Brexit Dynamic of Nation

Question: Describe about the Brexit for Dynamic of Nation. Answer: Introduction The June of 2016 garnered a lot of interest from all across the globe due to a phenomenon that both shocked and rocked the world. It shook not only the politics of the world but also the dynamics of all the nations. The phenomenon referred here was Brexit. Brexit occurred when the United Kingdom decided to withdraw from the European Union, and the exit of British was blended as the word Brexit, a short for Britain exit (Hunt Wheeler, 2016). A referendum was held in June of 2016, where the people of United Kingdom (UK) were asked to vote to either stay or leave the European Union. 52% of the people cast their vote in favor of leaving the European Union (EU). This referendum was considered as a historic referendum and the date of June 23rd, 2016 was marked in history as the day UK left the EU (Hunt Wheeler, 2016). This outcome resulted in jubilant celebrations from the Eurosceptics around the continent, but it sent huge shockwaves to the global economy. Even the then Prime Minister of UK, David Cameron, resigned from his post as a result of the referendum passed in favor of leaving the EU. Article 50 of the Treaty on European Union, which provides the formal procedure for withdrawing from the EU, was to be invoked by the end of March 2017, as announced by the present Prime Minister Theresa May, which would then put UK on the path to leave the EU by the end of March 2019 (BBC, 2016). The Prime Minister has also made a promise to remove the European Communities Act 1972 from the countrys statute books, and to integrate the present EU laws into the domestic laws of UK. In the following parts, the various aspects of Brexit have been covered. This includes the historical background, a discussion of Article 50, the 2016 referendum, the resultant consequences of such withdrawal. The following discussion is aimed at understanding how and why Brexit came into existence and the future of Brexit, as well as, its impact over UK, EU and the rest of the world. A lot of concern has been surrounded with the UK leaving the EU. Some have even viewed it as a potential doom of the UK, whilst others have happily accepted as a reform. The ensuing segment highlights the reasons behind these views and also tries to analyze which view is correct. Historical Background The Treaty of Rome was the reason why EU or as it was formerly known as, the European Economic Community, was formed in the year 1957. In 1961, the UK made its first ever application to the EU to join it. This was due to the increasing danger of political isolation within the Western Europe which was forcing the Commonwealth states to form allegiance with the new bloc, i.e., the European Union. UK found the support of America in this application; but this application was vetoed in the year 1963 by the French Government, and a consecutive application in the year 1967 was again vetoed by the French Government. However, UK was successful in getting the green light to initiate the negotiations for the British membership was given in the year of 1969. On January 1st, 1973, along with Denmark and Ireland, the UK joined the European Economic Community, as the EU was known back then (UK And EU, 2016). Even the joining of EU or the European Economic Community was controversial at that time. A renegotiation of this membership was sought by the Labor Party in the initial stages, though this was later on, brought down by requiring a referendum to be passed to decide if UK should or should not remain a part of the European Economic Community. The mainstream media, as well as, the key political parties were in favor of continuing the membership of the European Economic Community. In 1975, this referendum was held, to decide this matter, where the results were in favor of the continued member of the UK in European Economic Community, by 67% of the votes (UK And EU, 2016). And so, the UK continued to be a part of the European Economic Community. Such referendums have been constant since the UK became of part of the European Economic Community or EU. And in between such referendums, a lot went on where one or the other aspect of the EU was put to test. UK, in the year 1979, decided to opt out of the European Exchange Rate Mechanism, which acted as the forerunner in the creation of euro. In the general elections of 1983, the opposing Labor Party campaigned on a pledge to depart from the European Economic Community without passing any referendum (Vaidyanathan, 2010). The re-election of the Margaret Thatchers Conservative government heavily defeated this pledge and consequently the Labor Party changed its policy. A ratification of the Single European Act in the year 1985 took place with any referendum, which was the first major revision of the Treaty of Rome, and it was 100% backed by the Margaret Thatchers HM Government. On November 1st, 1993, the European Economic Community became the European Union as a result of the Maastricht Treaty. This new name was aimed to reflect upon the evolution of this organization from being just an economic union to a political one. On December 1st, 2009, the Lisbon Treaty came into force, which further resulted in the change in the name of the Maastricht Treaty to the Treaty on European Union 2007 or simply the TEU, and the Treaty of Rome was changed to the Treaty of the Functioning of the European Union 2007 or simply the TFEU (European Union, 2016). In 1964, Sir James Goldsmith formed the Referendum