Friday, June 24, 2016

Disaster in Europe

The English people have voted to leave the European Union and the result will have serious political and economic ramifications. The first casualty of the vote is Prime Minister David Cameron. Speaking on the steps if 10 Downing Street, an emotional Mr. Cameron told the nation that he has informed Her Majesty Queen Elizabeth II of his decision to resign and that he believes the country needs a new leader by Conservative Party's conference in October. 

The BREXIT vote is a victory for the nationalist movement in England led by former London mayor Boris Johnson and its effects will be wide-ranging. In France, leader of the ultra nationalist party, Marine Le Pen has hailed it as a success and is calling for a similar vote in France, calling it FREXIT. Global markets are in free fall and the world appears poised for another major economic crisis if the shocks cannot be arrested quickly. The British Pound has collapsed, trading at its lowest point in over 30 years, a considerable loss in value which could result in a spike in the cost of living. The FTSE is under stress as billions in share values were instantly wiped off the books. Nick Parsons, a global currency strategist at NAB in London, said "we've had a 10 percent decline in six hours, and a vote to leave provides an existential crisis for Europe".

Experts are predicting a cascading effect across the European Union which could potentially lead to a break up of the Union. News from the German Chancellery this morning indicate that the 6 founding members of the European Union will be gathering in Berlin tomorrow to discuss the UK referendum. There are fears of a recession in Britain that would affect Europe. Investors are rushing to US Treasury bonds hoping that they will prove to be a safe haven, while ratings agency Standard and Poors has warned that it would likely downgrade Britain's triple A rating.

In the Caribbean, we should brace ourselves for another downturn in our economies. The uncertainty in Britain and Europe coupled with the value of the Pound and the Euro may have disastrous effects on our tourism industry as Brits and Europeans hold on to their wallets until they feel secure about their economic future. Dominica's economy, already in shambles, will likely be shredded even more. We're in for a wild ride.

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1 comment :

  1. LoL you pray doom on Dominica and it bounced back and took you in the UK how's that big pay cut going down with you? Got any savings or English stocks? Don't worry you look young and you will be back to where you were in 10-20 years, Enjoy.


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