Commentary: Brexit to drag EU, possibly global economy into unchartered waters

Source: Xinhua   2016-06-24 22:25:16

by Qu Junya

BEIJING, June 24 (Xinhua) -- Stumbling under tremendous political and economic pressures, the European Union (EU) suffered another blow from one of its pillars, as Britons on Thursday voted in a referendum to leave the bloc.

Commented by German Foreign Minister Frank-Walter Steinmeier as "a sad day for Europe and Britain," Thursday's historic vote might drag the bloc and even the global economy into unchartered waters.

For the EU, saying farewell to a major European power, a permanent member of UN Security Council and a close ally of Washington, will not only reduce its influence and capability as a whole in dealing with global and regional issues, but also thwart its longtime efforts towards European integration.

In addition, losing its second largest economy has left the EU a 5 percent budget gap to be plugged by other members.

What is worse, some experts feared that the Brexit might just be a beginning of a domino effect, as far-right leaders in France and the Netherlands have immediately hailed the outcome of the vote and called for similar votes in their countries.

However, EU officials ruled out a chain reaction. "We are determined to keep our unity as 27," said EU President Donald Tusk.

"The chain reaction that the eurosceptics are celebrating everywhere will absolutely not happen," said EU Parliament President Martin Schulz.

Their confidence may find support not only in its survivals in prior difficult times, but also in a more integrated Europe over years that has brought about huge benefits to member economies and their citizens in terms of the market, investment and exchange of personnel.

However, their determination to hold continued unity without Britain may first be put under a test in tackling the immigrant influx, which is also the major argument by Brexit campaigners.

Brexit campaigners have held EU freedom of movement rules accountable for immigrant inflows that they believe have stepped up pressures on public services and job market on the islands.

A pain will also be felt in Eastern European countries: The migrant workers from Eastern Europe totaled about 1.2 million in late 2015 in Britain.

On a much larger scale, globalization is heavily hit by the British retreat.

By cutting its ties with the world's biggest single market of the EU, Britain saw on Friday an expected immediate decline in pound sterling. The pound suffered a record fall to hit its lowest since 1985, bringing down the value of euro and shares across the world, amid decreased global confidence and a rise in market fear.

As a result, uncertainties increase for a planned hike in interest rates this year by the United States Federal Reserve, and for financial markets already vulnerable worldwide.

Would Brexit plunge the global economy into further recession? The answer should lie first in how much it would affect the EU. And it may otherwise prompt a stronger EU to become more devoted to settling its own problems with lessons learned, just as EU President Tusk said, it was worth remembering that "what does not kill you makes you stronger."

Editor: Zhang Dongmiao
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Commentary: Brexit to drag EU, possibly global economy into unchartered waters

Source: Xinhua 2016-06-24 22:25:16

by Qu Junya

BEIJING, June 24 (Xinhua) -- Stumbling under tremendous political and economic pressures, the European Union (EU) suffered another blow from one of its pillars, as Britons on Thursday voted in a referendum to leave the bloc.

Commented by German Foreign Minister Frank-Walter Steinmeier as "a sad day for Europe and Britain," Thursday's historic vote might drag the bloc and even the global economy into unchartered waters.

For the EU, saying farewell to a major European power, a permanent member of UN Security Council and a close ally of Washington, will not only reduce its influence and capability as a whole in dealing with global and regional issues, but also thwart its longtime efforts towards European integration.

In addition, losing its second largest economy has left the EU a 5 percent budget gap to be plugged by other members.

What is worse, some experts feared that the Brexit might just be a beginning of a domino effect, as far-right leaders in France and the Netherlands have immediately hailed the outcome of the vote and called for similar votes in their countries.

However, EU officials ruled out a chain reaction. "We are determined to keep our unity as 27," said EU President Donald Tusk.

"The chain reaction that the eurosceptics are celebrating everywhere will absolutely not happen," said EU Parliament President Martin Schulz.

Their confidence may find support not only in its survivals in prior difficult times, but also in a more integrated Europe over years that has brought about huge benefits to member economies and their citizens in terms of the market, investment and exchange of personnel.

However, their determination to hold continued unity without Britain may first be put under a test in tackling the immigrant influx, which is also the major argument by Brexit campaigners.

Brexit campaigners have held EU freedom of movement rules accountable for immigrant inflows that they believe have stepped up pressures on public services and job market on the islands.

A pain will also be felt in Eastern European countries: The migrant workers from Eastern Europe totaled about 1.2 million in late 2015 in Britain.

On a much larger scale, globalization is heavily hit by the British retreat.

By cutting its ties with the world's biggest single market of the EU, Britain saw on Friday an expected immediate decline in pound sterling. The pound suffered a record fall to hit its lowest since 1985, bringing down the value of euro and shares across the world, amid decreased global confidence and a rise in market fear.

As a result, uncertainties increase for a planned hike in interest rates this year by the United States Federal Reserve, and for financial markets already vulnerable worldwide.

Would Brexit plunge the global economy into further recession? The answer should lie first in how much it would affect the EU. And it may otherwise prompt a stronger EU to become more devoted to settling its own problems with lessons learned, just as EU President Tusk said, it was worth remembering that "what does not kill you makes you stronger."

[Editor: huaxia]
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