People who regularly browse the Web for current events or watch the news on television will be able to confirm that there’s a certain issue that’s inflated in exponential terms. I’m talking about the referendum held by the United Kingdom on whether or not they should remain in the European Union.
I’m going to be discussing some key points about Brexit and the impact it may have on the world in general. Keep in mind that I am not a political scientist (though my mother is and she was the one who brought up this subject in a phone call last night), an economist, or an international relations/international law expert. I am merely stating my opinions and making calculated predictions based on what I know and what I’ve read and heard.
Disclaimer aside, I hope you have fun reading my post. If you have any thoughts, feel free to drop your comments below!
WHAT IS BREXIT AND WHY DID THE UK PUSH FOR IT?
According to the NY Times: A portmanteau of the words “Britain” and “exit,” it is the nickname for a British exit of the European Union after the June 23 referendum asking voters: “Should the United Kingdom remain a member of the European Union or leave the European Union?”
I think it’s known as a fact that the UK has never been the most enthusiastic EU member. They were resentful that the EU expanded its borders to absorb less economically stable countries like Hungary. They didn’t want to adopt the EU’s plans for a unified currency (the Euro). And most importantly, they didn’t want migrants from poorer EU countries to take advantage of free movement across internal borders. The last straw was when the EU didn’t allow the UK’s attempts for the extradition of certain terrorists. There are more reasons, I’m sure, but these are the more obvious ones that helped the UKIP gain momentum and cry out for a referendum.
WHAT IS THE PURPOSE OF THE EUROPEAN UNION?
The EU or the European Union originated from the EEC (European Economic Community) and the ECSC (European Coal and Steel Community). The modern EU was established in 1993 following the Maastricht Treaty. Its main purpose is to have a unified market for the free movement of capital, goods, people, and services between its member states. If treated as a single-country economy, the EU will arguably have the largest economy in the world, generating a nominal GDP of approximately €14.303 trillion.
WHAT ARE THE PROS OF BREXIT?
To be completely honest, I can only see one clear advantage – the United Kingdom will now have complete control over their immigration policies. Other, less certain, advantages include the fact that the UK won’t have to help and contribute to other, poorer member states to help keep the EU in balance. Now they have full control of who to fund and also to create deals, policies and decisions that benefit them without needing the approval of the EU council.
WHAT ARE THE CONS OF BREXIT?
- Brexit may lead to the disbandment of the United Kingdom. Scotland will most likely hold its own referendum so they can leave and join the EU. Spain will now most likely take the opportunity to assert their sovereignty over Gibraltar, although it is still British territory and doing so will be considered a declaration of war.
- Britain used to benefit from trade deals between the EU and other countries. Now that they’ve left the European Union, they might lose some of their clout – although they could freely establish their own trade agreements.
- There might be a delay in the Northern Ireland Peace Process. Ireland has made it known that they are strongly in favor for the UK to remain in the EU.
- Higher taxes and tariffs as Britain now has to pay more for goods from EU member states. Inversely, the EU might choose not to pay for Britain’s goods because of the import tax, and instead choose from goods produced within the EU – thereby contributing to a rising trade deficit.
- Farmers will lose their subsidies, thus steeply increasing the market price of food.
- Reduced clout in European politics.
I DON’T LIVE IN THE UNITED KINGDOM OR ANY EU COUNTRY. SHOULD I CARE ABOUT BREXIT?
Are you in fifth grade or something? Of course you should care. International relations and the global economy is a thing, you know? The European Union is an economic free trade zone which operates under the same economic laws. By leaving, the UK has just cut off ties with its largest trading partner and will now be subject to extra fees, regulations and even banned from entry in certain markets.
International companies that operate from Britain will be much less profitable because of this. The law of supply and demand will come into play. Since British goods will have a newly limited market, fewer people will be able to purchase their products. Less people buying = lowered value of money = lowered demand = lowered value of goods. Furthermore, foreign companies invested in the UK will lose assets, which in turn will hurt their future profitability and decrease their value.
The direct impact of Brexit on global trade and investment can tighten financial conditions due to uncertainty and delay investment projects until things have stabilized somewhat. This can dampen the trajectory of global growth – not enough to cause a recession, but enough to make a negative impact on the Euro zone and Britain’s most prevalent trade partners.
There are some discussions regarding a larger impact on the global economy and the central bank, but since I don’t know enough about that, I won’t discuss it. Here’s an article instead for more information: http://www.barrons.com/articles/what-is-brexits-impact-on-global-economy-1467124800.
AND THE MOST IMPORTANT QUESTION…IS THE UNITED KINGDOM A MEME NOW?!
Yes. Deal with it.
ENOUGH MEMES, JEN. WHAT DO YOU THINK? DID BRITAIN MAKE THE RIGHT DECISION? WILL THEY BE ABLE TO SURVIVE OUTSIDE EU?
You’re asking me if a country who won two world wars can survive outside of the EU…are you fucking kidding me. Of course they’ll survive. As for if they’ve made the correct decision or not…well, that remains to be seen. 😛