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Saturday, October 22, 2016

Expert: a British exit from the EU objectively strengthens the position of Germany

Experts have repeatedly pointed out that after 23 June 2016, the year we live in a new reality. The reason for that is the end of the day of the referendum on Brexit, that is, of a British exit from the EU. Most British citizens – but not overwhelming – spoke then for the “single voyage” for the United Kingdom, leaving the “common European home” before the need to adapt to new conditions. Recognized the fact that the driving force of the European Union is, first and foremost, Germany. How to change its role in the EU and what challenges face the country, “MK” has tried to understand with the help of an expert.

photo: pixabay.com

The market will put everything in places

A few years ago, the British economists predicted that by 2030 year, the United Kingdom’s economy would overtake Germany. Then, however, about Brexit was out of the question, and did not change the situation now, after the referendum on the British exit from the EU?

“The growth rates in may, Britain will overtake Germany. But there are also absolute values, e.g. GDP (according to it, Germany is ahead of the UK, the countries are according to this indicator, the most powerful European powers, taking on the world list of fourth and fifth place respectively. – “MK”). – said the head of the Center for German studies Institute of Europe RAS Vladislav BELOV. – If the British economy continues to go through reforms, reducing the tax burden, etc., then growth is possible. The application for conversion is, even when past Prime Minister Cameron the economy has been focused on providing greater freedom to economic actors, but the question is, will this course continue with the new Prime Minister Theresa may. Prerequisites for growth is definitely there.”

There are, at the same time, and fears of another kind. In may of this year, some Western experts have voiced dire for Germany figures – supposedly the country, after the British exit from the EU, maybe by the end of 2017, the year to lose about 45 billion euros. But, according to Vladislav Belov, a certain alarmist predictions related to the fact that a British exit from the EU can allegedly deprive German goods and services with certain competitive advantages. “I would like this approach was questioned, since it is known that production in Germany is competitive, primarily from the point of view of quality, not terms of prices. – reminds the expert. – Even if there are inevitable costs associated with change of tariff regulation of the supply of goods and services to the UK from Germany and Vice versa, I don’t think I will be talking about such large amounts. Had a similar damage assessment for the whole of the EU Brexit, but so far I haven’t seen any models where clearly justified by the magnitude of certain losses. There are other real risks associated with the labour movement, with an increase of necessary expenses for German experts working, say, in the UK, but I do not see significant risks for the national economy”.

You can refer to the example of our country where German exports were significant disadvantages, says Vladislav Belov: “However, German industry was able without problems to compensate them at the expense of other markets. The same course of events is probable, and in the case of UK: if there are some really decreasing segments in the UK market, the German economy relatively quickly to fill these gaps in supply in other regions. Today, even the moving of certain industrial or financial centers on the theme of what is often speculating, predicting that London will take part of financial flows, is not a serious threat. The market on the market, is the international division of labour that allows economic actors to quickly compensate for disadvantages in one places with advantages in others.”

“Problems I do not see the UK economy remains open and even the emergence of additional regulators, payments hardly will drastically change the flow of goods into the EU and out of it,” – concludes the expert.

It is well known that London is one of the world’s major financial centers. A British exit from such a mighty structure as the EU, according to some, could undermine the position of British capital in this regard. As alternatives to London are often called, for example, Frankfurt in Germany. Whether the capital of the United Kingdom will lose their previous status in the world of Finance?

“I don’t think it will happen, – said our interlocutor. – Most likely, London will retain its leading role. Some part of EU companies might transfer their financial flows with the London stock exchange in Frankfurt am main, but perhaps this will be a great acquisition for Frankfurt and a significant loss to London. The regulatory system in the European Union is greatly inferior to what you find in London, and it is unlikely the pan-European and national regulators, will significantly enhance the competitiveness of the continental financial centers. Not a secret, how long the Frankfurt stock exchange is trying to connect with the new York stock exchange is indicative of the fact.”