Party, with the aim of contesting the general elections of 1997, in order to provide a referendum on the membership of the UK in the EU (Ford Goodwin, 2014). Candidates were filed in 547 constituencies in the general election, where a total of 810,860 votes were won by the party, which formed 2.6% of the total casted votes. Though, the party failed in wining a single parliamentary seat at these votes, as a result of which it lost the deposits in 505 constituencies, which were funded by Goldsmith (Politics Resources, 2012). In 1993, a Eurosceptic political party was formed by the name of UK Independence Party (UKIP). In the general elections of 2004, this party was at third place; in the general elections of 2009, the party attained second place; and in the general elections of 2012, UKIP came at the first place with a total of 27.5% votes. Since the general elections of 1910, this was the first time that any party other than the Conservative or the Labor party had taken the majority of votes in the national elections (Mason, 2014). Eurposcepticism has seen a rise in the history of UK. The British Social Attitudes have been collected opinions since 1983 in Europe regarding whether the UK should withdraw or remain from EU. In the survey of 1990, 22% of the respondents agreed that UK should withdraw, but 43% agreed that UK should remain a part of EU but should attempt to diminish the powers of the EU. 65% of the people desired to break the legislative influence of the EU or to breach its ties (Tarran, 2016). And since 1993, the Euroscepticism has only risen. Article 50 of the Treaty on European Union Article 50 of the Treaty on European Union is one of the parts of the laws of the EU, which contains the provisions which set out the process through which the member states of EU can withdraw from the EU. The use of Article 50 has been extensively debated, especially after the referendum which was held in the UK on June 23rd, 2016. As soon as Article 50 is triggered, a country gets two year time limit to complete the negotiations. If the country fails through the negotiations to reach any agreement, the leaving stated gets nothing (Renwick, 2016). After the referendum of June 2016 was passed, the then PM Prime Minster, David Cameron declared that the subsequent Prime Minister of UK should be the one to activate this article and to start the negotiation process with the EU (Cooper, 2016). The subsequent and present Prime Minister Theresa May cleared that the discussions on this topic would not begin in the year of 2016. Through an announcement in October 2016, she announced that the Article 50 would be triggered only in the first quarter of the year 2017 (BBC, 2016). There was also controversy regarding whether or not a parliamentary approval was needed before invoking of the Article 50. One of the columnists of a famous newspaper asked this question, one week after the referendum was passed, and answered in that such an approval was indeed required (Pannick, 2016). The government was of the view that such an approval was not required as the use of the sanctioned powers to enact the referendum was constitutionally correct, as well as, was consistent with the domestic laws (Williams et al., 2016). This interpretation of law by the government was challenged by three groups of citizens in the case of R (Miller and Dos Santos) v Secretary of State for Exiting the European Union [2016] EWHC 2768, before the High Court of England and Wales (Courts and Tribunals Judiciary, 2016). The court ruled on November 3rd, 2016 that a parliamentary vote was required by the UK before formally initiating the leaving process of the UK from the EU. The court was of the view that the royal prerogative, which was being exercised by the United Kingdoms Prime Minister, could not be used to nullify the primary legislation which has been enacted by the Parliament. And so, only the Parliament of UK could trigger the Article 50, which notifies the intention of the initiation of negotiations of the terms to leave the EU (British and Irish Legal Information Institute, 2016). Theresa May promised in October 2016, a Great Repeal Bill, which would result in repealing of the European Communities Act, 1972. Further, this bill would reinstate all the enactments which were previously in force under the laws of EU, in the domestic laws of the UK. The bill is set to be introduced in the parliamentary session of autumn 2016 and would be enacted during or before the negotiations of Article 50. But this bill would not come into force, till the date of exit of UK. This law was aimed at ensuring a smooth transition by keeping all the laws in force, till the time they were specifically repealed (Mason, 2016). The 2016 Referendum The previous Prime Minister David Cameron in 2012 rejected many a calls for referendum over the membership of the UK in the EU, but kept open the possibility for a future referendum, in order to gauge the support of the public (Sparrow, 2014). Under the pressure from his own MPs, as well as from the rise of the UK Independence Party, Cameron announced in January 2013 that if elected in 2015, the conservative government would hold a referendum over the membership on a renegotiated package by the end of the year 2017 (BBC, 2013). Unexpectedly, the Conservative Party won the general elections of 2015 with a huge majority. To enable the referendum, the European Union Referendum Act 2015 was soon afterwards introduced in the Parliament of UK. Cameron was in favor of remaining a part of