Question

1. Why were the Europeans so intent on economic integration?

2. Why did the Leave vote win? What were the voting patterns, and how did they relate to the strengths and weaknesses of the UK overall?

3. What are the costs and benefits of Brexit for UK? What are the options for the UK's future relationship with EU?

4. What are the costs and benefits of Brexit for EU? Will the EU be strengthened or weakened with the removal of UK from EU?

Answer 1

1. The adoption of the euro has led to financial integration, thus facilitating the free movement of capital in the euro area. Financial integration enhances economic processes ' effectiveness, boosts demand, and increases the potential for stronger economic growth. While some differences are temporary, others are of a more persistent nature. Let me emphasize that the persistent disparities between some euro area countries in economic growth or inflation rates are absolutely normal in monetary union, to the degree that they are linked to catch-up phenomena.

There is evidence of stronger economic integration between European Union countries. The adoption of the euro has led in particular to this growth by reducing the cost of data, increasing price transparency and removing the threat of exchange rates between euro area countries. The euro has thus acted as a catalyst for the single market, where goods, products, people and resources can move freely. Nevertheless, much remains to be done, for example, to improve trade and labor mobility in services and to reduce structural rigidity.

2. The electorate was bombarded with reminders about how they would be poorer if they voted to leave the EU but were eventually not swayed by what they were told and/or felt it was worth paying a price. The CBI, the IMF, the OECD, the IFS— an alphabet soup of analysts lined up to say that economic growth would hobble, unemployment would spike, the pound would crash, and British industry would be left outside the EU in a no man's land. It was argued that differential voting patterns between younger and older people caused the result. According to Opinium, 64 percent of eligible individuals aged 18–24 voted, while 90 percent voted over 65. It is suggested that older voters were more likely to vote' leave' because they had lived in the United Kingdom before 1973, when the United Kingdom joined the European Economic Community which later became the EU, and this experience and any possible nostalgia could have affected their decision

Multiple sources found a correlation between higher education and' remain' voting, as well as a correlation between lower education and' leave' voting. YouGov found that 68% of voters with a university degree voted' remain' among those who voted in the referendum, while 70% voted' leave' only to GCSE or below.

3. The EU is a single market in which Member States are excluded from tariffs and other barriers for imports and exports. Products can also be delivered across the continent without limitation, including financial services. To businesses that took advantage of these freedoms, the implications of Brexit have always been a matter of debate and speculation.

The United Kingdom will lose the benefits of neighboring free trade and reduce its negotiating power with the rest of the world. However, Brexiteers said the United Kingdom would compensate for these drawbacks by creating its own trade agreements–and most small and medium-sized companies that have never traded abroad would be freed from the regulatory burden of EU membership.

Since the Brexit referendum, most banks and financial companies have been setting up EU bases to get some workers out of the United Kingdom-although most continue to retain most of their Uk operations. Car manufacturers have done less well-Honda is closing its Swindon factory, Nissan has given up plans to build a new model in Sunderland, and Jaguar Land Rover is cutting thousands of jobs-but non-Brexit-related factors have also played a role in this negative outcome.

The immigration rate had contributed to some housing and service difficulties, but the net effect was overwhelmingly positive. Brexiteers, on the other hand, said that Britain must "recover power" over its borders. Most wanted a substantial cut in immigration, although some said it was less about numbers than the principle of national sovereignty.

4. A hard Brexit would cost EU countries € 40 billion annually, the German think tank Bertelsmann Stiftung has found a report on the effect of Brexit on EU profits. New tariffs will make trade in goods and services very high after the UK leaves the EU Single Market. The UK will suffer the largest loss of income: € 57 billion annually, or € 900 per person, Germany and France, both export-oriented nations, will lose € 10 and € 8 billion annually respectively, while Brexit will cost Italians about € 4 billion.

Ireland, at the center of the EU-UK Brexit talks, would fail in a no-deal scenario: with a hard Brexit, the nation would face a welfare deficit of € 3.5 billion annually. In Germany, the most effects would be on the cities of Dusseldorf (€ 650 million) and Cologne (€ 560 million).

Within Europe, countries and continents are prepared to toast to the UK's departure from the EU: in a tough Brexit situation, US sales could grow by around € 13 billion per year. In China, annual revenue would grow by around € 5 billion, and in Russia such a scenario would result in a slight increase of around € 260 million per year.Brexit, hard or soft, would impact all primary sources of growth and competitiveness, resulting in negative costs for European economies. What is certain is that Brexit is going to dampen the UK and Europe's growth potential.