Yes, whether you are in the remain or leave camp, the outcome was clear…. Brexit has happened.
The long term pro’s and con’s will no doubt be discussed for many weeks, months and years to come, and while for many this feels like a leap into the unknown, with the exception of some short term profiteering on stocks, shares and currencies, the outlook for Britain looks every bit as positive as it did within the union.
Confidence and fear of the unknown has driven the Pound down against the Dollar and Euro, but this looks at this stage to be an over reaction to the vote and within a few months, the Pound is expected to recover its losses in much the same way as the FTSE did in the first seven days post Brexit.
In the coming weeks and months little is really going to happen. Politicians will attempt to manoeuvre themselves into the driving seats of their respective parties, business will report on their future plans and the world will continue to spin.
One of the first acts that the new Prime Minister will be required to do is to trigger Article 50 which begins the formal process of conscious uncoupling (as Chris Martin would say). From that point the UK then has 2 years to negotiate the terms of life outside of the EU.
While it’s not expected to be a straightforward process, it’s in everyones interests to get a deal done quickly and painlessly.
What the EU wants V What the UK Wants
One of the cornerstones of EU membership is free movement of people (labour). Initially this worked as a principle, but in hard times, as we have seen, people from poorer countries head on masse to richer countries…… which causes logistical problems for all.
To have access to the free market, a country is required to provide free movement for people, goods and services.
The UK left because of 2 key issues;
The British people it seems are not willing to relinquish their right to democratically vote to elect their Government every 5 years. With more powers being given away to Brussels (an unelected body) it was feared that we were losing our democratic rights.
Immigration can’t be controlled when you allow free movement of people. Additionally, with the flood of migrants and refugees arriving through Europe’s porous borders on a daily basis, it was becoming impossible to continue with the status quo.
By regaining our democratic rights and restoring power back to Westminster, we can now elect a Government to control migration into the UK in numbers that our infrastructure can deal with and additionally we can only admit the skill sets that our economy is lacking.
The Snowball Effect
While it’s only natural for other eurosceptic countries to watch our progress before jumping ship, it is expected that other countries may now also demand a referendum, with an equally high chance of voting to leave the union.
Whether other european countries, Netherlands, Denmark, Sweden, Austria, Italy do hold a referendum is a matter for conjecture and one would imagine that everything possible will be done to prevent a vote from taking place.
The Financial Cost
Potentially, if the EU deny Britain access to the single market, it will cost the UK up to 3 million jobs, but in the process, life being a tit for tat game after all, if the UK were to deny the EU access to the UK market, up to 5.5 million jobs are at risk.
It seems that the UK has a strong hand to play (being the largest customer that the EU has).
If negotiations are successful, there is no reason why the Uk can’t have access to the EU market without giving free movement of people in return. That is not an option that would sit with the British people.
On this basis, it looks like an impasse which might be difficult to get around, but just because no deal has been done like this to date, doesn’t mean that one can’t be done in the future.
The Eu has more at stake than the UK does in many regards and they will need to balance their UK deal with simultaneously trying to dissuade any other countries from leaving as well.
Future Trading Partners & Markets
While it’s true that there are 500 million within the EU, it’s also worth pointing out that at least half of them are not exactly well off and so are not likely to become significant UK customers for anything in the near to medium term.
By contrast, the world market (which as an EU member we are restricted in trading with) has 2.4 billion people in rapidly growing economies & we can reach out to those countries to forge new deals, new relationships and new markets.
On balance the future is looking brighter outside as we have the freedom to create on a truly global scale.
Leaving the safety of Nanny EU’s apron strings might seem daunting but in the longer term, Britain will be able to re-append the prefix that for so long stood in the world as Great Britain.