The estimated 1.8 million British expats living in the EU should consider reviewing their personal financial strategies as ‘no-deal’ Brexit looks increasingly likely, warns the deVere Group.

The warning from James Green, deVere Group’s divisional manager of Western Europe, comes after British Prime Minister Theresa May claimed that a no-deal Brexit “wouldn’t be the end of the world,” as she sought to downplay statements made by Chancellor Philip Hammond.

It also follows the UK government publishing last week its first technical notices advising businesses and consumers on the preparations being done for the prospect of there being no Brexit deal.

Mr Green comments: “A no-deal Brexit is now expected by a growing number of experts and the wider population to be the most likely outcome.

“If the UK crashes out of Europe with no deal in place, the estimated 1.8 million expats living in the EU could be financially impacted in two key ways.

“First, the pound would inevitably suffer and it could fall hard. This would deliver another heavy and serious blow for those who receive UK pensions or income in pounds as the cost of living, in effect, would be significantly more expensive.

“Second, unless there is considerable post-Brexit collaboration between the UK and EU there is a risk that existing payments from British companies, including pension and insurance companies, to those living within the European Economic Area (EEA) could be disrupted or even made impossible. Of course, this would be a major inconvenience to many UK expats.”

He continues: “Against this chaotic backdrop it is prudent that British expats in the EU consider reviewing their personal financial strategies sooner rather than later with a cross-border financial expert. This will help best position them not only to mitigate the risks of a no-deal Brexit, but also to enable them to take advantage of potential opportunities that may arise.”

Mr Green concludes: “Unfortunately, a smooth and orderly exit of the EU is looking increasingly unlikely and this can be expected to hit the finances of many expats.

“They should seek to make their financial strategies ‘no deal Brexit’ proof.”

(Source: deVere group)

The Enterprise Investment Scheme Association (EISA) has released a national and investor representative piece of research, gauging whether the British public and its investors feel that they will be wealthier in a post-Brexit UK, and how they feel the negotiations have gone.

With the date that Britain leaves the EU edging ever closer, the Enterprise Investment Scheme Association (EISA) has launched The Brexit Wealth Index 2018. Based on research conducted across a sample of 2007 respondents - of which - 1,122 were nationally representative investors, the data outlines the wealth creation opportunities available to them post-Brexit. Providing anecdotal and quantitative analysis as to whether the country will be richer after leaving the European Union, the survey specifically questions whether they feel their individual wealth will and has increased after the decision to leave was made.

Three in 10 British investors - 8.75 million - believe that securing a good deal with the European Union will be crucial to their continuing investments into UK SMEs. This is opposed to 5.75 million investors who do not agree that a good deal will affect their investments into SMEs in the future. British investors - 12.5 million of them (43%) - believe that the Government's actions affect their investment decisions more than ever before. This is opposed to four million (14%) who do not believe this to be the case. Moreover, 13 million investors believe that Brexit will not make them wealthier. This amounts to 44% of British investors, versus a fifth (19%) who believe that Brexit will make them wealthier. Of the wider sample, half of British investors - 14.5 million - believe that their wealth has not increased since the referendum decision in June 2016, while 5.5 million do believe that their wealth has increased since the vote to leave the European Union was made.

• 17 million (59%) do not think the Government is doing a good job in securing a deal for the UK’s financial services sector
• 12.5 million (43%) of British investors feel that the Government's actions now affect their investment decision more now than ever before
• 8.75 million (30%) believe that securing a good deal with the EU will be crucial to their continuing investments into UK SMEs
• Half of British investors – 14.5 million – have seen their wealth decrease since the referendum decision
• 13 million (44%) do not believe that Brexit will make them wealthier
• Nearly half (45%) - 13 million – believe that there will be a Brexit deficit which will make the UK poorer after March 2019
• Four in 10 – 11.5 million – believe that the Brexit deficit will make the UK poorer after March 2019
• A third of British investors – 10 million – feel that there will be more opportunities to invest into SMEs in post-Brexit Britain
• Four in 10 – 11.5 million British investors – feel that there will be more opportunity for wealth creation and entrepreneurship post-Brexit
• A third of British investors - 10 million – believe that there will be a Brexit dividend which will make the UK richer after March 2019.

