Brexit
What does Brexit mean?
It is a word that has become used as a shorthand way of saying the UK leaving the EU – merging the words Britain and exit to get Brexit, in a same way as a possible Greek exit from the euro was dubbed Grexit in the past.
Why is Britain leaving the European Union?
A referendum – a vote in which everyone (or nearly everyone) of voting age can take part – was held on Thursday 23 June, to decide whether the UK should leave or remain in the European Union. Leave won by 52% to 48%. The referendum turnout was 71.8%, with more than 30 million people voting.
What was the breakdown across the UK?
England voted strongly for Brexit, by 53.4% to 46.6%, as did Wales, with Leave getting 52.5% of the vote and Remain 47.5%. Scotland and Northern Ireland both backed staying in the EU. Scotland backed Remain by 62% to 38%, while 55.8% in Northern Ireland voted Remain and 44.2% Leave
.
What has happened since the referendum
Britain has got a new Prime Minister – Theresa May. The former home secretary took over from David Cameron, who resigned on the day after losing the referendum.
Like Mr Cameron, Mrs May was against Britain leaving the EU but she says she will respect the will of the people. She has said “Brexit means Brexit” but there is still a lot of debate about what that will mean in practice especially on the two key issues of how British firms do business in the European Union and what curbs are brought in on the rights of European Union nationals to live and work in the UK.
What about the economy?
The UK economy appears to have weathered the initial shock of the Brexit vote, although the value of the pound remains near a 30-year low, but opinion is sharply divided over the long-term effects of leaving the EU. Some major firms such as Easyjet and John Lewis have pointed out that the slump in sterling has increased their costs.
Britain also lost its top AAA credit rating, meaning the cost of government borrowing will be higher. But share prices have recovered from a dramatic slump in value, with both the FTSE 100 and the broader FTSE 250 index, which includes more British-based businesses, trading higher than before the referendum.
The Bank of England is hoping its decision to cut interest rates from 0.5% to 0.25% – a record low and the first cut since 2009 – will stave off recession and stimulate investment, with some economic indicators pointing to a downturn.
What is the European Union?
The European Union – regularly known as the EU – is a monetary and political association including 28 European nations (click here in the event that you need to see the full rundown). It started after World War Two to encourage monetary co-operation, with the possibility that nations which exchange together will probably abstain from going to war with each other.
It has since developed to wind up distinctly a “solitary market” permitting products and individuals to move around, fundamentally as though the part states were one nation. It has its own particular coin, the euro, which is utilized by 19 of the part nations, its own parliament and it now sets administers in an extensive variety of territories – including on nature, transport, purchaser rights and even things, for example, cell phone charges.
So when will Britain really abandon it?
For the UK to leave the EU it needs to summon an understanding called Article 50 of the Lisbon Treaty which gives the two sides two years to concur the terms of the split. Theresa May has said she plans to trigger this procedure before the end of March 2017, which means the UK will be relied upon to have left by the mid year of 2019, contingent upon the exact timetable concurred amid the transactions.
When transactions authoritatively start, we will begin to get a reasonable thought of what sort of arrangement the UK will look for from the EU, on exchange and migration.
The legislature will likewise establish a Great Repeal Bill which will end the supremacy of EU law in the UK. It will fuse EU enactment into UK law, after which the legislature will choose which parts to keep, change or hold.Shouldn’t something be said about the court test to the Brexit procedure?
A court test to Theresa May’s entitlement to trigger the Article 50 prepare without getting the support of Parliament has been effective in the High Court.
This implies there could be postponements to beginning the Article 50 handle, however Downing Street is engaging the Supreme Court with a listening to beginning on 5 December.
Bringing down Street says it plans to adhere to its March timetable for the start of the two year leave talks. Be that as it may, if the interest comes up short, Brexit Secretary David Davis has proposed that the judgment infers they should present a demonstration of parliament – which would mean both MPs and the House of Lords giving the go-set out toward the discussions to start.
In spite of the fact that it is for the most part trusted that the thumbs up would at last be given – in view of the EU submission result – going through the full parliamentary process could provoke endeavors to correct the enactment or include provisos, for example, the UK negotiating an arrangement which included remaining the European single market after Brexit.
Who will arrange Britain’s exit from the EU?
Theresa May set up an administration office, headed by veteran Conservative MP and Leave campaigner David Davis, to assume liability for Brexit. Previous safeguard secretary, Liam Fox, who additionally crusaded to leave the EU, has been given the occupation of universal exchange secretary and Boris Johnson, who was a pioneer of the official Leave battle, is remote secretary.
These men – named the Three Brexiteers – will assume a focal part in transactions with the EU and search out new global understandings, in spite of the fact that it will be Mrs May, as PM, who will have the last say. The administration did not do any crisis getting ready for Brexit in front of the choice and Mrs May has rejected calls to state what her arranging objectives are.How long will it take for Britain to leave the EU?
Once Article 50 has been triggered, the UK will have two years to negotiate its withdrawal. But no one really knows how the Brexit process will work – Article 50 was only created in late 2009 and it has never been used.
Former Foreign Secretary Philip Hammond, now Chancellor, wanted Britain to remain in the EU, and he has suggested it could take up to six years for the UK to complete exit negotiations. The terms of Britain’s exit will have to be agreed by 27 national parliaments, a process which could take some years, he has argued.
EU law still stands in the UK until it ceases being a member. The UK will continue to abide by EU treaties and laws, but not take part in any decision-making.
How ‘Brexit’ Will Affect the Global Economy, Now and Later
In the short run . . .
If you run a British company that exports a lot to Europe, or manage a European bank with thousands of employees in London, nothing much changed with the results Thursday.
Britain is a member of the European Union today, and will be one tomorrow. Your products can still be shipped to Düsseldorf without any hint of a tariff. Your employees can work legally whether their passport is from Sweden or Spain.
The immediate effects of “Brexit†will flow almost entirely through financial markets. Markets may be flawed, but they really do amount to a real-time verdict by millions of people with vast sums of money at stake on what something will be worth over the indefinite future. Economic shifts happen slowly; financial shifts happen overnight (literally, in this case).
The truth is that the stock market declines that took place worldwide Friday are nothing to be too concerned about. The British stock market, as measured by the FTSE 100 index, was down 3.2 percent late Friday afternoon in Britain, above its levels of mid-June. That suggests that investors do not envision the Brexit hit to hammer corporate profits in the near future.
Postcards featuring a World War II slogan for sale in London. Credit Leon Neal/Agence France-Presse — Getty Images
In the medium run. . .
As the months pass, the economic consequences of Brexit become less about financial market disruptions and more about real economic activity. Within Britain, a pall of uncertainty is likely to be cast over every business’s decisions on whether to hire people or make capital investments — and that’s true of both British-owned businesses and the many affiliates of global companies in Britain.
If you’re an American company that has its European headquarters in London, do you keep calm and carry on? Or do you start checking out real estate in Frankfurt or Dublin or some other place where the relationship with the E.U. is more settled? If you run a British company thinking of building a new factory, do you start to entertain the same question?
Even if the ultimate answer for these companies is “remain,†it is easy to see how the desire to wait for clarity could hold back economic activity for many months to come — and perhaps beyond British borders.
In the end
England will traverse the quick money related turbulence and a conceivable subsidence fine and dandy. The question for its future is which of two alternatives British pioneers now pick. They can keep up existing conditions and remain a noteworthy worldwide business focus (while disregarding the motivation that drove voters to pick “leave” in any case). On the other hand they can turn into a littler, more secluded island that is a less critical machine gear-piece in the worldwide economy — however no less than one that distinctions its voters’ …
...(download the rest of the essay above)