What comes to your mind when you hear the word Britain? London? Big Ben? The Queen? Meghan Markle? Brexit?
In the 21st Century, It is hard to imagine that you might not have heard the term “Brexit”. It has become more than a buzzword.
But, many of you may wonder what exactly is Brexit? Why bring it out there in the first place and what is the controversy surrounding it which is keeping the European Union on its toes and the Companies established there skeptical about their future operations?
If you still have that childlike wonder in you(though I can’t imagine why not?), then it is the time to dive into this article and satiate your hunger for knowledge!
Brexit-Breaking It Down
Brexit- described as the United Kingdom of Great Britain’s exit from the EU.
If you are not aware, then let me enlighten you- The United Kingdom comprises of four countries- England(Great Britain), Northern Ireland, Scotland and Wales.
Now, these four countries didn’t find it feasible to stay in the EU, with its current rules and regulations. And, as per its citizens, it was more beneficial for them to be independent rather than remain in the EU.
Or is it?
That we will cover later but let us voice the concerns of the citizens for making such an important decision!
Why Leave the EU?
There are a multitude of factors which have made the citizens of the UK to leave the EU-
- The EU has lost its charm
The EU was formed as a common state wherein there would be a free flow of capital and persons. It would benefit both the countries and the citizens and to unify the whole continent of Europe.
But, unfortunately, that purpose is no longer being fulfilled and the heavy amount of fees being paid to the EU by the larger countries is creating holes in their wallets. The UK contributes about $19Billion/Year, the second-highest in the EU after Germany. Why should the UK pay a lot more to support others?
2. The Financial Crisis Aftermath
The effects of the Financial crisis are still daunting upon the EU and the European Central bank hasn’t taken adequate measures to help the countries recover fully. The Greek Crisis, coupled with the Italian Bond Crises is what is making staying in the EU less and less favorable for the developed economies, as they have to pitch in when the other economies default.
3. We can have our own Taxes
Not bound by a tax rate as decided by the EU, the UK could even become a tax-haven, attracting companies to set up their offices here, as proposed by pro-brexiters.
4) Greater Sovereignty
The UK could now set up its own laws, regulations, border controls and not be bound to welcome anyone which they don’t want to(Turkish Immigrants for example). They could also have a chance to have an independent seat at the World Trade Organisation, hence working for their own benefit.
The Brexit Vote
The referendum turnout was 71.8%, and over 30 Million(3 crores) people had voted. Hence, we can say with surety that there was a high degree of uncertainty whether we should go ahead with Brexit or Not!
That uncertainty is still reflected in the way the Brexit negotiations are going on, with inconclusiveness about the Actual Plan to be implemented.
Beware of the word majority, it can range from 51% to 99%. As per the Brexit vote, a majority of the citizens voted for leaving the EU-
Hard or Soft?
Sitting in a fancy restaurant overlooking the Thames and deciding upon the Type of Steak you want!
Don’t get carried away here, stay with me as these are the two major types of Brexit which can take place in short.
Hard Brexit- Nobody benefits and leaves the UK worse off than before.
Soft Brexit- Brexit negotiates smoothly and a win-win situation for nearly everyone.
The Brexit Impact
It is expected that the GDP of the United Kingdom will fall by 8%, in the worst-case scenario, and guess what was the impact of the Financial Crisis of 2008 on UK- 6%! So, a hard Brexit, likely on the cards is not going to reap benefits for anyone, a lose-lose situation awaits us.
2) Moveout of Companies
Deutsche Bank will move its primary booking hub for Investment Banking clients from London to Frankfurt, citing uncertainty post-Brexit. Panasonic has also moved out its headquarters to the Netherlands.
A report of EY, as of June 2018, revealed that more than a third of the companies reviewed by it had publicly said that they would move out their operations from the UK to the EU. The prime reasons being red-tapism, bureaucracy due to Brexit and the possibility of difficulty in their operations.
3) Loss of Quality Personnel
As per research conducted by the Wall Street Journal, Britain’s state-run National Health Service which employs specialists in various fields from all over the EU is facing a big problem: Foreign Medical Personnel including specialists going back to their home country.They don’t feel welcome anymore and are not reassured by Theresa May’s promises.
4) Migration of Statistics Analysis
The above data is of Net Migration to the UK from 2014 to June 2018. The Brexit vote took place in mid-2016 and it is evident that the uncertainty and the fear factor that citizens from other countries may not be welcome, companies may set up offices elsewhere caused a no. of citizens to move out from the UK.
In 2018, the fact that the Brexit negotiations would result in a lose-lose situation and no.of jobs would be lost, which led to a fall in net migration.
Whom To Blame?
The blame instinct, in psychology, according to which we try to find a scapegoat and hold them responsible, in order to deviate from the issues at hand.
Brexit is a result of its citizens wanting to leave the EU, and Theresa May has become the scapegoat here, finding it hard to prove her majority in Parliament and be able to fulfill the wishes of its citizens.
Politics is playing a key role, where the opposition is putting pressure on May, and we are not able to arrive at a conclusive deal yet.
Ensuring that Brexit goes ahead smoothly is not anyone’s goal now, it is about who remains in power.
What Lies Ahead
High degrees of Economic and Political Uncertainties are what the UK will likely face ahead. The outcome of Brexit isn’t going to benefit anyone in the next decade, as per analysts. Only time will tell how bad it will be.