Overwhelmingly, 17 million British investors do not think that the Government is doing a good job in securing a deal for the UK’s financial services sector. Six in 10 (59%) of respondents believe this to be true.

A third of British investors (32%) - 9.5 million – do not believe that there will be more opportunity for wealth creation and entrepreneurship post-Brexit. However, nearly four in 10, (39%) - 11.5 million – do. This sentiment continues as 10 million British investors believe that there will be more opportunities to invest into SMEs in a post-Brexit Britain while seven million disagree.

A third (34%) of respondents believe that there will be a Brexit dividend which will make the UK richer after March 2019. This amounts to 10 million British investors. However, 11.5 million – 39% of respondents – disagree with this. In fact, when asked, I feel that there will be a Brexit deficit which will make the UK poorer after March 2019, 45% of respondents – 13 million – agreed, while just over a quarter (27%) disagreed.

Mark Brownridge, Director General of the Enterprise Investment Scheme Association (EISA), commented on the results of the survey: “It is clear that from this research that British investors feel that Brexit has not made them wealthier to date, and they do not believe that it will in the future either. Moreover, they feel that our Government does not have their back, and in fact, is contributing to the negative sentiment surrounding Brexit. The fact that so many investors feel this way is going to have a knock-on impact on the rest of the country and the economy.

However, there is some positivity, with many feeling that there will be great opportunities for wealth creation, entrepreneurship, and investment into SMEs in a post-Brexit Britain. We must remain optimistic yet cautious, we need to ensure that investors have the confidence to continue to look to UK SMEs as a viable investment, and also ensure that there is enough capital for investors to reinvest back into UK businesses.’

(Source: EISA)

More than a third (38%) of IT decision-makers across the UK financial sector believe it has become more difficult over the past five years to find staff with the right skills and experience. Over a third (34%) believe the problem is going to worsen in the coming five years. This is according to a survey across a range of financial and banking sector organisations, including retail and investment banking, asset management, hedge funds and clearing houses.

The survey, commissioned by software vendor InterSystems found a shortage across a variety of roles. Almost a fifth (18%) of respondents cited a lack of data scientists followed by 17% who revealed a shortage in security consultant/specialists, while 16% referenced application developers and 12% mentioned financial analysts.

“IT skills shortages are clearly a major concern for banking and financial services firms across the UK and this is only likely to escalate in the future,” says Graeme Dillane, financial services manager, InterSystems. “Skills shortages are a barrier to innovation in the banking and financial services sector. And as firms upgrade their legacy systems and look to innovate to meet the latest wave of regulations, that represents an increasingly serious concern.”

When survey recipients were asked to name the key qualities that technology can bring to help mitigate the negative affect of skills shortages within businesses today, 44% of respondents said: ‘simplicity of use’, 42% cited ‘ease of implementation’ and 36% ‘high-performance’.   

The study also found that skills shortages are one of the biggest barriers preventing innovation as cited by 35% of the study, behind only cost (41%) while compliance was referenced by 31%.

“These findings match with our experience in talking to customers and prospects across the sector,” added Dillane. “IT employees with the skills that banks and financial services companies are looking for are in short supply. Knowledge transfer is therefore increasingly key alongside solutions which combine ease of development; simplicity of use; high-performance and intuitive workflow transfer.”

(Source: InterSystems)

The United Kingdom, specifically London, has built a position as Europe’s primary financial hub, bridging the gap between the European Union and Asia, the United States and other regions. After Brexit comes into effect in March 2019, this once unassailable position will no longer be certain if it becomes more difficult for banks and other financial enterprises to provide services to EU clients due to a loss of ‘passporting’ rights – if no contingency plans are made.

