Unless you are Rapunzel and have been cordoned off in a tower somewhere, you know that Britain, to everyone’s shock, is set to exit the European Union. Brexit is the term coined for a referendum on Britain to leave or stay as a member state of the E.U. In a comical unfurling of events, searches for ‘What happens if we leave the EU’ spiked sharply after the nation voted to leave.
Before examining any effects an exit might have on Britain, it is important to know what the purpose of the E.U is in the first place. After the 2nd World War, countries were still in shambles economically. Trade was also not as seamless as it should have been. European countries formed an organization centered mostly on uniting countries and avoiding wars. For the most part, the EU has proved to be valuable, promoting free trade among member states. But the EU has also faced tumultuous times. During the 2008 recession, non-responsiveness by the European Central Bank added to the severity of the recession.
What made Britain even consider the possibility of an exit? Well, this wasn’t the first time. Two years after joining what was European Economic Community, an in-out referendum was floated, and it was voted that Britain should stay. Recently, there has been increasing unrest on the number of immigrants coming into Britain, undoubtedly a richer country than its smaller neighbours. On being questioned, more people say the influx of immigrants is a problem now as compared to a decade ago.
There was also concern that if there were another economic recession; Britain would have to bear the burden of bailing the bloc out. That, in addition to the fees it contributes as a member state went a great way in shaping opinions.
On the back of James Cameron’s 2013 promise of a referendum, it finally happened. However, the exit is not immediate. The incoming prime minister is expected to begin talks as to when the exit can take effect.
So what happens after the Brexit?
The effects of the referendum results were felt almost instantaneously. The pound sunk to a 30-year low, for instance. It would be interesting to see how things unfold.
1. The British economy will be volatile. A decision of this magnitude obviously has huge implications on what route the economy takes. Essentially, Britain might negotiate a deal with the EU that could see them still enjoy economic privileges. That might prove a bit of an uphill task ; seeing as one of the reasons Britain left is economic freedom.
2. Other exits could be underway. Britain might have set the most recent precedent. With an election year coming up in places like Germany and Spain, parties could use the possible exit from the EU as bait. There are murmurs of countries such as Greece and France courting the possibility of an exit as well.
3. A Scotland referendum could be on the cards. While it remains that Britain did exit, the Scottish voted overwhelmingly to stay in the EU. Scotland last held a referendum to secede in 2014, with 51% voting not to secede. With Britain now all but confirmed out of the EU, it might be the perfect time for another referendum call.
4. Britain could come out stronger in all this. Britain accounts for about 15% of the total EU market. In as much as the exit might spell doom, Britain could now negotiate deals with countries on its terms and avoid what some would term tough EU regulations.