Dear Financial Voice Reader,
Is the EU the winner between UK, EU and US? The Russia crisis is likely to lead to more EU diplomatic sanctions according to experts. With Trump also likely to expel diplomats and EU avoiding serious tariffs from Trump but instead likely to work with him on tackling China and a hard Brexit likely to be avoided, one could see how the EU is the key beneficiary between the UK, EU, US, China in the world economic picture.
And given that data supports the UK may leave the EU as its weakest major economy, the Europeans may well not be losers after all. And all the while Europe is powering ahead (despite French protestors).
It is little wonder that Euro-area confidence is so high as data shows for this past year.
Brexit has shown the instant negative impact on economic growth of EU and UK as well for short term. But the expert arguments show that if we observe the long-term impact of Brexit it may enhance the economic growth to a large extent.
Experts reveal that there are more risks for the UK with Hard Brexit. The recent predictions about Hard Brexit say that if we analyze the short to medium term impact of this deal, GDP of UK will fall by great extent as compared to EU. However, the report of Bertelsmann Foundation shows that Hard Brexit will cost somewhere around 0.1 to 0.36% for EU’s GDP by the year 2030. The impact continues to other platforms as well where Ireland will be losing by 2.66%, Germany will decline by 0.33%, Sweden by 0.48% and Belgium will lose by 0.99%.
We have a perfect storm where the EU may be in the peaceful eye; Brexit (the UK suffers more), trade wars (the EU is largely exempted so US and China fight it out), Russia (the EU is protected by its scale and size).
For my readers, the key point then becomes to diversify abroad your investments, and with your business, export! My own business is an exporter and with the falling pound, that’s good. But it’s meant with that devalued pound we’ve onshored a lot of services from IT to back office administrative work.
These are business and investment trends we will just have to get used to I think.
Alpesh Patel
