European Union and Brexit

What is Brexit?
 It is the abbreviation of “British Exit” from the European Union (EU).
 Brexit mirrors the term Grexit — a term which was coined and used by
two Citigroup’s economists in February 2012 to refer to the possible
exit of Greece from the EU.
 Britain has had a troubled relationship with the EU since the beginning
and has made various attempts in the past to to break away from it.

What is the European Union?

 The EU is a political, trade and economic union founded in 1957.
 The EU evolved over decades and reached its present model in 1992.
 There are 51 countries in Europe, out of which 28 countries have
signed a treaty to become a part of European Union.
 So, clearly, there are countries in Europe which are not part of
European Union.
 The EU treaty provided for a European Parliament and European
Council which consisted of representatives of the member-states.
 EU members account for 16 per cent of world imports and exports.
 It is the largest trading bloc in the world surpassing the US.
 In 2012, the EU was awarded the Nobel Peace Prize for advancing
the causes of peace, reconciliation, democracy and human rights in
Europe.

Why is Britain leaving the European Union?

 Britain has to pay millions of pounds each week as a contribution to
the European budget.
 The extremely bureaucratic nature of the European parliament is
hurting British exporters
 Migration from the European Union into Britain (mainly PIGS
economies) is creating an imbalance in the welfare schemes of the UK
government.

A referendum - a vote in which everyone (or nearly everyone) of voting age

can take part - was held on Thursday 23 June, 2016, to decide whether the
UK should leave or remain in the European Union. Leave won by 51.9% to
48.1%. The referendum turnout was 71.8%, with more than 30 million
people voting.

Pros of Brexit:
 Free International trade: Leaving the EU, Britain will be able to
independently access the international trade deals. You will have
an opportunity to negotiate for new deals and a chance to move
goods freely.
 No membership cost: Britain will no longer have to pay for EU
membership fee which can hinder the free movement of goods to
the international market.
 No more EU trade regulations costs: Exit from EU will allow
Britain to set its own regulations for the members. E.g. rules on
value-added tax.
 Reduced red tapes: Reduced policies have enabled firms to
increase their productivity potential and reduce cost spend on
adhering to bureaucratic policies. Consumers can also benefit from
reduced cost
 Lower Costs: Lower supermarket costs reduced barriers to
customs and tariffs and other trade costs will save the British
household £933 per year.
 Control immigration: The UK government will be able to control
and regulate the immigration of individual in its member state.
 Security: The new immigration laws will make it difficult for a
terrorist to enter the UK and also make it easier for the UK to
deport violent criminals which were a difficult task with EU courts.
 Independent: Britain will have a chance to influence world
decisions as an independent nation.
 Better Employment: Increased wages and job creation. Exit from
EU will lead to fewer regulations in the workplace environment.
This encourages talent pools from neighboring countries.
 Opportunity for Companies: Britain companies will no longer
have the mandate to follow the strict laws set by the EU.

Cons of Brexit:
 Loss in Business: Membership to EU will make Britain attractive for
foreign investment and exit from EU, they will lose 45% and 50% of
UK’s Export and import.
 No Free Trade Negotiations: Britain will not take part in the world
largest free trade negotiations between EU and the US.
 Loss of influence: Leaving the EU will limit Britain’s opportunity to
take part in EU’s decisions concerning world affairs or in setting
European laws.
 Barriers to EU workers: With the implementation of Brexit, there will
be a skills gap in the market because of the barriers put in the
workplace.
 Impacts on the economy: Leaving EU has an impact on the
economy, businesses and individuals will have a hard time raising
funds for any developments.
 Increase Energy Bills: EU negotiates for energy bills for its member
state, leaving EU will increase energy bills for Britain. They will also
not be able to uphold the EU plans for reducing air pollution.
 Less Educational Funds: EU offers support funds to a lot of
educational programs in the UK. Exiting EU will have an impact on
students since the Britain government regulates the costs for EU
students.
 Less Educated Manpower: Controlling immigration by Britain will
affect its economy and the society at large. Most immigrants from EU
are more educated than the UK nations and can contribute up to 34%
of UK finances.
 Reduced investment fee: Most of the jobs in the UK are due to trade
with the EU making the UK receive an investment of £66 from the EU
jobs.
 More Policy in Ground: Exiting from EU, Britain will have the
responsibility of setting policies to protect human consumption through
laws that ban any harmful additives from food and maintain a wide
animal welfare standards.