Many financial institutions are not waiting to see how Brexit plays out and are seriously considering – or already planning – to move at least part of their operations to remaining EU countries in order to be prepared for any fallout from Brexit. Hiring rates in London’s financial sector have already halved, according to LinkedIn – reportedly due to the uncertainty surrounding Brexit and how it will impact the industry. Research from EY shows almost a third of banks and asset managers in the City of London confirmed that they are looking at moving staff to locations such as Dublin, Amsterdam and Frankfurt.

As a result, teams will be scattered across numerous time-zones and locations, with more employees likely to be working from remote locations, including their homes. Connecting a relocated and dispersed workforce is no easy task, and if the process is not well managed, it can cause serious disruption to day-to-day activities. Banking and financial services organisations need to have the right tools in place to ensure far-flung teams can communicate effectively and implement a standardised and coordinated way of working so that employees do not have to flit between numerous applications to complete tasks, collaborate on projects, monitor progress, manage resourcing and track deadlines. Fortunately, disruption can be minimised by utilising tools that nurture joined working environments despite geographical barriers and offer structure that keeps employees at different locations on the same page – in real time.

The challenges of collaborating across borders

Remote working is not new phenomenon – it’s widespread and a hugely popular way of working –

But many businesses are still trying to overcome the barriers it presents to communication and collaboration. Clarizen’s own research has shown that some of the most prevalent issues workers struggle with when working remotely include:

• Struggling to communicate with colleagues;
• Difficulty to remain efficient;
• Limited access to up-to-date documents;
• Finding it difficult to prioritise.

The banking and finance industry needs to ensure that these issues are resolved before Brexit takes place. Otherwise, the serious and negative impact they have on effective collaboration, productivity and business profitability.  Having to relocate operations is just one area of business that organisations need to navigate as the UK continues its withdrawal from the EU.

Internal company restructuring, product and services analysis and engagement planning are also elements businesses have to plan and execute, which is why it’s so important that teams have tools that facilitate a coordinated work environment during this tumultuous period.

Equipping employees with the tools to succeed

During Brexit and beyond, banking and financial organisations need to ensure employees are equipped with tools that help promote coordination between dispersed teams, while maximizing efficiency. Recent research from Clarizen found that almost three quarters of respondents said that what they specifically need to boost communication and collaboration among employees is technology, structure and support that enables them to overcome geographical barriers and the gap between time zones to increase productivity, ensure management oversight and foster flexibility.

What can help achieve this is a cloud-based platform that enables real-time collaboration across locations and empowers teams to coordinate workflow, track progress, align goals, allocate budget and meet deadlines from any device and location.

Overcoming communication overload

Ahead of Brexit, businesses need to ensure that they pick the right tool to maximize productive interactions between employees. Some businesses have previously used social media apps to facilitate easy and frequent employee discussion – such as WhatsApp and Facebook – in the belief they would streamline communications between workers and reduce long email chains that cause frustration and confusion. Unfortunately, such applications have often only served to encourage non-work chat and oversharing of irrelevant information that doesn’t bring employees any closer to meeting business objectives.

In a bid to become more focused in their approach, businesses have been turning to business-focussed communication apps. A recent global survey showed that, in the past year, companies deployed one or more of the following apps to improve productivity: Skype (39%), Microsoft Teams (14%), Google Hangouts (8%) and Slack (7%). Yet, even then, efforts to boost productivity proved fruitless as they merely became a place for office banter and overloaded people with numerous notifications and interruptions, which negatively impacts productivity.

It’s a modern workplace malady that has been dubbed ‘communication overload’, which is symptomized by workers struggling under the weight of clusters of unfocused messages, meeting requests and unnecessary interruptions. Clarizen’s research indicates that, in the end, apps that fail to directly link communication to business activities, aims and status updates actually hamper collaboration, effectiveness and efficiency. The survey showed that 81% of respondents said that, despite taking steps to improve communication among employees, they still lack a way to keep projects on track and provide management oversight – and only 16% of the companies surveyed said productivity levels were ‘excellent’ – while a nearly quarter said they were ‘just OK’ or ‘we need help’.

