Brexit: Future-proofing our economy
As the Prime Minister stands poised to trigger Article 50, the debate about the Brexit process continues to dominate parliament and the press, amid general concern as to what the future holds.
As the Managing Director of a company which depends on supplies coming from the Eurozone, it may surprise some that I voted ‘Yes’ to Brexit.
Federalism – a good idea in principle
Offering a forum for working together, the EU has already made great strides in tackling the bigger issues fundamental to us all, including climate change and social injustice, and in standardising industry regulations, practices and codes to the benefit of suppliers and consumers alike.
However, being part of the Eurozone has brought mixed fortunes for the individual economies of member countries.
The economic model of the Eurozone is prefaced on 3 main pillars, which can be likened to the legs of a stool, each playing a vital role in maintaining stability: a single currency, a single interest rate and the free movement of labour.
Given the disappearance of local currency devaluation (remember the Lire, Peseta and Drachma?) this last is possibly the most important aspect of all, acting as a relief valve in times of crisis with the potential for realignment and rebalancing to steady the structure.
In the Federal Republic of the USA when a weather event or disease bring about an agricultural crisis or there is a decline in a geographically concentrated industry (oil and gas for example), an element of the working population can relocate from one State to another to better their opportunities, unhindered by legal or language obstacles. In Europe, by comparison, moving across the Eurozone is often subject to inherent barriers, both practical and political.
With the economies of individual member states of the EU differing in compilation, world events such as 9/11 or the banking crisis can have a disproportionate effect. Without the facility for currency devaluation, levels of employment fluctuate more widely. We see this now in the southern countries of the EU where unemployment levels have cast a blight on a whole generation. This crisis has been deepened by mass migration from outside the EU. The perceived overloading of domestic systems has led many National Governments, coming under populist pressure, to throw up barriers, with the real potential for even more restricted movement in the future.
Remove even one leg of the stool and the whole becomes unstable. And with the lack of political will among Europeans to forge a truly federal state which can overcome these obstacles, more pain down the road is inevitable.
Better times ahead
While nobody can guarantee our path will be smooth, the numbers suggest the outlook is positive, a view reflected in the Chancellor’s recent Budget. There is every reason to remain optimistic and to concentrate on building a better future for us all.
What are your experiences as a manufacturer in the wake of Brexit? How do you view your prospects for the future?