Thread: Brexit
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Old 06-24-2016, 08:06 PM   #51
Dr. Zaius
Superior Inhabitant
 
Join Date: May 2003
Location: Ape City
Posts: 73
Not good. Banking and Financial makes up a huge part of the UK economy; some 10-12% of GDP, from what I understand. One of the reasons is that London is the top trading market for the Euro. Except ... whoops, the only reason that the financial services in London can trade the Euro is because it is part of the EU. That access is going to be cut off now - apart from the natural unwillingness of the EU to make any exceptions for this, there are financial centers in Frankfurt, Paris and Brussels that will gladly take over that business. In addition, the UK financial services will also lose free access to the European market - which severely curtails the usefulness of UK offices.

In short, absent an absurdly unlikely deal for the UK, the financial sector in the country is facing a devastating period of uncertainty, most likely terminated by the loss of tens of thousands of jobs. There is a reason why banking services were hardest hit on the stock markets once the verdict was in and rumors of massive cuts started almost immediately.

In addition, new investments in the UK are screeching to a halt right now. No sane industry is going to spend money in a place where they don't know what the future trading conditions are going to be like, and - absent a truly remarkable deal - the UK is going to be prioritized a lot lower going forward. The UK may be the world's (now) sixth largest economy, but Germany and France are - as of this morning - both bigger, - and for most companies free access to the Eurozone will be more important than free access to the UK.

There was an old joke about "Holy Roman Empire" being neither holy, nor Roman, nor an empire. We now have a new iteration of this joke: the "United Kingdom" is not united. It is split right down the middle, and some regions are poles apart from others (e.g. Scotland vs. rural England).

And yes, all evidence points to the EU wanting to make an example of UK, lest there is a domino effect: "if you vote to get out, we will screw you up royally". Now that just reinforces the prejudice that those Eurocrats are bastards now, didn't it? Well played from both sides.

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