prices in the region of presence.
According to the last statistics of CNN, by Feb. 2016 Uber:

1. Capitalisation is $51 bln.
2. Just 6 years old
3. Uber has tested delivery of Christmas trees, food, pets by cars
4. Median annual income of Uber driver in San Francisco is more than $74.000
5. Uber uses not just cars: you can call for a boat in Amsterdam,a helicopter in New York (damn, I want this feature to be available in Moscow), an yacht in San Francisco
6. It employs Surge Pricing scheme

        Originally from USA, Uber in 2015 covered almost half of the world (look at a map above, red colour marks Uber's coverage).
        In February 2016 Uber has changed its logo causing outrage throughout the Internet. Even CNN said that its new logo is not as conceptual as ugly and mislead users (in fact, marketing books advice to change logo step by step, not totally like Uber Inc. did).    

Uber in Europe

The first country being chosen by Uber for the start in Europe was France. In December 2011 app was launched in Paris. Then it spreads all over Europe step by step. Among the cities where Uber was working were Brussels, Amsterdam, Geneve, Oslo, Praha, Rome, London, Lisboa and other capitals of Europe as well as other major cities. 
Traditional cab drivers hate Uber for its pricing strategy, because when Uber hits the city, drivers are forced to decrease their prices in order to stay competitive in comparison with Uber tariffs. Moreover, the prices after decrease become low too for to earn enough for living. That causes many protests in european cities demanding from government to ban Uber. The biggest protests stopped major highways of Paris, London, Madrid, Barcelona, Berlin and paralyzed traffic. Courtney Love Cobain has passed through protesters in Paris. That's what she said: 

   The voice of protesters was heard and governments started to crack down on app. For example, it was revealed that Uber used tax evasion schemes: 

The Guardian: Taxi associations claim Uber routes its payments through headquarters in the Netherlands to minimise its corporation tax payments in France, the UK and Germany – in a similar manner to Apple and Starbucks, which have found themselves in the firing line for the practice.

The results of such investigations and protests is well-known: Uber was banned in many cities. On February, 2016, according to Wikipedia, UberPop app (which is known for its hiring people without licence) stopped its activity and lost legal status in Brussels, Berlin, Frankfurt. It was banned on the whole territory of Italy, Romania, Bulgaria.
Only in US Uber has faced more than 179 lawsuits by the end of 2015. Uber expansion toughens as many countries are trying to expel it. Being backed by Google (its largest investor is Google), Uber is no more afraid of prosecution and in spite of the pressure in Europe and US is set to grow by covering more cities (by the end of January, 2016 it covers 378). 

                                         Uber in Russia

In June, 2013 app was launched in two major cities of Russian Federation: Moscow and Saint Petersburg. Then it spreads to Rostov-on-Don, Sochi, Kazan, Yekaterinburg. As taxi industry is slightly regulated in Russia, Uber has gained power and popularity. But in 2015, european scenario recurred in Moscow: there were protests demanding to ban Uber. The situation is the same: licensed drivers can't compete with Uber illegal drivers. 
        Moscow authorities announced an ultimatum: Uber Inc. must sign an agreement with government confirming that corporation is ready to share with government its cars' activity on the roads of the russian capital and also making a promise to employ only drivers with licence. Otherwise its activity will be halt in 1 month. Such agreement has already signed other taxi apps: Yandex.Taxi and Gett(former Get Taxi). But Uber is not intended to sigh an agreement soon: it emphasises that corporation operates in more than 68 countries and signing the documents is a long procedure. But there's no other way: Uber will arrange with Moscow authorities. And then it will continue battle for the market share in Russia and nothing can stop it.

Uber wins.

Uber is changing taxi market: traditional cab drivers will be ousted and will work under the taxi aggregators like Uber, Yandex.Taxi, Get Taxi and others in near future. This tendency outlined in 2010 since the first launch of such aggregators. Uber relies on technologies and traditional drivers can't compete with it: the corporation is investing huge amount of money on research and its strategy is aimed to get rid of "common" chauffeurs. If Uber will accept the demand of governments all over the world to tighten its policy and hire only licensed drivers, the major problem will be solved. Being a rich company, Uber can afford to pay millions for lawyers and lobbyists in order to protect business. Only in US, company has hired at least 161 people to lobby for its interests. In Sacramento alone, Uber spent $475,000 over five months to influence California lawmakers. In October, 2015, Uber wins court case in London. 

