Later today, the United Kingdom’s citizens will vote on whether or not they want to remain in the European Union. It should not surprise anyone, as the run-up to the vote has been building since the decision to hold a referendum was announced by UK Prime Minister David Cameron last February.
The debate is quite heated on both sides, among the respective “Leave” and “Remain” camps.
Leavers want the UK to split from the European Union because they don’t agree with what they see as the restrictive economic policy that was centrally designated for each European country since the 2008 economic crisis.
Meanwhile, those who want to Remain don’t want to change the status quo on the UK’s EU membership.
Of course, the announcement of the referendum generated plenty of reactions from heads of state, business leaders, economists and financial markets worldwide. Moreover, the question of the UK’s decision has created a real phenomenon called Brexit, for Britain’s exit.
Now that June 23 is nearly upon us, the markets have recently been reacting to this possible scenario in an almost apocalyptic way. From Japan to Wall Street, everybody seems to be sinking and predicting the terrible consequences that the Brexit could have. But, is a Brexit really possible?
Even if UK politicians and (for the moment) 50%+/- of its citizens are thinking to leave EU for real, the path seems more a steep hill to climb rather than a gentle slope. First of all, it seems that the British people as a whole will lose money. As reported by Bertelsmann, UK citizens will lose around 313 billion euros by leaving the EU. Also, if England leaves the EU its citizens will see an unknown increase in the cost of imported goods, exported products and regional travel.
Moreover, if the UK leaves the EU, it could find itself completely outside of the market. While the UK retained the Pound, and never adopted the Euro, the fact remains that the UK would probably need to sure up its economic stability (in the eyes of the financial community), before really winning back the trust of international markets.
However, there is another reason that makes this possible UK exit even more improbable. The European Union Agreement states that if a certain country decides to exit, the leave is not immediate and the country needs to wait two years before its decision becomes effective. This means that the UK will go through two more years of negotiations. Probably, during that time, the UK and the EU will find a pact which will satisfy both parties – meaning while the announcement of the Brexit (if Leave wins), is immediate, the outcomes and potential fallout are not.
Despite the somewhat unlikely possibility of UK leaving Europe, a Brexit could have some real consequences on the European Union. By retaining its own currency, while the UK is not one of those countries most affected by the EU’s restrictive economic policies, it is the first state that decided to stand up against it. This British “revolt” (or “Independence” as Boris Johnson called it), could encourage European countries such as Greece, Italy, Portugal and Spain, which are struggling the most in trying to adhere to the new economic agreement, to join the revolt.
To date, UK seems to be alone in its decision. Scotland doesn’t agree with the referendum as much as Wales. Moreover, even the British population seem divided: among young people (from 18 to 24-year olds) 60% don’t want to leave the European Union, while among 60-year olds, 58% back a Brexit.
What is for certain is that with less than 1 day to go before deciding whether to Remain or Leave, no one knows for certain what the outcome will be for the potentially biggest vote in the EU’s history.