WHAT IS BREXIT AND WHY IT MATTERS

While we in America have been enduring the soap opera that passes for politics these days, Europe has been manufacturing their own drama known as BREXIT, meaning Britain exiting the European Economic Community. The vote to decide the issue will be Thursday, June 23, 2016.

“Brexit, in sum, might be a big economic shock and not for just the UK. This is largely because of the fragility that precedes it and the many uncertainties that would follow it. The referendum is itself irresponsible. The outcome might well prove devastating.” Martin Wolf, Financial Times, June 15, 2016

Those in favor of leaving the EEC, mainly the conservative party led by David Cameron, list the following as reasons for secession:

  1. BUDGET

THE UK CONTRIBUTES BETWEEN $8 AND $20 BILLION POUNDS ANNUALLY to Brussels and would prefer to use it for its own purposes such as research and new industries.

  1. SOVEREIGNTY

The EU has laid down regulations on a number of issues such as immigration, health safety, etc., that Britain would rather decide for itself.

  1. TRADE

Britain wants to be unconstrained by trade agreements established by the UEC. In other words, it thinks it can make more money on its own.

  1. IMMIGRATION

EU regulations promote the ability of people to move around Europe. Conservatives feel this free labor mobility is taking over British jobs from British workers.

  1. ECONOMIC

The EU was In the process of imposing restrictions on London to make it more financially stable in order to attract more financial investment to the mainland.

  1. LEGAL PROVISIONS

          Europe has control over many UK laws such as influence of European Court of human Rights in deportation of foreign born criminals.

Those who oppose leaving the EEC pose the following arguments for remaining in the EEC:

  1. Migration: there will be an immediate increase of migrants leaving Britain and going to the EU. This will hurt British businesses and public services which rely on French bankers, Bulgarian builders and Italian doctors.
  2. Trade: at least 50 % of British trade is with the EU which might be endangered immediately. Losing trade relations with the 25 countries it currently has through the EU countries will also be a burden.
  3. The British Isles: Scotland and Northern Ireland have long had their differences with Britain and this could be just the catalyst needed to end their historic relationships.
  4. Security: the EU provides an important shield of security especially against the Middle East and Russia. The EU also assists Britain with counter terrorism measures.

This is a very short and superficial discussion of disagreements that go back centuries. Egos and wallets are, of course, at the heart of the matter. Polls show the British people to be evenly split on the issue.

Those with a broader perspective must consider the existing instability of the financial system, which this will undoubtedly make much worse if not disastrous. The EU is the 3rd largest economy in the world. To create this type of upheaval at a time when the Central Banks of the world are trying desperately to hold things together is, indeed, foolhardy.

 

 

 

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