The Brexit vote has affected the economic growth of Britain to a great extent. With a hard Brexit imminent, the United Kingdom is likely to lose its single market. Many experts predict that the loss for the European Union will be greater than that of Britain as a result of Brexit. The EU expects an overall economic slowdown in Britain, but according to forecasts, the whole bloc will improve its economy even though there are numerous uncertainties.
The Winter Economic forecast was released by EU. According to the forecast, Britain’s economy will fall from a gain of 3.1% in 2014. It will reduce by 1.5% in this year and another 1.2% in 2018. Surprisingly, the economic growth of EU is forecasted to improve during Brexit talks. In 2014, the growth was 1.6% and EU’s economy is expected to gain 1.8% for this year and 2018. Growth is evident from the activities and the deficits along with unemployment rates have gone down recently.
The economic growth for the United Kingdom is projected to be steady in 2017 while it is expected to decline in 2018. As the UK severs itself from the European Union, it has to undergo major political and economic changes. The Brexit negotiations will take at least two years to finalize the deal. During this period, the economic growth is expected to decline. While the decline may not be severe immediately, there will be a notable decline in growth in 2018.
Greece is also under the radar due to is crumbling debt position. The forecast figures were however not as disheartening as it was expected. The EU hopes that Greece will find a way to negotiate with the creditors so that the total debt load decreases. Greece is expected to borrow huge bailout loans before July, but a solid agreement must be made. The Eurozone finance ministers are expected to meet on next Monday in Brussels. The financial situation of Greece is in dire need of a helping hand. The European Union has hopes for the country while International Monetary Fund feels that the debts of Greece are unsustainable.
The USA contributes the maximum to the International Monetary Fund. The President Donald Trump has expressed his concerns about the future of Greece. This means that Greece may not receive all the help it needs from IMF. The European creditors are already burdened with uncertainties and they won’t be interested in adding to it. So, Greece is expected to wrangle a good deal out of its creditors.
In France, Marine Le Pen won the presidential elections and this could also threaten the French economy. Le Pen campaigned effectively to disassociate France from EU and usage of the euro currency. Experts suggest that this can influence the European Union in several ways, while it can be majorly problematic for France.
Despite the numerous uncertainties, the European Union as a whole bloc is economically growing stronger. It is not the same for individual nations that have been in the EU for a few decades.