MASTER 1 LANGUES, LANGUES ETRANGERES APPLIQUEES [M1LLEA231]

The British referendum on the membership of the European Union on 23 June 2016 was a cataclysmic event in British politics and sent shockwaves on the stockmarket. The Brexiteers won with 51.9% against the Remainers (48%). The vote to leave the EU has opened an era of uncertainty, lowered the pound by 15% hitting consumer spending and reducing the purchasing power of British households. In February 2020,  unemployment in the UK was at its lowest at 3.8% because of the flexibility of the labour market. The UK left the EU on 31st January 2020 and will remain in the customs union and the single market during a transition period until 31st December 2020 cushioning the country and Britons from the practical effects of Brexit. Prime Minister Boris Johnson who is a Brexiteer wants to get the best deal for the UK. Are we heading towards a deal or no deal ?

So far the consequences of Brexit are unpredictable. Will Brexit weaken the United Kingdom and lead to the breakup of the nation with Northern Ireland joining Ireland and Scotland asking for a second referendum on independence? Will Brexit challenge the status of the City of London as the world’s financial centre ? Brexit will affect every sector of the economy in a transition period before new trade agreements are reached with the United States, Central America, China, India and Commonwealth countries.

Leaving the single market will have serious consequences on the British economy in terms of growth and employment. In Ireland, the consequences of a no deal Brexit would be felt and there would be a fall of growth by 3% and 55,000 more unemployed people. It will also have a huge impact on the European economy leading to the relocation of companies to Frankfurt, Dublin, Luxemburg, Madrid and Paris. It will affect the trading relationship between the UK and the EU and the rights of EU citizens living in the UK and British people living in the EU. What Brexit actually means will dominate British and European politics for the next decade and may lead to the fragmentation of the EU.

In the meantime Covid-19 has hit the UK on 27 January 2020 and has created economic uncertainty. It has brought about a collapse in growth and a collapse in investment. Britain’s economy shrank by 22%, twice as much as the United States, worse than Germany and France. The national lockdown on 23 March 2020 has led to a deterioration in government finances. The fiscal deficit will come at £350 billion which is unprecedented with public finances during WWII. The companies which survive will have to face a new environment. Global unsolvencies are set to rise by 20%. This full-scale economic crisis has revealed our vulnerability to the State. It will produce significant winners and losers.