the EU and wanted to negotiation again on the four main points, which were, the reduction of red tape, restriction of the EU immigration, protecting the single market for the non-euro zone countries, and the exemption of UK from the ever-closer union (BBC, 2015). The announcement of the renegotiations outcome was done in February 2016. Certain limits regarding the in-work benefits were agreed upon for the new immigrants from the EU, but before any of these could e applied, UK had to attain permission firstly from the European Commission and subsequently from the European Council (Spaventa, 2016). Cameroun announced the date of referendum as June 23rd, 2016 while delivering his speech in the House of Commons on February 22nd, 2016 (UK Parliament, 2016). Vote Leave was the official campaign group for leaving the EU, and other major campaign groups included Better Off Out, Grassroots Out and Get Britain Out (Watt, 2016). Britain Stronger in Europe which was informally known as Remain was the official campaign which supported the UK continuing a part of the EU, and this was chaired by Stuart Rose (BBC, 2016). Some of the other campaigns which supported this included the Labour in for Britain, Another Europe is Possible, Conservatives In, #INtogether (Liberal Democrats), and Greens for a Better Europe. The morning of June 24th, 2016, came with the announcement of the results of the referendum, where 51.9% of the people voted in favor of the UK leaving the EU, as against 48.1% who voted in favor of UK remaining the part of the EU. A petition which called for a second referendum achieved signatures of over four million people, but this petition was rejected on July 9th, 2016 by the government (The Electoral Commission, 2016). (Source: The Electoral Commission, 2016) After the results of the referendum were declared, David Cameron announced his resignation, effective from October 2016 (BBC, 2016). On July 13th, 2016, he stood down from his position of Prime Minister and Theresa May took his position as the Prime Minister of the United Kingdom. The Chancellor of the Exchequer, George Osborne, was replaced by Philip Hammond; Boris Johnson, who was the former Mayor of London, was appointed as the Secretary of State for Foreign and Commonwealth Affairs, and on the post of Secretary of State for Exiting the European Union, David Davis was appointed. Jemermy Corbyn could not attain the vote of confidence from his Labor Party and this resulted in a leadership challenge. The UKIP also changed its head as Nigel Farage resigned on July 4th, 2016 as the head of the UKIP (BBC, 2016). The result brought celebrations amongst many of the Eurosceptic leaders outside UK and they expected the other nations of the EU to follow the footsteps of UK. Geert Wilders, who is the right-wing Dutch populist, announced that Netherlands needed to follow the example set by UK and should hold a referendum on whether or not Netherlands should remain a part of the EU (Foster, 2016). But the opinion polls showed a different view, which were taken a fortnight after the results were declared of the referendum, and this depicted that the other nations of EU, along with Netherlands, showed a decline in the support to the movements of such Eurosceptics (Oltermann, Scammell Darroch, 2016). The former Prime Minster and Labor Party leader, Gordon Brown who was a signatory to the Lisbon Treaty in 2007, clearly warned that in the next decade, the UK would be busy in refighting the referendum. He further stated that the pessimist were adamant at proving that Brexit was unmanageable without a catastrophe, and on the other hand the optimist claimed that the economic risks were exaggerated (Brown, 2016). His predecessor, Tony Blair, who was also the former Prime Minster and Labor Party leader, said on 28th October, 2016 that the public opinion was set to change, as soon as the implications of the Brexit were clearly and fully understood by the people (BBC, 2016). In 2004, he signed the Treaty which led to the establishment of the Constitution of the Europe, which remained ungratified by the other states, along with the UK. Blair called for a second referendum, where the decision had to be made through either a general election or through the Parliament of UK to finally decide upon the point that Britain should leave the EU (Watts, 2016). Consequences of Brexit Economy Some attempts have been made to quantify the impact of the UKs exit from the EU over the economy of the UK. There are a broad range of estimates in these post-Brexit situations. On one hand the people have argued that the economy of the country would suffer permanent losses due to the weaker investments, as well as, trade. But, on the other hand, the people believe that the freedom from the rules, along with the costs, which have to be borne due to the membership with the EU, would enable UK in being prosperous (Allen et al., 2015). To support the statement that Brexit would result in loss to the economy of UK, the 2004 research is often cited which belong to the researchers of the National Institute of Economic and Social Research. As per their research, the GDP of the UK would be permanently reduced by 2.25% due to the lower foreign direct investments. But, these estimates are quite old and the economy of the world has changed in a considerable manner since then. Centre for Economic Performance (CEP) which is a part of the London School of Economics gave anther analysis where the income falls suffered by UK were estimated to be in between 6.3% to 