Anasayfa / Corner post / BREXIT AND GLOBAL TRANSFORMATION

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BREXIT AND GLOBAL TRANSFORMATION

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European Union is among the biggest and the most ambitious initiatives in history in regard with states’ economic integration. As said, it is an initiative. This union expanding constantly since 1957 constitutes the biggest economic union challenging big economies such as US. On June 23, 2016 the people of United Kingdom has decided to leave this very union. Once the results were made public, it made a tremendous effect. But the real question is what is behind this effect? What did the people vote for? The people of United Kingdom actually chose to get rid of the extraordinary and non-transparent legislation system of the European Union. This messy legislation system includes thousands of bureaucrats and technocrats in Brussels who make very comprehensive legislative regulations in every subject. Therefore the real result of the referendum is that the Britons wanted to get rid of the legislative handcuffs and make their own regulations. In 1957, the European Economic Community was created following the signature of Rome Treaty by only five countries (Germany, Belgium, Netherlands, Luxembourg, Italy). The United Kingdom joined this economic community in 1973. Within time, the European Economic Community has transformed into European Union with 28 members. If the results of Brexit will be approved by the British parliament, the process of leaving the EU will start and according to the article 50 of Lisbon Treaty the leaving negotiations will enter into force officially. In fact, it is possible to evaluate the Brexit result as the start of disintegration process of EU. According to many polls in many EU countries, the people desires a similar vote to Brexit. In 2017 there will be general elections in many EU countries and if the anti-EU political parties gain strength at the end of these elections, the referendums to leave EU seem inevitable. The economic changes related to Brexit results will go on for years. However the earthquakes in the finance markets started already after the results, and it created, is creating and will create big fluctuations. The markets entered a long process of uncertainty and the news about the future of the EU will, even though they are small, rock the markets considerably. The financial markets are kept alive for years in an artificial way and the big uncertainties caused by Brexit create bigger premium demand for the market actors. In the meantime, Brexit was also a painfully wake-up call for the investors, who became quite lazy lately, that the real task of the financial markets is risk pricing. Since long time, the risk conception in financial markets had caused a misunderstanding due to the artificial respiration of the global central banks. Brexit reminds that there is always risk in the markets. The recommenced risk pricing will occupy the markets for a long time. From now on, the behaviours of all the actors will matter importantly. The reactions of EU bureaucrats and politicians will deeply affect the actions of EU states and people. If they decide to punish the Britain and its people for the decision they made, they will be clearly showing that they are afraid of disintegration. And if they make the process easier for them to leave then they will be suggesting to the other people who wish to leave it’s an easy process. In any way, the jinni has left the bottle. They are between the two fires! According to my opinion, the last stage of the EU disintegration is on, and there will be a very fast dissolution in the following years. The dissolution of the EU will cause the dissolution of Euro currency and I am waiting for some currency reforms within the following years. The period we are in will change the global paradigm and I am waiting for a whole new global paradigm until 2023. Following the burst of financial balloon caused by the new technologies in 2001 and the September 11 had pushed the world into a historical transition (transformation) period. During this period, the 2008 financial crisis and the totally artificial financial reactions had accelerated the transition developments and caused subsequently sociological, geopolitical and economic shakes (Arab Spring, EU crisis, Syrian war, etc.). Now Brexit and the following dissolution of EU accelerate everything even more in this field leading up to the new global paradigm. If we add to all those the innovations brought and to be brought by the 4th industrial revolution, in 2023 the world we know will be a whole different place. It may be on our favour that Turkey’s efforts to become an EU member didn’t work. Every cloud has a silver lining! Just like giving birth, every change involve big pains but at the end there is a new life. Which mother would refuse to give birth because of pain? Brexit makes the global transformation pains more violent but at the same time, it reminds this to those who don’t care: “The world is going through the biggest change process and it’s not over yet!”