On June 23, citizens of the United Kingdom, will vote in a Referendum to decide whether to “Remain” in the 28 member European Union, or “Leave”. That vote is commonly referred to as the “Brexit”. Recent polls show a slight edge to Leaving.
In the aftermath of World War II, the E. U. incrementally formed—primarily led by France and Germany—as an organization to promote peace through cooperation in trade and capital (or financial) markets. The original six member nations has currently grown to 28. Cooperation for the common good, however, also includes some loss of national independence.
From my vantage point, some 3,500 miles away in South Florida, I am mostly insulated from the emotional appeals of: misleading TV ads; biased Op-Ed pieces and other assorted noise. From what I can see, however, few of those actively involved in the debate seem to even be considering any statistical analysis regarding the issue. Namely, what would the impact on the British economy be–and jobs?
According to the linked editorial from The Guardian (UK), some 88% of the 600 economists surveyed—from academia, the City (London’s financial district), corporate and small business, and the public sector—believe that the British Economy would be significantly harmed, for years to come, by a Brexit. That link is as follows: http://www.theguardian.com/politics/2016/may/28/economists-reject-brexit-boost-cameron.
Several points are worth noting at this time: all components of the Union’s mission statement—trade, capital markets and peace—are enhanced with greater membership; there are anti-EU factions across Europe; and, in some countries—such as Austria and Greece—there appears to be a strong sentiment in favor of considering an Exit.
Some Britons seem to believe, should the United Kingdom leave the Union, that it would continue to be business as usual. I disagree! I believe, rather, that the U. K. would have to negotiate new agreements with every nation that it wishes to trade with. That could result in considerable administrative expenses, varying tariffs, border checkpoints, and otherwise hamper British trade with Continental Europe. This would probably decrease the Gross Domestic Product of the United Kingdom,as the economic survey reported, perhaps by several percent, and for years to come.
Lastly, the underlying question remains: Would the European Union really be expected to facilitate the U. K.’s decision to leave, by making it easier? Remember that the GDP of the U. K. is 16% of that of the E. U, and such a loss would take a very big bite out of the size of the Union’s cumulative GDP. Also, if the U. K. leaves, might we not expect the Scottish Independence Party to call for another Independence Referendum? Hmmm…