Effects of Brexit on the Maltese economy

Abstract

At present Brexit is one of the most discussed issues in the European Union (EU). In 2016 the United Kingdom (UK) held a referendum to decide once and for all whether to remain or leave the EU. The majority voted to leave and the UK decided to exit the EU under Article 50 of the Lisbon treaty. The problem is that after two years, (nearly three), Theresa May’s negotiation agreements have been rejected three times by the members of parliament and this delayed the whole Brexit process. The relationship between Malta and the UK goes back to the times when Malta, (as a colony), was under the British rule. Since then, even after Malta gained its independence, it always maintained close ties both in and outside the EU. This dissertation aims to identify how Brexit might impinge on this relationship and what could be the possible economic implications. The dissertation answers two research question ‘What are the possible repercussions of Brexit on UK and the EU?’ and ‘What are the Brexit effects on the Maltese economy?’ The dissertation mainly consists of three main sections. It starts off by mentioning the possible scenarios from a soft deal Brexit and hard deal Brexit that the UK might adopt once it leaves the UK. It then delves into the first part; the literature review which mentions the possible economic implications for the UK mainly focusing on trade, foreign direct investment and other economic implications like migration and employment. The analysis chapter provides two sections: the possible economic implications for the EU as a bloc rather than the EU27 individually, and then it specifically focuses on the possible economic implications for the Maltese economy. This chapter also has the same structure as the literature review as it focuses on trade, foreign direct investment and other economic implications that the EU/country is likely to face.