The Verge reports that Uber is successful at using public support and in June, 2014 has shut down one state regulator within 48 hours:

The Verge: Uber used common political advocacy tactics to generate public support for its business.  It was able to provoke hundreds of people in Virginia to complain to the Department of Motor Vehicles commissioner responsible for shutting its business down. Then, it sent its team of lobbyists to meet with aides of Virginia Governor Terry McAuliffe. Within 48 hours, Virginia's transportation secretary told the DMV to leave Uber drivers alone — meaning the company was successfully able to leapfrog regulators.

         Anyway, the new era of taxi has come and I'm confident that Uber is more likely to survive in this competition because of its advantages: data-driven business, credit cards for payment, many drivers and cheap prices help the company to stay competitive. Traditional cab driver now should choose whether to switch to Uber or to be ready for unemployment.

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Is Schengen zone agreement under a threat and will soon disappear?

Firstly signed by Benelux countries (Belgium, The Netherlands, Luxemburg, West Germany and France) in 1985, now Schengen Area consist of 26 (2015) countries covering almost 3/4 of all European Union's territory. The chronology of members (sorted by date of implementation):

1995: Spain and Portugal join.

1997: Austria and Italy join.

2000: Greece joins.

2001: Denmark, Finland, Sweden, Iceland and Norway join.

2007: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia join.

2008: Switzerland, Lichtenstein join.

2016: Cyprus, Bulgaria, Romania and Croatia are expected to join.

      Initially the treaty was signed to facilitate the economic development allowing qualified labor force to cross the borders of countries without special permission. The only thing need was the citizenship of any country signed the Schengen agreement. Also Schengen Area was established to provide the common visa policy. 

      Now in 2015, after the greatest influx of migrants EU ever was exposed to, the gap in Schengen Area was found. Members of the treaty have found that external borders of Area are not sufficiently protected to stop the illegal migration in Europe which is suffering from migrants fleeing from war and crime in Middle East. Refugees ultimate purpose is to enter the Schengen zone. In 2014 the migration route from Syria was:

Syria->Turkey->Greece->Serbia->Hungary

After entering the territory of Schengen Area member migrants scatter around all the Europe. 

But Hungary (heading by PM Victor Orban) decided to prevent any migrants from coming to country by building a 3-meter fence. Then EP members blamed hungarian Prime Minister for violation the convention concerning the insurance of safety for those needed. But Orban said that 4-million populated country can't cope with the flow of 1 million migrants. Security forces of Hungary can't ensure that country will not be exposed to crime migrants potentially can do. Also ISIL made a statement that they sent their militants to EU as refugees in order to carry out terrorist attacks on EU countries. The fence near the northern borders of Hungary has changed the route of migrants seeking the asylum. Now it's as described on the picture (left side).

 Most of migrants are coming to Germany (nearly 1/2). But it has become the problem of all European countries. The first sign of Schengen crysis was the decision of Germany to re-establish border control in September 2015. After Paris attacks in October 2015 France did it as well. Then this action was done by Austria, Sweden and Denmark. Rumors said that after desperate discussions suggesting to protect borders of Schengen zone The Netherlands started to negotiate with Benelux countries to make a new Schengen-like area.

        Terrorism has become one of the biggest issues in Europe since the ISIL has proclaimed itself in 2014. This threat pushes countries forward to undertake the measures to protect the citizens from attacks. One of the solution is to secure national borders. I think that if border control will be in force there would be a higher chance to arrest Salan Adbeskam - one of the suspected in terrorist attack in Paris on October 2015. What heated the atmosphere is that terrorists came with the migrants coming from Middle East.  

      

What can save the Schengen?

        After some analysis EU has decided to start negotiations demanding from Turkey to establish the border control with EU and Syria to stop illegal migration and human trafficking. Also EU asked Ankara to accept migrants and to create the facilities to provide the basic standards of living for refugees. In return Brussels announced the financial support for Turkey to meet wants of Europe and also promised visa-free policy for turkish citizens in 2016. This actions seemed to be appropriate in accordance to the desperate situation.

        Also investigations should be started to arrest human traffickers. Most of illegal refugees have reached Europe with the help of traffickers paying them more than €2000 per each person making it a huge business for those who involved.

     Furthermore, EU should provide an extra financial support for countries protecting EU and Schengen zone' borders. Among them are Italy suffering from african migrants crossing the Mediterranean and of course Greece - the first country of EU and Schengen lying on the route of migration from Middle East. Spending more money for security can help Athens to cope with the influx of migrants. But there aren't enough number of security forces. EU policy does not have the treaty of common military forces or peacekeepers: for allowing ones country's forces to help another country needs to be approved by national parliaments of both. So now Greece being the first european frontier is one-on-one with refugees.

