Brexit is the most used term currently in the global
financial market. Not long back, Greek
exit was stalled. Even as EU is trying to
find its feet from a dozen murky issues that it has gotten itself into, threat
of Britain exit (Brexit - to be “with it”) looms large.
Britain, after a lot of hesitation and some amount of
gawking with admiration, in 1973 finally joined the European Economic
Community (what later metamorphosed into
EU). A late entrant and an almost consistent Eurosceptic - its skepticism only
worsened post Euro crisis and it’s immigrant issues. David Cameron, as a part
of election manifesto promised to offer a choice to the citizens of Britain
whether to stay in or leave EU.
In three days is the referendum to decide whether to leave
or remain in EU. We know the “remain in”
group is happy with status quo. What do “leave campaigners” expect, post
Brexit?
- · A significant decrease in immigration
- · Quick closure of new trade deal with EU
- · New trade opportunities with rest of the world
- · Freedom from issues that the EU region and the Euro is facing
- · Better employment opportunities and labor laws
- · Continued cooperation with EU on issues that are in Britain’s interest
- · Money that would be freed from EU budget contribution, to go into public spending
What is alarming is nobody knows what would it be, post
Brexit. Most importantly, the trade deal that Britain would have to negotiate – there are estimates of timelines between
2 to 10 years. After such a hostile
move, will EU be fair to offer a deal that would help Britain? Because of the uncertainty, arguments and
numbers presented by both sides are distorted; and there is no precedent that
you could refer to.
Post Brexit looks scary with possibilities of
- · UK’s GDP dropping considerably
- · London losing it’s financial capital status for EU and Euro zone
- · Security concerns for Britain
- · Huge delay in arriving at an agreement for new arrangement. This is a big one!
Britain
would invoke article 50 of the Lisbon treaty, which sets a 2-year timetable to
arrive (and agree) at terms of departure. What happens in these two years, how hostile the atmosphere will get,
is anybody’s guess.
What
is really concerning is, when agreeing to a new deal, the EU acts without the
involvement of the country that is leaving.
The Economist article explains this best “ to get a feel for the
negotiating dynamic, imagine a divorce demanded unilaterally by one partner,
the terms of which are fixed unilaterally by the other. It is a process that is
likely to be neither harmonious nor quick – nor to yield a result that is
favourable to Britain”.
It
is unclear what is in it for Britain. It
is as unclear what would it to do EU and rest of the world. While Brexit looks highly unlikely in my
opinion (even more so now, as we have the backing of the weekend poll results
following the fatal accident last week) - exits, new unions and changes are
here to stay!
All
this talk of exits is making me sad and tired.
And it’s only Monday!
