InternationalMarkets & Economy

The European economic landscape — post-Brexit

Where did the European Union come from, and what's the big deal about the breakup?

The media in the U.S. have gotten Brexit wrong. The real story requires an excursion to Europe, and then back into markets. Briefly, stock markets have recovered on expectations that central banks will ease anew. Bond markets, on the other hand, have held their deep declines in yield -- it is strange not to have some bounce-back, and not explained by prospects for central banks. Yields as low as these reflect anxiety. The U.S. media decided that Brexit is all about Donald Trump. Right-siders are pleased by any anti-government action, and left-siders are horrified by racist, nativist, xenophobic Brexit. We can find those bad traits in any nation or tribe on earth, but they were not central to Brexit. Nor a sign of Trumpism or mis-named “populism” sweeping the globe. The European Union (EU) began as the Common Market in 1957, a customs union intended to reduce tariffs and facilitate commerce across borders. It succeeded. Flash forward to the 1990s, the Cold War ended ...