Kalla: Brexit will Increase Mercantilist Tendencies Across Europe
24 June 2016 17:00 WIB
TEMPO.CO, Jakarta-Vice President Jusuf Kalla said that the United Kingdom's (UK) decision to opt out of the European Union (EU) after the Brexit Referendum on June 23, 2016, will increase the protectionist tendencies across Europe - as the UK's decision will create a domino effect that will bolster the already-rising nationalist and regionalist sentiment within Europe.
"The decision to opt out is a nationalistic move on the UK's part - but this will definitely be echoed across members of the EU, which I believe will step up their protectionist measures," said Kalla at the Vice President's Office in Jakarta on Friday, June 24, 2016.
Whilst a member of the EU, the UK has enjoyed lowered trade barriers - if not, free trade - with 27 other EU member countries. Now that it has opted out of the Union, the EU will undoubtedly become more protective of their economy - by installing more cautious attitudes and policies towards UK's exports, and vice versa.
"UK's economy will definitely face significant challenges if they have to deal with additional regulations that they have to face now that they are no longer a part of the EU - and similarly, goods from the EU will be screened and regulated more stringently as the UK will apply similar protectionist measures," said Kalla.
Furthermore, the VP said that the Brexit will shatter the confidence of investors that had invested their capital in the UK - as protectionist measures will undoubtedly affect the ease and cost of doing business in the UK, as opposed to the more lax, and consistent rule applied throughout the EU.
"Investment flow into the UK might experience a downward trend because investors cannot freely access the European market through the UK since it is no longer a part of the Union," continued Kalla.
Xin Hua has reported that the around 17 million Britons - equivalent to 52 percent of British voters - went to the ballot to express their wish for the UK to leave the EU. Meanwhile, around 16 million UK citizens opted to remain in the EU.
As a result, the UK is now no longer a part of the pan-European Union - after having been a significant power player in the Union for 43 years.
UK is the first European nation in the EU's 60 years history that has opted to leave the Union.
ANTARA