Will Brexit shatter the EU or is it still too early to predict?

theresa-may-juncker

Discussion between Theresa May and Jean-Claude Juncker (in the foreground, from left to right) Date: 21/10/2016. Location: Brussels – EC/Berlaymont. © European Union , 2016 / Source: EC – Audiovisual Service / Photo: Etienne Ansotte

The president of the European Commission together with EU and German officials fear that Brexit will divide the EU after the negotiations have been concluded. Theresa May is about to trigger Article 50 of the Lisbon Treaty and begin the talks for UK’s exit once the House of Lords grants permission.

In addition to the Brexit procedure, Europe has other threats to worry about such as migration crisis, the elections that are taking place in various European countries this year and the effect of Donald Trump’s policies. But let’s focus on Brexit which according to Jean Claude Junker is able to cause severe turbulences to the unity of the 27 EU member states.

Britain’s plan

The UK prime minister is planning to start the Brexit negotiations by the end of March. The UK intends to seek a new partnership with Europe and the procedure will be transitional in order to have minimum impact on the EU. Furthermore, trade deals will be seeked with the U.S., China, Brazil, Australia, New Zealand, India and states in the Persian Gulf and decide for the future of the 2.8 million EU people who live in Britain. However, UK aims to protect only the common travel area that exists between Northern Ireland and the Republic of Ireland.

EU and German officials warn UK about Brexit repercussions

Valdis Dombrovskis, European Commission’s vice president, pointed that UK will most likely face economic disruption and worse trading agreements when it will lose access to the European single market. More specifically, the European Commissioner for the Euro and Social Dialogue stated that: “Inevitably there will be some economic disruption by clearing out decades of economic integration. Unfortunately, it will be a situation where we will be spending lots of time and energy moving from Point A to Point B, when we already know that Point B is likely to be worse than Point A. That, unfortunately, is the reality that we are in.”

What is more, the European Commissioner for Budget and Human Resources Guenther Oettinger mentioned last Sunday that the Brexit impact on the EU budget might cost Germany of up to one billion euros in case the budget remains the same. In case though the budget is cut by Britain’s share , then no other EU member state will have to contribute but it would mean that many EU countries and especially the southern ones will have to face further problems since there will be less financial aid by the EU.

Germany‘s approach to Brexit

“The current model of using London as a gateway to Europe is likely to end,” Andreas Dombret, executive board member for the Bundesbank said at a private meeting of German businesses and banks organised by Boston Consulting Group in Frankfurt last week. It seems that Germany is having a tough approach towards Britain regarding the last one’s exit from the EU.

The senior banking regulator said also that even if banking rules were “equivalent” between the UK and the rest of the European Union that was “miles away from access to the single market”. What is more, the Germany’s central bank executive expressed his concern that the UK will attempt to cut taxes and relax financial regulations in order to persuade banks and businesses to invest in Britain.

Juncker’s pessimistic views

Jean Claude Juncker has decided not to run for a second term as EC president at the end of the five-year term which expires in 2019. The current president of the EC has stated at the German Deutschlandfunk radio that is not optimistic about the European unity during and after the Brexit talks.

More in detail, the EU official said that: “The other EU 27 don’t know it yet, but the Brits know very well how they can tackle this. They could promise country A this, country B that and country C something else and the endgame is that there is not united European front.”

However, UK Brexit department refused to comment on Jean Claude Juncker’s statement, but refered to Theresa May’s recent speech where the UK Prime Minister had said that she wanted a “strong and constructive” partnership with the EU.

There is still long way ahead

The fears of the EU officials are reasonable but it is too early to judge how, if and to what extent Brexit is going to affect the rest of the EU. Besides, it should not be forgotten that the imminent impact of the UK-EU referendum’s result was absorbed very quickly. Thus, the financial markets managed to adopt easily compared to the Armageddon that was expected to come.

Last Monday, the UK economy has exceeded the EC’s expectations regarding GDP growth reaching 1.5% from 1% that was forecasted last November. Furthermore, the EC forecasts 1.6% GDP growth for the euro area in 2017 and 1.8% in 2018, revealing potential growth of all EU member states for the first time in 10 years.

