It is done! Britain has now left the European Union; well, not quite. There are years of negotiating ahead and until article 50 of the Lisbon treaty is signed, the U.K. remain a member of the union. But what does the Brexit, as it is commonly referred to, actually mean — economically, and politically?
Libertarian and former London mayor Boris Johnson has been the face of the Leave campaign. He argues that the EU is crippling U.K.’s progress and economic growth by imposing a multitude of regulations while reeking in £350 million every week from the U.K. That number, however, is closer to £190 million when accounting for rebates etc.; regardless, if the U.K. wants to move away from all these regulations imposed by the EU, all they have to do is leave and be done with it, correct?
Yeah, not so fast. The U.K. still has to trade with the countries in the EU. As such, they will have to abide by rules and regulations set forth by the EU. Leaving changes nothing in that regard. They will most likely still have to accept labor migration, and they will still have to abide by the 109 rules for pillows (like they featured in their documentary “Brexit: The Movie”).
What will happen, however, is that there will be a net loss in Britain’s GDP. This is mainly due to the decrease in direct investments; London, which used to be the EU finance capital, will have major banks closing down to relocate to either Paris, Berlin, or Frankfurt. Centre For Economic Performance (CEP), which is a part of the London School of Economics (LSE), estimates that the U.K. would suffer a fall in income by 6.3% to 9.5% of GDP — similar to the loss the U.K. experienced during 08 financial crisis. Even in the best case scenario (a scenario where the U.K. manages to secure trade deals and the like), there is no possibility that they will break even as a consequence of the results in this referendum.
As of the time this is being written, the results have not been out for even 12 hours. The pound is already at the lowest it has been in 30 years, the stock market is in shambles, and chaos has erupted both economically and politically. The British Prime Minister, David Cameron, has announced that he will be resigning; Labour MP Jo Cox was shot dead merely a week before the EU referendum — the last word she heard was “Britain first,” words she would normally be thrilled to hear. Even during her memorial, a “Vote Leave” banner was attached to a plane that flew right over the event, leaving many, including myself, disgusted.
Traitor, you are being told, if you voted for remain in this referendum. “Do you not love democracy?”, “Do you not love your country?” There is something which the leave campaign has done particularly well, something which another specific orange colored man, with equally ridiculous hair like Boris, has been doing since he initiated his campaign on the Western side of the Atlantic ocean (I’ll leave this one up for your imagination), and that is fearmongering.
By being doomsayers, spouting nonsense about the Brexit being for democracy and turning the Brexit debate into an immigration debate, the United Kingdom Independence Party (UKIP), alongside Boris Johnson, has been able to turn the uninformed in their favor and well, the results are in.
Is this the beginning of the end for EU? It could be. But let’s damn well not hope so.