Looking ahead to a post-Brexit world

Brexit presents the banking and finance industry with a number of challenges that could put successful collaboration – and ultimately revenues and profits – at risk. However, by employing tools and methods that encourage an environment that nurtures a truly collaborative environment – where communication is in a business context and reporting in real time – the sector can enhance productivity and business agility, taking some of the sting out of any staff redeployments necessitated by Brexit. Even though it’s not clear what shape Brexit will take, there is no reason businesses in the banking and finance sector cannot minimise disruption and its potential costs by providing their employees with an approach and the tools they need to succeed during Brexit and beyond.

Website: https://www.clarizen.com/

Amidst the recent shock resignations of Brexit Secretary David Davis and Foreign Secretary Boris Johnson, investment uncertainty, slower economic growth and a weaker pound, the United Kingdom is on its way to a slow but steady Brexit, with negotiations about the future relations between the UK and the EU still taking place.

And whilst the full consequences of Britain’s vote to leave the EU are still not perceptible, Finance Monthly examines the effects of the vote on economic activity in the country thus far.

Do you remember the Leave campaign’s red bus with the promise of £350 million per week more for the NHS? Two years after the referendum that confirmed the UK’s decision to leave the European Union, the cost of Brexit to the UK economy is already £40bn and counting. Giving evidence to the Treasury Committee two months ago, the Governor of the Bank of England Mark Carney said the 2016 leave vote had already knocked 2% off the economy. This means that households are currently £900 worse off than they would have been if the UK decided to remain in the EU. Mr. Carney also added that the economy has underperformed Bank of England’s pre-referendum forecasts “and that the Leave vote, which prompted a record one-day fall in sterling, was the primary culprit”.

Moreover, recent analysis by the Centre for European Reform (CER) estimates that the UK economy is 2.1% smaller as a result of the Brexit decision. With a knock-on hit to the public finances of £23 billion per year, or £440 million per week, the UK has been losing nearly £100 million more, per week, than the £350 million that could have been ‘going to the NHS’.
Whether you’re pro or anti-Brexit, the facts speak for themselves – the UK’s economic growth is worsening. Even though it outperformed expectations after the referendum, the economy only grew by 0.1% in Q1, making the UK the slowest growing economy in the G7. According to the CER’s analysis, British economy was 2.1 % smaller in Q1 2018 than it would have been if the referendum had resulted in favour of Remain.

To illustrate the impact of Brexit, Chart 1 explores UK real growth, as opposed to that of the euro area between Q1 2011 and Q1 2018.

As Francesco Papadia of Bruegel, the European think tank that specialises in economics, notes, the EU has grown at a slower rate than the UK for most of the ‘European phase of the Great Recession’. However, since the beginning of 2017, only six months after the UK’s decision to leave the EU, the euro area began growing more than the UK.

Reflecting on the effect of Brexit for the rest of 2018, Sam Hill at RBC Capital Markets says that although real income growth should return, it is still expected to result in sub-par consumption growth. Headwinds to business investment could persist, whilst the offset from net trade remains underwhelming.”

All of these individual calculations and predictions are controversial, but producing estimates is a challenging task. However, what they show at this stage is that the Brexit vote has thus far left the country poorer and worse off, with the government’s negotiations with the EU threatening to make the situation even worse. Will Brexit look foolish in a decade’s time and is all of this a massive waste of time and money? Or is the price going to be worth it – will we see the ‘Brexit dream’ that campaigners and supporters believe in? Too many questions and not enough answers – and the clock is ticking faster than ever.

The financial services industry must “unite and fight” against a no-deal Brexit that potentially erodes clients’ rights and damages the financial sector itself.

This warning from deVere Group founder and CEO, Nigel Green, comes as the UK's International Trade Secretary, Liam Fox, said that Britain should accept a ‘no-deal’ scenario, instead of requesting more negotiating time.

