Brexit: Reasons and Implications of the UK leaving the EU
Brexit is basically a blend of two words – Britain and exit. It is used to describe the recent referendum of the exit of Britain from the European Union. This move if successful will put an end to a 43 years old strategic relationship between Britain and the European Union. But Britain isn’t the first country to sever its ties with the European Union. Greece was one of the very first. In fact, this came to be known as Grexit.
Reasons for the exit
Ever since the UK joined the EU (then European Economic Community, EEC) in 1973, there has been a continual debate as whether the country should still maintain her membership or not. On 23rd June 2016 which happens to be a Thursday, Britons went to the polls to decide if they were going to remain a member of the EU or not. Turned out most were fed up with the whole EU’s idea. While 52% voted for the country to leave, 48% was against the move.
Brexit effect on UK economy and Politics
The decision of the UK to exit the European Union has caused a ripple effect. First was the resignation of David Cameron, former British Prime Minister, with Theresa May taking over the resigns of Power. Some other European States notably the Netherlands have indicated signs of following UK’s lead.
There has been opposing views as regards the effect of Brexit on the economy of UK. Pro Brexit campaigners are of the opinion that the move will lead to a fall in taxes and increase in government spending which will help keep the economy afloat. But experts say it will take some time for the full effect of Brexit to be felt.
Already, the country has lost its envious AAA credit rating, thus causing the cost of borrowing to increase. Some UK based firms are already complaining of the high cost of doing business.
The value of the Pound has taken a deep since the vote for Brexit. As at mid-October, one Pound exchanged for $1.22 and €1.12. Though the value in the pound’s value favors exportation and tourism, it makes importation hard. Brexit has seen banks slash interest rates with the goal of stimulating the economy.
Effect of Brexit on UK citizens
It is still not clear who Brexit will affect UK nationals living and Working in other EU countries. But it is very unlikely the move will limit UK nationals from working in countries outside Britain but within Europe. Only time will tell.