Facts on renegotiation of EU terms

Find the potential positive and negative outcomes on financial instruments.

09:19 29 April 2013

Some businesses are concerned about the latest push for renegotiating the UK’s terms with the EU. They believe that investments will decrease. Financial instruments may be worth looking at to determine what trends may potentially occur.

 

What are financial instruments?

 

• Stocks
• Bonds
• Loans
• Foreign exchange

 

What are some potential outcomes related to financial instruments from changes in EU terms?

 

Possible positive outcomes:

 

• Greater cash flow for businesses, resulting in safer lending practices.

 

• Increased financial stability for many individuals and families as a result of lowered product prices, resulting in larger investments in financial instruments.

 

• Improved attitude and trust in the financial sector, attracting more consumers.

 

• Greater allowances for investing in financial instruments may also promote growth for businesses.

 

• Improved business growth from financial instruments could affect wages and standards of living for many who were struggling.

 

• More consumers would draw more investors to the businesses due to improved cash flow.

 

• Slight economic recovery could also stimulate activity involving financial instruments.

 

Possible negative outcomes:

 

• Decreased faith in financial management capabilities.

 

• Stagnant investments in financial instruments.

 

• Potential loss of certain financial instruments in the event that the economy does not improve, or becomes worse.

 

• Restrictions on certain financial investments that decrease consumer interest.

 

• Waning interest on the part of investors, due to lacklustre business financial performance.

 

• Smaller business budgets resulting in fewer workers being hired and consequently a larger burden on the overall economy.

 

Overall, there are a few ways to try and minimize the risks of the negative aspects of the financial instruments.

 

If terms can be gained which create breaks for businesses one of the best ways to ensure it has a positive impact on society would be to ensure that the extra funds are used towards safer lending practices, wage increases, or hiring more workers to combat that skyrocketing unemployment rates.

 

If business can do that, it will help the economy stabilize.