A look at Brexit, part 2. If it happened

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The City

Also, keep in mind that a large number of investors outside the EU use the City (that’s the colloquial term for London’s financial district) as a diving board into other euro zone investments. If you remove the relation UK-EU those investors would seek a new launching pad inside a UK-less European Union. And what about multinationals seeking to set headquarters in Europe? London would no longer hold the attraction of being in the EU.

What Brexit would mean for EU countries...

The economic consequences would differ from nation to nation. Ireland would be most affected because both nations have a large amount of direct commerce and trade. Also, Ireland depends on the UK for energy, both electric and natural gas, and the Irish electric grid is directly linked to that of the UK. An exception agreement would have to be set right away to maintain that supply.

Additionally the Netherlands would be badly hit; inasmuch that the trade cut would mean a loss of 4.3% of the national trade, representing a loss of 1% of their GDP.

A great problem for every nation would come from banking as well because British banks hold 17% of consumer and firm debt of the European Union, a portfolio of over 1 trillion dollars. Cut the EU bond, and consumers and companies in every nation would suffer the added fees for making payments to their loans, increasing their cost, and that’s without taking into account possible new tax implications at home for having those loans now considered “abroad”.

And for the EU identity

One of the greater changes would be a political shift that would be a great danger to the EU

in itself. The loss of the British vote in EU-wide decisions would signify the loss of a decisive vote for the liberal side of the Union, a threat to both current and future liberalization policies. The block of liberal nations would hold 33% of the total votes, versus the current 41% they hold with Britain. This shift in voting power would lead to the implementation of conservative policies in the future. 

Furthermore, we live very uncertain days in Europe. There are large political divisions on subjects such as human rights, immigration and national bank policy. The exit of one of the greater associates of the Union could inspire other nations, some that don’t agree with the more liberal policies decided in recent years or that are still pending vote today, to leave the Union as well.

What do the polls say?

That’s the great unknown.

Right now a vote would be expected to go 51% for staying in the EU and 49% for Brexit, yet 15% of the voters are undecided and they will be the key come June.

That’s why the campaigns to grab the vote of that 15% have become fierier on both sides. There are barely three months left till the referendum and both sides know it’s an all-or-nothing deal.

What do polls say about the future of the UK?

I actually just learnt this today, during my latest research. You see, this referendum not only

affects the United Kingdom’s permanence as member of the EU, but also the very identity of the UK as a nation. The United Kingdom Is comprised of four different nations: England, Wales, Scotland and Northern Ireland. The latter two don’t really feel like they fit in but through wars and treaties they are part of the country. In the UK as a whole, the largest number of voters lives in England. 

The problem is that voters in Wales, Northern Ireland and Scotland wish, unequivocally, to remain in the European Union. A very recent poll by the Scottish Nationalist (pro-independence) Party shows that 54% of Scots would want independence from the United Kingdom if Brexit happened. Additionally, under the Belfast Agreement of 1998, if Ireland and Northern Ireland were to agree that they wished to become their own nation, the United Kingdom would release Northern Ireland from its UK bond to allow for that new country to form. There is worry among Irish on both sides that if the UK leaves the EU, the borders between the two would close yet again, shutting off the exchange of workers, families and friends; Brexit might just push them to make the request. 

This means that a Brexit vote could possibly confront the very kingdoms that form the United Kingdom so that the only friendly, peaceful election result would be one in which staying within the EU wins by a very small margin. A strong vote for Brexit in England outvoting the other three in a final tally would likely mean that the leaders of any of the other three would call the vote unconstitutional as a national choice; and the same would happen if a by-and-large against-Brexit vote in Wales, Northern Ireland and Scotland outvoted England’s wishes. Sadly, one of these two scenarios seems very likely now.

As you see, Brexit is an extremely complex subject that, were it to become a reality, would mean drastic changes in its mother nation, the EU and many other nations. We will have to wait until June 23. Everything is on the balance.