Three years after the British Prime Minister David Cameron decided to put the decision of Brexit(British withdrawal from the European Union), to a referendum, Britain has voted to leave the EU. The Prime Minister resigned shortly after.
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David Cameron resigned after UK votes to leave European Union[/caption]
Article 50 of the Treaty of the European Union, states the procedure for any member state to withdraw from the Union. The member state has to notify the EU of its withdrawal and the EU is obliged to then negotiate a withdrawal agreement with that state. After the British referendum to leave the EU, Prime Minister Cameron didn’t invoke the process of notifying the EU of UK’s exit from the Union, as he stated that negotiation with the European Union would need to begin under a new Prime Minister. This official notification from Britain is yet to be presented to the EU and could take place in the summit of the EU member countries which is scheduled for 28th and 29th of June.
Britain’s exit from the EU would cause a lot of problems for the British economy as the EU has been their biggest trading partner. The uncertainty about the future of the relations between Britain and the EU could push Europe’s strongest economy into a recession. This would definitely have a awful impact on the world economy, which was apparent from Friday’s huge drop in the Indian market when both BSE and Sensex opened at a loss of approx. 1000 points. The Pound also recorded its lowest value in the last 31 years. This volatility reflects market worries about even more severe consequences in the months to come. Now that Cameron is out of the power, Britain’s chances of negotiating a favourable deal with the EU will be even slimmer and this could impact the businesses based out of the UK. The exit from the EU would mean a drop in business investments in Britain due to the fall in foreign direct investment and withdrawal by overseas firms.
Depending on the negotiations regarding access for the UK to the European market, a fall of 3.8 to 7.5 percent in the British economy is estimated by the UK government.
The main concern that gave rise to Brexit campaign was the immigration surge due to the open immigration policies of the EU. This concern came to prominence when EU started expanding in 2004 to include mostly the eastern European countries. These countries are poorer, which means that when they acceded to the EU, their citizens were more likely to move out of those countries to find work in richer countries such as the UK. Indeed, Now the Poland is second-largest source of immigrants to the UK, just behind India. This caused a decline in job opportunities for native youth in the UK. But looking at the analysis of polling, suggests that the younger members tend to support remaining in the EU, while the elderly have been more in the favor of Britain leaving the EU.
From the European Union’s point of view, Britain leaving the Union is considered unhealthy, as this may cause a fall in relative importance of the Union on the world stage and thus, even more members would be likely to take leave from the EU.
Note: This post was originally published in June 2016 and has been completely revamped and updated for accuracy and comprehensiveness.