(06-25-2016, 05:29 AM)Nebbs Wrote: The way out of this is together, and not every one for themselves.
No small irony inheres there.
(06-25-2016, 06:19 AM)Scarlet Heath Wrote: All the while the UK will still be recovering and establishing its place once more in the world; whilst Scotland in comparison will be seeing a second coming of current events with very little support. Not to say it won't happen, but its a while off yet.
I'm not sure about 'very little support'. Sturgeon is not unaware of all this, has been lobbying the EU member states for special consideration as early as today, and there is a lot of incentive for the EU to accommodate her in the way that they would not, say, accommodate Erdogan's Turkey. It is a little early to make firm bets, but I would not discount Scottish independence on the back of this, in the medium-term.
With regard to consequences in trade, it is of course true that a lower currency boosts exports, but the UK is not an exporting country, a few sectors like pharmaceuticals aside. The British economy is (to the tune of some three quarters of GDP) service-based, and trade in services with the EU is going to become very complicated because as you pointed out it is impossible for the UK to join the EEA and restore free movement. Shifts in confidence and credit ratings affect it disproportionately, too, and here we are this morning with Moody's cutting outlook. You cite the FTSE 100 rallying somewhat from its immediate descent, but it is weighted toward companies that can count on overseas revenue, and notably includes mining companies, which always benefit from the flight to gold in the face of financial disaster.
A better measure would be the FTSE 250, which is more dependent on UK revenue and remains funereal, and of course the banks themselves, lopped off by a third.The UK will not become an international pariah over this, and certainly, bilateral trade deals will be concluded quickly enough. However, the UK has nowhere near the leverage in such negotiations that the giant European market does, and so the agreements, while less time consuming, are likely to be less favourable. For all the warm talk from the Americans and Canadians about historical ties and special relationships, they are likely to be quite hard-nosed about this. Overall investment in the UK is likely to go down, simply because a lot of businesses are averse to uncertainty. I am aware of several corporations here in Canada which have viewed the UK specifically through the lens of regulatory access to the EU and will likely be shifting operations to the continent.
The EU itself has tried to be gracious about the whole thing, and it is true that German exporters in particular would like trade relations smoothed over as soon as possible. There is talk, all the same, of negotiating harshly for the sake of 'deterrence' with a view to preventing other exits (some alluded to in the thread) and of course the Swiss, Norwegians and Icelanders would be right to wonder what the UK has done to earn any future preferential treatment.
So, tough times ahead. I do hope, at this point, that the best prognoses turn out true and the UK will thrive in the end, but it does no good to whistle past the graveyard.
