The businessman and mechanical engineer Flavio Maluf, son of an important Brazilian politician, stated his thoughts on the consequences and effects that the departure of the United Kingdom (UK) from the European Union (EU) would bring to the block, to the country itself and to Brazil, as well as the global impact that would probably follow after the event.
According to him, the departure, also commonly called “Brexit (Britain + Exit),” already caused a massive devaluation of the pound sterling, the British currency, in a hit that caused their coin to achieve the lowest value since 1985. In fact, the value of the currency slumped right on the day of the referendum where they voted for the Brexit.
With this massive hit to their economy, there will be ongoing effects that will impact many places around the world, more notably countries that had direct commercial relations with the UK through exportation or importation.
Consequences to the British economy will be the most severe, starting with a rise in inflation in the country, followed by rising of unemployment. The economic crisis was already predicted, says Flavio Maluf, since the isolation of the country will directly cause the fall of investments.
The major concern is the loss of free transit of people and merchandise between countries in the EU which was previously possible but now isn’t anymore. With the departure, the UK now will have to pay additional taxes to commercialize with countries of the European Union just like other countries that are not part of the block. The reverse is also true. This will not only bring a loss of commerce with the exterior but also brings difficulties for other countries in the block.
Flavio Maluf says, however, that there are actually little-spoken benefits with the United Kingdom leaving the block since there are new possibilities for bilateral deals between those countries that were not previously possible.
About the consequences for Brazil, Maluf stated that there is the chance of new commercial deals between both countries since products that were exchanged had to pass through the rules of EU and could suffer from additional taxes. These changes however are not that relevant, since the United Kingdom isn’t currently an essential part of the Brazilian’s exterior market.