Brexit
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The document discusses the potential impacts of Brexit, which refers to the possibility that Britain will withdraw from the European Union. A referendum will be held on June 23rd for Britain to decide whether to remain or leave. If Britain chooses to leave, it could slow the world economy and have wide-ranging consequences politically, economically, and diplomatically for Britain, the EU, and other countries like India that have close trade ties. The financial markets may also see increased volatility depending on the outcome.
Brexit
- 1. BREXIT:?is?the?Fate?of?the?Financial?Market?&?the?Economy?laying? on?23? ?rd ???June,'16?? ? Brexit?is?an?abbreviation?of?"British?exit"?from?European?Union.It?refers? to?the?possibility?that?Britain?will?withdraw?from?the?European?Union.? The?country?will?hold?an?in?out?referendum?on?its?EU?membership?on? June?23. Backdrop: ? Britain?might?exit?European?Union?largely?because?of?Europe’s?migration? crisis?and?the?interminable?euro?mess. The?Utopia?of?globally?minded?Eurosceptics?is?a?British?economy?set?free? from?burdensome?Brussels?Regulation,?retaining?access?to?Europe’s?single? market,?no?longer?paying?into?the?EU?budget,?trading?freely?with?the?rest? of?the?world?and?setting?its?own?limits?on?immigration. The?Paris?based?OECD?club?of?mostly?rich?countries?says?that?Britain?has? the ? least?regulated ? labour ? market ? and ? second?least?regulated ? product? market?in?Europe.? If?Britain?wishes?to?escape?the?EU’s?rules,?it?will?lose?full?access?to?the? single?market.?The?argument?that,?because?Britain?imports?more?from?the? EU?than?the?other?way?round,?it?is?in?a?strong?bargaining?position?is? unconvincing: ? the ? EU ? takes ? almost ? half ? of ? British ? exports, ? whereas? Britain?takes?less?than?10%?of?the?EU’s.?A?free?trade?deal?in?goods?might? be ? negotiable, ? but ? it ? would ? not ? cover ? services ? (including ? financial? services),?which?make?up?a?rising?share?of?British?exports.Next?is?the? assertion ? that ? a ? post?Brexit ? Britain ? could ? trade ? more ? with ? dynamic? economies?beyond?Europe.?Leave?aside?the?fact?that?German?exports?to? China?are?three?times?as?big?as?Britain’s.?The?broader?objection?is?that?a? Britain?in?search?of?free?trade?deals?with?these?giants?would?lose?the?
- 2. negotiating?clout?of?belonging?to?the?world’s?biggest?single?market.?A? prime?example?is?the?Transatlantic?Trade?and?Investment?Partnership? being?negotiated?by?America?and?the?EU.A?post?Brexit?Britain?would?be? excluded?from?TTIP.Then?there?is?migration,?today’s?most?emotive?issue.? Switzerland’s?and?Norway’s?experience?suggests?that?if?post?Brexit?Britain? wants?full?access?to?the?European?single?market,?it?will?have?to?accept?the? free?movement?of?people?from?the?EU.?Leaving?the?EU?would?not?stop? refugees?from?crowding?into?Calais,?but?they?would?be?harder?to?manage,? because ? co?operating ? with ? France ? would ? become ? more ? problematic.? Liberal?Eurosceptics?favour?more?immigration?and?a?more?global?Britain.? But?that?is?a?pipe?dream. Consequences: The?Britain's?exit?of?European?Union?(EU)?could?not?only?slow?down?the? world’s ? economy, ? according ? to ? analysts, ? but ? also ? have ? far?reaching? consequences?for?politics,?economy,?defense,?migration?and?diplomacy IMPACT?ON?UK: ?Regulatory?divergence?grows?over?time?increasing?the?cost?of?trade,? impacting?on?volumes?and?the?UK?place?in?supply?chains ?The ? UK ? is ? less ? attractive ? as ? a ? gateway ? to ? Europe, ? as ? a ? base ? for? corporate?HQs?and?as?a?location?for?investment?from?Europe ?The?UK?loses?influence?over?EU?regulation ?without?gaining?much? freedom?to?regulate?independently ?The?UK?gains?flexibility?over?industrial?policy,?but?loses?the?benefits? from?scale?and?influence?in?some?areas ?Immigration?is?tightened,? ? IMPACT?ON?EUROPEAN?UNION: ?EU?trade?matters?more?for?the?UK?than?UK?trade?for?the?EU,?but?some? states?with?big?bilateral?surpluses?feel?a?macro?chill?from?Brexit ?Businesses?find?it?costly?to?relocate?investment?from?the?UK?and?there? is?a?risk?the?UK?attempts?to?undercut?the?EU?on?standards?to?attract? FDI ?The?balance?in?the?European?Council?shifts?away?from?liberalization?
- 3. and?it?becomes?harder?to?form?a?blocking?minority?against?illiberal? measures ?There?could?be?a?weakening?of?competition?policy,?looser?collaboration? in?education?and?research?and?impacts?on?public?procurement ?The?EU?is?a?less?attractive?trade?partner?without?the?UK?in?the?deal? and?loses?a?member?state?that?puts?its?political?weight?behind ?negotiations Impact?on?India: As?far?as?India?is?concerned,?in?the?near?term?it?will?heighten?global? volatility?thereby?impacting?capital?flows?and?in?medium?term?we?will? most ? likely ? be ? impacted ? through ? currency ? exchange. ? India ? has ? a? substantial?trading?corridor?with?EU.?Any?material?depreciation?of?the? Euro/Pound?could?lead?to?increased?headaches?for?India?in?a?sluggish? export?environment.?Indian?businesses?have?a?material?presence?in?both? the?UK?&?Europe.?There?are?over?800?Indian?companies?in?the?UK,?the?top? 10?15 ? of ? which ? contribute ? $4 ? billion ? to ? the ? British ? economy. ? Indian? companies?see?the?UK?as?the?springboard?to?Europe.?The?language?and? legal ? system ? give ? Indians ? a ? comfort ? level. ? Many ? Indian ? information? technology?companies?based?in?the?UK?with?large?work?forces?and?offer? services?to?Europe?will?be?hit?too. Impact?on?Global?Financial?Market Global?Financial?Market?remains?volatile?&?range?bound?on?the?eve?of?the? Referrendum.?Exit?of?Britain?from?European?Union?may?create?a?negative? impact?on?the?Stock?market?Globally.?The?degree?of?impact?may?be?severe? &?long?lasting.?On?the?other?hand,??Decision?to?stay?within?Europe?may?be? neutral?to?positive.?It?might?not?have?long?lasting?impact?as?well. From ? Indian ? aspect, ? Indian ? Economic ? data ? is ? showing ? impressive? improvement.?Any?neutral?to?positive?cue?from?the?International?Market? may ? be ? a ? trigger ? for ? Indian ? Market ? to ? perform ? Upside. ? ?