Friday, June 24, 2016

Ten Observations After BREXIT

What happens now, after the 'leave' vote in the UK?  My ten observations.

1.  It isn't an immediate 'leave' situation.  Most people anticipate it taking a minimum of twelve months....some even think two years before it'll be completely out of the EU.  Even twelve months could be an eternity for some people.

2.  PM Cameron is not the guy to carry the UK through the hurdles of exiting the EU.  I would speculate that he's probably gone within thirty to sixty days.  Someone on the 'exit' team will end up as PM.

3.  Scotland is virtually guaranteed now to hold another exit referendum.....probably by summer of 2017, and it'll be an overwhelming vote to exit the UK stay part part of the EU.

4.  Northern Ireland voted in a significant way to stay in the EU.  Some say because of the EU funding that came each year to ensure the 'peace' settlement stood in place.  There's talk of a referendum possibly occurring there....either to exit the UK entirely or to connect in some ways to Ireland.

5.  A large segment of young entrepreneurs who had small operations (less than twenty people) in a start-up company....were pro-EU and will be discouraged to stay in England.  My guess is that Czech and Slovakia will both be viewed as a friendly place to re-locate to, and at least 20,000 Brits will relocate over the next year into the region.  Germany might try to set up some friendly immigration plan for Brits.....just to take advantage of the situation.

6.  Expect some shift on immigration control in the UK within twelve months.....where anyone without an education or craft-trade....will be denied entry.

7.  Expect at least a couple of counties talking up a similar anti-EU referendum (Austria and the Netherlands would be on the list).  Any additional countries doing this by summer of 2017.....would have a serious impact on the 2017 fall election in Germany.

8.  By pushing the value of the British pound down (as we noticed early this morning), you've cheapened goods made in the UK, and made them more attractive to non-Brit customers.

9.  The 'stay' voters are dismayed, frustrated and angry.  They won't be accepting this in a friendly way, and try through various legal means to challenge the vote, the exit, and politics will be forever shifted over the next decade in the UK.

10.  Any attempt by the German political establishment to punish the UK for the vote and direction taken.....will end up with massive business leader support telling them to shut up and get entry procedures fixed so Germany can sell products in the UK, and the UK to sell products in Germany.  Chancellor Merkel will be standing there and frustrated with the business view of this, but no one in the German business world wants to screw up business operations or opportunities.

Bottom line, if you go out and talk about the EU with working-class Germans.....around one-third of them are fed up with the EU and want to reign in or force changes to the EU.  It's not just the Brits who have a problem.....the EU probably needs a wake-up call and this was it....for reform.

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