Đurović: The region will adjust to Brexit

#Brexit #GordanaĐurović


EU will significantly change without Great Britain, but everyone will adjust, as well as countries in the region that have a goal of membership, said Gordana Đurović, professor at Faculty of Economy in Podgorica.

She commented on Brexit, saying that for Montenegro, trade with this country would be modest, 1,7% in export and 0,7% in import.

“The trade could be even smaller if there were customs. Around 35% of our exports goes to EU market, while we import 46% from EU. With further approaching to EU, I expect to see trade get stronger, but this does not pertain to trade with UK”, Đurović said to MINA Business Agency.

When it comes to foreign investments, Đurović said that Montenegro gets 3% of them from Great Britain.

“Unlike trade, direct foreign investments would not change with Brexit. Investments can develop without issues. Our structure of investments is quite dispersed, and we need to support every developmental project with foreign partners”, she said.

According to her, national gross product BDP of UK is 16% of BDP of EU.

UK gives 14 billion EUR a year to EU, or 0,6% of its BDP, but it takes 7 billions or 0,3%. It means it contributes to EU with only 0,3%”, she explained.

British economy developed dynamically within EU and it change its trade course towards EU in terms of export and import.

“From their total trade, 45% is with EU members. Britain gives 73 representatives in 751 member EU Parliament, so their leave will influence decision making, majority and connections for unity“, she said.

She said that around 60% of British regulations come from EU, so it remains to be seen in which direction will Britain introduce liberal system into its economy, and in which parts it will leave EU standards.

“The total process will require some time. These changes will hit 1.2 million British people living in EU, as well as 3 million EU citizens in UK”, Đurović thinks.

When it comes to economic effects of Brexit, Đurović said that it means 16% less resources in EU budget, which is that much less for future members in IPA II fund.

Keeping in mind that IPA II is scheduled to run until 2020, Đurović said that a reconsolidation is set to happen on a lower part, and that some IPA projects from 2018-20 will not be able to be implemented at a planned level.

“Average IPA support to countries in our region is 0,7% of BDP a year, and for us it is a significant and important support. This support will be decreased in some projects, such as Agenda of connectivity and grants for infrastructural connection in the region”, Đurović said.

At this moment, she concludes, these predictions can not be exact.

Source: Cafe Del Montenegro