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Why London is trying to leave the E.U

WHY LONDON IS TRYING TO LEAVE THE E.U. 1

WhyLondon is trying to leave the E.U

In the recent referendum, Britain made a decision to move out of theEuropean Union for certain reasons. Despite the reasons that wereprovided, there were initially divisions on the decision that wastaken through the formal vote. Some have argued that the step takenwill mean grave impacts on the economy of Britain, and London willdirectly be affected. Upon completion of the vote, furthernegotiations have been conducted with a view to trying to changeBritain’s position on the exit strategy. However, Britain hasinsisted on the decision that was made via the formal vote. There arevarious reasons that make the proponents of the exit decision stickto their opinions.

Reasonsto Exit

A larger portion of those for the idea of moving from the E.U seeBritain a great nation that has a proud history that has with timebeen forced into the unelected bureaucrats of Brussels. By leavingthe E.U, this point of view believes that the E.U will become apowerful independent nation. Economically, Britain forms the world’snumber 5 economy. In addition, the country has the 5thmost potent army and owns a nuclear deterrent. As far as Britain’ssupremacy is concerned, the proponents of this idea see Britain as aworld’s powerful country, being a permanent member of the UnitedNations Security Council. Consequently, there is the idea thatBritain can do better on its own as opposed to the current situationwhere it’s regulated by the E.U.

The other reason for Britain to insist on its exit strategy is basedon her democratic principles. Historically, Britain is known to bethe mother of democracy. The most organized and developed countriesrun on democratic parliamentary systems of government. As a result,most of the custodians of Britain’s traditions believe it’s timeto get the country back to its democratic and parliamentary history1.This is unlike in the present state where it’s managed by ‘murky’and un-elected leaders from the European Union. The unelectedcommission is in charge of initiating legislation, veto rights withinthe nation and some of the economic decisions. Leadership legitimacy,therefore, is a value that Britain seems to be losing with fulldependence on the European Union’s system of governance.

Immigration has also been cited as a major crisis in Britain sincePoland and other European countries got admitted into the EuropeanUnion in the year 2004. Most of the migrants have used E.U.’s freelabor movement policies to flood the United Kingdom. Poles now formthe largest number of migrants arriving in Britain from the EuropeanUnion. These have led to a condition of housing crisis, congestion ofeducation and welfare facilities, and alteration in the securitysituation in Britain. This condition has been worsened by the E.U.’sslow pace of handling court cases that are related to issues ofimmigrant crisis. The E.U. wants United Kingdom to take in morerefugees. In response to this, Britain prefers quitting the E.U inorder to control its borders.

The mother of all reasons is pegged on the economic situation ofBritain. The cost of overregulation by the E.U. has been estimated toover £125 billion. Most of the economists believe that if freed fromthe E.U., UK’s economy would flourish like in the cases of Norwayand Switzerland. Britain now prefers being free to negotiate itstrade deals independently. It looks forward to making such deals withChina, the United States and Russia. Despite moving from the E.U.,Britain maintains that it would continue to make trade deals withE.U. member countries, but as an independent trader. The countrylooks forward to strengthening its economic power and reclaiming itsposition as the case was in history. Overregulation by the E.U. seemsto control the financial performance and capabilities that thecountry is capable of achieving. The decision to move out of the E.U.has been disputed for several reasons, some of which might beconsidered to be genuine. In essence, exiting the European Union willdefinitely have significant effects on the state of Britain. Theseimpacts will be political, social, economic and business-related.Some of the possible consequences have been discussed below.

PotentialCosts to Britain of exiting the European Union

The consequencesof exiting the E.U. will vary depending on the terms of exit. From aneconomist’s point of view, Britain has to be wary of theuncertainty in the nature of the relationships that will existbetween Britain and the other countries. Most investors would notconsider the U.K for the most critical investment decisions due touncertainty that currently exists regarding the future of Britain’seconomy2.At least in the short-run, most investors would withhold investmentsawaiting to analyze the trends that would be taken by Britain’seconomy. The risk averse business men and women would not be willingto risk high capital towards uncertainty. The situation would changewith time depending on the state of Britain’s economy.

Sovereigntywould also lose meaning in the course of the transition. There is ahigh likelihood that most politicians would try to downgrade thevalue of sovereignty and the best leadership decision-making. Most ofthe new policy makers would tend to deviate the policies forindividual interest or for the value of a few members of the highsocial class. This is not, however, conclusive since the decisionlies in the hands of the new leadership that would guide Britainthrough the exit process.

The UnitedKingdom would seem to be through a season of economic uncertainty3.Britain’s future relationship with other E.U. countries is likelyto diminish. Post-exit relationships would only come to shape upafter approximately two or more years. This would make it difficultfor Britain to sign deals with the countries just a few years afterthe exit. Economic derail would be a real challenge to deal with.

TheNegotiations

The post-referendum negotiations are a way through which Britainwould seek to explain to the member states its reasons to exit. Inthe course of this debate, the country would seek to eliminate anynegativity that would arise from other E.U. member states. Thecountry’s representation seeks to find better exit strategies thatwould not ruin its economic position and those that would help itmaintain a positive link with the E.U countries.

Conclusion

Britain’s quit decision is based on sociopolitical and economicsarguments, most of which are valid. However, the impacts of thedecision would be far-reaching on the economic fate of the country atleast in the short-run. Uncertainty and political manipulation arethe most likely impacts of the quit decision.

References

Erlanger, S. (2016). ‘Brexit’: Explaining Britain’s vote onEuropean Union Membership. New York: The New York Times.Retrieved fromhttp://www.nytimes.com/interactive/2016/world/europe/britain-european-union-brexit.html

Giles, C. (2016). What are the economic consequences of Brexit?London: The Financial Times. Retrieved fromhttps://www.ft.com/content/70d0bfd8-d1b3-11e5-831d-09f7778e7377

PWC (2016). Leaving the E.U: Implications for the UK Economy.London: PricewaterhouseCoopers LLP. Retrieved fromhttp://www.pwc.co.uk/economic-services/assets/leaving-the-eu-implications-for-the-uk-economy.pdf

1 Erlanger, S. (2016). ‘Brexit’: Explaining Britain’s vote on European Union Membership. New York: The New York Times

2 Giles, C. (2016). What are the economic consequences of Brexit? London: The Financial Times

3 PWC (2016). Leaving the E.U: Implications for the UK Economy. London: PricewaterhouseCoopers LLP