Brexit: Britain’s Exit from the European Union

 

Britons’ vote last week to get a divorce from the European Union rattled major stock markets but the separation dubbed Brexit seemed inevitable with the U.K. a reluctant partner from the start.

Brexit, the blending of the words “Britain” and “exit” as a moniker to the news topic, is the latest development in a 43-year marriage mired in ambivalence by Britons. Ironically, former British Prime Minister Winston Churchill broached in 1946 the idea of a United States of Europe, which inspired the EU. In fact, he is in the EU Founding Fathers roster. But when Belgium, France, Germany, Italy, Luxembourg and the Netherlands invited Labor Prime Minister Clement Attlee in 1951 to form the EU precursor European Coal and Steel Community (ECSC), he snubbed it. The ECSC established the first economic bloc meant to prevent another war among European states by providing them a common market for coal and steel.

The History of Great Britain and The European Union (EU)

 

In 1957, Conservative leader Anthony Eden backed out from signing the Treaty of Rome creating the European Economic Community (EEC), which merged with the ECSC in 1967 and evolved into the European Community (EC) in 1993. The administrations of Harold Macmillan and Harold Wilson applied to join the eco-political grouping in 1961 and 1967, respectively, but both were rejected by France. It was only in 1973, under the government of Prime Minister Edward Heath, that Britain became officially part of the group.

The EC membership was approved by Britons in a referendum in 1975. Reinforcing the approval was Prime Minister John Major’s government’s ratification of the 1992 Maastricht Treaty that created the EU out of the EC in 1993, though later the U.K. did not adopt the euro and retained their own currency.

Britain Votes to Leave The EU

 

While it was the stronger economies of EEC members that enticed the U.K. to join the community, Brexit was prompted by the influx of immigrants into the country. In the 1975 referendum, the government campaigned for a “yes” to staying in the EC and more than 67 percent of nearly 26 million voters agreed. In last week’s referendum, 52 percent of some 30 million Britons, who felt the 43-year marriage did not improve, had a change of heart and voted to leave the EU. Around 48 percent were “stay” votes.

The UK Independence Party led the Brexit campaign saying Britain was being shortchanged by getting little in return for its billions of pounds share in the EU’s annual budget. “Leave” campaigners also were tired of bailing out troubled economies of EU members and the EU policy of visa-free travel as immigrants were taking away local jobs with their low wages.

Meanwhile, the “stay” campaign backed by Prime Minister David Cameron centered on the economic security the free-trade EU market offers. Cameron also countered anti-immigration sentiments saying young immigrants’ tax contributions help sustain social services.

While Britain’s next administration still has to formalize the country’s exit from the 27-nation EU by starting the divorce process provided under Article 50 of the Lisbon Treaty, the Brexit vote already affected the value of the British pound. There is fear of losing foreign investments repercussions to the economy. Separation meant the U.K. will have to revise employment, health service, trade and travel arrangements with EU members. Gains expected are regaining full sovereignty, political freedom, higher wages, and funds spent for EU membership.

For the EU, there is a less feeling of losing from Brexit in terms of commerce. However, there is concern that Britain’s leaving could prompt other EU members to consider a similar move.