It also follows MPs being told earlier this week by the Association of British Insurers that it could be “illegal” to pay private pensions to British expats if the UK crashes out of the EU with no deal.

In addition, the City of London is claiming that Brexit will cost Britain up to 12,000 financial services jobs in the short-term, with many more potentially disappearing in the longer term.

Mr Green says: “Now is the time for the financial services industry to unite and fight against a no-deal Brexit that potentially erodes clients’ rights, protections and freedoms. It must also stand against it potentially damaging the financial sector itself.”

He continues: “It is an outrage that if the UK crashes out of the EU, and free movement of capital stops because there is no agreement in place, people could stop receiving their hard-earned retirement income, saved over many years, simply because they have chosen to live outside the UK, which they are perfectly entitled to do.

“As an industry we need to step up, lobby the policymakers, and ensure clients are secure on this issue, amongst others. We need politicians to guarantee their rights, choices and safeguards as a matter of urgency.”

Mr Green goes on to say: “This latest warning, and the ongoing uncertainty, is likely to trigger even more people who are eligible to do so to consider moving their British pensions out of the UK into HMRC-recognised pensions while they still can.

“Many will be seeking to safeguard their retirement funds by transferring them into a secure, regulated, English-speaking jurisdiction outside the UK.”

The deVere CEO adds: “The financial sector also needs to make its own voice heard.

“The industry needs continuity and certainty. What it does not need is the chaos and the expense of a no-deal Brexit.

“A no-deal scenario will likely mean a reduction of the services and products that we are able to offer clients, as well as increased costs for businesses and, ultimately, the client.

“Therefore, we must actively engage with politicians – who largely seem only to have their own political agenda at heart - to prevent this from happening.”

(Source: deVere Group)

Below Rebecca O’Keeffe, Head of Investment at interactive investor, comments on the latest global market updates offering insight into the recent Ryanair strike debacle and Brexit progress.

Global markets continue their malaise, as trade tensions weigh on sentiment amid fears that global growth will slow. With no major catalysts to drive the market higher, the risks are on the downside and the danger is that equity markets will drift lower. Earnings will allow individual stocks or even sectors to out or underperform, but the broader indices are likely to find it more difficult to gain traction.

What a difference a week makes. Just last week, Theresa May appeared to have come up with a revised vision of Brexit that offered a middle ground and might have delivered a softer Brexit. However, resignations, rebellions, concessions and amendments now mean that it is difficult to be sure what the UK’s position actually is.  With May’s government somewhere between a hard Brexit and no deal, it will be very difficult for Europe to sign off on any deal based on the current UK confusion. The summer recess may provide some respite, but as the weeks ticks by the prospect of no deal is rising rapidly and the impact on sterling could become more severe than it already is, and international companies may once again begin to rachet up the rhetoric regarding the very real risks of a bad deal.

Ryanair are suffering multiple threats, all of which are weighing on the bottom line. Sustained higher oil prices, air traffic control strikes in Europe, bigger wage costs and increased competition are all problems for the low-cost airline. Ryanair has historically been reasonably good at hedging their oil exposure, but prolonged higher prices have increased their costs. Strikes by European air traffic controllers, in particular in Marseilles, have wreaked havoc for many European airlines, causing significant cancellations and disruption. Further strikes by Ryanair pilots are adding to their woes, alongside additional staff wage costs for pilots. The prospect of further competition in the low-cost sector from IAG is another headache that Ryanair could do without. Some of these headwinds are generic and some are self-made, but it is difficult to see much upside for Ryanair in the short term.

The European funds industry still has major concerns over Brexit and the fear and uncertainty that comes with it, according to new research with European fund managers.

More than half of respondents (55%) say that Brexit continues to be one of the biggest issues facing the funds industry in 2018. However, the study, conducted by online board portal provider eShare with delegates at the recent FundForum International event in Berlin, also revealed the funds industry was generally optimistic about  prospects for the industry in 2018 and beyond - 82% believe that the funds market is generally buoyant despite political and economic affairs.

