Brexit and the Currency Diplomacy – By Marie Antoinette Akl

It should be glorious! Yes Sirs, it is Brexit. Putting an end to decades of a globalized world has not only shaped the course of global politics, it has also threatened the general decline of foreign economies and currencies. As negotiations on Brexit have started to take place in the UK, an eye must be kept on countries with constant disadvantage to the next changes. Hard Brexit is the decision of Brexiteers to move out unilaterally from Europe that may endanger a global recession due to the main factor of the Euro currency falling sharp with no profitable ties with the EU, or better said with no Deal at all. Financial and Economic damages can affect the Middle East indirectly. The virtue of hard Brexit vs soft Brexit won’t be present in face of problematic economic chaos by its creation. Let’s first discuss the currency change with regards the European industrial production. It has been a long struggle for Europe facing a bipolar power in production, employment and movement of goods: the UK vs Germany and the Euro notable ground standing which emerged as a big competitor against the GBP. Brits stuck in neutral before the re-election of a new Prime Minister to lead on Brexit. Meanwhile, the GBP will keep losing its value before any set up Deal and rise sharp after. Soft Brexit on the other hand is an option on the table. The Labour party calls on “mini-deals” to seize slow recovery post hard Brexit. Surviving the next global self-sufficiency is a part of preparation to plumb into depth if no Deal is set. Politics leading the geoeconomic imbalances on Brexit and Europe. Europe was never seen so much divided. Even its core is unable to find a common understanding on The EU Commission Presidential elections. The EU vs Brexit. Europe is moving towards bipolarity shifting the world to move in bipolarity as well. Brexit is awaking the rise of populism vs the rise of nationalism in Europe in a time when populism is in decline. Whether the UK parliamentary next elections towards Brexit Deal or no Deal, Germany vs France towards the EU Commission Presidential candidates, there exist a syndrome of division in Britain and Europe itself. How is it explainable? Britain asking for a divorce that brings back advantaged isolationism to the Kingdom and putting Europe -highlighting France- in a weak position against Germany. Moving Brexit with a Deal could ease the masses on different economic levels. A no Deal Brexit will only make Europe more expensive on the movement of goods by creating digital walls and will only make Europe suffer from high unemployment rate since firms to be shift back to London. Britain on the other hand will not only pull back its businesses, Britain will be pulling out its human capital leading towards the creation of more jobs on its own territory and prospering the cycle of finance on a macro and micro level. The risk has entered Europe as it has always been dependent on Capitalism after the fall of the Soviet making its middle small states suffer in terms of first shock absorbers and finding difficulties to build themselves back up. History is retelling us the layers of the past haven’t gone yet. The present is blaming the divorce who is definitely putting back populism and nationalists on the rise, where citizens are asking the protection of their rights from an economic fall. Germany on the other hand who made Europe suffer-long from its strong production, will forcibly shift its businesses back home as well in order to guarantee employment to its own citizens. Britain decision to leave Europe makes it a leader for everyone to follow. Until Merkel’s term to leave as a Chancellor, Germany will be seen for the first time weaker than France. Not before the next Chancellor elections, the Alt-Right movement in Germany will be still in depth sleep to be awakened post Merkel’s departure, and to take over political decisions hard time. Germany will also be seen the duplicate of America in terms of decisions of protecting the rights of its Citizens First vs Germany for all, and promoting the Pound and France the winners. That’s what we call profound division and the loss of an effective economic statecraft. On a currency level, the British Pound will be moving unilaterally where no one will be able to challenge England. England’s economic plans have been set up ready since the start of talk about Brexit. Meanwhile, the world has entered a secular stagnation before the execution. In fact, it should scare everyone as a chain of political and economic decisions are hanged in domino chain in Europe and the Middle East with a starting point zero from America. Moving on strategically, let us make the drawing of Brexit vs Europe. Theresa May ending her term in October, EU Parliamentary elections taking place in Brussels tomorrow July the 2nd. . As for the Fall season we will be awaiting