SWOT-analysis, not a “superstate”

At the end of June 2015 in Prague, at the meeting of the Visegrad four (Hungary, Poland, Slovakia and Czech Republic), France and Germany presented its plan for reform of the European Union, implying the “deep integration” in the EU members. Some media took these intentions as a desire to create a single European “super-state with a common army, a common penal code, a common currency (not only within the Eurozone) – in response to a British exit from the EU. However, the Quartet have rejected the plan. “Fast and reckless integration would be meaningless response to what happened in the UK,” he said, in particular, Czech foreign Minister Lubomir Zaoralek.According to him, the essence of the integration processes offered by the leading powers of the EU, has not been adequately explained to the public.

“Many domestic media has misinterpreted proposed by Berlin and Paris plan as an attempt to create a unified superstate. – said Vladislav Belov. – Not sure that was the speech, namely the need for reliance on the best that already exists in the European Union – in fact, it’s a SWOT analysis to identify strengths, weaknesses, given the chances and the potential opportunities and threats. Not by chance, and German Chancellor Angela Merkel has softened the tone, speaking about the future of the EU, and German Finance Minister Wolfgang Schaeuble has received speaks… Comes the understanding that it’s not rock, but rather to strengthen the existing complex structure”.

Objectively the UK out of the EU strengthens the position of Germany in the EU, according to our source: “I would have marked it as “new German question”, which is how Germany is ready for a new role, how she cope with her and if she wants it. Still earlier we were not dealing just with a bunch of Germany-France, but with the triangle Berlin-Paris-London, UK had its significant role, in spite of some inconvenience caused by it. Let’s not forget about the other members of the European Union, among which is also a powerful economy. Therefore, Germany and France declared their readiness to continue to be leaders. Not to impose their own views, and to discuss specific measures. In connection with Brexit prospects for once again a critical look at the Maastricht Treaty, the Lisbon agreement, the prevailing Bureaucratic – with a capital letter, structure. There is something to change, so Brexit – shake”.

Populism vs calculations

Berlin has repeatedly declared that are ready to sign a special agreement with the UK emerging from the EU as an associate member of the Union. “This is definitely one of the possible models of the relationship. – says Vladislav BELOV. – Was at the time, and the European free trade Association, and now there are various ways of building relationships. Interested in this and the UK has repeatedly emphasized that criticism of the EU was mainly about migration issues. And if London wants to achieve a separate agreement, it is likely the signing of a peculiar analogue of the TTP (TRANS-Pacific partnership preferential trade agreement between twelve countries in the Asia-Pacific region – MK) with the EU. The common denominator here may be found, although, of course, with the loss of the benefits that are now available in the UK in the single market”.

The loss of these benefits is not the only of its kind. We have repeatedly heard the words that the supporters of Brexit, inspired by populist rhetoric, was not quite ready to its success and, as a consequence, all the risks are not counted. “It is a proud 17 million British nationals with whom 16 million are not agreed, not going to forget about it. – reminds the expert. – Why Mei and announces his intention to show an example of respect for the democratic will of the population of the state. Sounds of populists? Yes. But that is the policy in which London appears to be not counted until the end of the pros and cons of Brexit; and the processes of real discussions and calculations are now just beginning. Not by chance the same Johnson immediately after the referendum was hiding, that is, into the bushes. Because it was about the British expression of dissatisfaction with how the EU relates to their position on the immigration problem. All statements like “We pay more than we get!” was at the level of General reasoning. Now have to face the consequences”.

And, of course, do not forget that a significant part of voted for the EU the future of young people, while among the supporters of Brexit more of the older age.

“Mei, she is a politician in age and must understand that young people, those who will replace it, voted for the Union. – said our interlocutor. And we should think about this, because no one has figured out, how the situation will develop in the future, with the advent of this generation in power – especially if the UK faced with the need for “belt-tightening”. As well as did not aim for the admission of new members to the EU in 2004-the year when the EU entered Hungary, Cyprus, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia, Czech Republic and Estonia – “MK”) is a political will, then you can join. Right now there is the populist will of the population… it is no Coincidence that the Prime Minister of the Netherlands mark Rutte in the footsteps of the past in his country a referendum (on the approval of the Association Agreement between Ukraine and the EU was held in the Netherlands, was held on 6 April 2016, the majority of citizens voted against the Treaty with Kiev – MK) said that such a vote would be worth a ban – from the point of view of the mandatory implementation, within the framework of international legal agreements. I’m not a lawyer, but, in my opinion, needs to be some quorum, quotas.”

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