When British citizens vote on June 23, there is a 30% chance that written will exit the European Union, according to economists at UBS, Switzerland’s largest bank. They believe that even if it Brexit occurs, there will be a minimal impact on Switzerland and the franc.
On Wednesday, in Zürich, UBS presented the conclusions generated from its research to reporters. According to UBS predictions, approximately 55% of the voters would be for staying in the EU. While opinion polls for this British referendum in the case of a vote will be much closer, UBS believed that 15 to 20% of the voters are undecided, and in the end will probably vote for no change.
According to Dean Turner, the UK economist at UBS, opinion polls often underestimate the tendency of the status quo bias of undecided voters.
The British economy with swiftly space recover from its pre-Brexit space instability, according to the base scenario of no change. If no change occurs within the EU, Switzerland will be able to resume negotiations with the EU on the free movement of people. These talks have been put on hold space until the Brexit issue has been resolved.
In 2014, voters in Switzerland demanded that the EU place restrictions on mass immigration from EU states. The EU has written use to disguise whether or not the bilateral treaty can be changed, especially since Britain’s continued membership in the EU has not yet been determined.
Life in Britain after the EU
In the unlikely event that UBS predictions are wrong, Brexit could lead to referendums in other countries. This significantly slow-down EU integration plans.
UBS economists believe the damage to currency exchange rates will not be as harmful as many observers think. Ricardo Garcia, the head of UBS European Macroeconomics predicts the appreciate of the franc will be no greater than 5 percent against the euro if Brexit occurs.
Garcia told reporters that the Swiss National Bank (SNB) would be aggressive in defence of the franc, so the increase in value would be limited. There are two other factors which could cushion the franc if Brexit were to be realized: the attraction investors have to the safety of the US dollar and the impending spending spree created by the end of the European Central Bank, which is scheduled for March of next year.
If voters force a split, the most difficult outcome to determine would be the resulting British-EU ties. It is believed that the British public would not accept the Swiss model of bilateral treaties which is too similar to the EU model.
It might be difficult to convince British citizens that their government should continue to contribute to the EU budget, accept free movement from EU citizens and comply with some EU regulations.
However, since Britain has many close ties with the EU, it would not be able to drift too far from the bloc, especially when it comes to its financial centre.