Here’s What a Brexit Could Mean for the World
Here in Britain we’re currently dealing with the idea of leaving the EU, which we’ve termed Brexit. There’s a referendum scheduled for Thursday, June 23, 2016.
Why some people in the UK want to leave the EU
There are many arguments being put forward for a British exit of the European Union, however, the trump card rallying for this campaign is immigration. Those fighting for a Brexit claim that migrants coming to the UK take jobs and school places from British citizens. Justice Secretary, Michael Gove, said in a column for The Times, “Because we cannot control our borders… public services such as the NHS will face an unquantifiable strain as millions more become EU citizens and have the right to move to the UK.”
Other arguments include the idea that Britain’s economy will be much better after an exit. Boris Johnson, a leader of the Brexit campaign claimed that the UK would be more competitive because it could make its own trade deals independent of the European Union. It is also claimed that the EU “has become centralizing, regulating and controlling,” according to Gerard Lyons, and many people believe that rules set in Brussels override Britain’s own, giving us limited flexibility and control over ourselves.
The ‘Out’ side also argue that the cost of living will significantly drop after an exit due to Britain now being part of the world market, rather than being subject to farming and fishing restrictions. Lyons argues that, “With Brexit, people would suddenly face cheaper prices for food, as we would be paying world prices.”
Why some people in the UK want to remain in the EU
The Bremain side also have something to say about immigration, and argue that immigration is “actually fuelling the relative growth of the UK economy,” and “European migrants… pay in more taxes than they take out in state benefits.” According to the Guardian, this tax contribution is valued at £2bn a year. Due to free movement across the European states, there are an estimated 1.2 million Brits currently living in other EU countries, if a Brexit were to occur this would likely result in visas being needed merely to travel across the continent, let alone live there.
Other arguments to remain within the EU include the belief that Britain is stronger in. Outside of the EU, the UK could be sidelined on the global stage and therefore have less influence over transnational decision making on issues such as trade, the environment and combatting terrorism.
The remain campaign also argue that trade deals and the economy are stronger within, Euronews stated that the remain stance is, “Being part of Europe makes the UK economy stronger. The EU supports British businesses, creates jobs and delivers lower prices for consumers. If the UK leaves, investment will fall and millions of jobs will be lost as global manufacturers move their operations to lower-cost EU member states.
“The EU is the UK’s number one trading partner. Leaving the EU poses huge risks, as trade barriers will be introduced and tariffs implemented. The UK is part of the EU’s trade deals with 50+ counties around the world, and it benefits from better terms due to the EU’s size.”
What could the global effect be if a Brexit did happen?
In short, nobody really knows and there is plenty of speculation being thrown around. However, there are some consequences worth considering.
One would be the ease of working in the UK for those in the EU and migrants. Currently, because of the single market, anyone with a European passport can work in the UK, and vice versa. However, according to woodfordfunds.com/, “Policy is far more likely to change to restrict the number of low-skilled workers entering the country and shift towards attracting more highly skilled workers.” something akin to how Australia work with working visas and immigration.
It could be argued that a Brexit could cause a “rush for the border” ahead of immigration restrictions, causing a sudden influx of European migrants to the United Kingdom and borders.
Laws on refugees arriving in the UK will also be up for debate — currently, under EU regulation, “The [Geneva] Convention, to which the UK is a signatory, states that refugees should not be penalised for their illegal entry or stay, while its non-refoulement clause prohibits the expelling or returning of a refugee “in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened.” These laws are currently up for a refurb by the European Commission, and, according to the Guardian, the Dublin Regulation (which requires refugees to claim asylum in the first country they arrive in) is in for a shakeup. This will see, on way or another, a legal way for refugees to be distributed throughout EU member states to take the pressure of those on the front line. With a Brexit, the UK will be exempt from such rules.
Economically, the losses on GDP will mostly affect us here in the English Channel. However, Goldman Sachs estimates 15-20% drop in the sterling in response to Brexit as well as a drop in the property markets — the effect on global markets will likely be minimal, but noticeable and currency exchanges will be noted. The Economic Times said, “The long-term economic impact of Brexit is hard to discern, but the short term disruption while the UK renegotiates is only likely to be bad news for both sterling and Euro assets.”
Travel to, and from, the UK may also be highly disrupted. If the UK “enters only a free trade agreement without free movement of persons or services, tourism is likely to be affected.” This means that those within the EU will likely need a visa to travel to the United Kingdom, and vice versa.