The U.K. is the first major country to decide to leave the European Union (EU), a partnership of Europe’s nations which emerged from the ashes of the Second World War, foremost as a diplomatic means of establishing economic links and averting hostilities. The country’s “shocking” decision to depart the EU has caused other nations, including the Netherlands and Italy, to consider leaving the Union as well.
Since a majority of the U.K. voted to leave the European Union, British officials have made repeated efforts to reassure the people of the United Kingdom, and the global community, that “Britain is ready to confront what the future holds.”
It will not be plain sailing in the days ahead. But let me be clear. You should not underestimate our resolve. We were prepared for the unexpected. We are equipped for whatever happens. – George Osborne, Chancellor of the Exchequer
The U.K.’s economic plan, introduced more than a half-a-decade ago, has worked to rebuild Britain’s economy; putting it in “a position of strength” as the world’s strongest major advanced economy. In fact, according to George Osborne – the chancellor of the Exchequer and the number two public official in the British government after the country’s Prime Minister:
- Growth has been robust
- The country’s employment rate is at a record high.
- Capital requirements for banks are 10 times what they were.
- The budget deficit has been reduced from 11 percent of national income; and is expected to fall below 3 percent in 2016.
Mr. Osborne’s upbeat outlook for the U.K. was confirmed by Boris Johnson – an important figure in the campaign to leave the EU – who said “people’s pensions are safe, the pound is stable, the markets are stable; I think that is all very good news.”
In a column for the Telegraph newspaper, Mr. Johnson suggested that the U.K. could retain access to Europe’s single market once outside the EU. This could be accomplished through continued participation in the European Economic Area. Remember, Norway – which had also declined EU membership, is an active member. The concern for some is that, for that to happen, the U.K. would likely have to make a contribution to the EU budget, accept some degree of freedom of movement of EU citizens, as well as adhere to EU regulations over which the U.K. would have no say.
Despite the confidence of Britain’s officials, the U.K.’s vote to leave has plunged the EU into “a new existential crisis,” which has been compounded by the European Union’s struggles to recover from continued economic woes, and public disenchantment with “Brussels-imposed” austerity policies. Adding to the U.K.’s troubles, following the referendum the British pound fell to a three-decade low, and the Standard & Poor’s Global Ratings and the Fitch Ratings stripped the country of its top triple-A credit rating.
To address the country’s surprising vote to depart from the European Union, (the current) Prime Minister David Cameron has established a unit of civil servants that will focus on exploring options for the U.K.’s future relationship with Europe, as well as the nation’s participation in other important markets across the globe.
The rest of the world beyond Europe has experienced significant economic growth, and a key argument by the Vote Leave campaign was that the U.K. would be able to quickly sign free-trade deals with trading partners around the world. – UK Chamber of Shipping
With investment in trade playing an important role in the future of the United Kingdom’s economic development, the UK Chamber of Shipping has recommended that Government officials create a new Free Trade Commission. This new division, working seamlessly with the Department for Business and the Foreign Office, would be expected to implement a plan quickly to establish new trading relations around the world, and be prepared for trade negotiations with the remaining members of the European Union.
Shipping is an international business. And, with 80% of the trading world located outside of the European Union, investing in the shipping industry is expected to remain popular with investors; both inside and outside the United Kingdom. To ensure continued prosperity, Britain’s shipping industry leaders are already working on a “manifesto” which will set out more clearly what the country’s industry hopes to achieve in their negotiations with the remaining European countries in the Union.
With the U.K. unlikely to depart from the EU for at least a year-and-a-half, Britain’s shipping officials have ample time to consider the implications of Brexit, conduct deep analysis of their options moving forward, and decide how to turn the situation to the U.K. shipping industry’s advantage.