It is all about the Money

I’m writing this short post from Timisoara in Romania. This is a stunning European city – and I am working here. I just got on a plane and came to work. This city has had some European money to help with regeneration, but then so has Liverpool (where I was last week). It has also had a lot of support from EU projects in terms of democratic development. I’ m here to work with a team from over 12 different EU countries for a workshop on how to host a Public Hearing. This is what the EU funds – projects that bring people together to share our knowledge and make the whole of Europe a better and more peaceful place. Peace. This is what I voted for when I voted to remain. (By post because I did not know which country I’d be in).

This post is about money and risk.

Please note this is a simplified version of the economics so please read the links for more in depth information. First I want to talk about confidence. Whilst studying the Great Depression of 1926 I remember my lecturer telling us that ‘Its all a confidence trick’ that basically shares and stocks increase in value because the market has confidence in the future value of those shares. If those holding shares lose confidence they sell their shares and because there are more shares for sale, and people are less confident about them they are worth less money. So share prices drop and people lose money.

When we are uncertain about the impact of something it affects share prices. We are already seeing some wobbles in share prices as investors hedge their bets and sell some of the shares in companies that they think might be affected by leaving the EU.

http://www.inet.ox.ac.uk/news/Brexit#.V1hk-Y4EPMQ.facebook

This brings me to my second point. We don’t really know how ‘Brexit’ is going to affect individuals financially. Falling share prices affect us all and some companies may find they lose investment so cannot expand, or may have to contract. We could see jobs being lost. Small business in particular will be affected by the rising legal costs of trading with the EU. There may be some longer term benefits but actually no one can predict these thing on either side. In a time of existing austerity it seems rash to rock the boat. I’m voting to remain because we already have so much uncertainty it just not worth adding any more.
Read this very useful summary of the financial arguments on both sides before you vote

http://blog.moneysavingexpert.com/2016/06/05/how-to-vote-in-the-eu-referendum