One of the most important news circulating in the media is Britain’s exit from the European Union. As economic pundits continue to shed light on the future impact of the exit, Brazilian businessmen are also keen to learn about the impact on the local economy. Perhaps, the best person to ask is Flavio Maluf, one of the most prominent businessmen in Brazil, who is well-known for his contacts in the international arena. His company Eucatex is famous for delivering quality environment-friendly construction products around the world. In addition, Flavio also has important political connections in the developing world and Europe.
When asked about the possible impact of the exit, Flavio Maluf pointed to the immediate negative consequences. For instance, the stock market in Europe fell drastically after results of voting were announced. The impact was also catastrophic on the British currency as Pound Sterling took a direct hit shedding its value by 12 percent, which is the lowest level since 1985. The immediate impact means that investors around the world are looking cautiously to the future proceedings.
Commenting on the British economy, Flavio insisted that the country will need to cope with negative trade consequences in the short-term. However, the negative impact can be controlled because Britain offered more output to the EU compared to the overall input it received. Perhaps, the exit will likely hurt EU in the long run, instead. As Britain comprised the three most powerful economies within the EU, the exit will mean that France and Germany may need to tackle the brunt of economic pressure. Because the economy of France is already weak, Germany will need to come forward and make plenty of important decisions. In case, Germany and France are not able to take the pressure, it can also lead to the end of EU.
Regarding the impact on Brazilian entrepreneurs, Flavio sees the exit as potentially beneficial to the local economy. Actually, the exit will allow Brazilian firms to create new bilateral agreements that are not depended on strict EU trade rules. Creating new agreements also make a lot of sense because export to Britain only constitute 2 percent of the overall trade outflows of the Brazilian market. Check out Flavio’s blog for a more in depth break down.