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The UK votes on EU membership

David Cameron, current Prime Minister of the UK, renegotiated the terms of the UK’s membership in the EU before a referendum to determine whether the country should remain in the EU or not. The referendum is set for 23rd June 2016. There are various opinions in favour of or against the UK leaving the EU (Brexit), ranging from reduced spending on immigration to economic uncertainty which might lead to loss of jobs.

In quantitative terms various researchers predicted that the UK could suffer a drop in GDP of 6.3% to 9.5% in line with what occurred in the 2008 crisis, even if a Free Trade Agreement were to be successfully negotiated with the EU.

Major critics state that leaving the EU would impose costs on the UK economy and as such it would be a gamble. In his book ‘The Trouble with Europe’ Roger Bootle, a British economist for the Daily Telegraph, says it is not ideal to base Brexit on UK-to-EU contributions.

In the job sector, former liberal democrat leader Nick Clegg argues that three million jobs depend on EU membership. Membership is said to award the UK with bigger market access of more than 500 million customers as Britain’s current state attracts a lot of foreign firms looking to be part of that market. Therefore, a Brexit would open the exit door for big companies resulting in huge job losses. This view was also shared by some big companies who took a stand on the Brexit scenario. However, this argument was challenged by the Institute of Economic Affairs who argued that jobs are not merely associated with political unionisation but also with trade agreements.

It is also worth mentioning the position taken by two of the country’s big industries: the automotive and the financial services industry.

The Society of Motor Manufacturers and Traders (SMMT) argued that EU membership is fundamental to the success of the UK automotive industry where more than 700 thousand people are employed representing 3% of GDP, a figure that was also confirmed by KPMG.

The financial services sector in the UK employs 160 thousand people with 250 foreign banks. Sir Gerry Grimstone, former chairman  of the lobby group TheCityUK, says that research shows that a Brexit will seriously damage economic growth in the UK whilst also stating that the EU must improve. Furthermore, the group says that London is Europe’s top financial centre and it is in the national interest to support it.

If we further explore the sentiment of a looming Brexit vote we will find a lot of uncertainty and that is not healthy for the economy, in fact this was evidenced in the GBP exchange rate which lost 6.5% against the EUR, 7% against the USD and 15% against the JPY within the last few months. Further pressure is expected to mount if a ‘leave’ vote wins.

The IMF is quoted as saying that uncertainty is bad and no economic player likes uncertainty which will lead to reduced investment and a lack of jobs meaning that uncertainty impacts investment decisions. Betting companies are indicating that a vote to leave is unlikely as voters tend to vote for the status quo.

Finally for UK companies that export to the EU (and vice versa) a Brexit will create a lot of uncertainty resulting in volatility, at least until the terms of future trading become clear apart from the time needed for people to get used to them. In order to prevent disruption to the trade flows on which the British economy has come to depend, the country must negotiate agreements with EU and non-EU countries including the US, India, China, Japan and Australia, mainly because trade with these and many other countries are currently governed by agreements struck with the European bloc.


Il vot tal-UK ghal membership fl-EU

David Cameron, il-Prim Ministru Ingliż, innegozja mill-ġdid it-termini tas-sħubija tar-Renju Unit fl-Unjoni Ewropea qabel ir-referendum tat-23 ta’ Ġunju 2016 li se jiddetermina jekk il-pajjiż għandux jibqa’ membru tal-Unjoni jew le. Hemm diversi opinjonijiet favur u kontra l-ħruġ tal-Ingilterra jew aħjar ir-Renju Unit mill-Unjoni Ewropea. Biex nagħtu stampa aktar ċara, dawn l-opinjonijiet ivarjaw mit-tnaqqis fin-nefqa fuq l-immigrazzjoni għall-inċertezza ekonomika li tista’ twassal għat-telf ta’ impjiegi.

F’termini kwantitattivi diversi riċerkaturi qed ibassru li l-Ingilterra tista’ ssofri minn tnaqqis fid-dħul ta’ bejn 6.3% u 9.5% tal-Prodott Domestiku Gross (bl-Ingliż il-GDP) bħalma ġara fil-kriżi tal-2008, anke jekk Ftehim ta’ Negozju Ħieles jiġi negozjat b’suċċess mal-Unjoni Ewropea fil-futur.

Kritiċi ewlenin jistqarru li jekk ir-Renju Unit joħroġ mill-Unjoni Ewropea se jkun hemm aktar spejjeż fl-ekonomija Ingliża ,u għalhekk, din tkun ta’ riskju. Fil-ktieb tiegħu ‘The Trouble with Europe’, Roger Bootle, ekonomista Ingliż għad-Daily Telegraph, jgħid li mhux ideali li l-kwistjoni tal-Brexit (jiġifieri, il-ħruġ tal-Gran Brittanja mill-Unjoni Ewropea) tkun ibbażata fuq il-kontribuzzjonijiet li tagħmel l-Ingilterra lill-Unjoni Ewropea.

