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Implementation of the project "BREХit"
Material posted: Publication date: 27-04-2017
"The UK in contrast is not a geo-strategic piece, no harbors ambitious vision for the future of Europe and its decline has reduced its capacity to play the traditional role of the States holding the balance of power in Europe" - says American political scientist Zbigniew Brzezinski. Despite the fact that the work was written at the end of the last century, her predictions never cease to amaze us with its accuracy to this day.

Indeed, in recent UK like he was trying to distance himself from her burdensome for the EU, which was manifested in many actions of the British government: from the refusal to adopt the Euro, and ending the relative passivity in the support of the German initiative assistance to Syrian refugees. It would seem that all roads led to the exit of the UK from the EU. However, Brexit was a shock not only for European but also for the entire international community and led to a different kind of debate about the future of the UK and Europe.

In order to trace the process of a British exit from the EU, and the consequences that Brexit has led, do not have to wait for the official date announcement, because many of the consequences (especially the economy) made itself felt even before the referendum.

Although the referendum was held on 23 June 2016, the procedure for the withdrawal of great Britain began only in 2017, according to the Lisbon Treaty, signed on 19 December 2007. The contract was to replace not entered into force, the EU Constitution and to amend the existing agreement on the European Union. According to article 50 provides that "any member state in accordance with its constitutional rules can change the decision to withdraw from the part of the Union." For this purpose it is necessary to notify its intention to the European Council. The Union conducts negotiations and concludes with the state agreement on withdrawal from the EU. After the procedure, the UK will have two years to sign trade agreements with all countries of the European Union. This process can be extended if you want all members of the Union. However, some representatives of the British elite stated the need as soon as possible to sign the contract: "once we stop wasting time trying, to agree on the impossible, for example, on special terms for the UK in trade with the EU, the faster we will be able to separate. The long period of uncertainty is bad for the economy and the business of our entrepreneurs," - said in an interview with the fourth member of the house of lords, Nigel Lawson.

In anticipation Brexit'a , UK warned: You will recession, the increase in government debt, low GDP growth. At the same time, some publications predicted the growth of the national debt to 90% GDP in 2017. Contrary to many forecasts, the UK economy "feels surprisingly good" - such headlines are filled with many foreign periodicals. The event itself has caused shock and uncertainty in the markets (including world), but soon the situation began to stabilize. For the second quarter of 2016, economic growth was 0.6%, while analysts had expected growth of 0.3%. GDP increased by 2.2%. The consumer confidence index increased by 5 points. Public opinion polls have shown that consumers are willing to buy more, rather than to postpone for "tomorrow". At the same time, we are not talking only about the Essentials, this also applies to the real estate market. Moreover, the weakening of the pound sterling, not only provoked the influx of tourists, but also a boom in online retailing. Online sales rose 19%, the share of online orders from abroad amounted to 27%. Increased exports of industrial goods, the consumer price index rose 0.6%.

However, the government fears a shortage of manpower. At the same time, the sterling was unable to recover and remains far below the marks 2015. The weakening of the pound "does the British" poorer compared to people in other countries, raises the cost of imports. Increasing prices for raw materials and food producers that subsequently will be felt and customers. At the same time, companies begin to cut investment. Yields on Government bonds fell to record lows. Analysts expect further reductions in investment and hiring. Special attention should be paid to inflation. Now, when the savings rate is now at a historic low, inflation can lead to even greater spending cuts next year.

We have reviewed the economic indicators of the reaction of the UK to Brexit. Now you should understand what changes have occurred in the basic statutes. The law on human rights, one of the points of the EU Charter on fundamental rights will be replaced by a British bill of rights. According to the Secretary of justice, Liz Tross: "the bill will better protect the rights of people in the UK...", as a judge now, the EU will not be able to reverse the decision of the British courts. The previous law was actively used in order to stay in the UK after received a notice of deportation. Another important issue for the UK in EU migration. This was also one of the reasons for withdrawal from the EU. At the G20 summit, Theresa may made a speech with the words: "leaving the EU needs to establish control over the movement of people from the EU to the UK". One of the main advantages of membership in the EU was free trade with other countries of the Union. However, some States, not being involved in European enterprises, have the opportunity. Consequently, the UK doesn't even have to be part of the trading zones of the European Union, will be sufficient to conclude a broad trade agreement before the final rupture with the EU. With regard to agriculture, there is obviously some laws in this sphere there are also a number corrected. Andrea Leeds, the new Minister of the environment will receive task on the replacement of the common agricultural policy of the EU.

