For
many weeks now after the surprising exit of England in the political activities
and involvement of politics in EU, the vulnerability of EU economy is greatly
affected in its circulation of the EURO currency inside EU countries and around
the world. Analyst and business academe
are anticipating and forecasting as to how the world market will respond to the
sudden change of political setup in EU were England plays a huge role in the
whole economy of EU. Furthermore, EU members are in an inferior stance towards
Russia in terms of politics, economics, and military power given the fact that
some EU member countries are having a huge negative difference compared to
Russia who is known of their emerging economic power and experienced military
might and intelligence. The big Apple
(US) as well is in a big awe in terms of its relationship with England and
their continued political and economic rapport with other EU member countries. Probably, US business negotiations with other
EU member countries will come to a halt mode were in huge research funding and
businesses in Pharmacology for example will come to a “vacuum” not knowing what
to do next. The most affected project
this time is the research and projects related to climate change. Enormous amount of financial capital are invested
in EU to create products and innovations that will lessen the worsening delimma
of climate change. But as a result of
BREXIT many related ongoing research in EU that involves England and the US
will be affected in terms of management and organization.
Financial
confidence of other regions of the world market will also weaken in perspective
of EU economic market. Stocks are
affected negatively in real time right after the vote and the unanimous
decision was given to the public from the legislative chambers in England.
Moreover, Asian and the African financial markets are in a continued emerging
financial status knowing that the shift of financial confidence is going
somewhere in Asia and the Africa. As far
as I can remember what Mr. Marc Faber a twitter academic blogger friend living
now in Changmai Thailand (running a financial academic blog http://www.gloomboomdoom.com/,
Twitter: https://twitter.com/marcfaberblog)
was always emphasizing that US economy is in a volatile situation that the
financial market confidence is shifting to Asian Markets and other Emerging Markets. Undeniably, the BREXIT that had happened will
change the economic formation of the world and the future of the world economy.
Banking
adjustments on the contrary is another issue that the governments involve in
the BREXIT must adjust to the new rulings and other affected accounting and
financial market policies that are deemed involve in the BREXIT package of
economic relationship. International
banks are also in a vacuum situation not knowing what to answer to the
financial reporters asking the future of EU and England. Furthermore, banking adjustments involves not
only to the policies and the flow of currency exchange but rather the most
important part in the banking adjustments in the BREXIT event is the capital
investment presently incurred within and other transactions outside EU member
countries. Those existing business financial
market contracts that will extend up to five or ten years more will experience
a halt and vacuum in its market operation continuation.
Mr. Marc Faber
Likewise,
bank lending in specific are being affected knowing that existing lending and
investment transactions between England and other small countries in EU are
interconnected in terms of the flow of financial capital and the existing
business and marketing operations. By
itself, the effect of BREXIT along the inner supply chain of EU before and the
BREXIT effect will totally change the whole supply chain interconnectedness
both within EU and the world market.
SME’s
on the contrary are the most affected in terms of the BREXIT’s new economic
policies conceding the fact that SME’s economic and financial stamina to
survive both local and international market are in a huge difference compared
to the multinational firms. Furthermore,
SME companies are dependent to the government’s assistance both financial and
International marketing negotiation between G2G affecting B2B and B2C. As a thought, what will happen to the SME
business in Europe and England? Do you think it will create another financial
bubble that will identically the same with the US financial market credit
crunch?
Per
se, fiscal policy integration in specific must be given concern with the WTO
and the IMF given that they are the international mediator in terms of balancing
the financial world market. Need not to
say that BREXIT and EU must likewise adhere to the advice of WTO and the IMF to
prevent further negative economic ripple across the world. It is inevitably known
that Inflation will happen in a few months’ time both in England and the EU
countries knowing that some consumer goods that are abundant in EU are in
scarcity in England for example. In a
vice versa economic and supply chain of consumer goods effect inflation of
consumer goods will probably happen and with the possibility of supplying
affordable goods from Asia and other parts of the world to fill the void and vacuum
of consumer goods in the country involved.
Finally,
continued financial and academic market observance must be imposed to acquire
the most robust data analysis for financial forecasting affecting the EU member
countries, England, and the world market relatively.
Mr. Mario
Draghi
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