KIS Bridging Loans
 
Presented by KIS Finance
 
This is Why the EU Nations are Making Brexit as Difficult as Possible
As Brexit Day looms closer and closer, concerns are being expressed as there still hasn’t been any sign of a clear deal between the UK and the EU and how the relationship will develop over the next few years.

We recently conducted a survey where we asked 12,000 members of the public from all over the UK how they would vote if there was to be a second referendum. 9.6% of our respondents claimed they would change their vote, knowing more now than they did in 2016.

A comment that came up frequently in our results is that a number of people who voted remain would now change their vote to leave after seeing how the EU has been treating the UK over the past two years. So, after conducting further research into this matter, we are questioning the reasons as to why it seems the EU are making this transition as difficult as possible for the UK.

The EU currently has 27 other member states (discounting the UK). Perhaps not surprisingly, each one of these countries will be looking out for their own interests and ensuring their country and their people are protected.

It has become clear that a majority of the other member states don’t want Britain to leave the EU.

Here are some of the reasons why:

Germany

Germany is mostly worried about how Brexit will affect their current trade relationships with the UK and how German business operating in the UK will be affected.   A recent report conducted by the European Commission identified the 50 regions in the EU where industrial, manufacturing and trade sectors will be hit the hardest by the UK’s withdrawal. 41 of these regions are located in Germany. Germany’s economy is largely export-focused and the possibility of a no-deal Brexit, or a deal that does not grant the same trading conditions, could be detrimental to Germany’s economy.
Germany see being a good European as the same as being a good citizen. This could be linked to Germany’s history during the 20th Century and how they now have the desire to be a part of Europe. They see the UK’s withdrawal as a weakening of the EU and are concerned that it may lead to other countries (particularly Italy) following a similar path.

 

France

A big concern of France is how Brexit will affect the fishing grounds as Northern France currently depend on British waters for at least 50% of their catches. As Britain is currently a member of the EU, this means they are signed up to the Common Fisheries Policy.  Under this agreement fish are classed as a common resource and all European countries with a coastline and a fishing industry share their territorial waters and have the right to fish in each other’s.

With nothing certain in place, there are still concerns that Britain will return to controlling their own fishing waters, after years of resentment from the British fishing industry of other European countries being able to take a majority of the fish from the UK’s own waters.

 

Hungary

Hungary is currently one of the largest net recipients of EU funds, meaning they receive more from the EU than they contribute. The UK’S withdrawal is estimated to leave a 12billion Euro gap in the EU’s budget which will have to be filled by the other member states. Hungary will now have to contribute more of their Gross National Income to the EU which will increase to 1.2% from 0.85% for the next funding cycle.
Hungary are also concerned over their economic ties with the UK. There are currently 800 British companies operating in Hungary which employ 50,000 people. There are concerns over the stability of the Hungarian employees’ jobs if these British companies were to transfer somewhere else after Brexit.
According to data recorded in 2017, there are currently 93,000 Hungarian nationals living in the UK due to more opportunities being offered for them than in their own country. Still with nothing certain in place, they are concerned over the rights and protections they will be given.

 

Poland

Poland have always been a close ally of the UK within the EU. With the country currently facing disciplinary action themselves from the European Commission over judicial changes, they don’t want to lose the UK as they are worried that this will weaken their influence within the EU.

 

Spain

A poll just after referendum found that Spain was the country which felt the most strongly about wanting the UK to stay in the EU.  Historically there has been a strong relationship between Spain and the UK, with the UK being Spain’s main investment destination.  There is also significant UK investment in Spain.
Spain has expressed strong concerns in relation to preserving the rights of Spanish in the UK and British ex-pats in Spain, who contribute significantly to their economy.
They fear that Brexit might derail their own economic recovery, particularly in light of potential increased EU contributions.

 

Greece

Britain currently hold the 7th position on Greece’s exports list which amounts to over 1 billion Euros worth of goods every year. Greek businesses and manufacturers are majorly concerned over future trade deals as they rely on this to survive during their country’s current economic crises.
Greece also fear disruption to the current tourist trade within the country. It is estimated that over 2 million British tourists visit Greece every year which they rely on to bring a huge amount of custom to local shops, businesses and hotels. This level of tourism could decline due to increased difficulty for Brits travelling to European countries as well as the devaluation of the Pound against the Euro, reducing their purchasing power.

 

Italy

One of the main concerns of Italy is the impact of Brexit on their farming industry as a no-deal Brexit could affect 800,000 of their farmers. These concerns follow threats of a potential cut of 2.7billion Euros from the Common Agriculture Policy when the UK exit, leaving European farmers with a massive shortage of funds.

Also, in the absence of a free trade agreement with Europe, some popular Italian foods and products will not be so freely available in the UK, posing a huge threat to their export trade.

 

Sweden

Sweden’s capital has always had strong financial and business links with London. It has already been estimated that, in the event of a hard Brexit, Swedish GDP would drop by 0.3%. This monetary loss would equate to 18 million Krona (about 1.5 million pounds).
The potential trade deal is another big concern for Sweden.  As of 2017 the UK became Sweden’s 4th largest export market, exporting just over 140 billion Euros worth of goods and services each year. If the deal doesn’t offer the same trade conditions as are currently in place, this could have a huge impact on Sweden’s export market.

 

Romania

Figures from the Office for National Statistics show that there are currently about 391,000 Romanians and Bulgarians living and working in the UK, making them the second largest immigrant community. So, of course one of the major concerns of the country is the future rights and protections for these people.

 

So, clearly Brexit will cause a whole lot of problems for other countries in the European Union, not just the UK, so it’s no wonder they are making negotiations less than easy for the UK.

Borrell, a former President for the European Parliament, summed it up when he said:

“They (the EU nations) are quite angry with the United Kingdom. Because of all this mess, all the trouble created, all this time lost on negotiations…. Brexit is not a political problem, but it is a pain in the ass”.

 

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