With the historic decision that shocked the world that United Kingdom has chosen to leave the European Union, people across the world are reeling about the idea of European Union with the United Kingdom. 52% of the voting population of UK chose to walk out, and so the country did. And that is how the term Brexit emerged.
A shorthand way of saying that United Kingdom leaving the European Union, Brexit is merged with two words, Britain and exit.
Here are a few important things that one needs to know about Brexit.
This could be good news for the ones currently going to United Kingdom, but it can have a long-term effect of the trade. The British pound dropped 8% in the first day after voting, and traded around $1.36. And according to the UBS economist David Tinsley, the adverse effects have just begun to show up.
According to the wall street journal, the following threat signals have already started coming up: -
The businesses would have to restructure and plan their work in a new way, adapting with the new regulatory structure of an independent Britain. Between, Britain and other nations, new trade agreements will also have to be made. These things will surely hit the nation’s economy.
It all started with the 1985 Schengen Agreement, which allowed the ‘free movement’ amongst the member nations of the European Union, i.e. without a passport check. This was further exploited when Germany decided to allow a massive influx of migrants from Middle East and North Africa. This resulted in problems of violent crime and the increased risks of terrorism.
Also, the open borders policy has also resulted in an economic disaster for United Kingdom, as explained by Rory Broomfield in the following: -
“We have seen wages fall behind inflation since 2010 by a massive 8.6%. from 2010 to 2014, the rise in the UK born unemployment was 3.7% whereas the rise in UK born employment was 12%. According to Professor Tim Congdon, about half of the increase in foreign born employment was of immigrant workers from eastern Europe, allowed in because of our EU membership.”
The concept for European Union began for the European countries after World War II, as a way to forge economic cooperation, especially between Germany and France. The partnership was known as European Economic Community or the EEC in the late 1950s to fight against communism and Soviet Union. Later in 1993, it came up to be called as European Union. Since then, the European Union has devolved into an inefficient, power grabbing bureaucracy that has brought down the United Kingdom.
Conservative review’s Nate maddens highlights the following statistics from vote leave, which is a pro Brexit nonprofit:-
Madden also states that studies from the Cardiff business school and the University of Buckingham having the European Union membership cost 11% of the Britain’s annual GDP and these costs were certain to increase due to the austerity measures and to cover the cost of the new EU projects.
Daniel J. Mitchell from Cato institute goes on to explain that he European Union has imposed “protectionism against outsiders, tax harmonization, bad fisheries policy and dreadful agriculture subsidies” on Britain, all of which have contributed to a bad effect on the nation’s economy. The protectionism is especially a drag, as the EU has what is called as the common external tariff, which punishes the nations outside the EU. Also, the European Union consists of 45% of Britain’s exports, down from 55% as in 2006. The European Union has also come down from 36% of the world’s economy in 1973 to only 17% in 2015, resulting in Britain at a further disadvantage to remain bogged down by it.
It won’t be wrong to say that Brexit is seen as the beginning of the end of European Union. With United Kingdom stepping down from its membership, Italy, Netherlands and France also looking forward to have their own referendums as to remain a member of the European Union or not. Thus, it won’t take much long for the EU to dissolve.
The impact of the Brexit on the value of the Irish holiday homes on the Mediterranean is also quite uncertain. Pensioners are by far the largest group among the current population of the United Kingdom in other EU states. While noting changes for the following 2 years, Britain’s pensioners who are living overseas are anxious about the health entitlements and the living standards.
As stated by Madden, “Perhaps the most glaring issue about United Kingdom’s involvement in the European Union is the fact that its laws are completely subordinate to laws passed by the European parliament. It means that the average British voter cannot vote to replace the people who make their laws. Furthermore, these laws are also subject to the review of the European court of justice, which means that the people have a very little amount of say in what their laws mean and how they are implemented. One case in particular was over a ban in prisoner voting that came up a couple of years ago, in the European courts. While the measure was eventually upheld, the people of the United Kingdom had their laws under review by a foreign body that was not subject to them, sparking a massive public outcry.”
In other words, it means that United Kingdom was bring governed by a set of unelected and unaccountable bureaucrats that had little or no say in the way they were governed. It violated with the ideals of the enlightenment upon which the west was founded.
In a Forbes interview, former British Prime Minister Margaret Thatcher said, “What is it about some of these people enjoying the freedoms of democracy, who enjoy the elected representatives’ being accountable to the people?” Thatcher also cautioned that centralized power among the countries would be infeasible economically because each of them is at different levels of development. This can lead to redistribution of wealth in some countries to other countries via subsidies and losing their sovereignty, through mass immigration.
Thatcher also stated, “Both would cause resentment and not harmonious development. We should each of us be proud to be separate countries cooperating together.”
United Kingdom has to negotiate an agreement with the European Union before leaving the membership officially. This would take at least another 2 years under the Lisbon treaty, though they can have a separate agreement outside the thirty, if they choose to do so.
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