“The fund management industry has faced much pressure over the past few years, with new regulation intended to improve transparency adding many layers of complexity to governance and compliance programs,” said Camilla Braithwaite, Head of Communications, eShare. “But confidence amongst European fund managers remains high despite this, with Brexit the only main concern for many. However, with the major decisions over Brexit and its impact on financial services still to be made, fund managers are proceeding as normal until they know more and the industry is thriving because of it.”

The new regulations, such as GDPR and MiFID II, have undoubtedly affected the industry though, with fund managers increasingly aware of the risks that come with non-compliance. 84% of those surveyed felt that their organisation could improve the operations surrounding risk management and decision-making.

With fund managers facing tough decisions about compliance, investments and many other factors, the ability to be transparent about such matters was one of the most important things identified by survey respondents. 97% said that demonstrating transparency into decision-making is increasingly important for the industry.

As the pressure grows on fund managers to be compliant and well-governed, so the need for transparency increases too. 84% of respondents said that technology is the future for improving governance standards within the funds industry.

“Transparency is essential in modern fund management and demonstrating this is right at the top of the agenda for most fund managers, keen to reassure clients and regulators alike,” continued Camilla Braithwaite. “Technology can play a significant role in this, showing how decisions were reached and supporting governance and compliance requirements. The industry has woken up to the potential of technology to help in this way, and the research would suggest that the mood within fund management is positive.”

(Source: eShare)

In light of last week’s events surrounding markets and Brexit talk, Rebecca O’Keeffe, Head of Investment at interactive investor comments for Finance Monthly.

There is no doubt that President Trump has been highly positive for US equity markets, which has fed through to rising global markets, but his increasingly erratic behaviour is making it very difficult for investors to work out whether he remains a friend or foe. His America first policy is designed to play well at home, but in classifying the rest of the world as competitors rather than allies, he has increased tensions and raised geopolitical risks for investors.

Bank of America, Blackrock and Netflix all report second quarter earnings today, which may provide further clarity for financials and the outperforming technology sector. Mixed results from three of the big US banks on Friday saw bank stocks fall, so today’s figures from Bank of America should provide further clarity for financials. Technology stocks have been the place to be invested in the first half of the year with the Nasdaq up over 13% compared to relatively flat performance elsewhere. The first of the FANGS to report, Netflix earnings are hugely important for investors to confirm whether the outperformance of technology stocks is warranted or if the market has got ahead of itself.

Calls for a second referendum and a coordinated effort by Brexiteers to undermine Theresa May’s policy and position means this could be a make or break week for the Prime Minister. Having set out a radical plan to seek what she believes is the best possible deal for the UK economy, Theresa May must now try to sell the deal to parliament this week. The hard-line Brexiteers have already indicated their objections, but they could also instigate a direct challenge to May’s leadership if they can secure the 48 Tory MP signatures necessary for a leadership ballot. After months of failed negotiations and an increasingly divisive government, this week is pivotal for Theresa May.

As the trading week gets under-way, once again it is the political world that has the attention of markets. Below David Jones, Chief Market Strategist at Capital.com, discusses his thoughts on this week’s markets.

The decision by the UK's Brexit Secretary David Davis to resign late on Sunday evening may have been expected to unsettle some - but that hasn't been the case so far. At mid-morning, the UK stock market was slightly higher and that Brexit-barometer - the pound - was trading at its best levels for almost a month. At first glance, this rise might seem somewhat illogical. But traders seem to be taking the weekend discussions and Davis's resignation as the sign that a soft Brexit could be on the cards - although the resignation does not exactly add much stability to Prime Minister May's government.

Politics is likely to be making the headlines for the rest of the week as US President Trump visits the UK. But it's another important week for the US markets as it is the start of earnings season. It kicks off on Tuesday with Pepsico but the main focus is likely to be Friday when the banks such as JP Morgan and Citigroup reveal how the last quarter was for their businesses. Expectations are running high that the last three months have been good ones - any misses here could well dent the near 105% recovery US stocks have enjoyed over the past three months.

