This article was exclusively written for the Sting by Mr Vincent Daher, newly elected Vice-President of JADE, European Confederation of Junior Enterprises.
The industrial and financial power of the United Kingdom, which remains one of the three economic engines of the Union behind the Franco-German tandem, benefits the entire economic zone. The aftermath of a potential Brexit would therefore affect all EU members. The common market would be totally destabilized and a rebalancing in favour of Germany and at the expense of France is possible to emerge.
On one hand, the rest of the EU countries would have to comply with international trade rules to be able to sell their products in the UK and the economic consequences would continue over time. On the other hand, the UK economy would be rapidly affected by new financial conditions, weakening confidence, new barriers to trade and workforce mobility limitation.
The long-term consequences would extend to capital leakage, lack of skilled immigration and ability to innovate. In particular, labour productivity would be affected by a fall in foreign direct investment in the EU and at the same time limited access to skilled European workforce. The shortfall in the UK GDP would also widen with time.
Brexit would represent a direct loss of the UK contribution to the EU, equivalent to 9 billion euros, while at the same time the UK would lose 6 billion euros income. UK currently represents 15% of the European population.
Bad news for entrepreneurs
England is an important cradle of entrepreneurship in Europe. As explained above, British entrepreneurs would face serious difficulties in the event of a Brexit. The loss of England’s leadership in the EU would unequivocally also affect European entrepreneurship. Additionally, foreign entrepreneurs located in the UK might leave the country due to the new market situation and requirement for applying a work permit. Conversely, the same might occur for English entrepreneurs working in Europe due to immigration restriction.
German and French entrepreneurs would become the least affected by a potential Brexit compared to other EU countries, thanks to their national support to start-ups and small enterprises.
In consideration of the significant contribution of the UK to the European Union, Brexit would affect the entire continent’s competiveness internationally over time. The European Union has been able to expand and collaborate despite all the challenges it has been facing during the last decades. Besides the direct economic impact, losing such a big contributor to the European edifice could seriously affect the willingness to develop a stronger partnership among EU countries and would weaken the Union.
Several partnerships between Junior Enterprises in Europe are made to perform different mandates and organize events. Brexit could affect the movement of students and prevent the development of various projects involving Junior Enterprises in the UK.
The loss of British budget contribution would affect EU ability to finance JADE projects as well. The European Commission might significantly reduce its support towards JADE in consideration of other priorities due to budget constraints.
Nevertheless, the British Junior Enterprise, Westminster Business Consulting (WBC) is very active and the most international Junior Enterprise of the movement. In the event of a Brexit though the European Union might decide to exclude any support provided to British Junior Enterprises, thus slowing down both JADE and WBC.
Junior Enterprises though will always find a way to work together and achieve fabulous projects. As young entrepreneurs we are part of the future of our world and thus we will surely find a way to overcome all the challenges and achieve great things together.
About the author
Vincent is a student at the University of Applied Science in Business and industry in Geneva, he is finishing his bachelor this year. He currently chairs the Junior Enterprise of his university and has been elected Vice-President of JADE Europe. He will be in charge of public affairs and international relations. He also was a board member of Swiss Federation of Youth Parliaments and plays tennis competition.