UN-UNITED EUROPE BREXITS AND ITS EFFECTS ON EUROPEAN COUNTRIES

1. An
Assignment On
“UN-UNITED BREXITS AND ITS EFFECTS ON EUROPEAN COUNTRIES”
SUBJECT: INTERNATIONAL FINANCE
MBA SEM-4 (2018-20)
CLASS: F1
S.R. LUTHRA INSTITUTE OF MANAGEMENT GUJRAT TECHNOLOGICAL
UNIVERSITY
Group no. – 04
SUBMISSION DATE: 24TH FEBRUARY 2020
SUBMITTED TO: SUBMITTED BY:
DR. HIREN PATEL ROSHANI CHAUHAN (18)
RAHUL JOSHI (47)
DIVYESH MAHALE (56)
CHAITYA MEHTA (61)

2. UN-UNITED EUROPE BREXITS AND
ITS EFFECTS ON EUROPEAN
COUNTRIES

3. Introduction
Britain's relation to the European Union has never been
simple.
It finally joined only in 1973.
The European Council is one of the main decision making
bodies of the European Union.

4. What is Brexit?

5. What happens after Brexit day?
UK has agreed the terms of its EU departure.
UK will continue to follow all of the EU's rules and its
trading relationship will remain the same.
Upto 31 December 2020.

6. What needs to be agreed?
A free trade agreement will allow goods to move around the EU without checks or extra charges.
Prime Minister Boris Johnson insists the transition period will not be extended, but the European
Commission has warned that the timetable will be extremely challenging.
What is the transition period?
Travelling to and from the EU (including the rules around driving licences and pet passports)
Freedom of movement (the right to live and work in the EU and vice versa)
UK-EU trade, which will continue without any extra charges or checks being introduced

7. Where does the UK trade?
% of total UK trade in 2018

8. What is the Brexit deal?
Most of that was negotiated by Theresa May's government.
But after Mr Johnson replaced her in July 2019, he
negotiated some changes to it.
Some goods entering Northern Ireland from Great Britain
will be subject to checks and will have to pay EU import
taxes (known as tariffs).

10. Why did Brexit take so long?
Brexit was originally meant to happen on 29 March 2019, but the deadline was
delayed twice after MPs rejected the deal negotiated by Mrs May, the prime
minister at the time.
After MPs voted down the deal for a third time, Mrs May resigned.
Mr Johnson needed a Brexit extension of his own after MPs failed to get the
revised deal passed into law.
This led to the new deadline of 31 January 2020.
The election, which happened on 12 December 2019, resulted in a Conservative
majority of 80. With a sizeable majority in Parliament, it proved straightforward
to pass the Brexit legislation.

11. Impact on the European Countries:
The consequences of Brexit would not be limited to the UK. Brexit would fan
the flames of growing anti-EU sentiment in Europe, emboldening nationalist and
Eurosceptic movements, and leading to a retreat from EU-level solutions to
cross-border challenges.
In addition, by removing a major power from the EU, Brexit would increase the
already dominant influence of Germany in the Union.

12. How might Brexit impact on EU policies?
There are four likely areas of change:
First, in the wake of a Brexit, there is a risk that the euro
will depreciate.
Second, without the UK, the EU budget would have to do without
the UK’s €10.5 billion net annual contribution.
Third, on the immigration front there is much to be done.
The refugee crisis of the past year has clearly demonstrated that the
EU needs to move towards a centralised border control and asylum
mechanism.
Finally, foreign and security policy would perhaps be the least-
fraught areas.

13. Size and Wealth:
Budget:
To help fill the gap, the European Commission has looked
at reductions in regional spending of up to 30%, which has
concerned some of the poorer member states which rely
heavily on the regional funds.
The budget issue oppose those who expect the budget to be
1% of the GDP and those who expect it to be 1.074%

14. Policy changes:
Defence and foreign affairs
The UK was a key asset for the EU in the fields of foreign affairs and
defence given that the UK was (with France) one of the EU's two
major military powers, and has significant intelligence capabilities,
soft power and a far reaching diplomatic network. Without the UK,
EU foreign policy could be less influential.
Brexit also produced new opportunities for the European defence
cooperation, as the UK consistently vetoed moves in this direction,
arguing it would undermine NATO.

15. Economic changes:
Trade with UK:
In October 2019, the UK and EU renegotiated the Northern
Ireland Protocol of the draft Brexit Withdrawal
Agreement so as to keep open the border in Ireland and to
have a customs border between the island of Ireland and
the island of Great Britain (leaving Northern Ireland 'de
facto' in the EU Customs Union in some respects).

16. Institutional Changes:
Agencies located in the UK
In 2017, the UK was currently hosting the European Medicines Agency and
the European Banking Authority. As an EU agency could not be located outside
the Union, the Council began a process to identify new host cities for the
agencies.
European Parliament seats
The UK's seats would have been redistributed between the remaining members
according to the standard formula, but there were a number of alternative
proposals.

17. How does Brexit affect the euro?
The Brexit effect on the euro exchange rate was also
recently marked with the announcement of Boris Johnson’s
new Brexit deal, which sent the euro higher versus the dollar.
When there has been bad news regarding Brexit and the
chances of a no deal Brexit have increased, it has not been
uncommon to see the euro decrease in value versus the US
dollar, but increase in value versus the pound.

18. The value of the euro since Brexit
The value of the euro against the US dollar has fluctuated since
Brexit. The pair fell sharply in the months following the Brexit
referendum to a low of $1.03 in January 2017. However, it is worth
noting that this was not just Brexit. Other factors such as Trump’s tax
cuts and lacklustre eurozone inflation also played a large role. So, is
the euro going down? No, it rebounded, and the euro is once again
trading around $1.11.

19. Conclusion
Brexit would not only be bad for the UK, but would also be
on balance bad for the EU. Both parties could waste years
negotiating a new relationship.
the EU could be strengthened on multiple fronts –
internally, through further liberalisation of the single market,
and externally, as a robust pillar of a liberal order in an
increasingly hazardous and chaotic world.

20. THANK YOU