In other markets, oil remains just below its recent three and a half year high. The last 12 months have seen the crude price rise by 70%, with little impact so far on the bigger economic picture. It does feel as if something needs to give here - $100 a barrel oil would surely start to slow down the world economy, but for now at least any dips in the price of crude just serve to fuel more buying.

(Source: Capital.com)

Refugee crisis, political turbulences, economic struggles brought on by austerity and Brexit. Katina Hristova explores the crisis that the European Union has found itself in.

"The fragility of the EU is increasing. The cracks are growing in size”, warns EU Commission Chief Jean-Claude Juncker. With Italy’s Government crisis finally being resolved and the country’s shocking rejection of NGO migrant rescue boats, it has been easy to detract from the political earthquake that the third largest EU economy experienced and the quick impact that it had on the Euro. But Europe’s problems go deeper than Italy’s political turbulences. A month ago, Spain, the fourth biggest Eurozone economy, was faced with a very similar crisis and even though the country now has a new leader, analysts believe that the Spanish instability is not over yet. With the shockwaves of both countries’ political uncertainty being felt on Eurozone markets, on top of migration pitting southern Europe against the north and as the UK marches on towards Brexit whilst Trump abandons the Iran Nuclear Deal, which could mean the end of the transatlantic alliance between the US and Europe, is the EU in serious trouble?

Why is it so serious?

Billionaire Investor George Soros is one of those people that can sense when social change is needed and when the current cultural and political processes are about to collapse. A month ago, in a speech at the European Council on Foreign Relations, Soros claimed that: “for the past decade, everything that could go wrong has gone wrong”, believing that the European Union is already in the midst of an ‘existential crisis’. The post-2008 policy of economic austerity, or reducing a country’s deficits at any cost, created a conflict between Germany and Greece and worsened the relationship between wealthy and struggling EU nations, creating two classes – debtors and creditors. Greece and other debtor nations had sluggish economies and high unemployment rates, struggling to meet the conditions their creditors set, which resulted in resentment on both sides toward the European Union. Back in 2012, the European countries that struggled with immense debt, malfunctioning banks and constant budget deficits and needed help from other member countries were Portugal, Ireland, Greece and Spain. In order to help them the creditors countries set conditions that the debtors were expected to meet, but struggled to do so. And as Soros points out: “This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based”.

Although Italy finally has a government, after nearly three months without one, the financial markets are apprehensive about what to expect next, considering the country’s €2.1 trillion debt and inflexible labour market. On 29 May, fearing the political crisis in the country, the Euro EURUSD, +0.6570%  slid to a six-month low, whilst European stocks ended sharply lower, with Italy’s FTSE MIB I945, +1.43%  ending 2.7% lower, building on the previous week’s sharp losses. Bill Adams, senior international economist at PNC believes that: “The situation serves as a reminder that political risk in the Euro area hasn’t gone away. Italy is not on an irrevocable road to anything at this point,” he said. “I think what is most likely is another election later this year, and what we’ve learned is that outcomes of elections are very unpredictable.”

Spain on the other hand has made huge progress since being on ‘EU life support’ when ‘its banks were sinking and ratings agencies valued its debt at a notch above junk, on a par with Azerbaijan’. Since receiving help, the country’s economy has been growing, unemployment is not as high and its credit rating has been restored. However, with the Catalonia separatism, and the parties, Podemos and Ciudadanos who have emerged to challenge the old duopoly between the Popular Party (PP) and the Socialists, the political uncertainty in the country is set to continue.

Greece has been in a permanent state of crisis for a decade now, with its current debt of 180% of its gross domestic product (in comparison, Italy's is 133%). In less than two months, on 20 August, the country is due to exit its intensive care administered by the European Central Bank and International Monetary Fund. The EU will then have to come up with a new debt relief offer on the $280 billion Greece still owes – which could be challenging, as the ‘creditors’ are not in a charitable mood.

