This post reflects on an article posted by Osmi Anannya on 4 March 2016 (The Brexit Debate) that opens up for a discussion about the coming referendum and touches upon some of the advantages and disadvantages of potentially leaving the European Union.
The word “Brexit” is a merge between the words Britain and exit. On 23 June, a referendum will be held in the United Kingdom (UK) to know if they should leave or remain in the European Union. In order to change the terms of UK’s membership, Prime Minister David Cameron secured an agreement with other leaders of the European Union (EU). After the referendum, and if the UK votes to remain in the European Union, this deal will take effect immediately.
What is the deal?
The deal concluded by the Prime Minister would give the UK a special status in the EU. The main points are especially about the child benefit, the migrant welfare payments, keeping their own currency (pound), the protection of the City of London and running their own affairs and, in general, being more independent.
What will be the effects on the UK?
If British people vote for leaving the EU, it will affect several points in a political, economic and social way, but also concerning the free movements and competition law with the EU. According to some political parties, British national policy is not to be dictated by the European Union. The UK can lead as they want employment rules, public education or the labour market. Euroscepticism is one of the main drivers of political ideologies for some British parties.
From an economic perspective, the project Brexit represents the liberation from debilitating EU regulation. It is also the opportunity to improve their trade with the rest of the world. The UK would keep its economy against external competition. The rules of competition of EU law would not be applicable. Not supporting other states would not be a priority and UK would be able to focus on its own economy. Moreover, the UK does not use Euros. It can be one of the reasons why it would be easier to be out of the EU.
If the UK gets out of the EU, they will have control over their own market and will be able to enter different trade deals with others countries. The UK wants independence. We can explain it first of all with the geography. The UK is detached from Europe as an island country. Compared to the other countries in the EU; it also had the Commonwealth and a positive relationship with the United States.
What do other nations think?
In German media a potential Brexit is presented as a most serious matter which would likely cause the status of the EU to decrease in the eyes of the rest of the world and the stability to be threatened, according to articles published in Frankfurter Allgemeine and die Welt. The Chancellor Angela Merkel, as well as the German Minister of Finance Wolfgang Schäuble, both openly encourage the UK to stay in the EU. According to Frankfurter Allgemeine there is also the fear of Germany’s relationship with its third biggest country of export becoming a lot more complicated and unprofitable, at the same time as Germany would have to take more financial responsibility to cover for the loss of British contribution. The fear is also that the EU would lose a nation of important foreign relations, as stated in the analysis “The United Kingdom and the European Union:What would a “Brexit” mean for the EU and other States around the World?” (p. 23) which was published by the made by the German Council of Foreign Relations (DGAP).
In some regards France and the UK have very different ideas of what the EU should look like. In others they are much more alike, for example when it comes to their similar approach to foreign policy (DGAP-analysis, p.11), a relationship that makes the French opinion of a potential Brexit quite complicated to define. Overall France seems to have a very different approach to the Brexit debate, shifting focus from what the EU would be missing out on if the UK left, to what the negative consequences would be for the UK, as stated by both President François Hollande and the Minister of Finance Emmanuel Macron.
The official standpoint of the United States was made clear when President Barack Obama encouraged the UK to stay in the EU, a controversial article in which he argues that a Brexit would negatively affect the unity in Europe and making it harder to cooperate at an international level to fight terrorism, economic setbacks and climate change. The fact that the UK works as perhaps the strongest link between the EU and the US is another factor, and the UK leaving the Union would be followed by consequences for the transatlantic trade as well (DGAP-analysis p.17). Another potential motive (as discussed in the media and as President Obama briefly mentions) is the ability to face potential aggression from Russia, which requires a strong European Union and balance between the world’s leading nations.
The possible negative repercussions on the UK and the European Union
If Brexit takes place many challenges would occur in the UK concerning trade market, migration, changes regarding jobs, legal system and the law-making process (see BBC News, 26 February 2016). The UK would have to negotiate a new trading relationship in order to not face tariffs and other restrictions when firms sell goods and services to EU countries.
As the EU is the UK’s main trading partner, constituting 52% of the total trade in goods and services, the withdrawal would create barriers, such as exports to the EU might face 15% tariff and the imports a tariff of 10%. It is considered that millions of jobs would be lost. Further, since there are 2.2 million British citizens living and working outside the UK, the ability to live and work in other member states would be made more difficult and this could entail visa and residence permit requirements.
As regards of migrants, if the EU allows the UK to have access to the free market then the UK should allow free movement of persons. The British Office for Budget Responsibility stated that the economy depends on migration labour and the taxes paid by immigrants in order to fund public order. The EU benefits from the UK’s contribution to the EU budget, it is one of the 10 member states who pay most, but this contribution cannot be compared with the provided benefits of the involvement in the single market.
The UK would not be as involved in world change if it left the EU, it would not have influences in Brussels, Berlin or Paris, also in transnational issues such as the environment, security and trade. Dominic Grieve, former Attorney General, informed that British immigrants in the EU countries would be viewed as ‘illegal immigrants’ if the UK left the EU and if it did not had the free movement as part of a new agreement.
It is hard to foresee the consequences of the UK leaving the EU in terms of their foreign relations, since other member states, as well as the US, are strongly advising them to stay. In theory it might be easy to deregulate the UK’s free trading economy but in practice it could cause a serious political conflict within the UK, since a large part of the British population would prefer the UK to remain a member of the EU.
Khaleda Abdul Khalil, Linn Glännestrand and Samantha Guillet