Dec 2, 2018

With Brexit, economic vitality is not the first priority

Illustration: Sarah Grillo/Axios

In most countries, the government claims to be doing what's in the economic best interest of its citizens. In general, this helps the cause of capitalism. Now, the oldest democracy in the world is taking the opposite route.

What's happening: This week saw the release of three separate worrisome official reports on the economic consequences of Brexit.

  • The U.K. Treasury, modeling a deal very similar to the one currently on the table, says it would result in the British economy being 3.9% smaller in 15 years than it would be if it stayed in the EU. If there's no deal at all, the gap rises to 9.3%.
  • The Bank of England's forecast is worse: A failure to reach a deal could cause the worst recession since the Second World War, with the GDP falling by as much as 8% in one year and house prices crashing by 30%. If Britain manages to agree to a deal, the result is still bad, with the GDP ending up between 1% and 3.75% smaller than it would have been as part of the EU.
  • The Scottish government expects that Scotland will lose £1,610 ($2,055) per person by 203o as a result of leaving the EU, and that investment in Scotland would fall by 7.7%.

It's hard to model Brexit with accuracy, but there's surprising unanimity — even among Brexiteers — that its economic effects will be negative, and substantially so.

The Italian story is even scarier: The populist government seems to be steering the country toward a crisis that could be truly catastrophic, not only for Italy but also for Europe and the entire global economy. The crises of 2008 and 2011 ultimately ended with politically unpopular bailouts, but Italy, with its €2.3 trillion ($2.6 trillion) national debt, is too big to bail out.

Why it matters: China isn't big enough — yet — to drive the global economy on its own. Without G7 economies like the U.K. and Italy contributing to their full potential, the entire world could splutter into recession.

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Acting Navy head apologizes for calling fired captain "stupid"

Acting Secretary of the Navy Thomas Modly testifies on Capitol Hill in December. Photo: Saul Loeb/AFP via Getty Images

Acting Navy Secretary Thomas Modly apologized Monday for calling Capt. Brett Crozier, the ousted commander of the USS Theodore Roosevelt, "too naive or too stupid" over his letter pleading for help following a coronavirus outbreak onboard.

The big picture: His apology came after President Trump told a news briefing earlier Monday he would "get involved" following a leak of Modly's remarks to the ship's crew on Crozier, who has since been diagnosed with coronavirus, which were obtained by CNN.

Go deeperArrowUpdated 18 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9:30 p.m. ET: 1,346,299 — Total deaths: 74,679 — Total recoveries: 276,636Map.
  2. U.S.: Total confirmed cases as of 9:30 p.m. ET: 367,507— Total deaths: 10,908 — Total recoveries: 19,598Map.
  3. 2020 update: Wisconsin Supreme Court blocks governor's attempt to delay in-person primary voting delayed until June.
  4. States latest: West Coast states send ventilators to New York and other states with more immediate need — Data suggest coronavirus curve may be flattening in New York, Gov. Andrew Cuomo said.
  5. World update: U.K. Prime Minister Boris Johnson moved to intensive care as coronavirus symptoms worsen.
  6. Stocks latest: The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.
  7. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Former Vatican treasurer George Pell's sexual abuse convictions overturned

Cardinal George Pell at the County Court in Melbourne, Australia, in 2019. Photo: Michael Dodge/Getty Images

George Pell, the former Vatican treasurer, has won his appeal and had his child sexual abuse convictions overturned by Australia's High Court.

Why it matters: The cardinal became last year the highest-ranking Catholic Church official to go to trial and be convicted for sex abuse. But the High Court's ruling means he can be immediately released from prison, where he was serving a six-year sentence.

Go deeperArrowUpdated 1 hour ago - World