The momentous referendum result announcing Britain’s withdrawal from the EU has made an impact worldwide.
Since the 25th, the media has been overflowing with reports and analyses of the inherent risks. Below is a summary of the crux of what people around the world are worrying about.
Fears of a Worldwide Simultaneous Stock Price Drop
According to newspaper reports from the 25th, stocks dropped 3.4% at the New York Stock Exchange due to anxieties for the future of the world economy, marking a record low in the past 4 years and 10 months. In Europe, Britain’s stocks dropped 3.1%, France 8.0%, and Germany 6.8%. Stocks in countries experiencing economic slowdowns such as Greece, Spain and Italy have plummeted by around 10%. Japan’s Nikkei dropped by 7.4% hitting the lowest point in the last 16 years.
This is one of the things that everyone had feared.
Fears of Instability in Trade
When Britain leaves the EU, there will be a need for new trade agreements, possibly causing instability in trade relations. For an economic giant like Japan, the drop in the British pound could cause a rise in the Japanese yen. Britain’s buying power will diminish and this will make it harder for Japan to export goods and services.
Britain was the center of EU-oriented business, so when Britain leaves the EU, a great many companies may decide to leave Britain. This will consequently cause a rise in unemployment in British domestic companies.
Japan’s Security in Danger if Britain and China Bond
There is another fear that Britain’s economic unease may prompt them to strengthen economic ties with China. This is very likely as last year Britain was one of the first countries to announce their intention to join the Chinese-led AIIB.
Although the EU stopped exporting weapons to China after the 1989 Tiananmen Square Massacre, a Japanese government official explained the possibility of Britain lifting the embargo after leaving the EU. This may further endanger the security in Asia.
Fears of “Domino Exit Effect” on Other EU Countries
After hearing of Britain’s withdrawal, many countries with nationalist tendencies such as France, Holland and Italy are coming out ever stronger. According to Asahi Shinbun, the French far right party, Front National, hailed Brexit as a “victory for freedom”, and is demanding a referendum in other countries including France.
‘Pocket Money’ Within the EU Sow Seeds of Discontent
Why did Britain choose to leave the EU knowing all of these risks?
In a lecture given in Hokkaido on the 25th, Master Ryuho Okawa founder of Happy Science explained the truth behind Britain’s decision.
“The EU is acting like a place of refuge for the less fortunate: like a Union of the Feeble. Countries have started to join the EU thinking that they will get the same level of financial profit as other countries, more opportunities for employment, and easier political handling. In reality, only around 3 countries in the EU are strong, so the organisation has become a Union of the Feeble where wealthy countries give the poor ones ‘pocket money’.”
The current EU is under the illusion that even weak countries can become strong if they gather together. In reality, however, these poor countries are becoming a burden for the wealthier ones, and the organisation as a whole is becoming poorer.
For the EU to prosper, each country must have the will and patriotic spirit to earn their own money and make their country wealthier.