The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Monica Patra, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
David Cameron’s referendum on Britain’s membership of the European Union comes at a very crucial time in European Environment. Withdrawal from the European Union is a right of European Union (EU) member states under the Treaty on European Union (Article 50): “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.” Mr Cameron strongly believes in the benefits of continued EU membership, but a handful of high-profile MPs, including justice secretary, Michael Gove, and London’s mayor Boris Johnson, have pledged support for the “out” campaigners. In early 2015 the chances of “Brexit”— Britain departing from the European Union—seemed remote. Today, largely because of Europe’s migration crisis and the interminable euro mess, the polls have narrowed.
The Brexiter’s think that Britain is held back by Europe and by exiting the EU they would flourish as an Open Economy and would continue to trade with EU and the rest of the world. They consider EU’s arrangement with Norway and Switzerland as guides to their new relationship with EU, but the union demands free movement of people and a big payment to its budget before allowing unfettered access to its markets. But even this is a rosy scenario as EU would have strong incentive to impose a harsh settlement to discourage other countries from leaving. Even the trade relations of EU and Britain are unbalanced as Eu takes almost half of Britain’s exports while Britain takes only 10% of EU’s exports. British trade deficit is with Germany and Spain only, not with other 25 countries with whom they have to make new trade agreements.Another one of the concerns of the Brexiters’ was the free movement of people among the EU countries. Britain could stop the flow of of immigrants from EU after Brexit but it will mean losing full access to EU market and it would hurt Britain’s businesses and public service as they depend on French baker’s, Bulgarian builder’s and Italian doctor’s.
Britain right now thinks that by exiting Eu they will gain Sovereignty from Europe, but that Sovereignty comes at the cost of clout through its membership of NATO , the IMF , etc.. Britain after Brexit will be independent and Sovereign, but it will be relegated to the sidelines where it will have to follow rules, which it once helped formulate but can’t anymore.
Brexit’s effects will have larger impact area, it might very well break up UK. Scotland and Ireland will become major pain points for UK. EU will also be poorer and weaker with loss of its biggest military power and most significant foreign-policy actor.
West needs a stronger EU for its foreign and security policy to deal with troubles rising in its neighborhood- from Russia through Syria to north Africa.