Quizzes & Puzzles0 min ago
So Much For Going Down Hill
Answers
“…so that once Brexit happens they can sell the stock that is already in Germany without having to pay the 15% export tax. Once the 15% export tax is implemented they will no longer have the cheapest price and expect to lose much of the business to EU countries that do not have the export tax.” It won’t be an export tax, Eddie. It will be an import tax...
19:56 Wed 10th Jan 2018
Boost demand by shrinking your currency
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“…so that once Brexit happens they can sell the stock that is already in Germany without having to pay the 15% export tax. Once the 15% export tax is implemented they will no longer have the cheapest price and expect to lose much of the business to EU countries that do not have the export tax.”
It won’t be an export tax, Eddie. It will be an import tax (imposed by the EU). But that pedantry aside, what makes you think such a tax will be applied?
“…but the company has spend over £32 million over the last 25 years specifically to develop the trade with V/W (the car manufacturer) by building plants and installing machinery dedicated solely to the V/W contract. . They are now V/W's preferred supplier and NEVER expected a situation where they were outside the EU while their main customer was within it.”
Then their management should have had better foresight and diversified a little. To depend on one customer in one country is a little foolhardy, however much confidence you have in that customer.
“Boost demand by shrinking your currency…”
A perfectly sensible strategy which, together with variable interest rates, all nations should have at their disposal. To see why this is so take a quick glance at the Eurozone. Because of the continued and massive current account surplus (far in excess of EU rules) run by Germany, the peripheral countries of the EU (notably Greece, Spain, Portugal) suffer a chronic lack of competitiveness. The normal remedy for this problem would be currency devaluation. But they cannot devalue their currency and so they suffer “internal devaluation” where the value of their currency maintains its value compared to other nations but loses its value within. The result of this is lack of competitiveness is massive unemployment. This phenomenon was widely forecast before the euro was launched but was dismissed by the Euromaniacs. Schoolboy economics was too complex (or perhaps philosophically unpalatable) for them.
It won’t be an export tax, Eddie. It will be an import tax (imposed by the EU). But that pedantry aside, what makes you think such a tax will be applied?
“…but the company has spend over £32 million over the last 25 years specifically to develop the trade with V/W (the car manufacturer) by building plants and installing machinery dedicated solely to the V/W contract. . They are now V/W's preferred supplier and NEVER expected a situation where they were outside the EU while their main customer was within it.”
Then their management should have had better foresight and diversified a little. To depend on one customer in one country is a little foolhardy, however much confidence you have in that customer.
“Boost demand by shrinking your currency…”
A perfectly sensible strategy which, together with variable interest rates, all nations should have at their disposal. To see why this is so take a quick glance at the Eurozone. Because of the continued and massive current account surplus (far in excess of EU rules) run by Germany, the peripheral countries of the EU (notably Greece, Spain, Portugal) suffer a chronic lack of competitiveness. The normal remedy for this problem would be currency devaluation. But they cannot devalue their currency and so they suffer “internal devaluation” where the value of their currency maintains its value compared to other nations but loses its value within. The result of this is lack of competitiveness is massive unemployment. This phenomenon was widely forecast before the euro was launched but was dismissed by the Euromaniacs. Schoolboy economics was too complex (or perhaps philosophically unpalatable) for them.
"It won’t be an export tax, Eddie. It will be an import tax (imposed by the EU). But that pedantry aside, what makes you think such a tax will be applied?" - and in turn we'll retaliate with our own import tax, German jam jars etc would get a lot dearer. Why do the VB always assume only the EU can do these things? In the end the business community will override all the politically cobras and we'll get an agreement that suits both sides.
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