the following: Article 50 extension expiry date, Tory MPs decision vote of no confidence, and definitely the 2020 elections. If May succeeds holding her position and responsibilities, the Deal will take place, Europe will be saved and that makes an end of the simple story. If May loses her chair, I definitely see Boris Johnson the strong candidate to be passed the Baton defeating Jeremy Hunt. On a pursuit of the geoeconomics, I see Boris with high potential to succeed May. A tactic recognition of the danger of Europe, is the Middle East currency turnover. What about the EU Parliamentary Presidential elections then? As I previously mentioned, Europe vs Brexit, rise of populism vs the rise of nationalists lead signals in such divided era. The main 4 candidates for the EU Parliamentary Presidential Elections hold the answer: Manfred Weber representing the European People’s Party (EEP) strongly backed by Merkel, demanding no Brexit without a Deal. The second, Frans Timmermans candidate of the Party of European Socialists (PES), third Margarethe Vestager, strongly backed by President Emmanuel Macron the candidate of the Alliance of Liberals and Democrats for Europe (ALDE) and finally Ska Keller nominated by the European Green Part (Green) candidate. How to best accurately predict on the winning candidate in a time all decisions are being broke into oppositions? Since Britain is exiting Europe, and referring to the history of the rise and fall of nations, the rise of nationalism is awaken against the rise of populism where populism is in decline. It will be hard to nominate a winning candidate backed by Germany when the country is seen as an economic threat to Europe. On the other hand, France decision to back Vestager is a weak choice since the escalations are taking place between France vs Germany. The Green party leading the least common interest when people are more concerned about jobs post Brexit. I see Timmermans, the only candidate holding the EU Parliament Presidential Trophy. As for the EU Parliament Speaker nomination, it will be inevitable to not to appoint a candidate who holds an opposite opinion to the EU Presidential President. Yes, even the EU Institutions will be in bipolarity. Why is it easy to predict? The elected Members of the EU Parliament are more likely to represent the voice of the rising nationalists of Europe. On the other hand the Parliament itself must act in the favor of the people, therefore leading to an election that closely resemble populism. Vestager cannot be replaced for such a job. People get ready for the next Parliament Speaker in EU to be a woman. Another version of Brexit with a Deal could flip the aftermath, seeing a high race among Vestager vs Menfred taking the seat at the EU Commission Presidential Elections. However, this second version of Brexit is far from happening. Brexit won’t stop here. The next stop locating the Middle East and the stop after locating the Gulf or vise versa. Brexit will indirectly affect the Middle East and directly affect the Gulf, where the Middle East some country’s currency is more dependent on the Euro Bonds, mentioning Lebanon. Since the GBP will rise against the Euro, the Lebanese Pound currency may face a hard shock in losing value if not backed by the American Deal, when the Euro Bonds of the country are directly affected by the currency fluctuation post hard Brexit, yet creating an instability in many sectors fearing that the country is not prepared to absorb such a financial shock. The Gulf affected by Brexit where most of the Gulf Emirates highly depend on the Brits as leading businesses, named by the small hidden power. A chain of events creating a widened gap, and creating the new Realism in the world. Every leader in countries where Democracy is weak, is ruling-base upon his own beliefs, tightening the influence of foreign powers in the most needed time. Who would possibly imagine that after the WWII, Nationalism will be rising again as a major player in the region when Iran conflicts are centralized in the political talks? For those who follow my columns, you remember when I mentioned Iran doesn’t look like the new face of Russia. But Iran doesn’t look like the new Nationalism either. Until we analyze and discuss the Iranian case, hold on to your belts until we hit the last stop: Iran.
*The Article has been edited from its original version on the following errors: The EU Parliamentary Presidential Elections & The EU Commission Appointee/ Nomination.

Marie Antoinette Akl American Writer in Strategic issues

Marie Antoinette Akl is an American scholar and strategic analyst and writer. She writes about American Foreign Policy and its global effect on the shifts in the world with special focus on the Middle East and East Asia. Her strategic analysis brings the latest in Geopolitics, Geoeconomics and Geofinancial.

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