IMF head Christine Lagarde has flip-flopped twice on the impact of Brexit.
- Ahead of the vote on Brexit, IMF head Christine Lagarde warned of a prolonged period of uncertainty.
- On July 3 Lagarde, said Brexit provides the EU a “Better Opportunity for Reform“
- On July 7, Largarde was worried Brexit would lead to “Disastrous” Trump-Style Protectionism
View number 2 is ridiculous. Yet one can change two characters in the sentence and get things correct.
Stellar Opportunity for UK
The idea that a group of 27 nannycrats are going to agree on needed reforms and implement them is ridiculous.
However, change sentence number 2 to “Brexit provides the UK a Better Opportunity for Reform”, and you have the right idea.
Let the EU Self Destruct
France and Germany want financial transaction taxes. Let em. It will mean more business for the UK, not less.
France insists on agricultural tariffs. Should the UK care now?
The EU does not like Ireland’s low corporate tax rate so much so that the EU is Considering a Minimum Corporate Tax.
Should the EU insist on such silliness, it will drive business to the UK, not away from London.
Trade War the Right Way
The UK should preemptively stick it to the EU by slashing its corporate tax rate to 10%, lower than any country in the EU.
| Country | Corporate Tax Rate % | Highest | Lowest |
|---|---|---|---|
| Austria | 25 | 55 | 25 |
| Belgium | 33 | 48 | 33 |
| Bulgaria | 10 | 40.2 | 10 |
| Croatia | 20 | 20.32 | 20 |
| Cyprus | 12.5 | 29 | 10 |
| Czech Republic | 19 | 45 | 19 |
| Denmark | 23.5 | 50 | 23.5 |
| Estonia | 20 | 26 | 20 |
| Finland | 20 | 61.8 | 20 |
| France | 33.3 | 50 | 33.3 |
| Germany | 29.65 | 56.8 | 29.4 |
| Greece | 29 | 49 | 20 |
| Hungary | 19 | 50 | 16 |
| Ireland | 12.5 | 50 | 12.5 |
| Italy | 31.4 | 53.2 | 31.4 |
| Latvia | 15 | 29 | 15 |
| Lithuania | 15 | 20 | 15 |
| Luxembourg | 29.22 | 40.29 | 28.6 |
| Malta | 35 | 35 | 35 |
| Netherlands | 25 | 48 | 25 |
| Poland | 19 | 40 | 19 |
| Portugal | 21 | 55.1 | 21 |
| Romania | 16 | 38 | 16 |
| Slovakia | 22 | 45 | 19 |
| Slovenia | 17 | 25 | 17 |
| Spain | 28 | 35 | 28 |
| Sweden | 22 | 60.1 | 22 |
| United Kingdom | 20 | 52 | 20 |
| Euro area Average | 24.6 | 36.8 | 24.3 |
| European Union Average | 22.8 | 35.2 | 22.8 |
The above table created from Trading Economics data.
Black Holes
France, Germany, and Belgium are hell bent on sticking it to the UK to make a point.
Recall that the Belgian Premier Warns EU Won’t Help UK Out of “Black Hole”
Ironically, If the UK does things correctly, it will be the EU that falls into the black hole.
Set Example for the World
Shed of inane EU rules and regulations coupled with the freedom to do anything it wants, the UK has a golden opportunity to embrace the benefits of genuine free trade and growth via low taxes.
I have often stated the first country that fully embraces free trade, regardless of what any other country does, will come out stunningly ahead.
The UK now has that chance.
Mike “Mish” Shedlock.