Is it important to save the Schengen Area?

      There are a lot of politics expressing their concerns about existence Schengen in such situation. Europe is very slow about re-evaluating its basic agreements. But evolution is what push changes and Schengen needs to be reformed in order to exist. I think that border control is not the biggest problem for europeans facing the possibility disappearance of Schengen. The common visa policy was the initial problem Schengen treaty was aimed to solve. And until the common visa policy exist the Schengen should present. Disruption of such basic value of EU can cause the further actions damaging the Europe as an institution based on elimination barriers and aspiring to create a giant commonwealth.

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A nightmare for women in Cologne, Germany

         As Russian TV channels are broadly observing the situation in Cologne, Germany, russian people are deeply concerned by the behaviour of men tried to abuse german women on New Year's Eve. It's seems like the nightmare when you're out in street celebrating and then someone surround you in attempt to stole you mobile phone and even rape you.

        The boiling point is that the most of those attacking women were migrants waiting for permission from the state allowing them to live in Germany. That produced much anger within the german society and around the Europe as well. Such accident in Cologne took out people into the streets demanding stricter laws for immigrants forcing Angela Merkel to express her own opinion on such mass protest.
And she commented: 

"When crimes are committed, and people place themselves outside the law... there must be consequences," she told reporters after the meeting.

Under current German laws, asylum seekers are only forcibly sent back if they have been sentenced to at least three years' imprisonment, and providing their lives are not at risk in their countries of origin. Now Bundestag will consider to sent migrant back for any violation of law.

          I'm afraid that such incedent like in Colongue can deepen society division regarding immigration policy. And as new wave of anger PEGIDA has held a new protests which seems to be massive. Gestures of people in this crowd doesn't look very friendly toward the counterparts protesting against PEGIDA.
 To express my own thoughts I should say that such violations like on New Year's Eve should be considered not as a mistake of refugee policy but as a mistake of policy office in Cologne. Protection of people was insufficient. There should be more policemen managing the order in the streets. At the same time Merkel should make the law stricter for refugees violating the law. They must be sent to their places of origin. And german government should promote law restrictions for refugees because the perception of woman's nature in Arabic countries and in Europe is much different. I know that Merkel will satisfy the society by stricting laws. But will that prevent migrants from violations? I guess no. Because if they have nothing - they have nothing to lose. And it's a very dangerous situation. Germany should concentrate its efforts on assimilation of refugees giving them job and a place to live. Only then migrants will appriciate the hospitality of Bundestag. 

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Election in Greece and GREXIT

After wining of SYRIZA in parliament election in Greece some nervous situation has arised.

Final results of elections are: 

SERYZA - 36.34% (149 seats in Parliament)

ND (former leading political party) - 27.81% (76 seats in Parliament)

Others are not so important.

The main promise of SYRIZA is to set aside TROIKA's agreements and recommendations. Alexis Tsipras said Greece will no longer follow ECB, WB and WMF advices. They will no longer cut their spending. Also they want to decrease public debt of Greece by refusal from world bank's funding. The possibility of default is now bigger than just one year ago. All of that may lead to GREXIT (Greece will leave the eurozone)

FT Says: Syriza the victor in Greece’s general election, has agreed to form a government with the rightwing anti-bailout Independent Greeks, the leader of the latter party said after talks in Athens on Monday.

As my own opinion I think that greek people just fed up of promises like "tomorrow it will be better" and they want to live like they did in 2004-2008 period. In 2008 the GDP of Greece was $341,6 billion. Now it's just $241,7 billion (the shortage is about 25% percent during the last five years). If we compare the developing economy of Egypt it's now bigger that the Greece's one. That's sad news. People are going to live worse (35.7% at risk of poverty or social exclusion )

But just a little mount of that SYRIZA's voters thought about what such changes will cost them in future. Exit of Greece from eurozone will push the unemployment further while the returned lira currency would be devalvated and inflation will hit the country. I hope that SYRIZA will not do ANYTHING of that they promise to do. It will cause the unpredictible consequences for the economy. 

All of that makes the euro currency continue to fall. Today it costs just $1.12 and this is not the end of the falling the euro down. 

What can happen next? Nobody knows exactly. 

But we must respect people's choice.

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