9.5% of UKs GDP. This loss was similar to the loss which resulted from the worldwide financial crisis of 2008-2009 (Allen et al., 2015). So, in the pessimistic scenario of these researches, UK would fail in negotiating on favorable trade terms. Even in the optimistic scenario where UK had free trade agreement with EU, the loss would be in terms of 2.2% of the GDP (Allen et al., 2015). And the overall view of such individuals was that leaving the EU would impose a lot of substantial costs on the economy of UK and was a very risky gamble. There are others who believe that the exit of UK could result in the boosting of the GDP of the country. Roger Bootle, a famous economist, believed that without a fundamental reform, EU was not worth stating in. Bootle noted that UK had paid 1% of its GDP of 16.4 billion in 2012 to the institutions of the EU. The government of UK, on the other hand, received a rebate on the contributions to the budget of EU for a sum of 3.1 billion, in addition to 0.9 billion in other receipts. UK had paid an overall sum of 9.6 billion to the EU, which was about 0.6% of its nominal GDP (Allen et al., 2015). He believed that such sum could not dictate the momentous decisions like Brexit. There are groups who believe that even though UK is the net contributor to the EU, but the country would face pressure after Brexit, to replace the regional funding, as well as, the agricultural subsidies, along with the domestic spending of the EU. And since the migrants form a large base of net contributors to the Treasury, Brexit would place a dent on immigration, and would result in the rejuvenation of the ageing population of the UK (Allen et al., 2015). Jobs Nick Clegg, the former Liberal Democrat leader, in the past has claimed that over three million jobs were dependent upon the UKs membership of the EU when the arguments were being made for UK to remain a part of the EU. It had been reported by the Guardian that the Liberal Democrats had said that EU played a huge apart in safeguarding the jobs in Britain, as EU provided an access to different markets which consists of over 500 million consumers, and also for the reason that the membership of UK in EU attracts a lot of foreign companies which are keen on becoming the part of this market (Allen et al., 2015). Some of the companies who have considered scaling back in Britain, in case Brexit was to come into being include the US investment bank Goldman Sachs, food maker Nestl, and car companies like Ford and Hyundai. The Society of Motor Manufacturers and Traders believe that Europe is a crucial part for the success of automotive industry in Britain. This sector alone accounts for 3% of the GDP, and employs around 700,000 people (Allen et al., 2015). But such facts have to be dealt in a cautious manner. Even though the bosses of such companies have raised this issue that EU creates a lot of jobs for UK, and a loss would result from Brexit, but there are no guarantees to this fact of loss. Also, implying that millions of job would disappear is unsubstantial and outright mischievous. This view has been supported by the Institute of Economic Affairs, in its paper by author Ryan Bourne. Bourne believes that the dynamic market of UK would easily adjust to the changes which would result from Brexit and that the stated loss by the bosses was a misuse of assertion (Allen et al., 2015). Trade This area has been full of claims and counter claims regarding the impact of Brexit over the exports of UK. Nigel Farge has made an argument the UK has freed itself from the rules, as well as, regulations by withdrawing from EU. He further believed that as a result of Brexit, UK was on its way of being a stronger, independent trading nation (Allen et al., 2015). The others believe that Brexit would result in UK being shut out of the most crucial market, which is the EU, as well as, with such markets with which the EU has trade agreements. The British Chambers of Commerce conducted a survey of around 3500 businesses. 57% of the respondents believed that by remaining a part of the EU, and with more power being brought to Westminster, UK would have been in a more favorable scenario. But 28% of the respondents believed that withdrawing, accompanied by a formal UK-EU was the positive scenario. A mere 13% believed that leaving without any agreement was a positive case (Allen et al., 2015). Immigration It is claimed that Brexit would allow the UK in taking back the control of its borders. But this claim is doubtful. The reason behind this is that a lot less number of people, come to work and live in Britain from the EU, as compared to the other nations. This is evident from the stats of 2014, which show that out of the 624,000 people who immigrated to Britain contained majority from out of EU, at 292,000 (Allen et al., 2015). Unless clarity is brought around the updated arrangement of UK with EU, it is hard to say that the borders are in control of UK. Experts believe that the access to single market would be provided to UK at the price of a similar arrangement that is currently in place regarding the free movement (Allen et al., 2015). And till the time a replacement arrangement is adopted, the British national law would regulate the migration from in and out of UK. Impact on EU The impact of Brexit on the EU would be extensive and long-lasting. As per the economist Gregor Irwin, the actual process of Britain leaving the EUs partnership, as well as, the establishment of new agreements with the rest of the nations in the EU would