The referendum that happened on the 23rd of June 2016 is known as Brexit. It is here where the UK voted to be free from the European Union. It was decided by the residents of UK that there were more benefits for the free immigration movement than staying united to the monetary body. It is the nickname of ‘British Exit’ from the EU.
However, the UK and EU were provided with notifications and a date of March 29, 2019, to reach the agreement.
Three different hard choices were provided to the UK.
- Keep the deal or something similar. The United Kingdom doesn’t really have the clout to come to terms or even negotiate with the term and hence most people disagree with this.
- “No Deal Brexit” is the one that most of the supporters of Prime Minister Theresa May are in favor of. However, there is no trade agreement, and hence all the ports are blocked along with the grounding of the airlines as well. Also, drugs and food import will also run short. With the deadline drawing nearer, the companies are preparing for the change.
- Re-voting on Brexit is for those who want to remain unified with the EU. Some polls provide results such as the rejection of Brexit from the referendum if offered with the choice.
The Current Status On Brexit
The EU and the Prime Minister have reached into a conclusion that there will be a 21-month plan of transition in March 2018. However, the Parliament cast a negative vote on the proposal on January 15th, 2019. So, it was a pretty massive blow with 432 opposing members and 202 favoring ones. The Parliament even had to vote over the stepping down of May as well.
On January 21st, 2019, May made a proper revised plan of transition which included a ‘Backstop.’ So, the customs of the UK will be in union with the EU in case there is no solution.
Consequences For UK
The plan of May didn’t allow the UK people to prohibit the flow of others from the EU. This was basically the reason why Brexit came to existence. There were feelings of growing concerns regarding the refugees in the Middle East and Africa.
The economic growth of the UK is slowing down because of the Brexit, and it is a pretty significant disadvantage for sure. It can be due to the uncertain nature of the outcome.
If there is a Hard Brexit, then the tariff-free status that Britain has will be eliminated with the trade agreement. So, the costs of exports will increase and hence the goods will be overpriced. Apart from that, it will also hurt young workers as well.
The next scenario is the No Deal one, and it will ensure that the UK is free from EU. However, there will be no trade agreement there as well. So, the food shortages can come to the surface causing a very vulnerable position for the UK due to the summer drought and heat wave.
Consequences for EU
The anti-immigration parties in the EU have increased due to the Brexit vote. So, the Chancellor of Germany, Merkel has announced that she will not take part in the re-election. In case there is enough ground for the parties in Germany and France, there could be an anti-EU vote as well.
There is also a sense of cohesiveness in the people of Europe due to the vote as well; however, it is a different scenario.
Consequences for the United States
With the Brexit Vote, the Dow has taken a pretty hard hit. The different markets of currency are also very much in trouble. The value of the Euro fell a whole 2 percent. So, the dollar value increased a lot. However, this strength doesn’t do well for the stock markets in the US. The shares of America are getting more and more expensive for all the foreign investor. There is also a rise in gold prices.
