Brexit, The Tough Lessons Europe Must Learn

The editor-in-chief of top French daily Le Monde says the UK's departure from the EU must be a wake-up call for the remaining 27 countries. But the answer may be more Europe, not less.

Count the stars
Count the stars
Jérôme Fenoglio


PARIS — Britain's vote to leave the European Union is a major repudiation of Brussels. That's the plain, brutal truth of the referendum organized by British Prime Minister David Cameron. It means the EU's second biggest economy after Germany will leave the European project. It means that one of the few EU countries to possess a substantial defense apparatus and heavyweight diplomacy is abandoning Europe.

No matter how you look at this sad business, it's a defeat for the EU, which is left weakened. The world now sees the bloc as an entity on the wane. You could think that this is an unfair assessment given Europe's track record. You could judge that Cameron had been a mediocre defender of the Union since the Conservative leader was fundamentally a Eurosceptic who rarely had a word of support for the EU. You could think that the British took a massive risk. But that's their own business now. They took a decision on their own, democratically. They're putting an end to 43 years of participation in a European project that didn't turn out too bad for them.

But our first thought is about the 27 countries that now comprise Europe. This is a historic blow for the EU. These 27 nations cannot simply ignore the consequences of Britain's exit. The worst thing to do would be to carry on as usual, an attitude that generates more skepticism for the bloc than enthusiasm.

The worst we could do today is to think this is just one catastrophic decision taken by Britons to withdraw into their island and that this decision won't prevent the European project from going on "as before." The most irresponsible position to take would be to blame it all on demagoguery, xenophobia and the lies that accompanied the Leave campaign.

You could, of course, denounce the easy nature of electoral populism, which, in this case, was cynically exploited by former London Mayor Boris Johnson. But that doesn't mean we should give up trying to understand the reflex of rejecting Europe.

Because if we do give in to this easy explanation, the EU will continue to undo itself with similar referendum votes and departures here and there. On the contrary, if we want June 23 not to mark the beginning of the EU's disintegration, the institution must understand that the British referendum forces it to reflect deeply on what it must become.

The issue of this new direction the EU must take won't be solved in a few lines. Let us carefully attempt to set out a potential path. Europeans aren't asking for a never-ending improvement of the single market, but they're not in a federalist mood either. They want more security in an unstable environment. They want controls on the Union's external borders at a time of significant influx.

In this day and age of "the democracy of immediacy," which the digital revolution established, Europeans want more European democracy. This means reinforced cooperation on defense and migration as well as a strengthened relationship among national parliaments on EU issues. This type of a "more Europe" thrust should reconcile ordinary citizens with the Union.

David Cameron took a massive gamble and lost. Consequently, he announced he would leave office in a few months. Now, organizing the divorce promises to be a long and complicated process. The treaties allow a delay of two to four years to negotiate UK's withdrawal from the EU.

The Parliament in Westminster is opposed to Brexit. Already, leaders from the Leave campaign are backpedaling. They say there's no rush. They want to drag out the process until 2020. Facing the unknown, they're scared. They see the tornado hitting the sterling pound and their city. They know a British recession is awaiting further down the road. And they know only too well that this was really an English vote, and that Scotland as well as a great part of Northern Ireland rejected Brexit. Now, again, it's the Kingdom's unity that is under threat.

In this troubled context, we on the continent must abide by fair play. But the English have made their decision. Out is out.

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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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