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Increasing numbers of articles about the potential for the United Kingdom to leave the European Union have been published within the last several months, providing analyses and highlighting varying potential end scenarios. Much of the coverage on this topic, dubbed the “Brexit”, could initially be found in mostly regional or economic publications such as Financial Times and The Telegraph. Recently, however, worldwide interest appears to be increasing and now the topic is being covered more broadly.
With a scheduled referendum set for a vote on June, 23 2016, now varied publications such as CNBC, CNN and even USA Today are taking notice of the broad repercussions that may occur if Britain leaves the EU. The Brexit concept may be particularly challenging for non-Europeans to understand. Luckily, The Washington Post has provided an extensive overview of the Brexit with this very audience in mind. The title of the piece is: “What’s a ‘Brexit’? A guide to Britain’s E.U. drama for confused non-Europeans.” Like several other publications have done, The Washington Post explains the background of the issues, key players and potential outcomes of this issue.
Armed with analysis of the Brexit and a review from key consulting groups, competitive intelligence and information professionals can gain better understanding of this complicated matter. Overall, the repercussions of this potential breakaway may affect every sector of British and European life: political, economic and even cultural.
The Brexit: EU Referendum 2016
In short, the Brexit is the dubbed name for the potential for Britain to leave the European Union due to numerous reasons. Such reasons include the belief that many British citizens feel that the EU has too much influence over British affairs and that too many outsiders from the EU travel to Britain to take advantage of its generous benefits. Accordingly, the UK is seeking several concessions from the EU such as allowing Britain more power to not necessarily have to abide by all EU rules and limiting the benefits of migrants into Britain. Explained more broadly, some people see Britain’s actual sovereignty at stake with the Brexit decision.
UK Prime Minister David Cameron appears to be focused on keeping Britain in the EU, but he has stated that even he is conflicted regarding the right course. Some of the most vocal leaders of the initiative to leave the EU come from the United Kingdom Independence Party (UKIP) and also some members of the Conservative party. Even some members of Cameron’s own Cabinet have hinted that they are of the “leave” opinion. London mayor, Boris Johnson, also wants the country to leave to EU.
In gauging the latest opinions of the UK populace, The Telegraph has an online poll tracker providing insights regarding how the vote may go. A final vote of whether Britain will leave the EU is expected on June 23, 2016, by a nationwide referendum vote.
Brexit Review from Major Consulting Firms
Perhaps one of the most robust analyses regarding all the societal segments which may feel reverberations from a Brexit comes from UK-based consultancy, Global Counsel. They wrote a briefing paper that examined 10 channels of concern if Britain left the EU. The issues include trade with Europe, foreign direct investment, regulatory changes, industrial policy, immigration issues, financial services, general trade policy, international influence, budget and uncertainty. They conclude that if Britain left the EU, significant disruptive challenges would occur not only in the UK but throughout Europe.
A.T. Kearney’s Paul Laudicina has opined that the Brexit will be a lose-lose proposition for Europe. He states that if Britain left the EU, the union would see a 15% reduction in GDP immediately. Households within the EU may also see reduced liquidity if they lose the connectivity with London as their financial center. Furthermore, Laudicina states that foreign direct investment and general supply chain dynamics may be disrupted.
If one is searching for positive comments regarding the after-effects of a Brexit, that search would be challenging. One consulting firm that reported positive (or at least less dire) opinions regarding the potential Brexit is Grant Thornton, which published some key insights from UK business leaders. While a substantial number of the opinions tended to be against the Brexit, a few interviewees spoke of some positive elements. A few such positive sentiments include the concepts that the UK might have greater freedom to sign other free trade agreements and that there would be fewer onerous regulations to follow that originate from outside of the UK.
Economic and Political Repercussions from a BrexitA multitude of possible repercussions of a Brexit have been suggested by numerous politicians and pundits. One such prediction is that HSBC, although it has been indicating for some time it may want to leave Britain, may finally do so. Additionally, JPMorgan indicates that the Brexit could drive stock markets lower, however the sterling’s weakness as well as key moves by the Bank of England may help deter large swings in the stock market. Domestic retail and homebuilding stocks, however, may see some fluctuations, they contend. Some of the other predicted potential effects of a UK Brexit could include:
- Other EU countries could follow Britain’s lead to leave the EU
- EU could impose tough trade restrictions if Britain leaves
- The EU could no longer claim London as their financial capital
- Britain leaving the EU may reignite the campaign for an independent Scotland
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