The United Kingdom’s decision to exit from the European Union will have a severe impact on its real economy and discourage other EU members from taking a similar move, said Gerhard Schroder, former Chancellor of Germany, during his keynote speech at the 17th World Knowledge Forum in Seoul, Korea on Tuesday.
“When the U.K and EU begin the Brexit negotiations next year, the U.K will see a rise in export, pushed by cheaper British pound, for a short term, but it is clear that the departure from the EU will eventually limit the U.K’s goods and services from entering the EU market with customs duties,” said Schroder.
The U.K’s decision to depart the EU has already displayed negative impacts on the country such as decision on long-term investment in the U.K being deferred, reminded Schroder. “When other EU members witness the U.K suffering economically, they will not follow the step the U.K has taken,” he said.
The British government will launch the process for departing EU in March next year. Schroder who predicted a rare chance for the U.K. parliament reversing the Brexit decision arrived by referendum warned that yielding too much to the U.K’s demand during the Brexit negotiations raises the risk of triggering an opportunity for other European countries to consider a departure from the union.
“The EU will become stronger around the euro zone,” said Schroder although he added that the euro zone still needs a “reform” in political, financial and social welfare policies. “The reform is a must even if individual countries are required to give up some of their own rights,” he said.
The future EU will be close to such a model where each member countries advancing at different pace, predicted Schroder as he said, “Flexible form of integration may be the answer to the crisis that Europe is facing now.”
By Cho Si-young and Lee Yu-sup
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