Brexit and the War in Ukraine: Ongoing Impacts on the Western Economy
Cross-Border Supply Frictions and Worker Shortages
The United Kingdom's departure from the European Union has led to significant cross-border supply frictions. Businesses have faced delays and increased costs in moving goods between the UK and the EU, due to new customs checks and regulations. This has resulted in shortages of certain products in both the UK and the EU, as well as rising prices for consumers.
In addition, Brexit has caused a shortage of workers in the UK, particularly in sectors such as agriculture, hospitality, and healthcare. This has put pressure on businesses to increase wages and benefits, and has contributed to rising inflation.
Rethinking Core Assumptions
Russia's invasion of Ukraine has forced Western nations to rethink some of their core assumptions about the global economy. For example, the EU has historically relied heavily on Russian energy imports, but the war has made it clear that this is no longer a sustainable option. As a result, the EU is now looking to diversify its energy sources and reduce its dependence on Russia.
The war has also raised questions about the future of globalization. For years, the global economy has been characterized by increasing interconnectedness and interdependence. However, the war has shown that this can also lead to vulnerabilities. For example, the war has caused disruptions to global supply chains, and has led to rising energy and food prices. This has had a negative impact on the economies of both developed and developing countries.
Conclusion
The ongoing effects of Brexit and the war in Ukraine are significant and far-reaching. These events have caused disruptions to global trade, led to worker shortages, and forced Western nations to rethink their core assumptions about the global economy. The full impact of these events is still unfolding, but it is clear that they will have a lasting impact on the Western economy.
Financial Times
France 24
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