From the 2016 novelties presented by Zenith at BaselWorld, one watch that caught our attention was none other than the brand’s Academy Christophe Colomb Tribute to the Rolling Stones.
With the Union Jack on the dial, what came immediately to mind is the impending vote today (Thursday, 23 June 2016) in the United Kingdom regarding their European Union (EU) membership.
No, this is not a “Brexit” watch. The Zenith Academy Christophe Colomb Tribute to the Rolling Stones is part of a series of watches dedicated to the brand’s partnership with this British rock band that began in 2014.
This Academy Christophe Colomb Tribute to the Rolling Stones wristwatch was unveiled at the time when the Rolling Stones was in Cuba in late March 2016. The rock band was there to perform at Havana’s Ciudad Deportiva.
The Rolling Stones played to 1.2 million people in Cuba, as stated on the official website of this British rock band. This represents 10.5% of its population as Cuba has a human population of 11.39 million, according to The World Bank.
What is Brexit? This term is best explained by an article from The New York Times1 describing it as a portmanteau of the words “Britain” and “exit”. It is a term coined for Britain’s possible EU exit.
Since the topic was brought up, why Brexit?
One factor being played up is Britain’s migrant issue. As highlighted in an article by journalist Jonathan Eyal and published in June 2016 in The Straits Times2, after the East European nations joined the EU in 2004, there had been a large inflow of workers. EU citizens that have settled in Britain is around 3.1 million or around 4.8% of the country’s population.
The human resident population in the United Kingdom was estimated at 64.96 million in 2015, based on statistics from The World Bank.
Before 2004, most migrants were from former British colonies, particularly from the Indian subcontinent.
The argument is that these EU migrants are a strain on British taxpayers. However, there are also counter-arguments. For example, Eyal has pointed out that not all EU migrants were from poor East European countries.
For instance, the third largest group of EU migrants in the UK are from Europe’s wealthiest country, Germany.
In an article published in The Straits Times3. Douglas Webber, political science professor at graduate business school Insead (Institut Européen d’Administration des Affaires), highlighted that total net migration to Britain in 2015 was 333,000 people which was the highest in the country’s history since 1975.
He noted that 149,000 were from countries like India, Pakistan, Australia and New Zealand while the remaining 184,000 were from poorer Eastern European countries like Poland.
However, Webber also points out that British government data “showed that the incoming Polish plumbers and their EU ilk paid more taxes than Britain’s entire native population” which puts a dent on the argument that such migrants place a strain on British taxpayers.
On the migrant issue, British Prime Minister was quoted as having said that: “Immigration is a challenge but I think everybody understands you don’t solve an immigration problem by wrecking your economy.”
What are the possible fallouts arising from Brexit?
Some market commentators figure that it could eventually lead to the “disintegration” of the EU. There are EU skeptics and some governments might want to hold their own referendums.
As explained by Capital Economics8, a provider global economic and market analysis, “Brexit could conceivably be the first step towards the break-up of the EU, or the exit of one or more countries from the euro.”
Market commentators have also highlighted that the City of London could lose some shine as a financial centre with Brexit.
According to some reports, The City of London vies with New York to be the world’s biggest financial centre in part thanks to the automatic right to sell services across the 28-nation bloc with low costs and a single set of rules under a system known as “passporting”.
Brexit might then offer more opportunities to the cities of Paris, Frankfurt and Luxembourg, all of which are aiming to be important financial centres as well.
Capital Economics highlights that a Brexit will not be immediate as the UK will probably remain a member of the EU for several years.
“The result of the referendum would only be advisory. While UK politicians cannot ignore the views of the electorate completely, most favour “… ‘Remain’ and could drag the process out or try to find a relationship which replicates EU membership in all but name. Even leaders of the ‘Leave’ camp have suggested that Brexit would not actually take place until 2020,” as noted in a Capital Economics7 report.
Neither does the research firm expect Brexit “… to have important consequences for the global economy at least,” adding that “… the UK is not China”.
What is the impact of Brexit on countries in Asia? For example, China, Hong Kong, Australia and South-East Asian countries like Indonesia, Malaysia and Singapore?
Capital Economics figures that Brexit is unlikely to have much impact on China as its exports to the UK are equivalent to just 0.5% of Chinese GDP and even a sharp slowdown in the UK economy (which the firm says is unlikely), will have a very small impact on Chinese growth.
As for Australia, only 1.3% of its exports reaches the UK and another 2.7% went to the Eurozone which means Brexit isn’t much of an issue for the country’s economy as its cumulative exposure is around 4%. This is unlike 25 years ago when the cumulative share of Australia’s goods exports to the UK and the euro-zone was higher at 12%.
Capital Economics9 notes that in addition to merchandise exports that are less than 3% of its GDP, Hong Kong’s exports of service to the UK are worth another 2.3%.
Singapore’s service exports to the UK are worth 2.8% of its GDP and its merchandise exports are less than 1.5% (of GDP)
Two vulnerable South-East Asian countries, adds Capital Economics9, are Indonesia, which runs a current deficit, and Malaysia, which has a large amount of short-term external debt. It expects the currencies of these two countries to experience the highest declines with Brexit.
The clear impact over nervousness and uncertainty about Brexit, highlighted Capital Economics8, is the strong performance of safe havens such as the Japanese yen and the price of gold. It adds that such effects may not last long as the uncertainty should end on 24 June 2016 with the voting results announced.
Will the UK remain or leave the 28-nation bloc?
The “Remain” camp is led by conservative British Prime Minister David Cameron.
In a 20 June 2016 report by Capital Economics6, bookies are “… suggesting the probability of a stay vote has fallen to 65% while the probability of a leave vote has surged to 35%”.
What did the Rolling Stones frontman Sir Mick Jagger have to say about Brexit?
According to an article in the Sunday Express10, while Jagger concedes leaving is “complex”, he believes an exit will be detrimental in the short term but could be beneficial in the long term of around 20 years.
However, Jagger qualifies himself, clearly stating that he is not a politician. Neither are we but it is good to know the possible effects of Brexit.
What we can say though, is that the Academy Christophe Colomb Tribute to the Rolling Stones takes its leave from classic watches as it is innovative but remains a Zenith as it is in the spirit of the brand.
1. What is “Brexit”? A look at the Debate and Its Wider Meaning by Amanda Taub, The New York Times, 20 June 2016
2. Brexiter’s call for amnesty for illegals seen as a gimmick by Jonathan Eyal, The Straits Times on 21 June 2016
3. All signs point to Brexit, says EU expert by Cheong Suk-Wai, The Straits Times on 19 June 2016
4. How will the UK’s vote on EU membership affect the markets? – by Capital Economics, 20 June 2016
5. China would shrug off a Brexit vote, Capital Economics, 17 June 2016
6. Australia need not fear a Brexit, Capital Economics, 20 June 2016
7. Vote for Brexit may prove to be a damp squib, Capital Economics, 16 June 2016
8. Three reasons not to panic over “Brexit”, Capital Economics, 17 June 2016
9. Should Asia worry about Brexit? – by Capital Economics, 13 June 2016
10. Mick Jagger backs Brexit? Rolling Stones legend claims quitting EU “could be beneficial”, Sunday Express, 5 April 2016
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i. Zenith Pilot Type 20 Hommage à Louis Blériot: The Calibre 5011K’s Space Edge
ii. Zenith El Primero Chronomaster 1969 the Rolling Stones Edition: Rapid heartbeat
iii. Zenith Pilot: Type 20 – the 6 C-type?