Created to unify European nations after WWII left them economically bereft and spiritually aggrieved and to prevent further conflicts like those leading up to the war, the EU brought together 6 member nations (now 28) in the hopes that new unity would bring prosperity back to Europe.
As of two days ago, this 43 year old union is down to 27 nations, Britain being the first in history to vote to leave the EU.
Responses have run the full gamut from people praising the move as a self-determined escape from the corrupt, burgeoning bureaucratic regulations and laws of the EU, to others criticizing the country for giving into xenophobic, hateful rhetoric.
Why such a dichotomy? Why would Britain leave a system that ensures the free movement of over 508 million people, goods and services, and capital between member nations? That allows its citizens to work and live in different countries without visas?
Economics
The EU is a statist system that standardizes financial and trade regulations as well as many other aspects of EU nations’ livelihood. EU policy aims to level the playing field for all people and member states. A noble, humanistic cause, but one that prevents the UK from making certain financial decisions tailored to its own needs should these decisions not align with the arrangements and goals of the EU. And also one that causes the UK, as one of the financial leaders of the EU bloc, to contribute a significantly greater amount of annual funds (20 million euros) to the EU than it gets back (10 million euros).
For instance, Britain may put in more money than Poland, but because Poland is considered to have greater needs by the EU, it receives much more redistributed wealth than Britain. Another grievance some British people harbor is that the high trade tariffs imposed on non-EU nations may make Britain unattractive to other countries and divert trade opportunities as a consequence.
This was the backdrop for the 2008 economic crisis. According to Forbes, when the crisis hit, the EU made a terrible mistake. It called for austerity (mixing spending cuts with tax increases) by way of big government. Instead of supplying more money, spending was cut from public services, but not the government sector, and taxes were increased, thus resulting in economic stagnation and an arduous recession for the Eurozone of Europe.
While Britain was not directly effected because it uses the pound as currency rather than the euro, many British citizens saw this as another reason to get out of the EU before it brought them to ruin. How long until they were pressured into bailing out a country that had poor economic policy and may or may not use the funds efficiently?
Immigration
The UK seems to feel encumbered by the EU’s immigration policy as well. 333,000 migrants made their way in and out of Britain last year with the countries total population equaling 630,000. Only 83,000 of those people are British with 547,000 non-Brits. Migrants entering from the EU account for more than half of all the workers in the UK who are not British citizens.
Due to free movement, migrants from other EU nations can live and work in Britain without visas, make insurance claims, and receive tax credits and in-work benefits. Couple this with the Eurozone crisis and you have a significant influx of migrants from Western Europe whose economies have tanked, looking for opportunity in the UK. In addition, the Labour government allows Eastern European workers access to the UK. It is unclear whether these migrants put more into the economy than what they get out of it, but it is easy to imagine they work jobs that unemployed UK citizens could be working instead.
On top of lost job opportunities in favor of cheap labor, many people feel that the influx of immigrants has wrought havoc on the infrastructure, culture and prosperity of their cities. In some such places, like Petersborough, migrants form their own cultural bubbles rather than attempting to merge with the local populace. This has caused tension to flare and disdain for migrants to take seed. Petersborough migrants and the cheap labor they provide has been a boon to the city’s economic growth.
However, the downsides of immigration are lost work opportunities for unskilled/low-skilled laborers, the strain put on hospitals and schools and the increase in families on waiting lists for public housing has not been acted on by the government but instead contributed all the more to anti-EU sentiment.
Migrants are not the entirety of the immigration concern though. Earlier this month, 4 Syrian refugees were charged with sexually assaulting two young girls in the UK. This assault came just as the PM declared plans to resettle approximately 20,000 Syrian refugees into the UK (a feat that would cost over half a billion pounds). All of this has been happening against the backdrop of Germany’s current immigrant situation. Angela Merkel let hundreds of thousands of Mideast refugees into her county, resulting in self-governing terrorist havens and horrendous sexual assault of German women by conservative Muslim men. Hundreds of women reported sexual assault on New Year’s Eve, dozens of cases have cropped up at German pools where women and children have been assaulted and German football stadiums have begun seating women and men spectators on different sides of the stands.
Economic strife and negative attitudes towards immigration has festered in a desire to be free of the EU's laws and restrictions. The Prime Minister, David Cameron, promised change to his people via Referendums, but ultimately failed to deliver, convincing more Britons that their was no hope for improvement in their overly regulated economics and unwieldy immigration situation, should they stay with the EU.
And now that the UK is “free,” what does it mean?
Most economists agree that the UK’s departure has had and will continue to have significantly negative impacts on the UK’s economy in the short term. Not to mention the EU, America and the rest of the world. Investors don’t like uncertainty and have begun pulling out of investments in Britain with massive market volatility. The pound has lost about 9 percent of its value and British stocks are down more than 10 percent. $830 billion was lost in the US markets in one day and stock indexes across the globe have fallen, even plummeted.
As for the long term economic impact, no one is quite sure. A lot will depend on how exactly the UK disentangles itself from the EU (which will take years) and how the economy adapts. Some believe being freed from the regulations and red tape of the EU will engender economic growth. Switzerland is currently, extremely financially successful without being part of the EU and Britain, the 5th strongest economy in the world, survived and prospered for a thousand years of independence.
Others fear the changing value of the euro and pound and the loss of jobs and trade in the UK as banks and companies that supported the UK staying with the EU try to appease the rest of Europe. There is also the matter of America having made trade deals with Britain practically exclusively through the EU. How will that be resolved?
Migrants who have found prosperity in the UK and British migrants in other EU nations face an uncertain future. At the very least, there will be required passports and far more paperwork than before. At the very worst, some immigrants may lose the right to work in the UK and be deported.
The Brexit may have far reaching consequences. It is possible that the Brexit may encourage other EU countries to leave which could lead to the dissolution of the EU. Without the protection of the EU, former satellite countries like Lithuania and Estonia would be easy prey for Putin to reclaim. If that came to pass, would America then become involved militarily?
The Brexit arose out of frustration and fear culminating in a desire to take power back into one’s own hands. It may benefit the UK in some ways, but harm in others. Only time will tell what the full impact is for Britain and the world at large.
