Due to the United Kingdom approved exit from the European Union in June 2016, the sterling pound deteriorated in value, hitting rock bottom for the first time in over three decades. The stock markets across the entire European continent experienced a market downturn, registering a significant drop of about 12 percent. According to CEO Flavio Maluf, who is also a global economy expert, the UK and the entire world are yet to see some of the far-reaching ripple effects of the exit.
Possible Effects of Brexit
Statistics show that the UK has been the largest contributor to the European Union over the years. In the year 2014, for example, the country spent €4.4 billion more than what it received from the union. Those who supported the exit argued that this kind of expenditure would potentially increase inflation in the country. But Flavio’s view of the matter was that the UK was standing to lose a substantial amount of investments from other European nations. The free movement of people and products out of and into the UK that the country enjoyed for being a member of the EU will be scrapped. Therefore, more dire consequences on the country’s economy may be witnessed.
Member countries of EU enjoy free trade amongst themselves. Following the exit, UK will cease enjoying the provisions of this free trade, which means that the country’s trade partnership with the rest of Europe will be negatively affected. Flavio, however, argued that this would have both positive and adverse effects on the country’s economy. On the negatives, exports from the country and imports from other nations will be slammed with higher rates regarding quotas and tariffs. On the positives, the UK will be at liberty to sign bilateral agreements with EU members, which would have been impossible if it was still a signatory of the EU.
About Flavio and Eucatex
Flavio ventured into business after college. He now manages the Eucatex Group. This company has been a leader in the production of building materials in Brazil for the last six decades. Eucatex excels in the manufacture of paint, tiles, and hardboards among other building materials. https://br.linkedin.com/in/flavio-maluf-172147b3