It seems that if the Brexit will come, there can occur a lot of Problems for the British population and economy, but also on the economy and population of other EU member States, because of different regulation consequences which will come with the Brexit. The question is how far the Brexit can influence the british economy positively or negatively. Another question is what models the british population can use after the potential Brexit to prevent a negative outcome. The aim of this work will therefore be to identify the potential impact of the Brexit on the UK economy, as well as on the EU.
On 26 June 2016 for the first time in the history of European politics, direct democracy was applied. The British population decided directly and not through a parliamentary representation in a referendum, to withdraw from the European Union. The British EU cepticism rose with the debt crisis in the euro zone that had existed in the years prior to the referendum. At the end of the referendum, a majority of 51.9% of the British population was against remaining in the EU. The referendum had a turnout of 72%, with Scotland and Northern Ireland showing a majority rejection of the resignation, while Wales and England spoke in favour. Never before in the history of the EU, a country has left the Confederation of States which makes the economic consequences of the so-called Brexit for the British or European economy uncertain, because it is unclear what the relations of the United Kingdom and the European Union will be like after the withdrawal.
The British government had until March 2017 after the referendum to announce an official exit notice, and Theresa May submitted her country's official resignation to the EU on 29 March. Future economic and political rules between the EU and Britain will be negotiated under Article 50 of the Lisbon Treaty. It is important that if the EU and Britain cannot agree on the different points within two years, the EU treaties will beco-me invalid for the United Kingdom. Article 50 has never been applied because no EU member state has ever wanted to leave the alliance. For this reason, the outcome of the negotiations is currently uncertain.
Table of Contents
1. Introduction
1.1. Problem Statement
1.2. Objective
1.3. Structure of the term paper
2. Economics of the United Kingdom
2.1. Economic Situation of the United Kingdom
2.2. Economic relationship of the United Kingdom with the European Union
3. Impacts of the Brexit on the British economics
3.1. Impacts on the tertiary sector
3.2. Impacts on the good trade
3.3. Foreign direct investments in the United Kingdom
4. Chances after the Brexit
4.1 The Switzerland Model
4.2 The Norwegian Model
5. Summary
Objectives and Key Themes
This paper aims to identify the potential economic impacts of Brexit on the United Kingdom and the European Union, while examining alternative trade models that could mitigate negative outcomes for the British economy.
- Analysis of the current economic situation and relationship between the UK and the EU.
- Evaluation of Brexit's impact on the tertiary sector and financial services.
- Assessment of consequences regarding trade in goods and customs relations.
- Investigation of shifts in foreign direct investment (FDI) post-Brexit.
- Comparison of the Swiss and Norwegian models as potential future frameworks.
Excerpt from the Book
3.1. Impacts on the tertiary sector
As seen in figure 3, the tertiary sector is the most important sector for the british economy, this can also be seen at the growth of 2.6 % in 2016 with a GDP growth of 2.2%. Also about 83% of the british inhabitants are working in the service sector.
Services of an amount of 171.8 billion euros were exported to the EU in 2015. Those services are e.g. finance, consulting and IT- Services. British service exports to other EU countries were at about 39 %, Germany imported about 6.3% of services.
The tertiary secor in the UK is growing. According to the institute of fiscal studies, 1999 the service sector exports made up 31 % of total british exports, while 2015 the amount of service exports were 44 %. If the Brexit is going to be fulfilled, the consequence would be the loss of the EU internal market, which would be hard for british service companies, due to the loss of the trade market advantages as a EU member state.
The british finance sector is the biggest in Europe. It had a beneficial surplus of 31.3. billion euros with the finance services exported to the EU. The fact that a fifth of the worlds bank activities find place in the UK shows the power of the british finance sector and many foreign banks have locations in London from which they can do banking business all over the EU.
Chapter Summary
1. Introduction: Outlines the historical context of the Brexit referendum and defines the scope and objectives of the analysis.
2. Economics of the United Kingdom: Describes the structural composition of the British economy and its deeply integrated relationship with the EU market.
3. Impacts of the Brexit on the British economics: Analyzes the potential negative repercussions of leaving the internal market on the service sector, goods trade, and foreign direct investment.
4. Chances after the Brexit: Explores the feasibility of adopting either the Swiss or Norwegian economic model to maintain stability after an EU exit.
5. Summary: Synthesizes the main findings and emphasizes the necessity for the UK to negotiate favorable terms to prevent long-term economic decline.
Keywords
Brexit, United Kingdom, European Union, British Economy, Tertiary Sector, Financial Services, Foreign Direct Investment, Internal Market, Trade Agreements, Switzerland Model, Norwegian Model, Article 50, Customs Union, Economic Growth, Referendum.
Frequently Asked Questions
What is the primary subject of this academic paper?
The paper examines the potential economic influences and consequences of the United Kingdom's withdrawal from the European Union.
What are the central thematic areas covered in the study?
The research focuses on the British economic structure, the importance of the EU internal market, impacts on the service sector, trade in goods, and the role of foreign direct investment.
What is the central research question?
The study asks to what extent Brexit might influence the British economy positively or negatively and which alternative models could prevent negative outcomes.
Which scientific methodology is utilized?
The author performs a structural and economic analysis based on historical data, OECD statistics, and existing academic studies regarding trade relations and economic policy.
What topics are analyzed in the main body of the work?
The main body covers the economic status of the UK, the specific impacts of Brexit on the tertiary and financial sectors, trade barriers, and a comparative study of the Swiss and Norwegian models.
Which keywords define the core of this work?
Key terms include Brexit, British economy, internal market, tertiary sector, financial services, foreign direct investment, and trade models.
How does the loss of the "finance pass" specifically affect London?
The loss of the finance pass would strip foreign banks of their EU banking licenses, potentially triggering a relocation of jobs and financial operations to other EU member states.
What are the major advantages and disadvantages of the Norwegian Model mentioned?
While the Norwegian Model allows access to free trade and services, it is described as expensive due to required contributions to EU programs and involves applying EU rules without having a right to control them.
- Quote paper
- Vanessa Ramos (Author), 2018, Brexit. Which potential influences does it have for the British Economy?, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/471122