It is planned to develop a more flexible approach to agricultural subsidies due to the government supported insurance program to farmers from bad weather, crop failure and falling prices. A new scheme of agriculture the UK could be supported by savings from the termination payment of the EU contributions.

Thus, a British exit from the EU will require the conclusion of a huge number of contracts, revision of the whole legal framework applicable for many years, and largely not in the hands of the country. With regard to the situation in the economy, it generally does not seem to us so catastrophic as predicted by the experts. This is confirmed by the key economic indicators that have been mapped in this Chapter. It is important to note that the data for the second quarter of 2016 is very important, as they most accurately reflect the consequences of Brexit. To the above should also be added that the index of activity in the services sector grew by 0.8%. Not true forecasts of the Bank of England, which had expected a much smaller GDP growth. So don't be afraid of lowering the key rates at the upcoming meeting on 19 December, as planned earlier.

However, economists stress that the main consequences of Brexit may have a pending character, and expect a double reduction in the rate of UK GDP growth in 2017 relative to the projected growth of the economy by 2% this year.

Further complicating the situation is the uneven growth, which may be a sign of the growing instability of the British economy. The service sector does not reduce the pace of its growth since July, while industrial and construction sectors, on the contrary, slow down. So the index of business activity in the U.K. construction sector a large part of the quarter was at the level below 50 points, which indicates that the negative dynamics in the industry. The volume of industrial production, in turn, after a sluggish growth of 0.1% in July in August decreased by 0.4%.

The situation is also complicated by the fact that at the time of exit from the EU the UK will have to pay 50-60 billion euros for its past obligations. At the EU summit held in Brussels, the sides of the channel noted that the question of payment of tens of billions of euros will be one of the first in the agenda of the negotiations during the process of withdrawal from the EU, the launch of which is scheduled for spring 2017. This amount includes the previously signed obligations of the United Kingdom, for example, the payment of pensions to Britons working in the EU as well as other payments until 2020

For assessing the social and economic development in General, we present the results of surveys conducted in the period from 2012 to 2016. A survey conducted for the Economist showed that the main problems affecting Brits in that period was the economy 55% and unemployment of 33%. As for the second, it is, in fact, a surprising finding, given the continuing growth in the number of employed Britons. Later, the unemployment rate in the UK fell to 7.8%, to 2.51 million people. Employment was 71.2%, of 29.58 million people. As for the economy, in General, the concern of the citizens is understandable. Lasting several months alternating decrease and the growth of the main macroeconomic indicators did not give a clear idea of the situation in the foreseeable future. Both pessimistic and optimistic remained equally possible. In particular, the consensus view of the international banks and financial organizations is hardly noticeable gravitated to the negative scenario. November review the projections published by the Finance Ministry showed that overall expectations regarding the results of the year on the key indicators have changed slightly. But if the GDP was forecast to fall -0.1 percent, with inflation expected growth to edge for the Bank of England value of 2.5%.

On the other hand, the index for construction rose to 50.9, finally indicating a positive trend in the industry, which has long had a negative impact on the GDP figures. In addition, retail sales rose 0.6% in volume and 1.6% in monetary terms.

Thus, to sum up: contrary to many predictions, the economy was able to stabilize its growth amounted to 0.6%(versus 0.3%). GDP increased by 2.2%(vs 1%). Increased exports of industrial goods, consumer goods increased by 0.6. Despite the rather controversial personality may, you can be sure that the new referendum will not happen, moreover, the Teresa may have managed to enlist the support of 62 % of the population . While the economy can be described by the word "uncertainty", but some indicators are gradually beginning to improve, but it takes time to assess the consequences of Brexit, and to give a more accurate forecast. However, something you can be sure: Brexit would cause a chain reaction in many countries of the European Union. Now a radical party forced to think about the necessity of separation from the EU. Brexit questioned the future of the European Union.

Elizabeth Tikhon

Tags: Europe , UK

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