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European Economy Proves to be Solid Facing Brexit | ASHARQ AL-AWSAT English Archive 2005 -2017
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British students hold UK and European Union flags in front of the European Parliament in Brussels, Belgium, June 23, 2016. REUTERS/Eric Vidal

Cairo-After a large wave of concerns about the global economy during the eight weeks that followed the referendum leading to Brexit, reports based on reliable statistics have proven that the global and particularly the European economy has succeeded in surviving Brexit without additional crises.

The world is anticipating results of elections in the United States and Europe that may change the current structure of powerful countries amid expectations of the ascension of the political right-wing, which will affect the flexibility of trade and economic agreements that have witnessed turmoil.

The Brexit has been one of the biggest anxiety triggers in the world, fear of a major economic disorder in Europe or a complete dismantle of the Union, which would maximize economic crises worldwide.

The European Union (EU) topped the World Banks list of world GDPs in 2015 with more than $18,460 trillion and the U.N.’s list with more than $18,518 trillion… while it has ranked second following the United States in the World Bank’s list in 2016 by $16,477 trillion.

*Stable indexes
A survey has shown stability in the growth of private businesses in the Euro Zone in August; but concerns have persisted from difficulties that may confront industries in September.

Most of results indicated that economic consequences of the British referendum have retained the United Kingdom without affecting main trade partners. Chris Williamson, chief economist at Markit for research said that the positive process of affairs will be an encouraging issue for policymakers. According to Markit’s statement, conditions in the region point to cautious positive promises to face threats of Brexit.

In its report, Markit said that the complex reading was slightly above the average it reached before during this year, which indicates that the growth in the Q3 will likely be similar to the results appeared during the H1of 2016.

Analysts see that these results, and despite its slight positivity, clearly show a remarkable stability bearing an important significance following the referendum, which was expected to cause a huge downturn in the European economy.

Williamson says that the Purchasing Managers’ Index (PMI) in August shows that the Euro Zone still has witnessed a constant growth in Q3 with no indicators on recovery caused by the uncertainty concerning the implementation of Brexit.

*Positive indexes in Britain too
As per of Britain, a survey showed that export demands in the British sector of manufacturing industries in August rose to its highest level in two years due to the drop in the pound sterling’s value after the referendum; However, this drop has scaled up price rates forecasts to their highest level since one year.

A survey implemented by the Confederation of British Industry showed that an index, which measures demands in all factories has slightly dropped to (-5) in August from (-4) in July; but demands of exports have improved to (-6) from (-22) in August 2016 to its highest level since August 2014.

*Leaders’ contentment
Concerning the leaders of Europe, their recent speeches have carried a clear contentment tonality, which assert the continent’s capability on overcoming the consequences of Brexit; in a joint press conference with German Chancellor Angel Merkel and French President Francois Holland, Italian Prime Minister Matteo Renzi said that Britain’s decision to split from the EU is not the end of the world for Europe, and called for strong measures to achieve an economic growth in the Union.

However, the German Chancellor was more cautious concerning Renzi’s demand for more investments, flexibility in budget, and rejection of austerity and said that the stability charter in the European budget already includes much flexibility that allows European countries to use it smartly. Merkel considered that similar decisions should be taken by the European commissioner and called EU member states to move forward in the field on modern technology.