Brexit kick-off: a historic day for the EU anticlockwise

Teresa May Francois Hollande 2017

Informal meeting of EU Heads of State or Government – February 2017. From left to right: Ms Theresa MAY, UK Prime Minister; Mr Francois Hollande, President of France. Shoot location: Valetta – MALTA. Shoot date: 03/02/2017. Copyright: European Union.

The beginning of the two-year negotiations is about to begin as UK submits today the letter to the EU today informing the latter about the decision of the British people to leave the bloc. However, it is still too early to say whether a deal will be reached within the timeframe that is set in Article 50 since two years is a very short time when dealing with such a very complex agreement.

Financial markets haven’t also fully weighted the consequences of Brexit and the British pound is about to experience a volatile period as it has dropped significantly in comparison to the U.S. dollar since the UK referendum. Britain’s hard stance regarding the upcoming trade deal with the EU will surely be influencing the sterling.

Furthermore, the manufacturing body of UK (EEF) has expressed its great concern that a no-deal will have disastrous effects on the British economy. According to EEF, the UK should definitely reach a secure agreement with full WTO membership allowing a free movement of goods and people.

Will Brexit hurt the UK economy?

According to the HIS Markit, only 29% of the British citizens believe that Brexit will boost the national economy in the next 10 year-period when about nine months ago the majority of the public opinion (39%) were supporting that it would be better for the economy to leave the EU. Thus, it is high likely that this sentiment will change many times during the harsh negotiations between the UK and the EU.

Furthermore, the manufacturing sector is about to be influenced negatively since it will not have access to the single market. The EEF published a report, responding to the UK Prime Minister’s recent statement that “no deal for Britain is better than a bad deal for Britain”, mentioning that businesses could probably face WTO tariffs of more than 5% on exports to the continent without a trade deal with the EU.

It is very crucial both for the EU and the UK to reach a mutual trade agreement since the EU is the largest manufacturing partner of Britain and the UK manufacturing sector employs 2.7 million people and accounts for 45% of the exports.

Brexit increases financial uncertainty

There are lots of uncertainties in the financial world and Brexit is surely one of them. According to Nomura, the Japanese financial holding company, “one of the main factors affecting sterling is the risk of a hard Brexit, which would mean that the U.K. would leave the EU without any agreement and raising all sorts of uncertainty, including on trade and financial services”.

The German Finance Ministry is also worried about a “Hard Brexit” and whether the EU and UK will manage to reach a deal in the predetermined period of time. The analysis of the German Ministry concludes that there will be an impact on the stability of the financial markets if Britain will not strike a deal with the EU. According to the report, such an event could trigger serious problems in the banking system with British banks not to be able to offer services in the EU and EU banks will have no access in London. Germany is following a hard stance on the Brexit procedure and will force the UK to meet all its obligations including paying to have access to the EU Single Market.

Negotiations will be long

It is understandable that the EU will be pushing Britain to the edge in order to reach a bad agreement for the UK discouraging the rest of the EU members to follow UK’s route. However, UK is a very strong economy and it will exhaust all possibilities to come up with a deal of its interest.

One thing is for sure though: negotiations are most likely to last for a long time, something that will lead to further uncertainty. Already banks and other businesses have been relocating jobs outside of London and the UK. The good performance of the UK economy in the aftermath of the referendum has started changing as inflation increased to 2,3% in February over the previous year and consumers are influenced by the pressure of higher prices.

All in all, it seems that the uncertainty will keep on rising in the UK and the EU as there is still no economic and political Brexit plan by both parties.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Rising political extremism in Europe escapes control

CHINA UNLIMITED. PEOPLE UNLIMITED. RESTRICTIONS LIMITED

Italy and Greece zeroed their fiscal deficits, expect Germany’s response

Trailing the US-EU economic confrontation

Who is to profit from the quasi announced ECB rate cut?

Merkel’s triumph will make Berlin more unbending

ECB to support only banks not Peoples

Why the euro may rise with the dollar even at lower interest rates

Who is to pay the dearest price in a global slowdown?

A Sting Exclusive: “Youth voice must be heard in climate change negotiations!”, Bérénice Jond Board Member of European Youth Forum demands from Brussels

Diana in Vietnam

EU unfolds strategy on the Egypt question

European Business Summit 15th year: Controversy and Constructive Ideas

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

EU leads the torn away South Sudan to a new bloody civil war

An entrepreneurial point-of view on tackling the migration crisis and the risks of abolishing Schengen

Franchise India 2016, returns in 14th year 

Greece may offer to China a European gateway

European Investment Bank to borrow €70 billion in 2013

Is a full course lunch, a new Commissioner and 2 million anti-TTIP citizens what you would call a “Fresh Start”?

ECB again to subsidize euro area banks with more than one trillion euro

The ECB ‘accidentally’ followed IMF‘s policy advice for growth and job creation by printing more money

G20 LIVE: G20 Statement on the fight against terrorism

Greece’s last Eurogroup or the beginning of a new solid European Union?

Will CETA be implemented after eight long years or it will be vetoed by the EU citizen?

Germany to help China in trade disputes with Brussels

Is it impossible to place the banks under control?

The European Parliament wants to stay in one place

The Parliament paves the way for the creation of the European Banking Union

Transition between education and employment: how the internship culture is threatening the foundations of our education

The COP22 is under full deployment while Donald Trump threatens openly to withdraw the US from the Paris agreement

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

Building cybersecurity capacity through benchmarking: the Global Cybersecurity Index

To Bing or Not to Bing? That is the question

Unanswered questions for Europe’s youth in President Juncker’s State of Union

The three sins the EU committed in 2015

MWC 2016 LIVE: GTI shifts to phase two – 5G – after hitting milestones

3+1 issues to haunt tomorrow’s EU Summit

French elections: by the time the EU economy revives and the migration crisis is solved extremists could take over Europe

It’s a week dedicated to all EU budgets; seven days that can make or break the Union

ECB offers cheaper money despite reactions from Germany

A Sting Exclusive: “The competitiveness of Europe depends on a digital single market”, EPP President Joseph Daul highlights live from European Business Summit 2015

The ECB again takes care of the bankers not the people

Why medical students decide to study abroad?

Parliament toughens its position on banking union

Can elections in Italy and Germany derail Eurozone?

Alexis Tsipras ready to test Eurozone’s political sturdiness; Up to what point?

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

Macron plans for Europe, Brexit and banks but vague on France

Intel @ MWC14: Our Love Story with Mobile – Transforming Wireless Networks

JADE Testimonial #2: Jacques @ Process mapping

Dear China

The true EU unemployment rate may have soared to 21.9%

How painful is the Greek tragedy for the Germans?

Eurozone officials play with people’s deposits and minds

Grexit no longer a threat but how to manage a “tutti frutti” government if not with fear?

IMF’s Lagarde to Peoples of the world: You have to work more for the banks!

The European Sting writes down the history LIVE from G20 Leaders’ Summit in Turkey

ECB indicates south Europeans can endure more austerity

Parliament approves key directive regulating professional qualifications

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