Saturday, June 25, 2016

Economist: “It’s an earthquake” – Aftonbladet

The British decision to leave the EU must not only consequences for Europe but also for Sweden. According to several experts, the news is very unfortunate and disturbing.

– This is a very serious situation. As the earthquake on the economy – a nine on the Richter scale, said Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce

During the Friday morning came the news that Britain leave the EU, which has spurred exchanges to collapse and the pound tumbling to its lowest level in three decades. Even the Swedish krona squeezed considerably.

According to Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce, is the exit to be likened to an earthquake that may have far-reaching political and economic implications.

READ ALSO PLUS So affected your finances by brexit

“Nine on the Richter scale”

– this is very serious and a historic event as it is the first time a country of this caliber leave the Union. As an earthquake on the economy – a nine on the Richter scale.

– The UK is one of our most important export market and one of our most important allies in the EU, he says to Aftonbladet.

matter what happens going forward Hatzigeorgiou responding to many calls and meetings between the EU and the UK will continue to come. He calls, however, the Swedish government to sit quietly in the boat.

– The focus for the EU now is to save what can be saved. For Sweden, it is important to see how to mitigate the negative consequences of Brexit. It would be unfortunate to do anything rash. It would be best to proceed cautiously and not to panic.

Depending on exports

For Sweden hopes Andreas Hatzigeorgiou now that you can negotiate as good a deal as possible between the both countries.

– Many counties in Sweden is dependent on exports to the UK, which may cost some jobs, hold back Swedish exports and hamper growth. It can have serious consequences for a small country like Sweden that is incredibly dependent on foreign trade

He also thinks that Sweden has an interest in more countries not to leave the Union.

– Everything depends on how big the economic impact will be of this. For example, if the stock market fall continues and the pound will continue to weaken as it may discourage other states from leaving the Union.

How to reason as an individual?

– you will see that a portion of their savings, as stocks and mutual funds may decline in value but at the same time do best advised not to panic and do something rash, but instead follow developments carefully

When asked what type of contract that may be necessary between Sweden and Britain say Hatzigeorgiou that there is as yet unclear.

“Their everyday life is affected”

– There will not be an agreement that corresponds exactly what we had before. There will be a new agreement, but it will take time and during that time, it risks becoming a number of storm clouds that make the economic costs may be rail, said Andreas Hatzigeorgiou.

He also testifies that it may become a problem for the Swedes who now lives in Britain and the British people who live in Sweden.

– We have corresponded to an intermediate Swedish city of Swedes who now live there, up to 90 000 people, and also many British in Sweden. Their family will be affected by the decision, since it may be harder to live, study and work in both Sweden and the UK.

– Sweden is a relatively open country but for stag crowd may be required both residence and work to get stanan in the country.

“Will be messy”

Even Swedbank chief economist Anna Breman is critical to Brexit-slip.

– the this is very big, and very negative, she said.

However explains Breman that in the short term does not need to be worried about the Swedish economy, but believes that there will be turbulence in the financial markets for some time.

– It will be messy ahead. We will need to see some kind of action by central banks and clear statements from politicians to try to calm this she said to TT.

However, think Anna Breman not any interest rate cuts are expected in the short term. However, central banks may intervene in the currency market to stabilize the exchange rates. They may also need to provide liquidity to the banking system, according to Breman.

“A weaker EU”

– Swedish banks’re very well capitalized, but in Europe it does not look quite as good. So where can the central banks step in and act as “lender of last resort”, ie the liquidity in the market, she said.

Anna Stellinger, Director-General of Trade, the Swedish authority for foreign trade, the EU’s internal market and trade mean that Sweden is now affected in several ways by Brexit.

– This is very unfortunate as we are in a period of many global and common challenges. Generally, it now becomes a weaker and more inward looking EU, where member countries could more make their own relationships and difficulties, which does not benefit anyone.

According to Anna Stellinger Sweden is highly dependent on the EU internal market and in which the UK accounts for 17 per cent of EU GDP.

Great uncertainty

the UK is also Sweden’s second most important country for the import of services, the third most important country for the export of services, the fourth important for exports and the fifth most important for employment

– Britain is Sweden’s most important allies in trade policy issues, and we have together pushed and wanted to have more mobility and more free trade-friendly approach in both Europe and the world. We also have 66 000 jobs in Sweden which is supported by our exports to the United Kingdom.

This brings the question of what type of trade that will now be made out to be crucial. According to Anna Stellinger are several different options but believes that there is considerable uncertainty about what it might be.

Different options

– Britain has voted to leave but we have not received any clarity and certainty in what the alternatives are. There are several different models but we do not yet know what it will land in.

Of the different options mentioned Stellinger including Norway’s EEA or EFTA + of EU relations with Switzerland. However, she does not believe that any of these are relevant for Strbritannien.

– Norway, for example, has access to almost the entire internal market, but no ability to influence. However, they still pay high fees, which the UK want to avoid using this exit. With Switzerland, the EU has 120 different contracts, which you will not want to do again.

Other options could also include a free trade agreement like the one with Korea and Canada or customs union similar to that of Turkey.

Can become a WTO agreement

– the Turkish solution is probably pretty unlikely since there is much that is not included in such customs union. It includes, for example, very little services and trade in services are extremely important to the UK.

According Stellinger there is a certain probability that it is leaning toward a so-called WTO agreements.

– This is what mentioned in the debate and means posting on WTO level, which means that the United Kingdom would have the same relationship to the EU, such as Russia. But it is at present impossible to speculate.


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