roughly take around 10 years. Many businesses would have to face uncertainty while the UK would be busy in forging new contracts with the countries left in the consortium (FXCM, 2016). The relationship between EU and UK could take a lot of different turns after Brexit. Irwin believed that it would involve either a Swiss-style model containing a number of bilateral agreements or a detailed Free Trade Agreement. Both of these would require continuous negotiations (FXCM, 2016). The Lisbon Treaty of 2009 dictates that the decision of the Council of EU can be blocked by four countries forming a blocking minority (EUABC, 2016). This rule was formulated with a view of preventing the three key members, in line of Britain, Germany and France from dominating the Council of EU. But, as a result of Brexit, the northern European countries like Balts, Dutch, and the Scandinavians, and the Germans would all lose an ally, and as a result, the blocking minority also. The EU could easily overrule Germany and its allies without this blocking minority regarding the budget discipline of EU and the German banks recruitment so as to guarantee the deposits in the troubled banks of the southern European member states (Siems, 2016). As a result of Brexit, EU would lose the financial centre of the world, the second largest economy of EU, the second largest net contributor to the budget of EU, and the nation which has the third-largest population (Global Counsel, 2015). So, with Brexit the financial burden would increase on the remaining nations. For instance, Germany would have to shed an additional of 4.5 billion Euros, for not only one year, but two consecutive years of 2019, as well as, 2020 (Reuters, 2016). Next to France, EU would lose its strongest military power due to Brexit. This would include the loss of one of the two veto powers that EU had in the UNs Security Council, along with the loss of the British nuclear shield. One of the reports by German Institute for International and Security Affairs suggest that Brexit could result in tipping of the EU towards protectionism, exacerbation of the present divisions and even the unleashing of such forces which would lead to the unraveling of the EU. He believes that on the other hand, that Brexit would free EU from its most uncomfortable member and would make way for EU to lead in a more effective manner (Oliver, 2013). Conclusion The 2016 Referendum has sealed the fate of UK and Brexit is the child of this referendum. The voters were asked if the country should remain a part of the European Union or should the country leave the European Union. A lot of politics involved this decision, where some parties favored the exit and other favored the stay. Ultimately, the results revealed that a majority has approved the exit of Britain from the EU. By invoking the Article 50 of the Treaty on European Union, UK would begin the formal procedure for withdrawing, as announced by the present Prime Minister of UK, Theresa May, and the procedure would start by the end of March 2017. Case was also filed challenging the view of the government as per which, a parliamentary vote was not required but the court held otherwise. Britain, in its history, has had a lot of decisions made through referendums. Whether the question was related to continuing the membership of the European Economic Community or continuing the membership of European Union, the referendums have been used as a solution to decide on the crucial matter. And even in between these referendums, a lot goes around, as has been highlighted above. Brexit has attracted a lot of attention from across the globe. Not only because of the major change in dynamics of the EU, as well as, UK, but also because of the impact would Brexit have over the other countries. Some individuals believed that Brexit was the best thing to happen to UK, while others believed that UK walked towards its doom by passing the referendum. The previous segments highlighted this view. The above parts also elucidated upon the consequences of Brexit, on the various aspects. As a result of Brexit, many experts believe that UK would lose on economical grounds, jobs, and that the borders would once again come under the control of UK. But other groups of experts have had an entirely different view, which says that UK would gain by the saving in the costs, and have also shown that the jobs would not be affected. The statistics have revealed that the border problem would continue, as the numbers of migrants were from out of EU. The impact of Brexit on EU was also highlighted, which revealed the EU would lose gravely from Brexit. To conclude, it can be said that only time can reveal which party loses and which party wins as a result of Brexit. But, it is sufficient to say that Brexit is a revolution, which has forever formed a party of history. References Allen, K., Oltermann, P., Borger, J., Neslen, A. (2015). Brexit what would happen if Britain left the EU?. Retrieved from: https://www.theguardian.com/politics/2015/may/14/brexit-what-would-happen-if-britain-left-eu-european-union-referendum-uk BBC. (2013). David Cameron promises in/out referendum on EU. Retrieved from: https://www.bbc.com/news/uk-politics-21148282 BBC. (2015). David Cameron sets out EU reform goals. Retrieved from: https://www.bbc.com/news/uk-politics-34770875 BBC. (2016). Brexit: David Cameron to quit after UK votes to leave EU. Retrieved from: https://www.bbc.com/news/uk-politics-36615028 BBC. (2016). 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