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!