The Slovenia Times

The impact of European (dis)integration on the economy


The Slovenia Times discusses a new reality with renowned representatives of Slovenian academic and business environment.

"In my opinion, Brexit is the most distinct proof of disintegration and is simply a consequence of various social, economic and of course, political processes which are in contrast to the idea of Europe as a single market, if I am allowed the latter simplification. In previous decades, economic interest has always been present and prevailing in the background of the arguments for European integration, even though political interest and a long string of chewed-out ideas and goals of enlightenment were pushed to the foreground. Political interest was focused on ensuring progress, democratic postulates but not always competitiveness (and power) in the ever-changing circumstances of global markets.
Naturally, disintegration processes are a part of any unification but now the economic interests have completely died out. This is a distinctly short-term political play which has and will continue to weaken Europe politically and economically. A certain political figure has obviously managed to become a part of the theoretical discussions and most importantly, history textbooks. However, they most certainly do not deserve any awards for excellence and achievement.
To cover one more aspect that is the common characteristic of the current conditions globally speaking, I would like to point out that we are actually used to populism - it is the lies which are new."

Toni Balažič, President of the Management Board, Mercator Group


"The lack of unity in Europe with regard to the immigration crisis, the growing lack of trust in institutions, debates on countries leaving the EU, as well as increased controls on the Schengen borders, expressions of extreme political views and intolerance toward immigrants from southern countries clearly point to the fact that the process of European disintegration is already in progress.
The consequences of European disintegration will undoubtedly include the closing of borders. This will result in impeded movement of people and goods, hindering commercial transactions between companies from different countries. The geopolitical map will show a divided Europe that, although it comprises the major economies of Germany, France and the UK, is nevertheless losing its strategic and competitive position compared to large countries."

Andrej Božič, General Manager of Steklarna Hrastnik


"In the medium and long run, Brexit will have negative implications for the global political and economic position of the European continent. Politically, Europe is becoming even more fragmented and therefore smaller in a globalised and increasingly multi-polar international environment. As far as economics is concerned, the size of the EU common market will shrink and the intra-EU power structure for the design and implementation of common policies will change. Brexit will also contribute to new uncertainties for the euro area which will have to adjust to the German-led economic governance structure introduced in recent years. "

Professor Mojmir Mrak, Faculty of Economics, University of Ljubljana


The United Kingdom will become the first country in the history of the European Union to withdraw. Essentially, Brexit came as no surprise for me and in my opinion, it is the most important political and market event this year. Just before the Brexit vote I had a very interesting conversation with a London Bullion Market Association representative who represents the key players and their clients in the bullion market and he convincingly told me that the number of gold purchase transactions by banks and individuals had increased strongly. At the time, it was a clear signal that the gold price would increase sharply in the case of a vote for Brexit, which was exactly what happened the day after - the US dollar price of gold increased nine percent and the euro price increased 11 percent in one day.

The World Gold Council from London reported record gold purchases by ETFs and central banks in Europe for August. Investors and countries hedge their assets against negative interest rates. Not only gold, the United Kingdom itself became a safe haven. The United Kingdom is slowly returning to its traditions and international links with Commonwealth members. London is traditionally the centre for physical gold trading and therefore, once Brexit happens, we can expect the United Kingdom to become a safe country to store gold, not for private investors, funds and also for central banks. The United Kingdom is becoming more attractive, the source of economic growth.

Gold will definitely shine for the United Kingdom; meanwhile Europe will be trying to cope with sluggish economic growth, negative interest rates and the migrant crisis. For this reason I believe that economic and political unity is very unlikely in the coing years.

Irena Moro, Director, Moro & Kunst Company


"Not long ago it was impossible to imagine that Great Britain could quit the EU, now it is a fact. June 2016 will go down in the history of the European Union as the month that marked a considerable turning point in the European community. It is very well known that uncertainty is the worst possible circumstance in an economy and for capital flow, hence we expect talks between the EU and Great Britain to begin and also conclude as soon as possible. It is crucial that the remaining Europe is politically strong, for only then can it be an equal economic partner for the rest of the world."

Nevenka Kržan, Senior Partner at KPMG in Slovenia



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