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Brexit

In the summer of 2016, the term “Brexit” was nearly ubiquitous in the news cycle. The term is a catchy condensation of the “British exit” from the European Union. On June 23, 2016, voters in the UK took to the polls in order to cast their vote in national referendum regarding the UK’s withdrawal from the European Union (EU). Politicians on both sides of the debate strongly staked out their positions, and, in a surprising turn of events, the British public narrowly voted in favor of Brexit.Brexit

Brexit has been a goal of various members of the British political system since the United Kingdom joined the precursor of the EU, the European Economic Community (EEC), in 1973. The European Union is a political and economic union of 28 European nations. Most of these member nations share a common currency, the Euro, which Great Britain never adopted, preferring to keep the British Pound as its currency.

Advocates in favor of Brexit argued that leaving the EU was vital to preserving the unique identity of the UK, including its culture, independence, and status as a world power. Many also believed that leaving the EU would curtail significant immigration into the UK from other parts of the world. Many UK citizens further felt that the EU was gaining too much authority over internal economic policies.

The debate over Brexit within the UK reached brutal proportions with the murder of Jo Cox, an anti-Brexit member of Parliament, who was shot and stabbed in Yorkshire mere days before the vote. Many analysts believed that the shocking murder would give greater weight to the Remain campaign.

On June 23, UK voters were presented with the question “Should the United Kingdom remain a member of the European Union or leave the European Union?” Pressure had been building on the government of David Cameron to hold the referendum since 2013, with Prime Minister Cameron promising the vote if his Conservative Party won the 2015 general election. As Britons went to the polls on June 23, opinion polls were showing a virtual tie, with no clear outcome before the votes were counted.

The next morning, June 24, the results were in. By a margin of 52% to 48%, voters in the United Kingdom chose to leave the European Union. The Brexit camp had won, and Prime Minister Cameron announced his resignation. Yet people across Great Britain remained unsure of exactly how the future would play out. Voters in Scotland, for example, overwhelmingly voted in favor of remaining in the EU, and renewed calls for Scottish independence were heard. Similarly, Northern Ireland was greatly in favor of remaining. Stunned, many voters in the UK began a new petition calling for a second referendum, claiming that not enough citizens had voted the first time. Yet almost 72% of Britons took part in the referendum, some 30 million people, the highest turnout for a UK-wide vote since 1992. Ultimately, calls for a second vote were rejected.

Under Article 50 of the Treaty on European Union, all member nations have the right to withdraw from the EU. However, as Article 50 has never before been invoked, the actual process by which the UK departs the EU remains unclear. The actual vote in Great Britain did nothing to officially break ties with the EU. David Cameron announced in his resignation speech that it would be the job of his successor whether to invoke Article 50 and formally leave the EU. As far as the EU is concerned, Great Britain remains a member of the body, although other European politicians have called for immediate negotiations to begin the process of Britain’s exit.

Therefore, many of the consequences of Brexit remain unclear. What was clear was the immediate effect of the Brexit vote on the world financial markets. First, the value of the British pound fell sharply against the US dollar, falling to a 31-year low the very next day, with further devaluation in the following days. Some experts believe that the pound may fall to parity with the US dollar, past its 1985 low of $1.05. The British pound also fell sharply in comparison with the Euro. Britain’s chief stock market, the FTSE 100 also fell, but was able to recover most of the immediate losses. The FTSE 250, an index of smaller companies, fell further than the FTSE 100, and had not regained its strength several weeks after the vote. Other financial markets around the globe experienced losses in the wake of the Brexit, with many investors fleeing to the US dollar and Japanese yen.

Politically, the Brexit has thrown UK politics into turmoil. As mentioned, Prime Minister Cameron resigned, to take effect in October, and it is not yet clear as of this writing who will take over. Many believe that former London mayor Boris Johnson, who was heavily in favor of the Brexit, stands a decent chance of becoming the next Prime Minister. The leader of the United Kingdom Independence Party (UKIP), Nigel Farage, who strongly favored the Brexit, also resigned, claiming that he had achieved his political goal of bringing Britain out of the EU.

The ethical consequences for Britain’s citizens is how the decision will affect those who did not vote. Further ethical decisions have sparked calls for Scottish independence from the UK. Legal consequences remain as well, as the formal process whereby the UK leaves the EU negates numerous contracts and business agreements that have been structured under the EU umbrella. In some ways, the Brexit is like a divorce, with complex negotiations ahead should the UK formally invoke Article 50 and begin the two-year process by which that nation leaves the European Union. Despite the vote choosing to leave, no one is yet truly aware of how it will all play out.

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