Alex Christoforou
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.
The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss UK PM Boris Johnson’s refusal to call elections before Brexit deadline takes place at the end of October.
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Boris checkmates Brexit saboteurs; Refuses to call elections, refuses to leave office by The Duran
The Duran Quick Take: Episode 271. The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss UK PM Boris Johnson’s refusal to call elections before Brexit deadline takes place at the end of October. #Brexit #BorisJohnson #Tories #TheDuran
The EU would be wise to make a deal with the UK. It will get clobbered in the event of no deal.
Conventional wisdom says the UK will get hit harder than the EU in the event of a no deal Brexit. Conventional wisdom is wrong.
Here are eight reasons the EU will suffer more in both the short and long term.
Reason 1: Corporate Taxes
The UK can and likely will slash corporate tax rates. A lower corporate tax rate will mitigate much of the profit damage suffered by UK corporations in the event of no deal.
Note that one of the EU’s biggest complaints against Ireland now is the “unfair” corporate tax structure of Ireland.
Reason 2: Currency Fluctuations
A falling currency is good for exporters and bad for importers. The British Pound has been falling in anticipation of Brexit.
Reason 3: Balance of Trade
In the event of no deal, WTO tariffs kick unless the EU offers to work out a trade deal. Under WTO rules, the EU could do that and rules allow a lengthy 10 years to get it done. The EU should agree to do that, but with animosity rising, it probably won’t.
In a rising tariff setup, exporters will suffer far more than importers. Germany has an enormous trade surplus with the UK.
Image from Order of Rank of Germany’s Trading Partners.
Angela Merkel is very concerned about German exports as well she should be.
Throw in the increasing chance of Trump putting tariffs on German cars and the EU will get crucified. A very severe German recession is in the cards and the EU faces a double whammy of Brexit plus Trump.
Note that a falling currency will mitigate some of the Tariff damage on UK exporters while compounding the problems for the EU.
Reason 4: Fishing Rights
In Brexit, the UK halts all EU fishing rights. EU fishermen will get clobbered.
Reason 5: Trade Deals
The UK will be able to make its own trade deals and set tariffs how it pleases.
Reason 6: Rules and Regulations
The UK will finally be free of inane EU rules and regulations on basically everything but especially agriculture.
Reason 7: Brexit Fees and Pay to Play Fee
Some dispute this, but the UK can halt the Brexit breakup fee. Boris Johnson has threatened to do that. Regardless, the UK will stop paying into the EU coffers even it does pay the breakup bill. The EU has budgeted for UK payments. When the UK stops paying, the EU will have to raise taxes to cover the difference.
Reason 8: Long Term Consequences
Both the EU and UK will suffer in the event of no deal but the long-term consequences strongly favor of the UK.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.
Brilliant article. I remember the days before the UK signed upto the Common Market. Days, before the asset strippers came to town, and dissected the UK industry, most of which went back to Victorian times and even prior to the 19th century. The days that you could walk out of one job and straight into another. You had no ‘zero hour’ contracts and were not expected to live to work or live to be one of the millions unemployed. When we could laugh at ourselves and others, in the guise of comedy. Now removed, owing to offending everybody and their… Read more »
Do you really think its going to be any better when the UK signs up to a trade agreement with the US care of Farage and Pompeo, do you think zero hour contracts will suddenly disappear……………. do you think that the NHS will recover and garner investment from the US ????????? I am in favour of Brexit, but not at the cost of becoming yet again a vassal of the US or its stationary aircraft carrier in the North Sea……………….. Independence means just that.
Brexit and Frexit. I hope both dreams will become true.
How is Boris going to pay for all those goodies? He may well win the election if voters think the economy will boom after Brexit, but if that turns out to be an empty promise, he is in trouble.
It all depends on whether British biotech can suddenly miraculously fix everything. I think it’s far more likely that the markets will realise it was all a silly dream and crash. He will be blamed. Trump will love it.
Europe needs this guy like we need a hole in our heads.