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Brexit: The Reality of Britain Leaving The European Union

Three months ago I wrote an article entitled “Brexit: The Possibility Of Britain Leaving The European Union” (you can read it here), which I ended on a rather equivocal note stating that there need not be a “right” answer to whether or not a Brexit should take place. If I were to tell you that this is indeed how I felt and I was not merely adhering to those tacit norms of journalism that encourage unbiased and factual reporting, I would be lying. Truth be told, I could not even comprehend the possibility of Boris Johnson’s ‘Leave’ campaign emerging victorious in this referendum until the day it actually happened. Nonetheless it is time for the world to embrace the words of Lady Macbeth and realise that “what’s done is done,” and look towards the future.

The British people should stop hoping for a second referendum and hope that their government acts sensibly and responsibly not only in electing Cameron’s successor but also in the triggering of Article 50 and the negotiations that accompany it. What they should not do is blindly follow politicians who deem it fit to tell the EU parliament that virtually none of them have ever done their proper jobs, but that is easier said than done considering the second most ‘googled’ question in Britain following the referendum was, “What is the EU?”

So what happens now? Well, David Cameron decided to leave no survivors when he sank his own ship. In his speech at 10 Downing Street on the 24th of June, Cameron announced his resignation and stated that he would not be the one responsible for the invoking of Article 50. British media house Independent published a fantastic article the very same day addressing the implications of his announcement. The gist of it is that Cameron’s successor has a lot more to worry about than simply taking a place in the history books as the PM who made Britain leave the EU; if he or she wins and doesn’t invoke Article 50 there will be a myriad of consequences which will not be well received by the British public. If he or she does invoke it and is unable to negotiate a fair deal then Scotland will probably carry out its threat of breaking away from the UK, there will most likely be a recession, a possible currency war and the British economy could be up to 7.5 percent smaller by 2030. Those who dismiss this as mere speculation should ask themselves if Boris Johnson’s decision to not run for PM, which came a week after the referendum, is indeed due to some so-called act of betrayal or because of a realisation that Britain currently finds itself between a rock and a hard place.

As far as the EU is concerned, they seemingly have no interest in holding any talks with Britain until the triggering of Article 50- something they believe should be done at the earliest.  The best alternative at the moment is to emulate the ‘Norway Option.’ This will not only be beneficial for the British, European and world economy as a whole but it will also reduce the costs that Britain will incur in the two-year process of exit, prevent British companies from having to leave Europe and keep Scotland from having another referendum. If you think this model is too good to be true, it is. The catch is that Britain will not be allowed to curtail free movement of labour from the EU and will still have to pay into the EU budget, the two things that were given primacy over everything else by the Leave campaigners. If Cameron’s successor decides to uphold these promises, he or she will have to negotiate a bilateral trade agreement instead which could lead to the adverse consequences mentioned above.

In conclusion, the British need to act and they need to act fast. Every day that they put this unavoidable process on hold creates more uncertainty in financial markets and the global economy. The British government has a difficult task ahead of it but has the option of playing its cards right and ensuring that this messy divorce is carried out with minimal damage to itself, Europe and the world as a whole.

 

Shraman Ghosh

shramang@dubeat.com



shramang@dubeat.com ; Shraman graduated from Modern School Barakhamba Road and is currently pursuing Economics Honours at Hindu College. In addition to writing, Shraman loves reading books and constantly tries to make himself better aware of the world around him. His pastimes include community service and theatre which he actively pursues in college. He hopes to complete his undergrad and do masters in Economics or Finance so that he can try and contribute to our country's economic development and growth. He loves travelling and is a massive foodie as well.


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