EU could face recession if it does not maintain its trade deal with the UK after Brexit.

Discussion in 'Economics' started by morganist, Aug 23, 2019.

  1. I sent the letter to Donald Tusk. It was sent, the letter with the book were sent to Donald Tusk he should receive it. I would be grateful if he would appreciate what I am saying because I don't want another Euro Crisis. It is simple if there is not enough money in the economy to repay the debt which is based on principal investment then it will not be viable to repay the investment people have made. There needs to be a perpetual level of growth in an economy to enable principal investment to be repaid especially with interest. The risk is that there is not annual growth which prevents annual with interest repayment. I have raised my concerns on many levels.
     
  2. tomorton

    tomorton

    Quite believable, with the EU economy being in so much more of a mess than the UK's.

    UK media is full of scare stories that we will be short of medicines, food and fuel imported from the EU. Forgetting of course that we also export these commodities to the EU.

    In any case, if we in the UK cannot readily buy pharmaceuticals from the EU, then the pharma's in the EU don't receive payment for the same either, so it cuts both ways.

    A no-deal Brexit will be bad for the EUR whereas its possible that its mostly priced into the GBP. There could be money to be made here shorting EUR if this all goes badly.
     
  3. It surprises me that the EC can get away with the threat that they will not give the UK a better trade deal considering how delicate the economy has been since the Euro Crisis. The last time that the political agenda of the EC was put before the economy of the EU it caused the Euro Crisis.
     
  4. tomorton

    tomorton

    The EC have always had a tough job - they can't give a country leaving the EU a good deal, that would only weaken the economic bonds of membership and encourage others to potentially leave in the future.

    But trade between the EU and the UK is so important to the economies of both that the exit deal itself is of secondary importance. Whatever its terms, and even if there are no terms, Brexit will be followed by energetic action to normalise trade again. Meantime, both parties benefit from the public and media over-attention on Brexit terms and both will emerge from the post-Brexit talks looking like heroes.
     
  5. The EU economy is too weak after the Euro Crisis and too dependent on maintaining a perpetual level of monetary growth to not uphold the existing trade deal with the UK after Brexit. There is also a legal requirement and expected stewardship of the EC to hit these economic targets, by not hitting the economic targets it is falling into the illegal failure of economic governance that it was in leading up to the Euro Crisis.
     
    tomorton likes this.