Hard Brexit or Soft Brexit? Pundits Have Their Say!
Prime Minister Theresa May Readies for a Brexit
Access to the European market is one of the most prized objectives of the British business sector. The reason for this is clear: Britain benefits immeasurably from the low-cost of current trade agreements. The real issue however is British sovereignty over its borders, and its independent judicial system. The Brexit vote was a resounding vote against Brussels, the excessive financial burden of being part of the EU, and the system of open borders. The Brexit was less about Britain’s trade deals than it was about Britain’s cultural identity, security and rule of law. It has since emerged (post-Brexit) that the UK will likely continue paying billions of pounds to the European Union post-Brexit. This will allow the UK and the City of London in particular to enjoy unfettered access to the single-market known as the EU.
However, British business is deeply concerned about the implications of a Brexit vis-a-vis passporting rights. If UK businesses lose their right to trade freely with European countries, this will impact upon the effectiveness of UK trade relations. At worst, it will lead to a shifting of business operations from the UK to Europe. Prime Minister Theresa May has been cautious in the way she has approached this Brexit issue. The phrase she coined, ‘Brexit means Brexit’ does not offer much either way. Analysts on both sides of the spectrum are uncertain whether it will be a hard Brexit or a soft Brexit. Plus, the PM has not ruled out the likelihood of continuing to make payments to the EU to ensure that Britain has access to the single market. In fact, in the five years between 2010 and 2014 the UK has paid approximately £35.5 billion to the EU. The real cost will be the divorce settlement which could cost upwards of £20 billion. In any event, there is a high probability of Britain making payments to maintain favourable trade relationships with the EU.
Banks Weigh in on Brexit Debacle
UK banks have been quick to point out that financial companies must not lose their right to access the European Union single market. With so many jobs at stake, the price may well be too high to pay. But the truth be told, the advisory referendum on June 23 was specifically against the extortionary payments that the UK was making to Brussels. If the UK simply ignores that component of the Brexit referendum, it may not sit well with the electorate. Much has been written about the role of the City of London in the Brexit saga. It is true that London and not any other European Union city, is the centre of operations for the EU. If the UK is no longer part of the EU, London will no longer enjoy its special status. Nonetheless, pundits are quick to point out that the wheels are being greased for a Brexit to take place. But they will not take place for some time. The issue of a hard Brexit or a soft Brexit will once again become the subject of intense debate. The vote was 52%/48% in favour of a Brexit, but that means that almost half the UK population is against such a measure. Finesse is the order of the day, and it is going to prove a tight balancing act for PM May in the weeks and months ahead.
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About Brett Chatz
Brett Chatz is a graduate of the University of South Africa, and holds a Bachelor of Commerce degree, with Economics and Strategic management as his major subjects. Nowadays Brett contributes from his vast expertise in online trading for spreadbettingreview.co.uk.