japanja
Will it be BRINO – Brexit In Name Only?

Will it be BRINO – Brexit In Name Only?

08-06-2018 | インサイト

The UK is likely to end up with a Brexit In Name Only (BRINO) when it ‘leaves’ the European Union, says Robeco Chief Economist Léon Cornelissen.

  • Léon  Cornelissen
    Léon
    Cornelissen
    Chief Economist

Speed read

  • UK government continues to bicker over Brexit terms
  • One solution is to remain half-in and half-out of the EU
  • Parallels with how Norway stays in the Single Market

In a new white paper, he forecasts a Norwegian-style half-in, half-out solution as being the only one currently possible given the limited timeframe available to make a deal. The time needed to solve the complex issue of the border between Northern Ireland and the Republic of Ireland makes it the only workable option of the models available, Cornelissen says.

This would mean the UK exiting the EU as planned on 29 March 2019, but remaining within the Single Market and its tariff-free Customs Union for a transition period of at least two years, and most likely longer. UK Prime Minister Theresa May has already suggested that this would be the most workable option in the short term, though she faces daily rebellions over it from her own Conservative Party MPs, some of whom want a complete exit.

最新の「インサイト」を読む
最新の「インサイト」を読む
配信登録

A vassal state?

“Two years after the June 2016 referendum result that shocked the world, the UK is still struggling to agree terms that will secure its divorce after a troubled 45-year marriage,” Cornelissen says in an updated white paper discussing the options available.

“Leaving the European Union is proving to be the most difficult thing that the UK has done in peacetime, as the Conservative Party continues to bicker over what it really wants. Meanwhile, the clock is ticking, with less than a year remaining to reach some sort of settlement before the UK legally exits in March 2019.”

“That would make it a kind of vassal state of the EU, but is that such a bad thing? The UK would essentially be following the Norwegian trading model, and few doubt that Norway has proven to be a successful and wealthy country by adopting this more conciliatory half-in, half-out approach.”

Soft or hard-boiled?

What will eventually prevail as the negotiations stumble on remains hard to predict, Cornelissen says. The main problem is that the referendum result simply called for Britain to leave; it did not say how, or on what terms. At the heart of the issue is whether the UK should pursue a ‘soft Brexit’, in which it remains in the Single Market, or a ‘hard Brexit’, in which it leaves the bloc entirely. Both are problematic.

“A soft Brexit would be the solution that is the most economically beneficial to the UK and solves a whole host of issues, including the complex Irish border problem (where Northern Ireland leaves the EU but the Republic stays in it), since the Single Market would remain in place,” he says.

“However, it would mean the UK must continue to accept the free movement of people and also contribute to the EU budget. This would not solve two political problems that lay at the heart of the Leave campaign – immigration levels that were perceived as being too high, and the notion that Britain is being ruled by Brussels.”

The Long Good Friday

“A hard Brexit does not though solve all political problems either. It would mean a hard border with customs checkpoints on the Irish border, which contravenes the 1998 Good Friday Agreement that brought peace to Northern Ireland after decades of the Troubles. It is also seen as being economically disastrous, since the UK would be leaving the largest trading bloc in the world, losing frictionless access to a market of more than 500 million people.” 

“And it raises the question over what future trading model the UK would then pursue, since none are without some sort of problem. All the others being considered, from trying to negotiate a Canadian style arrangement to crashing out of the EU completely and resorting to World Trade Organization terms with lots of tariffs, are not as good as a BRINO. Which by the way is of course still inferior to EU membership.”

Cornelissen says it all begs the question of whether Brexit can be canceled, particularly in light of growing opposition to it within the ‘Remain’ camp in the UK. However, both major political parties in the UK are committed to it, public opinion has not changed that much, and even a referendum to approve the final deal would be legally fraught with problems.

So… will it be BRINO, WTO or Don’t Know? The full white paper can be ordered here.

Leave your details and download the report.

This report is not available for users from countries where the offering of foreign financial services is not permitted, such as US citizens and residents.

Your details are not shared with third parties. This information is exclusively intended for professional investors. All requests are checked.

重要事項

当資料は情報提供を目的として、Robeco Institutional Asset Management B.V.が作成した英文資料、もしくはその英文資料をロベコ・ジャパン株式会社が翻訳したものです。資料中の個別の金融商品の売買の勧誘や推奨等を目的とするものではありません。記載された情報は十分信頼できるものであると考えておりますが、その正確性、完全性を保証するものではありません。意見や見通しはあくまで作成日における弊社の判断に基づくものであり、今後予告なしに変更されることがあります。運用状況、市場動向、意見等は、過去の一時点あるいは過去の一定期間についてのものであり、過去の実績は将来の運用成果を保証または示唆するものではありません。また、記載された投資方針・戦略等は全ての投資家の皆様に適合するとは限りません。当資料は法律、税務、会計面での助言の提供を意図するものではありません。

ご契約に際しては、必要に応じ専門家にご相談の上、最終的なご判断はお客様ご自身でなさるようお願い致します。

運用を行う資産の評価額は、組入有価証券等の価格、金融市場の相場や金利等の変動、及び組入有価証券の発行体の財務状況による信用力等の影響を受けて変動します。また、外貨建資産に投資する場合は為替変動の影響も受けます。運用によって生じた損益は、全て投資家の皆様に帰属します。したがって投資元本や一定の運用成果が保証されているものではなく、投資元本を上回る損失を被ることがあります。弊社が行う金融商品取引業に係る手数料または報酬は、締結される契約の種類や契約資産額により異なるため、当資料において記載せず別途ご提示させて頂く場合があります。具体的な手数料または報酬の金額・計算方法につきましては弊社担当者へお問合せください。

当資料及び記載されている情報、商品に関する権利は弊社に帰属します。したがって、弊社の書面による同意なくしてその全部もしくは一部を複製またはその他の方法で配布することはご遠慮ください。

商号等: ロベコ・ジャパン株式会社  金融商品取引業者 関東財務局長(金商)第2780号

加入協会: 一般社団法人 日本投資顧問業協会