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The Issue: How serious will the consequences of a Brexit be?

Foto: Frankie Leon/FlickrIn The Issue, three Avans experts share their views on a topical issue. Restoration of sovereignty, control of immigration flows and conclusion of trade agreements. How serious will the consequences of a Brexit be?

‘Finally rid of those troublemaking islanders’

Peter Pennartz, Lecturer in International Economics at the Avans School of International Studies
Will a hard Brexit be a knock-down for the Dutch and EU economies? Let’s put it the other way round. Last year, the June issue of Dutch business magazine Quote already showed that Britain’s leaving the EU will make our lives so much more fun. We will finally be rid of those troublemaking islanders in the European decision-making process. The UK will become an orphan and can join forces with the other European orphans, such as Iceland, Norway and Switzerland. They are also unable to influence decisions of the EU trading block.

Brexit will also be a huge relief for asylum seekers in the north of France who will finally be able to travel on to the UK once the French customs officers open the gates. Or will the deal that is agreed force the United Kingdom to pay billions of euros to the EU to take the refugees back? I’d make sure the payment was in euros because the pound is plummeting, which is nice for the always complaining Amsterdam elite living in the grand canal houses. They won’t be seeing Brits on their doorstep anymore. After all, the EU has become too expensive, Quote magazine claims.

Statistics Netherlands states that England is the Netherlands’ number 3 trading partner and British demand for our products accounts for just over 3 percent of our GDP. It also accounts for 300,000 jobs, according to Dutch bank ING. English trade rules will be different from the EU rules. This begs the question who will be affected most by that. The answer is England, because they will have to negotiate on their own from now on. ING claims areas including Dutch meat exports to the UK will be affected. But do the British really have an alternative? Importing meat from Ethiopia or Argentina? Or installing some British cattle farmers in the Falklands perhaps? They will have no other options but to negotiate or start producing British meat again. If they do, the risk of mad cow disease will rear its head again, which brings us – in a totally unexpected way – to Margaret Thatcher.

The problem in the UK is that the narrow majority in favour of Brexit is made up of Brits who lost their jobs at the end of the last century due to Thatcherism, as part of which no investments were made to educate the children and grandchildren of the workers who lost their jobs in the mines or shipyards and to create jobs for this new post-blue collar generation.

This situation is set to become even worse for the British if May opts for a hard Brexit, even without a trade agreement. This would mean the import tariffs of the World Trade Organization would apply. There’s no doubt that Dutch exports to the UK would become more expensive in this scenario, but until the English start producing everything themselves, it is British consumers who will really get the short end of the deal. Should the EU impose fines on UK banks for financial scandals or anti-cartel cases, it should do so in euros and not in pounds sterling.

‘Only time will tell what the repercussions are’

Alexandra King, Lecturer of English at the School of Entrepreneurship, Marketing and Innovation
Considering the many fruitful trade associations between the United Kingdom and the Netherlands, there can be little doubt that the impending British exit will indeed have major consequences for both countries, and the rest of the European Union.

The morning after the unexpected result in June 2016, the most googled question was apparently, “What is the EU?” This may be apocryphal, but highlights concerns that the British population were not wholly aware of what they were voting for. So it makes sense for any other country considering an exit to ensure that all citizens of voting age are well-enough informed about this extremely complex subject.

According to calculations by the Dutch independent research institute, the CPB, the British withdrawal could cost the Netherlands €10 billion by 2030, and additionally the drop in trade with Britain would result in a drop of 1.2% of the GDP in the next fifteen years.

The whole feeling remains unstable, and only time will tell what the repercussions are.

‘Patriottism and nationalism are OK when it comes to speed skating and football’

Joost Frencken, Lecturer in Economics at the School of Security and Public Administration
More than the economic damage, it is the political damage of the Brexit that worries me.
Great Britain is the Netherlands’ 2nd export partner in terms of added value. 3.7 percent of our Gross Domestic Product, accounting for 300,000 jobs, depends on Dutch exports to Great Britain, an ING study claims. This means we have a major interest in maintaining this level and, consequently, in negotiating a good deal with the UK.

The Brexit negotiations will take place at EU level, and there is a chance this will go wrong. However, I expect that common sense will prevail. After all, both parties stand to benefit from a solid relationship. Considering however that common sense is not as common as it used to be, the immediate economic consequences in the second scenario will not be that bad.

The political damage, however, can be much bigger, as well as the consequential economic damage this causes. If Great Britain is the first domino to fall, if the Brexit fuels nationalist (patriotist) sentiment elsewhere in the EU – meaning more countries will turn their back on the union – then we can be sure there’s trouble ahead. Great economic damage will be inevitable. This economic damage could turn out to be the least of our worries.

Patriotism and nationalism are OK when it comes to speed skating and football. In international politics they are highly dangerous. The pros of the EU project have always been taken as a given, while its cons have been extensively discussed and exploited for political gain. I can only hope someone will prevent the advantages we take for granted from turning into the serious disadvantages of disintegration.

Punt. Of had jij nog wat?

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