On June 23rd, 2016, Britain voted in a non-binding referendum to leave the European Union (EU). The result sent shockwaves through Europe and the world. The British pound fell to its lowest level since 1985. Prime Minister David Cameron, who was pro-EU and had daringly called the referendum to end the 'leave or stay' debate, announced his resignation the following day. Xenophobic attacks aimed against Polish immigrants roiled the country in the days following the vote. But beyond these immediate consequences, Britain faces an ocean of uncertainty and possible economic hurt over the next decade.
These are just some for EU, howeverm another culprit is on the way. This time it is for Germany.
Germany's pharmaceutical and transport industries - including the aerospace and rail construction businesses - are likely to suffer most from Britain leaving the European Union, a study showed on Thursday.
Reports says that the Mannheim-based ZEW think tank found these sectors were the most exposed in Germany to the fallout from Brexit but that smaller European countries would take a bigger trade hit. The not-so-good prediction and foresee includes the effect t countries such as the Netherlands, Switzerland and Belgium would suffer more than Germany, which has a high degree of diversification of trading partners and business sectors.
Brun-Hagen Hennerkes, chairman of the Family Enterprise Foundation which also happened to have commissioned the research, said the economic fallout from Brexit was nonetheless hard to predict. Fighting the risk of deflation, the European Central Bank has cut interest rates into negative territory, regularly offers banks free loans and has already bought over 1 trillion euros of assets, hoping to boost lending, economic growth and in turn inflation.
British Prime Minister Theresa May has said she would invoke Article 50 of the EU Lisbon Treaty by the end of March next year, starting a two-year divorce procedure.
"Even if the German economy is doing well and tax revenues are churning, no one can really foresee the consequences of Brexit," he said in a statement. "No one should rely on the monetary policy of ECB President Mario Draghi."
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