Is the European Union ready to deal with these new potential economic crises?

With Britain to conduct a referendum on whether their citizens want to stay in the Eurozone or not, which is planned to take place before the end of 2017, and the possibility of secession in Catalonia, Spain; the European and the global economy are in great danger.

The Member States of the EU are already facing several internal issues, such as the problem of the mass Syrian migration, which meant currency depreciation in relation to other currencies, such as the dollar and the yen.

As we mentioned before, in case the British citizens decide that their country must be located outside the European Union, the European and the global economies will become considerably weaker. However, when asked how they would vote if Britain renegotiated the terms of its membership in the EU, more than 50% said that they would vote for Britain to stay in; although this happened after the government said that the British interests would be protected in such a renegotiation.  

Because the UK is one of the largest and most powerful countries in Europe, their exit from the EU would result in a major change in political economy. Besides, other big problems will emerge from a potential exit, such as the free movement of economic migrants. We don’t know if an immigration policy for the borders will be applied by and to Britain after a possible exit from the European Union. Last, but not least, the European Union will lose an enormous economic power that will result in other large powerful economic countries, like Germany and France refusing to maintain their sizable contributions.

The second big blow to the European Union is the possibility of autonomy of Catalonia from Spain. As stated by the European Commission, the autonomy of Catalonia does not imply the accession to the Union, therefore it will not be automatically recognized as a full member.


Photo: David Ramos/Getty Images

This would clearly result in a shrinking economy for Spain, as they will lose significant ground of their sovereignty and part their GDP, not to mention the many other problems that will create additional costs for both Spain and the rest of the European Union. Lastly, if Catalonia manages to secede from Spain, then it won’t be at all unlikely that other areas from other big countries will want to do the same.

In conclusion, I believe that the European Union should take these two scenarios in consideration, and think about their possible actions, should they become a reality. In practice, a contingent of inertia for not having a plan for the next steps can irreparably damage the economy and create unrest and problems in other European countries.