REPORT
Arcadi Orrit (Lic&MBA 96), board member of the ESADE Alumni Finance Club, presented the club’s first event of the academic year, a talk about the implications of Brexit, a subject of great interest to alumni. The speakers were David Murillo, associate professor in ESADE’s Department of Social Sciences, Ángel Castiñeira (ADE 95), professor in the Department of Social Sciences and director of ESADE’s Chair in Leadership and Democratic Governance, and F. Xavier Mena, professor in ESADE’s Department of Economics, Finance and Accounting, and Chair of Economics at Ramon Llull University.
In the referendum held on 23 June 2016, 51.9% of the votes were in favour of the United Kingdom leaving the European Union – a result that took Europhiles by surprise and left them worrying about the impact on the EU as a whole.
Change of model
During his talk, Prof. David Murillo pointed out that Brexit "questions the EU’s interference in member States. This is an institutional crisis, because depending on how the EU reacts, things will work out one way or another", adding that it was necessary to ask whether we are in a period of transition. "Terrorism and immigration are currently citizens’ main concerns and the EU will focus on security, but due to our disadvantageous geographical situation, troubled times lie ahead if no solution is found for African conflicts", said Prof. Murillo.
Murillo compared Brexit to the pro-Trump vote, saying that "those seeking a return to the nation state must understand that it’s a concept of by-gone times and that what’s needed is more global governance and fewer borders". He did, however, acknowledge a growing crisis in neoliberal thought and that the relationship between institutions, citizens and market remained unresolved. "In this respect, Brexit is another facet of a transition process involving more citizen-oriented capitalism", he said.
Main repercussions
Àngel Castiñeira regards Brexit not as a crack but a rift with medium- and long-term consequences for legal and political agreements about regions, economics, immigration and free movement, and politics.
Although the UK was a member of the European Union, the Economic Union and the Customs Union, it did not belong to the Schengen area, the euro zone, the banking union or the Fiscal Compact. Therefore, "depending on how negotiations go, the UK could leave the EU and the Customs Union partly or entirely and strike up a relationship with the EU like that of Norway, Iceland and Lichtenstein, or Switzerland, or even Turkey", the expert pointed out, "which could cause Romania, Bulgaria and Croatia to start preparing to the leave the EU too". In other words, according to Prof. Castiñeira, friendly or hostile negotiations combined with a more tightly or loosely bound EU would lead to different scenarios.
In any case, Castiñeira emphasised that the main implications of Brexit would be as follows. "By losing its second economic power, main military force and an enormous diplomatic network, the EU would have less political clout and importance in the world whilst the Asia-Pacific hub would become stronger. The post-war dream would be damaged by showing that European integration is reversible, and this would lead to a decline in credibility and an increase in Euroscepticism. The UK would cease to be the 'eyes and ears' of the United States, prompting the US to seek new allies for its transatlantic relations, and the balance of power within EU institutions would begin to change".
A new scenario
Finally, Professor F. Xavier Mena gave a short historical overview explaining how the British Empire had controlled the 4 hemispheres until well into the twentieth century and, although the decline of the empire and the emergence of the US as a new global leader after World War II had changed things, Churchill foresaw this scenario back in 1953, "We have our own dream and our own task. We are with Europe but not of it. We are linked but not combined. We are interested and associated but not absorbed. If Britain must choose between Europe and the open sea, she must always choose the sea". Similarly, prime minister Margaret Thatcher asked the public to vote to join the Union, but at the Dublin Summit of 1979 she surprised her fellow members with one of her best known phrases, "I want my money back!"
Professor F. Xavier Mena felt that "the British have spent a thousand years changing the world, but been unwilling to change themselves in the slightest. The only thing they signed in the EU were opt-out clauses".
Although the UK is riding the crest of the digital wave and London is a global hub, the expert forecast "a bad year-end for the British economy" with short-term consequences for property funds, business, industry, the City and EU-UK trade.
"What’s more", said the economist, "things have changed a lot since the British Empire: the main trading partner of the former British colonies is now China, and London is one of the world’s main destinations for immigrants. We must not forget that more than 36% of the UK population comes from other countries".
"Article 50 of the Treaty on European Union establishes a two-year period for negotiating the terms of leaving the European Union, so negotiations may drag on for a long time and concessions will be made, but in the end the UK will leave: posing a problem for the UK and also for Europe", concluded Mena.
Programme
Come along to the first ESADE Alumni Finance Club talk of the year and gain an insight into Brexit.
In the referendum held on 23 June 2016, 51.9% of the votes were in favour of the United Kingdom leaving the European Union. This result is the start of the quite long (2-year) period for the UK to withdraw from the European institutions. Although the final outcome of negotiations is still unknown, it is useful to examine the possible geopolitical and geo-economic implications of Brexit in the short, medium and long term and the viewpoints of some of the agents involved (EU, UK, the business world and the general public).
Speakers:
David Murillo, associate professor, Department of Social Sciences, ESADE
Angel Castiñeira (ADE 95), associate professor, Department of Social Sciences, ESADE, and director of ESADE’s chair of Leadership and Democratic Governance
F. Xavier Mena, professor in ESADE’s Department of Economics, Finance and Accounting, and Chair of Economics at Ramon Llull University
For further information:
clubfinanzas@alumni.esade.edu
Language: Spanish
