The Brexit issue (Britain’s exit from the EU) has been haunting global media for over a year. Brexit has already become synonymous with financial instability and possible risks. Why is everyone so worried about this topic? The main reasons for the unknown. No one knows exactly what Brexit will ultimately lead to. It has already been recorded as the most important historical event in our life, which worries the whole world. But maybe not everything is so dramatic? Let's take a look at the 10 most likely consequences that Brexit can cause.
1
Japanese economy may be in positive territory
Most people do not have deep knowledge of the laws of trade in the foreign exchange market, but when major currencies, such as the dollar or the pound, lose their position, Europeans begin to buy the Japanese yen. This is because the yen is initially considered a reliable currency. Recently, the British pound has weakened sharply and declined in price. As a result, the yen wins in this case. Interest in the yen will stimulate the Japanese economy, giving an advantage to their stock market, which has been declining in recent years.
2
Sanctions against Russia may be lifted
After the Crimean events in 2014, Western countries imposed severe sanctions against Russia. Sanctions were the only lever of pressure that was possible. It is no secret that these economic restrictions weakened the Russian economy, but they also impeded the development of European business, as EU countries could not fully trade with Russians. Until now, European countries have dealt with these inconveniences. But the effect Brexit could have on the British economy could force EU countries to lift sanctions against Russia. When analysts said that Vladimir Putin would benefit from Britain's exit from the EU, then perhaps they were right.
3
Unification of Ireland
Of course, Northern Ireland is still part of the United Kingdom. But many in the country dream of a possible reunion with the Republic of Ireland. The population of Northern Ireland, as a rule, wants to remain in the Kingdom, but Brexit can turn everything around. Since 55% of Northern Ireland residents voted to remain in the EU, Irish Republicans can quickly use this result as a tool to appeal for the reunification of Northern Ireland with the Republic of Ireland. Now this seems unlikely, but no one knows how the near future will change.
4
Scotland Independence
The Scottish people have long nurtured thoughts of independence from Britain. Two years ago, the people of Scotland voted to remain in alliance with Britain. But at the Brexit referendum, the Scots wished to remain in the EU, and the United Kingdom voted to leave. This means that Scotland will be removed from the EU against its will. Scottish leaders made it clear that they want to hold another referendum on independence before Britain leaves the EU. Current polls show that most Scots support the idea of the country's independence at this point.
5
The unification of Gibraltar
Gibraltar is a small British territory bordering Spain. It has been under British control for several hundred years, but now its ownership is being called into question. The Spanish government has always wanted to regain control of Gibraltar, but now they have a good excuse.
Gibraltar voted to remain in the EU. Shortly after the announcement of the referendum, the Spanish government demanded the sovereignty of Gibraltar and its entry into Spain. This is worrying, as Spain may simply invade Gibraltar, with the result that the British fleet may increase its presence in the region.
6
HSBC may move to France
HSBC is a large Shanghai and Hong Kong banking corporation. She is one of the largest in the world. HSBC has long been based in London, but their future location is now not so clear. The company plans to transfer more than one thousand employees to France. These actions suggest that they want to completely move the entire organization to France. This would be a huge loss for Britain, as London would no longer be considered the financial center of Europe. In the future, seventy thousand jobs could leave the UK, which would simply destroy the economy. HSBC made it clear that they could indeed move to France if the UK did not remain within a single European market.
By the way, on our site thebiggest.ru there is an interesting article about the largest banks in the world.
7
The breakup of the Labor Party
The Labor Party is one of the two main parties in the UK. This is an opposition to the current government, so they can take advantage of the resignation of the prime minister. Nevertheless, they have their own problems in the party, which were formed against the background of Brexit. Almost half of the Labor Party cabinet fell down, which puts the party on the brink of a split. It is likely that the party is about to split into two different branches. The opposition of the country may be on the verge of complete collapse.
8
EU could fall apart
The UK is the second largest economy in the EU, so its output will be a huge loss for the EU. The EU may survive this blow, but the exit of other member states is a real threat. There are many European countries in which the popularity of the European Union is declining. Politicians in these countries are calling for a referendum on EU membership. There are some countries, such as Greece, that would leave the European Union if they had the opportunity. But the biggest concern among EU supporters is the possible domino effect. The Polish government said the EU would be much weaker without the UK, so they might be the first to leave.
9
The collapse of the British economy
With such big changes in the political system of the country, no one knows how the economy will behave. The pound has already plummeted, and British banks have lost most of their assets. The financial sector is simply in a fever. If this goes further, this could lead to an absolute collapse of the British economy. This is an unlikely outcome, but it does have a place to be.
10
British economy could get stronger
In the long run, Foggy Albion's economy can grow faster than ever. Brexit advocates have always argued that EU membership slows down the British economy due to bureaucracy. They note that neither Norway nor Switzerland are members of the EU, and their economy is one of the strongest and fastest growing in the world. Without membership in the European Union, they will be able to independently conclude trade transactions with other countries on their own terms. Now the country may not have enough of these opportunities after Brexit, but what will it bring for the British in the future?
Summary
It is absolutely impossible to predict all the consequences of Britain’s exit from the EU. Well, time will tell we guessed with some points or not. And we suggest you in the comments to state your thoughts about brexitis and its consequences.
Article author: Sergey Altenko