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Brexit And The Aftermath: Explained

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Nearly two years ago, the people of Great Britain voted in a referendum to leave the European Union, a landmark decision popularly known as Brexit. In March 2017, nine months after Brexit, British PM Theresa May triggered Article 50 of the Lisbon Treaty – which allows any nation to leave the EU. Once Article 50 is activated, there is no turning back, which is why this is so significant.

The Filing

The Lisbon Treaty is like the constitution of the European Union, and Article 50 of the Treaty allows a member country to exit the Union. It states, “Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.”

PM Theresa May signed a letter to the European Council President, Donald Tusk, officially notifying the latter of Britain’s intention to leave. It is largely emphasized that once Article 50 is in motion, there is no turning back. But, no country has ever left the EU and Article 50 does not explicitly say whether the process can be halted.

Although, Article 50 does provide the Member State, two years after the ‘trigger’ to renegotiate terms of exit. The UK, however, is adamant to complete the exit process.

When we say PM Theresa May is ‘triggering’ Article 50, it means a letter signed by her will be delivered to the European Council and its President, Donald Tusk. This letter will officially notify the E.U. of Britain’s intention to “divorce” itself from the European Union and thus the settlement process will begin.

What happens to the British and EU citizens?

Currently, there are a total of 3.3 million EU citizens living in Britain and 1.2 million British-born people living in other EU countries. The status of these people is usually at centre stage in any negotiations. The British government so far hasn’t given any substantial reply on the residency status of these citizens.

However, E.U. nationals who have lived in Britain for more than 5 years have a right of permanent residence and will be able to stay on regardless.

What role does Scotland play in Brexit?

In the June 2016 referendum, only 38% of the people in Scotland voted to leave the EU, while 62% wished to stay. On the contrary, an average of 54% votes, cast by all four countries in the UK, went to Brexit.

Naturally, UK decided to go ahead with the Brexit bill, much to the dismay of its Scottish buddies. At some point, the latter proposed to leave UK if it meant they could be a part of the EU. But over time, these protests faded away.

Almost two years later, the issue surfaced again, when in May 2018, the Scottish parliament voted to reject the Brexit bill. This was, however, only a cosmetic vote, meaning the British Government isn’t under any obligation to follow it. But if the latter does continue to push the bill in its current form, it shall be the first time it adopts a law against the will of Scotland.

How much alimony will they have to pay?

Money is a big part of any divorce and this one is no different. According to the EU, Britain will pay for all the financial commitments made by the former when Britain was still a part of it. Some estimate these liabilities to be as high as €20 billion. Of course, this figure will have to be adjusted for the loans Britain has given to EU member nations through the European Central Bank.
 
Irrespective, the biggest reason for the EU imposing such a huge amount on Britain during the negotiations is to discourage other nations from following Britain’s exit. Naturally, fears of the EU breaking up have been looming since Greece’s economic crisis, and Portugal and Spain’s rising poverty.

The Aftermath

1. Immigration will be drastically reduced in Britain

Theresa May has stated that reducing immigration was one of the main reasons for leaving the European Union. Thus, after the exit, strict immigration laws were expected to be placed. Britain believes that reducing immigration will, in turn, improve the unemployment stats. But there’s a catch. Any reductions in EU workers could lead to an increase in wages for domestic workers, costs UK companies are not ready to incur.

2. Brexit will have a great impact on the business

Big business, with a few exceptions, were in favour of Britain staying in the EU because it made it easier for them to move money, people, and products around the continent. Given the crucial role of London as a financial centre, there were fears of how many jobs would be lost to other countries in the EU.

Speaking of trade, half of UK’s food is imported, with 30% from the EU and 11% from countries with EU trade deals. There are speculations that by March 2019 (exactly two years after the trigger) import tariffs will rise to 22%, making food and other necessities very costly.

Inflation!

Moreover, goods imported from EU are now being subjected to the same border checks as those from other countries. This friction is causing distrust among freight and transport companies. Delays in customs and transportation of goods to local markets have lead to a big gap between demand and supply, another cause for inflation.

Today, over a year after the ‘trigger’, UK’s parliament is concerned with the falling economy. In fact, the House of Lords deferred a specific exit date after the trigger due to concerns about rising bills. In the Parliament, majority votes are cast to protect trade policies and deals with the EU.

3. The possibility of EU collapsing

The ECB makes it compulsory for rich countries like France and Germany to lend billions of euros in aid to weaker member nations. On the other hand, countries like Greece and Portugal have failed to repay these debts, despite growing pressure.
 
This is the major reason why other member nations may also follow Britain to leave the EU. In fact, talks of holding a referendum on an exit have already surfaced in countries like Italy, France, Greece, and Denmark.
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