Six months after the referendum which decided Britain’s leave from the European Union, “Brexit” has become an official word in the Oxford dictionary. Yet the way the process will unfold is still uncertain.
Here are the Brexit positives for January 2017:
1. The battle for banks is ongoing. PriceWaterhouseCooper, the firm which is advising several major financial institutions in the UK, said that its clients are working on post-Brexit plans and might start announcing their decisions by late February. This is a month before the May government is due to trigger Article 50 of the Lisbon Treaty and officially start the Brexit process. Therefore, PwC’s the announcement is probably a way of pressuring the cabinet to offer their clients – banks established in the UK some sort of deal and assure them the impact of Brexit on their activity will be limited. PwC predicts that 100.000 might be lost in the City up to 2020. Lobby group CityUK has similar claims and says that banks are reluctant to leave, but they need to know their situation clearly. Meanwhile, some major financial hubs of Europe, like Frankfurt and Paris continue their campaigns seeking to convince banks to relocate there.
2. Many American companies move their headquarters from Britain to other EU countries. A survey carried out by law firm Gowling WLG found that 40% of US firms are considering relocation amid Brexit fears. Most of them are from finance, food and beverage and life sciences sectors. Moreover, two thirds of the firms said that the Brexit referendum has already impacted their investment choices. Therefore, it becomes clear that, although the political procedures for Britain’s “divorce” from the EU will only start at the end of march, the business forces are already in motion.
3. In spite of the uncertainty, the following months might bring great opportunities for professionals to be hired in the United Kingdom. A recent survey, carried out by Manpower, found that British companies are seeking top talent. They entered 2017 with plans of hiring a lot of people. The prospect of Brexit only makes them speed up the process, employ the professionals they need while there are no barriers for immigration. There are job openings especially in constructions and utilities. Another survey, carried out by a business organisation, Institute of Directors, shows that almost half of UK businesses fear that, after Brexit, there will be a shortage of skilled workers.
4. Brexit might bring a boost to student life in the EU. The University of Cambridge announced that the EU students applications for undergraduate courses for 2017 fell by 14%. In a document sent to the Parliament, the university said that it is clear that “uncertainty around EU student status will create turbulence” and anticipated that the fall would continue. A report from the House of Commons Education Committee predicted that the UK would lose fees of more than 690 million pounds per year. This money would flow to other countries. And the issue is not just about fees. Wherever students go, business flourishes. They need and pay for accommodation, meals, trips, fun. After graduation, they might seek work in the same country, therefore contributing with their skills to that economy. Moreover researchers say UK Universities might also lose 15% of staff, as academics from other EU countries might relocate, seeking better stability. They too might be an asset for countries that manage to attract and keep them.
5. Financially, this is the best time to visit the United Kingdom. Whether they are traveling for business or for fun, people can take advantage of the lower prices, resulting from the sharp drop in the value of the pound. Immediately after the Brexit referendum, the pound dropped to the lowest level against the American dollar in 30 years. Travelers immediately took advantage of that and July 2016 has been the biggest ever month for tourist visits – 3,8 million people traveled to the United Kingdom. But it was short lived, as in the following months the number of tourists declined. As long as the UK is still in the european bloc, EU nationals can benefit from the lower prices and the freedom of movement. After the “divorce”, travelers will probably have to face higher bureaucracy, visa costs and stricter checks at borders.
- Summary in review
Theresa May has won a “blank cheque” to take Britain out of the EU family. The Parliament voted to back her plan to trigger Article 50 by the end of March. The only condition was for May to inform the MP’s about the plan of the negotiations with EU leaders. Therefore, there will be a Brexit, no doubt about that. The question is weather there will be a “hard” or a “soft” one.
Publicly, the government has not revealed much about its strategy. May has announced Britain will seek a transitional deal. Her cabinet plans to negotiate the “divorce” in the two-year timeframe set by the Lisbon Treaty, but create an “implementation phase” thereafter, for both British and EU businesses to adjust. Therefore, to avoid any shocks. It is yet unclear if EU leaders like this idea.
Another important issues is whether the deal between the EU and the UK will have to pass through all the Parliaments in the European Union. This would mean that any country or region could block it and it would add up to the influence countries will have during negotiations. Practically, every country might impose conditions on the UK in order to accept the deal. Along with this, there are other ways in which EU states might benefit from Brexit – which is what this monthly piece focuses on.