BREXIT is short for the British or the United Kingdom exiting the European Union(EU). This is a political move that seems to have affected the entire world in various ways and making it the most trending news out there on the World Wide Web rivalled only by the shocker of Argentine superstar footballer Lionel Messi retiring from international football.
Any member of the EU has a right to leave the union under the Article 50 of the Treaty Of The European Union. The result for this exit-referendum was held on the 23rd of June, 2016 with the outcome being 51.9% that is 17,410,712 people voted to leave the EU and 48.1% that is 16,141,241 people voted to stay in the EU. Although the funny thing is that according to a Google report, ‘What is EU?’ is the second most top searched question in UK on the Google and that too after the polling was over. And a few hours prior to the polling, ‘What is Brexit?’ is the most searched question on the net.
What is European Union?
EU is a political cum economic pact that is signed by 28 nations and is meant to create a kind of Internal Market (often referred to as ‘Common Market’ by the people of Britain) for trade and other variety of purposes. The policies of the EU are made with the perspective so as to ensure free movement of people and goods through its member nations. Belgium, Netherlands, Luxembourg, Italy, West Germany and France are the six founding nations of this Union. Since then its size and power has increased incredibly.
When did Britain join?
Great Britain had applied to join the European Union in 1963 and then again in 1967 but weren’t able to join either of the time because their membership was vetoed by the then president of the France Charles de Gaulle. A situation similar to what us Indians are facing at the hands of Chinese regarding the Nuclear Suppliers Group(NSG) membership, wouldn’t you say?
But once the French President had stepped down, the English made a third attempt at the membership, in which they succeeded and they became the member of EEC(European Economic Community-former name for EU) on January 1st, 1973. After just two years in 1975, a referendum similar to what happened now, was held on whether Britain should remain in the EEC or not. Unlike this time, 67.2% of the people voted to remain in the union and 32.8% voted against. Accordingly the Great Britain remained a member of the EEC.
Why did Britain do it now?
There may be numerous reasons as to why BREXIT happened. But the one important factor was immigration. Reports say that the people of Britain were not happy with increased scale of migration in exchange for free trade. This is what got many people to push the ‘No’ button.
Effects on Britain
The major economic effect on Britain would be Trade agreements. Official trade pattern suggests that the major destination of British goods is the European Union or at least many of its member states. Now that Britain will no longer be a member, it will lose its free trade policy with the union’s member nations.
However there will not be much effect, as this a two sided weapon, because Britain is also the market for many of the member nations’ goods. The only change we may see here is a little higher tariffs for the exporters on both ends, which the nations will be more than happy to discuss about and have separate agreements. And there is also a provision under the Treaty of Lisbon where the leaving country gets two years to negotiate a withdrawal agreement.
Foreign investment in Britain might take a blow as all of a sudden as Britain doesn’t have access to the common market. But still there are numerous reasons as to why firms should invest in Britain. And besides it is most likely to strike new agreements with other nations and even though it will be down for quite a while, slowly with time the Foreign investments are expected to regain its normalcy. Another effect is that The British Government will save a lot of money as it no longer will have to pay for the European Union’s budget.
But then again the British might have to part with this extra money if it still wants to preserve access to the Union’s market. On the overall I believe that, given time these small effects on Britain will fade and they will pull ahead of the European Union quite effectively.
How it effects others?
This is currently a topic discussed by the world’s top economists and is still uncertain. Many say that Britain will grow poorer and that Brexit will trigger a domino effect which will make many other member nations of the EU to follow Britain’s suit and pull out. Many others say that the US-UK ‘Special Relationship’ to become more special. In India the Sensex fell 604.51 points on the day the referendum result was out. It was the highest single day fall in almost five months. NIFTY took a hit of 181 points as well. Our currency Rupee also fell by about 96 paise against the US-Dollar.
Being a football fan myself I was wondering how BREXIT could affect the football world. The major effect will be felt on the player signing. According to the Union rules any European player could have easily signed for English clubs. But now that BREXIT happened, any European player signing will be the same as how it was for a non-EU player till now. The immigration rule states that a player from top 10 nation has to have played in 30 percent of their games in the last two years prior to the application date.
This cuts many foreign players from stepping foot in the EPL. Under these rules even Cristiano Ronaldo would not have been able to sign for any English Club. And also there is the part of the young talent. The EU rule stated that international transfer was possible for a player who’s age was 16 , but now for Britain that increases to 18, which means less youth talent in the EPL.
All these are various talking points about the BREXIT, how will it affect Britain and also the entire world. But nothing is clear as of now. It is complete chaos as the British PM, David Cameron said that he will be stepping down in two months. Even though the results of the referendum has come out, the actual breaking out process is quite complex and may take up to two years. The exact implications of BREXIT however can’t be predicted until then.
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