Fis-settur tal-impjiegi Nick Clegg, il-mexxej preċedenti tad-Demokratiċi Liberali, jargumenta li tliet miljun impjieg jiddependu mis-sħubija fl-Unjoni Ewropea. Jingħad li s-sħubija tippremja lill-Ingilterra b’aċċess għal suq akbar, ta’ aktar minn 500 miljun klijent. L-istat attwali tal-Ingilterra jattira ħafna kumpaniji barranin biex ikunu parti minn dan is-suq. Għalhekk, il-ħruġ ‘il barra tar-Renju Unit jiftaħ il-bieb biex kumpaniji kbar jitilqu u dan iwassal għal telf kbir ta’ impjiegi. Dan il-ħsieb kien espress ukoll minn xi kumpaniji kbar li ħadu pożizzjoni fuq il-kwistjoni tal-Brexit. Imma dan l-argument ġie kkontestat mill-Istitut tal-Affarijiet Ekonomiċi li sfida din l-allegazzjoni li l-impjiegi mhumiex biss assoċjati ma’ unjoni politika imma wkoll ma’ ftehim ta’ negozju (li bl-Ingliż ngħidulhom trade agreements).

Jixraq li nsemmu wkoll il-pożizzjonijiet li ħadu żewġ industriji kbar tal-pajjiż, dawk tas- settur finanżjarju u ta' l-industrija tal- karozzi.

Is-soċjetà tad-dealers u tal-manifattura tal-karozzi (magħrufa bħala SMMT) qed targumenta li s-sħubija fl-Unjoni Ewropea hi fundamentali għas-suċċess tal-industrija tal-karozzi fir-Renju Unit. Din timpjega aktar minn 700 elf persuna, jiġifieri 3% tal-Prodott Domestiku Gross, ċifra li kienet konfermata wkoll mid-ditta magħrufa tal-awdituri, KPMG.

Fis-settur tas-servizzi finanzjarji, ir-Renju Unit jimpjega aktar minn 160 elf persuna li wħud minnhom jaħdmu f’250 bank barrani. Iċ-Chairman preċedenti tal-grupp TheCityUK, Sir Gerry Grimstone, dan l-aħħar qal li r-riċerka turi li Brexit tkun ta’ ħsara serja għat-tkabbir ekonomiku fir-Renju Unit u fl-istess ħin qal ukoll li l- Unjoni Ewropea teħtieġ tagħmel titjib. Barra minn hekk, il-grupp qed jgħid ukoll li Londra hi l-aqwa ċentru finanzjarju fl-Ewropa u għalhekk huwa fl-interess nazzjonali li tingħata l-appoġġ meħtieġ.

Jekk nesploraw aktar is-sentiment elettorali fuq il-kwistjoni tal-Brexit insibu li hemm ħafna inċertezzi u li dawn ma jaffettwawx l-ekonomija b’mod pożittiv. Fil-fatt, din l-evidenza ħarġet fir-rata tal-kambju tal-lira sterlina (GBP) meta mqabbla ma’ muniti oħra, li dan l-aħħar tilfet 6.5% fil-valur tagħha meta mqabbla mal-ewro, 7% meta mqabbla mad-dollaru Amerikan u 15% meta mqabbla mal-yen Ġappuniż, u dan kollu f’temp ta ftit xhur. Il-pressjoni mistennija tikber jekk jirbaħ il-vot tal-‘ħruġ’ mill-Unjoni Ewropea.

Il-Fond Monetarju Internazzjonali (l-IMF) jqis li l-inċertezza hi ħażina u l-ebda parti interessata ma tkun tixtieq sitwazzjoni inċerta għax din twassal għal tnaqqis fl-investiment u għal nuqqas ta’ impjiegi. L-inċertezza tħalli impatt negattiv fuq id-deċiżjonijiet marbuta ma’ investiment ġdid. Il-kumpaniji tal-imħatri qed jindikaw li li l-vot favur il-‘ħruġ’ aktarx ma jirbaħx għax il-votanti jagħżlu li jivvutaw għal status quo, biex l-affarijiet jibqgħu kif inhuma.

Il-ħruġ mill-Unjoni Ewropea joħloq inċertezza kbira għall-kumpaniji Brittaniċi li jesportaw fl-Unjoni Ewropea (u bil-maqlub). Dan iwassal għal instabbiltà inċertezza u volatilita’, tal-anqas sakemm ikunu ċari t-termini tal-ftehim ta’ negozju għall-ġejjieni u l-ħin meħtieġ min-nies biex jidrawhom. Fl-aħħar nett, biex jiġi evitat tħarbit fil-kummerċ li fuqu l-ekonomija Brittanika saret tiddependi, il-pajjiż jeħtieġlu jinnegozja ftehimiet mal-Unjoni Ewropea u ma’ pajjiżi oħra barra mill-Unjoni Ewropea, bħal mhuma l-Istati Uniti, l-Indja, iċ-Ċina, il-Ġappun u l-Awstralja, għaliex dawn tal-aħħar, u ħafna pajjiżi oħra, bħalissa huma mmexxija minn ftehimiet li għandhom diġa mal-blokk Ewropew.