EU to Establish Brexit Adjustment Reserve

  • This reserve is designed to provide quick and simple assistance.
  • After lagging behind its peers for many years, the British stock market is expected to emerge from the shadow of Brexit.
  • Britain and Europe's trade agreement would allow trade in goods after December 31 duty-free and quota-free.

The European Commission today proposed the establishment of a Brexit Adjustment Reserve to help member states and departments deal with the economic losses and social impacts caused by Brexit, and to support affected businesses and employment-damaged fields. The total budget is €5 billion.

European Commission President Ursula von der Leyen said:

“These joint agreements show the EU’s shared determination to work together to safeguard the health and jobs of our citizens across Europe. Europe needs a sustainable recovery that benefits everyone and improves our ability to respond to health crises. Now is the time to move to implementation.”

Ursula von der Leyen is a German politician and the President of the European Commission since 1 December 2019. She served in the federal government of Germany from 2005 to 2019 as the longest-serving member of Angela Merkel’s cabinet.

The funds can also assist the administrative authorities to properly implement border, customs, sanitary and phytosanitary controls, and ensure that basic services are provided to affected citizens and companies.

Elisa Ferreira, the European Commissioner for Cohesion and Reforms, said that this reserve is designed to provide quick and simple assistance, and hopes that the European Council and Parliament can translate this proposal into concrete financial support.

Of course, structurally adapting to the new relationship with the UK will require more long-term adjustments.

UK Stock Market

After lagging behind its peers for many years, the British stock market is expected to emerge from the shadow of Brexit. At the same time, bets that the global economy will recover from the epidemic are also expected to boost cheap stocks.

Since the 2016 Brexit referendum, the UK stock market has been the worst performer among the major stock indexes, whether in local currency or in US dollars. For in the meantime to avoid UK stock investments are concerned, now relatively inexpensive British shares may be attractive because the value of shares expected to be outstanding performance in the coming year.

The United Kingdom and the European Union officially announced on Thursday that they had reached a historic trade agreement, which avoided the unhappy situation and laid the foundation for a new relationship between the two. At the end of the year, Britain will officially withdraw from the EU single market and customs union. This agreement will enable Britain to complete its exit from the EU.

Currency index

The agreement, reached at the last minute between the EU and the UK, is a good reason to buy for the UK market, from which it can find an advantage. The Brexit deadlock has come to an end.

The benchmark FTSE 100 stock index mainly targets industries that are sensitive to the expected simultaneous economic recovery in 2021. Materials, energy and financial sectors account for about 40% of the index.

Britain and Europe’s trade agreement would allow trade in goods after December 31 duty-free and quota-free, but this does not apply to accounts for about 80% of the UK economy, the service industry or financial services. Export commodities of a company will also face an end to customs to prepare the return and border problems, because Britain’s ports would be disturbed.

Since the 2016 referendum on Brexit, despite being boosted by the depreciation of the pound, the FTSE 100 index, which is dominated by export companies, has risen only 2.5%, far less than the 14% increase of the Stoxx Europe 600 Index. In dollar terms, the British stock index fell by 6.7%.

Another sign of the UK market appears to make unpopular, investors paid little attention to the FTSE 100 Index constituent stocks of the company’s market-leading earnings growth. This makes the valuation of the UK stock market relative to the global stock market close to historical lows.

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Doris Mkwaya

I am a journalist, with more than 12 years of experience as a reporter, author, editor, and journalism lecturer." I've worked as a reporter, editor and journalism lecturer, and am very enthusiastic about bringing what I've learned to this site.  

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