UK's exit from the European Union is certainly not a step forward

Although in public, the EU leaders have been urging Britain to remain in the union, privately Germany, France, Italy and Belgium -- core members -- are said to be preparing for a life after the probable divorce. Photograph:( Getty )

WION New Delhi, India Jun 24, 2016, 05.06 AM (IST)
When Barack Obama stood on the hallowed ground of Hiroshima on Friday to pay tribute to the victims of 1945 nuclear devastation, the Group of Seven (G7) countries were making a last-ditch effort to persuade Britain to remain in the European Union. So worried is the G7 about Brexit that the issue dominated the final declaration of the elite bloc's two-day summit in the Japanese peninsula of Ise-Shima.

Obama himself has been at pains to explain to Britain that the country will have a brighter future if it stayed in the European bloc. But if it exited, the consequences could be harsh. Not only this, he is on record warning the UK voters that if they choose to abandon the EU, their country should forget any fresh trade deal with the United States for at least a decade. "The UK is going to be in the back of the queue," Obama said during his visit to Britain in April, arguing that Washington's focus is on negotiating with big blocs rather than an individual country.

The panic button

The UK is holding a referendum on June 23 to decide its future in the European Union. And that has triggered panic among Britain's allies, trade partners, political leaders, economists and business honchos worldwide.

At G7, the leaders were unanimous in their opinion that a 'Leave' vote in the UK would pose a "serious threat to global growth." Any such move would reverse the trend towards greater global trade and investment, and the jobs they create, they said. Hours before the G7 declaration, Japanese Prime Minister Shinzo Abe warned that a crisis on the scale of Lehman Brothers was staring at the global economy.

What does the EU think?

Although in public, the EU leaders have been urging Britain to remain in the union, privately Germany, France, Italy, and Belgium -- core members -- are said to be preparing for a life after the probable divorce. Post-Brexit, the EU could stress on closer integration with tighter security and defence collaboration.

The EU leaders, however, fear that Brexit is bound to encourage separatist sentiments in other block states.

Why does Britain want to go separate ways?

'Love Europe, Leave EU', one of the online campaigners for an exit vote, argues that way back in 1975, the British public voted 'yes' to a free trade deal with Europe and not for a 'United States of Europe'. The present union, it argues, crushes democracy and "in the process creates a class of politicians clearly in it for themselves".

Many believe that Britain's political and economic clout has diminished ever since it joined the group, and that by standing alone the country can reclaim its glorious past.

Another campaign, Leave Vote, says it's time for Britain to spend its money on domestic priorities like the National Health Service not the EU. It claims that EU costs Britain £350 million a week and that since 1973, the country has sent over half a trillion pounds to the union. In return, the Euro skeptics believe, Britain has only run a massive trade deficit with Germany, France and nearly every other European country.

So then why bother with Schengen system, common currency and EU regulations when these are clearly failing in securing economic growth, the Leave vote campaigners argue.

Another of UK's biggest concerns is rapidly growing immigration from the EU and unemployment for its citizenry. Last year, Britain saw inflows of 1,84,000 EU and 1,88,000 non-EU citizens. 'Leave' vote supporter argue that being a part of EU prevents Britain from bringing in skilled workers from outside the bloc.

What do opinion polls predict?

Recent polls in the UK suggest that most people support staying on with the EU. Prime Minister David Cameron is leading a campaign for this and his government has stressed upon the negative fallouts of leaving EU.

A recent poll released by YouGov says that university degree holders or those aged below 30 are most likely to vote stay in the EU. Northern Ireland and Scotland are the regions that are likely to vote for staying in the union, while with almost two-thirds of respondents the Midlands is expected to cast a 'Leave' vote.

How will Britain be affected if Brexit happens?

If voters did decide to part ways with the economic bloc, its first casualty will be hundreds and thousands of migrant workers. Most of them are from Eastern Europe, who are currently employed and live in the UK. The borders will be resurrected again and visa regimes will again kick in.

The UK, too, is not expected to get away unscathed. IMF managing director Christine Lagarde indicated that Brexit may hit the British economy much harder than its supporters expect. She said the effect may range from "pretty bad to very, very bad".

A poll, carried out by Ipsos Mori for the Observer, says nearly 9 out of 10 economists believe an exit from the European Union will have negative consequences for the UK economy. The economists argue that a Brexit will hit both gross domestic product and household incomes.

Four-fifths of Britain's major companies have taken steps to hedge against the risk that a vote to leave the European Union will knock more than 10 per cent off the value of sterling, a poll of almost 800 of Britain's top 1,000 companies showed on Wednesday.

The British Pound is also expected to take a hit. The Bank of England, the central bank of the UK, says Brexit will hit the economy with pound falling and mortgage rates rising. Some analysts also fear that a Brexit vote will reignite calls for independence in Scotland and Northern Ireland as these regions may like to stay with the EU.

Several former Nato and US foreign affairs chiefs have red-flagged the idea of Brexit, warning Britain's national security and place in the world order would be severely damaged. Writing in different UK papers, these experts said that by leaving the union, Britain would not only lose its international clout but also "give succour to the West's enemies".

Let Britons decide for themselves

The EU, UK, and the world at large may be on tenterhooks over the outcome of the historic referendum, but we must presume that the British people will use their vote judiciously as it will shape the future of their country for decades to come. The way the world has been handling its affairs, it seems that boundaries are becoming omnipresent than what we would have imagined a few decades ago of a globalized, unified world.