Mr. and Mrs. Y was a happy married couple. They were married for 40 years and had kids. Their relationship was very good and the foundation of their relationship seemed to be unshaken. One night, Mr,Y left the tap running after bath and kept his wet towel on the bed. This was repeated a couple of times and one fine day Mrs. Y suggested for a divorce. The lawyers from the both sides were ready and then it just clicked to the couple, which why not gives the relationship a last chance before they get separated. So, as of now, they are seeking a marriage counsellor on one hand and with the divorce papers on the other.
Hello Jokers!!! Britain and European Union- a happy couple married for 40 years. But I don’t think that its working anymore. That is not what I said, but what Britain said to EU. Six months ago, Britain going out of EU seemed to be vague but rising popularity of Anti- EU party or the United Kingdom Independence Party (UKIP) led by Nigel Farage made Cameron think once again and now the Conservative Party and UKIP are the supporters of UK wide EU Referendum. The European Union has 28 members. Britain was already out of EU’s Monetary Union when they kept Sterling as their currency.
Last week Cameron wrote a letter to the President of the European Council Donald tusk describing a set of reforms to be accepted by EU in order to continue the 40 year old relationship. If these reforms are not met then a referendum on UK EU membership will be scheduled to take place before the end of 2017. However, there were rumors that the referendum might take place in June 2016 but it looked impossible that Cameron would held a campaign for the referendum at the same time when Scotland Elections were also due.
Highlights of the Reforms set before EU by United Kingdom
- Economic Governance which included a multi-currency European Union so no country has to face loss in business on the basis of the currency. Also, giving the right to all the member states to object to any decision taken by EU which affects them.
- Competitiveness which generally included an access to the Single Market and boost up the massive trade deals with America, China, Japan and ASEAN. This would also include a commitment by EU to ensure a free flow of capital goods and services,
- Sovereignty which included keeping everything in a formal, legally binding and in a irreversible way and enhance the role of national parliaments with the European parliaments to stop unwanted legislative proposals.
- Immigration Reform which would allow any EU population coming to Britain to live and contribute for 4 years before they qualify for in-work benefits or social housing,
Positives if they get divorced
- UK can form and secure trade deals with major countries like America, India and China.
- Britain can unblock non-EU immigrants who could contribute to UK
- The monetary cost of staying in European Union can be saved and used to promote business and other valuable sectors in UK
- Reducing red tapism and forming new trade deals can increase the jobs in UK.
Negatives if they get divorced
- Contradicting the above point in the positives, the creation of jobs would actually depend on the acceptance of the Free Trade Agreement between EU and UK. It is analyzed however that a Brexit would get a loss of more than 3 million jobs.
- With the exit, UK will no longer get any regional funding or agricultural subsidies which means, that UK will have to increase their domestic spending.
- In terms of GDP, it is expected that UK could end up losing more than 2% of GDP by 2030.
- There will be an increase in the competition once the doors are open for UK.
Comments from the Joker
All and all, looking at the history, we should remember the circumstances under which UK joined European Union. After the end of the Second World War, to prevent further conflicts, UK became a member of EU. Between both the nations i believe that UK will get hurt the most in-case of Brexit. For European Union, i must say that they should agree with all the reforms because if Britain exits then it will give the power to other nations also to replicate what Britain did and every year EU will start getting love letters from member nations putting reforms to be accepted.
Also, not to forget the Interest Rate Party this year and next year. If UK increases interest rates after US does then how sane it will be to take an exit from euro. The impact on pound would also be significant.
But on the other hand, reforms were sent and as i quote Cameron,”I am dead serious about it”, which shows the urge to sign the divorce papers. But are these reforms an easy way to get out from EU since EU has been in debt and UK had been under EU’s umbrella and saving itself from the disaster.
Will Britain take an exit from the European Union?
Will EU accept the reforms set by UK?
What will be the impact on Pound and equities?
There is only one way to find it out… Follow the TRADE JOKER
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