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The British referendum to leave the European Union (often called Brexit) has certainly stirred up plenty of controversy and caused a lot of companies and individuals to reconsider their plans. The latest to announce a possible departure from the country is the historic firm Goldman Sachs.
Business Insider is reporting that the banking giant has made noise that it would like to take its business out of the country and into another European nation that has remained part of the EU. This alone could be a huge exodus of jobs, as the company has some 6,500 employees in the United Kingdom at the moment. The scary thing for the British people is that this is just one company that has mentioned this as a possibility. There are a lot more who are certainly considering it as well.
The United Kingdom has long been the financial center of Europe. Not only does it have a long history in the industry, but the country is also important to currency trading markets. It is geographically positioned in such a way that it makes sense to standardize a lot of the trading around the time set in the United Kingdom.
The financial markets all around the world certainly did not expect the vote to go the way that it did last week, and they have been rattled ever since. Those who voted in favor of this change may soon regret the decision that they made if the trend continues in this direction. If there is one thing that companies do not like it is uncertainty, and right now the country is filled with it.
The recent announcement of the United Kingdom’s decision, after a vote by the general public, to leave the European Union has left the country in a state of financial uncertainty. Unfortunately, as a world power, the instability in the United Kingdom’s markets has shaken the financial confidences of investors all around the world. Besides the fact that investors are on shaky grounds with the United Kingdom, the country’s threat to leave the European Union has dragged the International organization into the same danger waters of financial doubt and discontent.
What makes the situation even more confusing is the fact that Britain will not be using their right to, through Article 50 of the Lisbon Treaty of 2007, leave the European Union until after the Prime Minister is replaced. Even after that, there could be years of negotiations between Britain and the other European countries to determine their relationships to one another. This means that trade agreements will be put on a hold until everything gets sorted out.
As if there needs to be even more added on to the pile, parts of the United Kingdom are announcing their plans to abandon Britain in favor of rejoining the European Union. This puts added stress on regional markets since different parts favor certain exports and imports over others. All of these things, added up over the past week, have made people in the United Kingdom to start wondering if they will even end up leaving the European Union after all. There might be too much outside pressure from the rest of the financial and political world for it to actually happen.
On June 23, the United Kingdom citizens will decide whether they want their country to stay in the European Union. The voices are split, so the outcome is not certain. According to BBBC News, the G7 leaders announced that Britain’s exit would be a risk to growth not only in that country, but overall.
These leaders feel that Brexit would reverse the trends that increased global trade, investment, and jobs.
Surely, the trade and cross-border investments have increased. But, the jobs came to one place and left the other. The Brits are also worried about increased migration, even though they like to leave their country and work abroad.
If Britain would decide to leave the European Union, the Scottish nationalists are likely to bring another referendum about leaving the United Kingdom and, subsequently, rejoining the European Union.
Many in Britain think that leaving the EU will bring simplified regulations as well as control over migration to the United Kingdom. Britain’s growth may not suffer as much if Britain leaves and gets the same trade deal as Switzerland. Yet, there’s no assurance that it will be granted.
Leaving the European Union would likely result in recession and fall in value of Pound Sterling. In the case of a vote for Brexit, many things will actually stay the same for two years, while negotiations between the UK and the EU take place.