Brexit in a Nutshell for Those Who Haven’t Been Paying Attention

It’s happening. Right now, across the ocean, citizens of the United Kingdom are running to the polls to answer the big question:  Should the UK remain a member of the European Union or leave it (or, as they say, Brexit)?

“It’s a once in a life-time opportunity to get back the independency and self-governance of this nation,” believes Nigel Farage, leader of the pro-Brexit United Kingdom Independence Party (UKIP).

“Leaving would be the gamble of the century,” warns Prime Minister David Cameron “and it would be our children’s future on the table if we were to roll the dice.”

Saying that the issue is polarizing would be quite an understatement. So would be saying that the race is tight. By tonight, just about half of the UK will be exhaling in relief as the rest sinks into deeper anguish and anxiety. Which is will be which and why does it matter so much?

If you have waited until the very last moment to learn about the stakes of what’s happening today, here is what you should know.

What is the Brexit and Why is it Happening Now?

You probably heard that part and if so, you can skip right on to the next point. If not: Hi, welcome to the world! I promise it’s much better than the rock you’ve been living under.

Brexit is the very catchy abbreviation for the British exiting the European Union (EU).

The European Union is an economic union between 28 countries. Its first iteration was formed in the 50s in the wake of the Second World War. The big idea was that giving common institutions and economic interests to European countries would prevent them from tearing each other apart again.

The UK has been a member of the EU since 1973 and has had increasingly mixed feelings about it for just as long.

The last few years have been especially troublesome for the European Union. The addition of a number of smaller countries with struggling economies to the ranks, the plummeting of the Euro and the refugee crisis all nourished growing frustration across the continent and particularly in Britain.

While conservative Prime Minister David Cameron wants the United Kingdom to remain in the Union, both the opposition and his own party kept pressing him to address the issue. In 2015, Cameron promised that he would put it to a vote in a referendum if he won the general election.

Who Wants to Leave, Who Wants to Stay

The United Kingdom’s population is split 50/50 on the issue, but polls show a pretty clear demographic divide between pro-EU and pro-Brexit supporters.

The first group is young and college-educated and they live either in London, Scotland or Ireland. They mostly support the Green Party or the Labour Party.

The people in the second camp are typically over 60 years old, with the equivalent of a high-school diploma and a career in manual labour. They overwhelmingly support UKIP or the Conservative Party.

The most vocal advocate for leaving the Union is UKIP. Much like the Front National in France and Donald Trump in the US, UKIP is keen on blaming all of the population’s problems on immigrants. To them, the EU’s open-circulation policies are a threat to the stability of the British economy and its national security.

This viewpoint is also popular amongst the conservatives, whereas the Green party and Labour are convinced that the UK is better off within the Union. So is Conservative Prime Minister David Cameron.

david cameron
British Prime Minister David Cameron (Zuma Press)

The vast majority of the International community is also hoping that the UK decides to stay.

The Case for Leaving

A really significant argument for the Brexit is the questionable democracy of the EU.

Many feel that too many decisions depend on unelected officials in Brussels. As Conservative Boris Johnson, then mayor of London, put it: “the more the EU does, the less room there is for national decision-making.”

Local representatives are often up against cumbersome economic regulations for their smallest initiatives, as well as hand-tied by EU policies for bigger decisions.

While the right wing campaign for Brexit tends to present the EU as a meddlesome left-oriented power, some people at the other end of the political spectrum view it first and foremost as a protector of corporate interests and power imbalance.

British journalist Paul Mason bluntly accused the EU of providing “the most hospitable ecosystem in the developed world for rentier monopoly corporations, tax-dodging elites and organized crime.”

Those arguments, as sensible as they may be, didn’t get much attention. The Brexit movement preferred attacking the EU’s bureaucracy and, especially, its handling of immigration.

Boris Johnson (Reuters)
Boris Johnson (Reuters)

The financial contribution the UK makes to the EU was also often mentioned as a source of resentment. It is notably Boris Johnson’s favourite talking point. It is even written “We send the EU £350 million a week” on the side of his campaign bus.

The number is disputed by many, though. According to Fullfact, an independent fact-checking charity, the net contribution the EU received from the UK in 2015 amounts to £8,4 billion (around £161 million per week).

The Counter-Argument

However, it is not certain that leaving the EU would allow the United Kingdom to regain control over its immigration policies and economic regulations. Not if London wants to negotiate access to the EU market.

There are countries outside the Union which were granted privileged access to it, but only because they agreed to respect the EU regulations. Norway, for example, is applying 75% of them. The same would probably be asked of the UK.

The European Union might not be particularly agreeable in the negotiations with a parting country, analysts have noted. It would be foolish to expect many concessions.

Being part of Europe’s single market exposes local businesses to a sometimes brutal competition. But the UK has done pretty well for itself. As it is not part of the Euro zone, it escaped the 2008 financial crisis with remarkably few damages. The unemployment rate and public debt are still low comparatively to other countries within the Union.

A lot of corporations choose to establish their headquarters in London because it allows them to conduct their business everywhere in Europe. But this only works as long as Britain is part of the EU. Banks and businesses will probably flee if they no longer have access to the trading advantages of the Union.

Furthermore, it is estimated that around three million jobs around the country are linked to the EU and could quite simply disappear in the event of a Brexit.

There are many more predicted upsides and downsides for the economy, but one thing seems to be certain: the initial shock will be brutal. The most catastrophic estimates warn that the Country’s economy could shrink 7% in the next year, but even the most optimistic ones remain worrying.

Another source of concern is the clear geographical cleavage of the public opinion. Northern Ireland and Scotland are overwhelmingly against leaving the Union. Their already complicated relations with London might not endure the additional tension.

It was only two years ago, after all, that 44% of Scots voted in favour of independence from the UK. If the United Kingdom elects to leave de EU, it might not stay united for very long.

Why Does the Rest of the World Care So Much?

Whatever the potential long-term benefits, economists agree that a British exit from the EU will hugely disrupt the global economy. Finance magnate and influential progressive intellectual George Soros even predicted that the sterling will take a “black Friday” plunge if the referendum’s results favour the Brexit.

Britain is the world’s fifth largest economy. It would be the first country to effectively leave the EU, but it’s certainly not the only one thinking about it.

Eurosceptic movements are gaining momentum across the continent. Lead by left-wing politicians tired of submitting to the austerity conditions imposed for bailout in poorer economies, and by extreme right parties tired of bailing out everyone else in richer countries.

The fear of a domino effect is very real. Close economic allies of the UK, like Finland, Netherlands and Denmark, would have significantly less incentive to remain in the Union. Others are also inspired by the idea of setting their own immigration quotas.

Back in February, the Czech PM warned that if the UK decides to part ways, “a debate about Czech Republic’s withdrawal is to be expected in the following years.” Official opposition in Austria also promised to organize a referendum of their own if they were elected.

Polls close at 10pm tonight (Thursday) UK time, so roughly around the time this article is being published, but results should only be known around 7am Friday in Britain, or 2am Eastern.

* Featured image: Al Jazeera Creative Commons

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