In contrast, Poland and Hungary are financially stable, however, both countries seem to be in opposition to the EU with regards to immigration, the independence of the judiciary, ‘democratic values’ and freedom of the press. Both governments have dismissed EU plans to share the burden that the Mediterranean region carries in terms of migrants arriving into these countries. In addition to this, Hungary’s Prime Minister is promoting an ‘illiberal’ alternative to European consensus, whilst Poland has sided with the US and against its European partners on a range of subjects, including the Iran sanctions and Russian gas pipelines.

And of course, let’s not forget the EU’s list of unsolved issues – the main one being Brexit. With nine months until its deadline, the terms of Britain’s exit from the EU are nowhere near finalised.

Make the EU an association that countries want to join again

Today, young people across the continent see the European Union as the enemy, whilst populist politicians have exploited these resentments, creating anti-European parties and movements.

Since its establishment, the EU, an association that was founded to offer freedom, security and justice without internal borders, has survived many turbulences. Although the current crisis is based on a number of deep-rooted problems, odds are that these challenges will be overcome. To save the EU, Soros believes that it needs to reinvent itself via a ‘genuinely grassroots effort’ which allows member countries more choice than is currently afforded.

"Instead of a multi-speed Europe, the goal should be a 'multi-track Europe' that allows member states a wider variety of choices. This would have a far-reaching beneficial effect."

And even though he isn’t offering a proposition for a bill that someone needs to draft and pass as soon as possible, he has opened a conversation - a conversation about moving away from the EU’s unsustainable structure. “The idea of Europe as an open society continues to inspire me”, says Soros. And in order to survive, it will have to reinvent itself.

An independent study commissioned by Dun & Bradstreet reveals a UK business community that believes it has already lost out due to the EU referendum. When asked how the Brexit process has affected business finances, 43% of business leaders say they have felt a negative financial impact since the Brexit vote. More than a third (37%) say they have lost out on potential revenue and, on average, businesses say 19% of their revenue will be put at risk by Brexit.

Two years on from the vote, almost a third of business leaders (32%) reveal that their organisation has or is planning to reduce UK investment, and almost a quarter (23%) have already halted or slowed their plans for expansion in the UK. This suggests businesses could be considering moving activities elsewhere in the EU or beyond, or simply downsizing the scale of activities in the UK.

When asked about their initial reaction to the 2016 EU referendum in a previous survey, business leaders’ views mirrored those of the general population, with 42% saying it was positive and 41% negative. Despite this fairly even split of opinion initially, it appears that optimism has waned significantly since then. The recent study found only 23% of leaders feel that the impact of Brexit has been positive, with 42% citing that Brexit has had a negative influence on their business.

Political instability, including Brexit, has been the biggest challenge that the majority (51%) of businesses have faced over the past two years. Many are still unsure of how the negotiations and outcomes will affect their business and views remain split. Almost a quarter (24%) say leaving the single market will impact them most, followed by the regulatory landscape (18%), the length of the potential transition period (15%) and the settlement on migration (13%).

However, the research also highlighted that not all businesses believe Brexit will have an impact on their business, positively or negatively, and in fact, a fifth (21%) of businesses believe that Brexit will have no impact at all. Moreover, over half (51%) of business leaders feel the impact of Brexit has not been as negative as they first anticipated. Perhaps most critically, over half of businesses are confident that they will survive and thrive after Brexit.

Commenting on the results, Edward Thorne, Managing Director UK of Dun and Bradstreet said: “As we move closer to the Brexit deadline, it’s evident that there is still a high level of uncertainty amongst UK businesses about their future in a post-Brexit era. Our research suggests that businesses have already been affected financially and are still unclear about further impacts once the UK does leave the EU. How businesses get ahead and plan for Brexit will be crucial to their future success.”

(Source: Dun & Bradstreet)