All in all, it is imperative that the EU watches closely UK’s plans on Brexit but there are still many more problems, as elections are taking place in France, the Netherlands and Germany in 2017, that the EU should currently worry about which could have critical consequences to the European unity in the short run.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

A new European banking space is born this year

COP21 Breaking News_12 December: Another sleepless night for the negotiators before Indaba meeting

Refugee crisis update: Commission still in panic while Turkey is to be added in the equation

Draghi’s ‘quasi’ announcement of a new era of more and cheaper money

When is Berlin telling the truth about the EU banking union?

Will ECB win against low inflation by not following Quantitave Easing?

Does the EU want GMOs and meat with hormones from the US?

European Union: More taxes out of less income

Is there a chance for the West to win the war on terror?

European Youth Forum welcomes establishment of new Youth Intergroup in the European Parliament

Press coverage of migration crisis in Europe: a call for collaborative action

Convincing the Germans to pay also for the unification of Eurozone

Scotland and First Minister Salmond enter the most challenging battlefield for independence: Europe

Refugee crisis update: Commission is struggling alone with little help from EU or G7 leaders

New skills needed for medical students in Industry 4.0

JADE May Meeting last call for participants – join us in Zagreb

Who really cares for the environment?

Yes, together we can make a change! YO!Fest and EYE 2016

“The winner is who can accelerate the transition to a new digital era”. The Sting reports live from EBS 2015: a Digital Europe 4.0

Eurozone: Retail sales betray economic frailty

Britain in and out of the EU

Does the Greek deal strengthen the Eurozone? Markets react cautiously

JADE visits Lithuanian Junior Initiatives

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

Why the ECB suddenly decided to flood banks with money?

European Sting Cookie Policy

JADE Spring Meeting 2015: a step forward for Youth Entrepreneurship

Draghi left alone with no hope of boosting EU growth as Merkel just focuses on next elections

More state aid to big firms, no special provisions for the SMEs

Germany and France only care about keeping their borrowing cheap

The refugee crisis brings to light EU’s most horrible flaws and nightmares

Youth unemployment: No light at the end of the tunnel

The EU slowly exits from “Excessive Deficit Procedure” and hopefully from ‘Excessive Austerity Procedure’ too

Access to ‘affordable’ medicines in India: challenges & solutions

Arlington, USA: kick-off of the fifth round of the EU-US boxing match

We are close yet so far…

Cloud computing under scrutiny in the EU?

YO!Fest back in Strasbourg for the 2nd edition of the European Youth Event – 20-21 May 2016

Neelie Kroes at the European Young Innovators Forum: Unconvention 2014

The 28 EU leaders show contempt for the European Elections results

Will Europe be a different place this Monday?

EU is now giving Google new monopolies to the detriment of European citizens and Internet companies

We’ll succeed together

Will Merkel ever steer the EU migration Titanic and restore her power in Germany?

SCADA Security Conference 2017 in Prague, Czech Republic

MWC 2016 LIVE: Telenor CEO calls on operators to embrace Mobile Connect initiative

China’s stock markets show recovery signs while EU is closely watching in anticipation of the €10bn investment

IMF’s Lagarde indirectly cautioned Eurozone on deflation

Who is to lose from the 6-month extension of the EU economic sanctions against Russia?

Counting unemployment in the EU: The real rate comes to anything between 16.1% and 20.6%

G20 LIVE: G20 leaders reaffirm OECD’s role in ensuring strong, sustainable and inclusive growth

Maros Sefcovic Canete European Commission Energy

Better late than never? Commission runs now to fight energy dependency on Russia with the sustainable energy security package

US, Russia oblige each other in Syria and Ukraine selling off allies

The historic accomplishment of a seamless EU patent and intellectual property space

Greece did it again

The European Parliament wants to stay in one place

How to test if Kiev’s ‘Maidan’ was an authentic revolt or a well-planned operation

A Sting Exclusive: why the environment is important to your health, by UNEP’s Head for Europe

Tsipras imposes more austerity on insolvent Greece; plans to win new early election soon

The Europe we want: Just, Sustainable, Democratic and Inclusive

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s