What Is Brexit?


In June 2016 the people of the United Kingdom voted to leave the European Union. The vote was close, but its result was a shock to much of the world. The final tally was 51.9% voting to leave to 48.1% voting to stay. Among the voter turnout, younger voters were far more in favor of remaining in the EU while older voters were ready to leave.

what is brexit

This vote triggered a series of events and decisions that must ultimately end in the UK’s withdrawal from the EU on March 29, 2019 – less than two months away. Current votes and debates taking place within the UK and between its government and the EU are related to the nature of their exit from the EU. As this date draws ever closer with no formal decision on the final nature of the UK’s Brexit, the situation is becoming more concerning for the people on the ground.


Why Did the United Kingdom Vote to Leave the EU?

what is brexit

The United Kingdom has always maintained a more cautious approach to the EU than many of its European neighbors. After World War II the European Union was envisaged to reduce risks of future wars by investing the financial and political interests of the European nations into a common cause. Until the 1970s this was led by Germany and France while Britain kept their distance. In the course of these decades different treaties and financial agreements integrated the EU into one powerful and growing geopolitical entity on the world stage that ultimately became the European Union.


Finally, in the 1970s the UK began moving closer to the EU but the caution remained.


After the 2008 global financial crisis a lot of the weaknesses within the EU were laid bare. The same was true for most of the economies throughout the world. These revelations rattled global markets and hurt the EU economies at a time when they needed all the strength they could afford. Since the UK’s integration into the European Union local political voices have called for their country to leave. This season of economic struggle provided such voices an opportunity to explain how leaving the EU would solve the United Kingdom’s own financial woes.


This politicizing of Britain’s membership in the EU was believed to be further weakening EU markets and performance due to the uncertainty it injected into already struggling situations. To that end, Britain’s Prime Minister David Cameron promised a referendum to determine if the UK should leave or remain in the EU once and for all. He believed the vote to stay in the EU held a strong position at the time and the referendum would put the matter to rest. He was of course mistaken.


Several factors drove those who voted to leave the EU. The shakedown of global markets in 2008 caused a general distrust of multinational trade, defense, and finance organizations, and agreements throughout the world. This was not absent in the UK. The safety and security which the EU promised to bring to Europe’s national economies were no longer believed by many voters.


In addition, rising immigration into the EU concerned voters. The wave of refugees from the Middle East and North Africa into southern Europe since 2012 took a toll on national politics across Europe. The greater toll of immigration specific to the United Kingdom however has come from Eastern Europe. The growth of the EU between 2004 and 2007 meant access to migration for new members of the European Union from Eastern Europe. By 2015 net migration from Eastern Europe to the UK was at 300,000 people a year. EU migrants into the UK tripled between 2004 and 2015, from one million to more than three million. Most of these came from new EU member states.

Article 50


The vote to leave the EU was only the beginning of the Brexit process. Just as there were standards and rules for the UK entering the EU, there were also standards and rules for exiting. The problem is that these standards are vague and untested. No independent country has ever left the European Union.

what is brexit explainer

Central to the rules for exiting the EU is Article 50. Article 50 is what must be invoked by the EU Member if they seek to leave the EU. It defines the nature of exit negotiations. And by definition, those negotiations are heavily tilted in favor of the European Union and a disadvantage to the exiting member. Nearly all the leverage of exit negotiations rests with the EU, and not with the UK as a result of Article 50.


Once Article 50 is invoked the exiting member has two years to negotiate their departure from the European Union, but they can no longer serve as an EU representative in those negotiations. In other words, they can present their proposal to the EU but they have no further say in how those proposals are received by the EU members.


The UK invoked Article 50 in March 2017, initiating the two-year countdown for final exit. To date, an agreement to the nature of that exit has not been reached between the EU and the UK government. Any proposal presented by the UK must be approved by a super majority among the EU countries and a majority among the European Parliament.


A key problem in developing this proposal is hardened positions of disagreement within the UK parliament regarding what such a proposal should look like.


What Comes Next


There are three leading options for what comes next as the Brexit March 29, deadline approaches.

three options for brexit hard exit soft exit new vote

If a deal is not reached by the March 29, deadline then the UK will be forced to a hard exit from the EU. This will mean a sudden and immediate disruption of trade and economic realities the country currently enjoys with the European Union. Many believe this could be devastating to Britain’s economy and GDP. It would also be harmful to the economy of the EU.


If a deal is reached by the March 29, deadline there would be a transition period of at least two years for the deal to be implemented. This would allow more time for adjustment and integration for the economies of both Britain and the EU to Brexit realities rather than the sudden economic jolt which a hard exist would produce.


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Why Is Brexit A Big Deal?  


Much of the concern over Brexit is simply over the unknown. Into that unknown is a great deal of conjecture and forecasting. While the voters opted for leaving the European Union likely believed they were voting for terms along the lines of a hard Brexit, critics contend that the Leave campaign was brought forth on deceptive grounds which misled much of the public.


A Hard Brexit means ports would be blocked, airlines grounded, and Britain would have a shortage on food and drugs. That is in the short term. In the longer term new trade deals would need to be negotiated between Britain and Europe. These deals would include tariffs that would translate to higher prices for the British people and an overall significant economic slowdown. Already, uncertainty over Brexit has slowed GDP growth in Britain.


Britain’s defense secretary has put 3,500 troops on standby, to deal with expected disruptions on March 29.

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Keys Issues Holding Up An Agreement


There are a host of unresolved issues and concerns related to Brexit that frequently go beyond the current negotiations. Few of these can be addressed until the nature of Brexit is agreed upon within the UK and between the UK and the EU.


What is to become of the millions of British citizens who are now living in the EU member states once Brexit occurs? By the same token, what is to become of the millions of EU citizens currently living in Britain?


Another leading cause of leaving the European Union was concern that the freedom of movement given to migrants and refugees created a security threat for member states. This was emphasized after multiple ISIS terror attacks in recent years among the EU member states. Paradoxically, if no agreement is met before the March 29, deadline, the UK could become more vulnerable to terrorist threats. Once removed from the EU the UK police and security forces will no longer have access to the collective databases of the European countries who track potential terror threats.


The fate of Ireland is one of the largest obstacles currently being confronted by the UK government. Ireland is deeply intertwined to both the EU and UK markets. There is concern that upending the delicate balance currently in place could result in a return to violence in Northern Ireland. According to a report last week in the Daily Mail, MI5 has dispatched hundreds of spies into Northern Ireland due to the concern of Brexit fears producing renewed violence.


If the EU bows to pressures and create an easier route for Brexit, this creates a potential new problem. Other members of the EU facing a rise in nationalism locally could seek to exit the union as well. To some extent, the European Union feels an example must be made of the United Kingdom to prevent future exits from destroying the European Union.


Watch for updates to this post and important issue as the situation continues to unfold.


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