There is an old joke about economists and their predictions on certain issues, “It’s the only field where two people can win a Noble prize for saying exactly the opposite things”.
Everyone who has been asked to deliver their two cents on the referendum has given their own take on the issue with variations depending on how they benefit from it. The referendum held in the summer of 2016 has probably become the greatest decision a European country had to make since the fall of its geographic adversary, the Soviet Union. The whole structure of the European alliance, economically, socially, politically and militarily was to provide a common ground for the western European states to combat the Communist super power. It would not be wandering far from ground realities if one were to elaborate on the problems that the EU finds itself in today, a consequence of failing to adapt to the fall of the USSR. NATO, for example, the military alliance brought into existence specifically to neutralize Soviet aggression, was never re-evaluated. It has become a unique concern for Europe, facing new problems and tribulations with the old structure. It is proving to be like a noose for states wishing for a more assertive individualistic solution.
Brexit is expected to result in a period of austerity in the UK for the future. Reinstating Article 50 means that the UK has officially launched the mechanics to secede from the Union although, it hopes to retain some of the more lucrative perks such as a common market and other vital features included in several treaties signed earlier. While April, 2019 should be the official time under present circumstances when the UK officially breaks away, it only takes a subtle glance at the numerous back end treaties and renegotiations that will inevitably have to take place to entertain the thought of it not being such a straightforward case.
One such agreement which is bound to be a bone of contention between the two parties negotiating the exit is the Custom Unions (CU) agreement, an agreement amongst the EU states that all members must charge the same import duty from countries outside the Union. While British Prime Minister Theresa May has made it clear on multiple occasions that she hopes to negotiate the impact of Brexit over the CU, Brexit secretary David Davis has had a much sterner stance on the subject, primarily stating that Britain wishes to establish its own trade agreements with countries around the world, unshackled from any centralized agreement. May’s most vocal opponent domestically, the Labor Party head Jeremy Corbyn believes that by adapting such an approach May risks a trade war with Europe. Something that can have a devastating ripple effect on the global economy. Similarly, it is expected that while the UK may wish to distance itself from the CU, it would still like to be in a single market system with the EU. The single market would mean that although the UK would be free to make its own trade deals and treaties it would have to accept the free movement of workers and of course, immigrants.
It has to be noted that immigration was perhaps the single most effective agenda used by the Tories in favor of Brexit, decrying the ever worsening situation of immigration in the UK and the problems that have risen directly because of this crisis, particularly hitting the job sector as well as the influx of individuals with fundamentalist tendencies. If after all the hassle of Brexit and the sheer maddening technicalities, the UK were to enter a single market system, it is only logical to assume that the Brexit voters might be left feeling cheated and lied to. Still, it is important to reiterate at this stage that this is all an assumption and thoughtful speculation. There are factors which will weigh heavily on the proceeding steps, for example an exit from the EU means that any British item being exported to any EU country will be subject to the standard 10% import tax which is expected to hurt the already fragile and stagnant economy. Furthermore, call it a matter of diplomatic unprofessionalism or anything else, it seems that the attitude adopted by the British officials on this matter has not gone down well with their counterparts at Brussels who have stated publicly that on matters such as the import taxes the UK will receive no special treatment and will have to go through the standard procedure.
Although alternatives are available, such as Canada’s agreement with the EU which allows it to enjoy privileges from the EU without being a part of its single market economy. However, such a process takes years to materialize adding the fact that the UK will have to wrap up the minutiae details of its secession. How the EU parliament responds to such a request is unpredictable, while hostilities are regularly directed at the UK’s representative to the EU General assembly, Nigel Farage.
There have been calls for a second vote, using the argument of a cooling off period or the buyers’ remorse concept however, both the Conservatives and the Labor Party have dismissed the notion calling it as “an act of betraying the democratic trust that the people of the UK have placed in their votes”. Only the Liberal Democrats remain a notable political party arguing in favor of a second vote, coinciding with many legal opinions pouring in which point to the inevitable vote of confidence that May will have to get from the House of Commons when her government officially starts renegotiations with the EU. Or even if it chooses not to do so and operate under the standard World Trade Organization (WTO).
Also, there is the pending issue of Scotland’s resurgent wave of independence, owing to the fact that nearly 70% of its population voted to stay in the Union. The Scottish head of state, Nicola Sturgeon has been referring to May’s handling of the entire Brexit affair as “reckless” and is demanding for a “Scotexist”, calling for Scotland’s formal ascension away from the British union. A similar wave of dissatisfaction can be observed in another British territory Northern Ireland, where nearly 55% of the population voted in favor of staying in the Union. On current face value, it seems like the biggest danger to the British economy is domestic and not the far reaching global implications of Brexit.
It was James Cook, a British explorer, navigator, cartographer, and captain in the Royal Navy who said, “When politics is elevated over business, economic disaster follows”. His quote haunts the future prospects of UK like a specter. It is a shadowy game of cloak and dagger at this point, trying to evaluate the pros and cons of the decision for the UK. It will take moral courage and complete refrain from technical discombobulation with regards to the general public from the politicians. Rough, uncharted waters await the old Kingdom, it must be strong in its resolve, for failing to do so will mount it steadily into the faltering and fumbling position, when no European Central Bank now exists for the UK to call out for help.