This page deals with economics and business issues,concerning Latin America, and the global economy.-
Monday, June 27, 2016
Brexit: What comes next?
For the world ,It is still hard to believe the outcome of the referendum about the Brexit,which was based on the option of leaving or remaining within the EU. Those option by themselves, stated as either "like" or "dislike", did not set clearly the whole complexity behind them both other than the economic cost, which in the balance for a country like Briatin it is posibble to recover.
What if the "remain" option, would has been about "remain in a different EU", and the Brexit option, would has been about "Exit no matter a reform in the current EU project". I can bet the remain alternative would have been with more than the 48% it got.-
Most of the analysis, was based upon the perception that Britih Remain option were both all that positive and desirable, which it was true but with some costs , which British citizens thought they were not ready to afford.
The UK has not been too much entusiastic about the European Union, as long as they believe it is mostly a bureaucracy, with no other goal than to reinforce the welfare state, and the power of those who are in charge of regulations and european laws. It follows that, It would be hard to believe , the all mighty British would become the "yes country", for such a purpose.-
Thus, no matter the economic advantage, there was a political barrier for Britain hard to avoid sooner or later, as long as the EU moved along into a deeper integration stage.-
Therefore what is the meaning of Brexit?.It means that British citizens do not care about deeper ties on trade, financial and business links with Europe?.My own guess goes in another direction.I do believe they do care, but they do not in the current status of the EU project.
So, what it is at stake?.They are beting for a different European Union, one in which they can participate on trade and finance links ,but at the same time to stay politically independent from Brusssel.Perhaps that would not be the European Union anymore,as much as the treaty already signed say clearly. Well,not necessarily ,except that with different boundaries and limitations.-
The narrow margin of the outcome (48% to remain, 51% to leave),suggest that a midlle ground based solution upon this lines, might be possible some time in the future, taking into account the expected period of time (between 5 to 10 years),needed to close the Brexit deal, and the burden of the economic cost to become not aparent but a costly reality ,specially for those who do not expect other than benefits form such a move.
Following the analysis of democratic rules, with such a narrow margin, it is hard to think there will not be a path to seek for an intermediate solution. However, such scenario actually looks far away from the negotiaton table.But what if other countries want to follow the exit path to join the British for such a different approach to the EU project?.
When markets are unpredictable, Good management policies are based on the premise of "Think the unthinkable". Besides, after the Brexit, the EU is not longer the strong and forseable project it looked before june 23rd. To be blind about it, would be more complicated than the brexit itself.In the years to come ,Politics rather than economics, have much more to say , for the EU to sustain the unpredicatble.-