WHAT ON EARTH IS BREXIT?
This week’s column blurs the line between economic and legal issues but is topical all the same.
Global media has been overtaken by the decision of the British people to exit the European Union (“EU”).
So what is the European Union?
The EU was established in 1957 as a 28 country conglomerate promoting a common economic area within Europe.
This meant that where each country had previously made its own laws in relation to immigration, trade and things like tariffs members of the EU formed a united front to allow citizens of member countries to travel and trade in other countries in the Union as they please.
So why did Britain want to exit the Union and what does this mean?
One of the main motivations for pro-Brexit campaigners is the increase in foreigners travelling to the UK to work. It has been argued that Britain’s foreign population has increased to such a point that foreign nationals have been obtaining employment at the expense of domestic citizens.
Further, as is the case with any partnership, you must take the good with the bad. This means that while there was an element of free trade within the European Union, this also means that each of the countries within the Union must weather global economic pressures as a collective. For example, a number of European countries have fallen into economic chaos in recent times (for example Greece) and some pro-Brexit campaigners resent the fact that countries like Britain are effectively roped in to the economic conditions created by other nations as a result of their membership of the Union.
Pundits argue that exiting the EU will have the following detrimental effects on Britain:
- People will not be able to travel as freely and Brits living abroad may need to return to England;
- Britain will no longer enjoy free/open trade with the rest of the European Union and this could lead to an increase in the price of imports and a decrease in demand for exports;
- Unknown impacts on foreign policy as Britain’s alliances with other nations need to be refreshed given that the EU as a block entered into agreements with other nations that may not now be available to Britain.
The referendum has resulted in the resignation of the British Prime Minister and dozens of members of Parliament on both sides. It is certainly a ‘watch this space’ moment as we wait to see what the impact on the rest of the world will be.