December 07, 2016

07/12/2016: The Pelletier Column - who’s afraid of Brexit?

by Christophe Pelletier

Brexit is a hot item. I am asked regularly what I think about it and I have to admit it is rather difficult to answer with any kind of certainty today.
 


I hear and read all sorts of points of views and their opposites. The financial markets sent their messages and legions of experts have given their opinions but I see two main forces in what they tell us.
 
Christophe Palletier

The first thing is a lot of subjectivity. Most predictions I read seem to be more the result of spite, particular agendas or wishful thinking; It sometimes sounds more like what the pundits would like to happen to the UK and to the EU than the result of a solid analysis.

The fluctuations of the Pound Sterling are also more the result of a lack of clarity than of a long-term view, but that is how financial markets work.

Uncertainty opens the door to all sorts of rumours and speculations. When the crystal glass is too blurry, everyone develops his/her own scenario, which of course adds to the confusion, the uncertainty and the nervousness.

The only way to dissipate uncertainty is for political and business leaders to come out and say clearly what they are going to do, and how.

They also must explain what will change and that includes the good, the bad and the ugly.

Brexit is about change and change always brings fear, which is really the fear of loss, as gains are usually never perceived as threats.

The missing bit in the Brexit issue is the lack of clarity and communication about what the political leaders will do.

Even the date of initiating the process seems rather fluid, not to mention those who say that it will not happen after all.

As long as clarity and determination seem to still be missing, confusion will prevail.

I believe that the situation remains vague simply because the leaders do not have a clear idea themselves of what to do with that referendum outcome, which they did not expect and therefore never really thought about what the next step should be.

Just imagine what the reactions would be if the UK had the Euro as a currency and were part of the Schengen area...


Read the full article HERE.
 

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