How Brexit will come to define global politics and economics for years to come
Much of the proverbial dust has settled on the mayhem that followed the British referendum to leave the EU, and despite the warnings that echoed throughout the world of the potential danger of leaving, the citizens of the UK chose to shed off their European ties.
Now that the reality has dawned on many that a British exit is very much a reality, media has become filled with the potential outcomes for not only the UK and EU, but for the world at large. And while much is yet to be done over the years in the building up to the UK’s exit from the EU, much can be said now about where it leaves all those affected.
Majority of the analysis on the impact of Brexit has indicated that the decision to leave the EU could not have come at a worse time for markets. As soon as the results were announced major global stocks took massive dives, and pound was left at a thirty year low. It has yet to be projected when the bounce back might begin (some markets seem to be making a steady return to normality), but for many the damage seems considerable.
Uncertainty towards a future Europe seems to be the key point for many investors, with credit ratings firms moving their UK outlook to negative. Globally there has been a lot to go around in the likes of uncertainty, mostly originating from the east, as a declining Chinese economy has called into question the solidity of current economic frameworks in trade and manufacturing. But to add to that the lack of solid information on future business in the UK makes the global market considerably more unappealing to investors, which has a negative impact on development, especially for developing states.
For those who might understate the implications of global investor uncertainty, the list of consequences is quite lengthy. For one, without investor capital mobility, there will not be injection of financing into the further development of economic activity around the globe. Since money does not simply disappear, there will either be massive flight of funds from more risque investor locations, often meaning developing states, or large scale saving that would cause the growth of inequality as the rich find ways to secure their wealth rather than bet on investing in economic expansion.
This is considerably more worrying when perceived in context of the role the UK plays in global economics and finances. Host to many of the major banks and financial markets, England’s slump may have a knock on effect felt in every corner of the world. This was a major point for debate during the build up to the referendum, and exit supporters were adamant that it was within the capacity of the UK to negotiate and navigate there way through a potential minefield of economic uncertainty and its affects on financial markets.
Already we have seen the express confirmation by the Bank of England that despite its steady forewarning of negative impact if such a decision was taken, it is prepared for the full brunt of Brexit.
For the most part, the Brexit was portrayed by those in favour as a major blow to the tyranny of big banks and their abuse of the British people after the crash of 2008. And as much as it might be argued that perhaps the bankers deserved the nightmare, as major employers and role-players in the British economy, it is yet to be seen whether that victory was worth it in the end.
Unemployment, trade and growth
The biggest stick waved over the British during the campaign to remain in the EU was the threat of a recession. To add to the irony of the situation, most of the justification for the departure from the EU was the potential jobs that might be added through the deregulation of the UK. So there seems to exist a misunderstanding of where the UK is positioned economically.
The UK is about to undergo one of the lengthiest and consequential economic negotiations of recent history, and for many involved the results seem bleak. As was warned prior to the referendum, Britain’s preferential access to the shared market in the EU was a great advantage not to be overlooked. Yet there now exists the necessity to renegotiate the basic principles that dictate trade between the EU and the UK.
Estimated to take two years to finalise, this negotiation period will place in jeopardy the millions of lives affected by the existing laws within the EU. The first concern would be a potential unemployment crisis caused by the flight of business from UK and the existence of large migrant worker base being dwindled by changes in immigration laws. This has been a particularly complex area of discussion for either side of the debate. One side indicating the slow down in business and subsidy’s for poorer communities, and the other indicating a drop of regulations as an opportunity for those very communities to achieve the economic activity and success they once enjoyed pre-EU.
All in all, this situation is extremely dependent on the shifting climate of British politics.
Since the fateful announcement of the Brexit referendum results, all three of the main political figures who spearheaded the debate from either side have removed themselves from leadership positions. The first to fall on his sword, was Prime Minister David Cameron.
It was with the mannerisms of a man truly dumbfounded by the outcome of the referendum that the Prime Minister addressed his nation. Upon admitting that his steadfast opposition to Brexit made him unfit to lead the process, he confirmed his eventual exit from the seat of power. The entire incident was shrouded by the irony of the fact that it was David Cameron’s own suggestion to have the referendum, and that his failure to sway the opinions of his people would now come to define his entire tenure in office.
What followed was the rush to find his replacement, with eyes quickly centered on Boris Johnson, the former London mayor and Brexit headman.
Boris Johnson was by no means a man who instilled confidence in the future of Britain, especially for foreign observers. He’s rash way of speaking, coupled with the unstable appearance of his hair rang alarms of similarity with U.S presidential hopeful Donald Trump, and the world could only deal with one Trump at a time. Nonetheless, Johnson had trumpeted on during the Brexit campaign and won the trust of many voters, and thus was seen as a shoo-in for the Torries top position.
And yet again the world was caught stammering on in shock as an alternative in the likes of Michael Gove (a fellow Brexiter to Johnson) rose to state his intention to challenge for the position. With one swift declaration of Johnsons’ incapability to “provide the leadership or build the team for the task ahead” Boris’ chances of success were blotted out by the sun of his very own campaign. Shortly after, Johnsons decalared that he would not pursue the job.
This left Nigel Farrage. As leader of the United Kingdom Independence Party (UKIP), Nigel Farrage became the voice of the far right in England after the party’s rise to prominence after the 2010 elections. Already indicating his wish to leave the position, Farrage stayed on to guide the party through their campaign for Brexit, and after its success decided to step down. At this point Farrage had become synonymous with UKIP’s very identity, and the Brexit campaign as a whole, so many saw his departure as a cowardly abandonment of responsibility in the wake of his own actions.
These thoughts were echoed in regard to both Johnson and Farrage by the European Commission president Jean-Claude Juncker.
“Those who have contributed to the situation in the UK have resigned – Johnson, Farage and others. They are as it were retro-nationalists, they are not patriots. Patriots don’t resign when things get difficult; they stay.”
President of the European Commission, Jean-Claude Junker
And then the unthinkable happened. After the successive dropouts by various candidates in the race, Theresa May was announced the new Prime Minister of England, and added Boris Johnson as her Foreign Secretary. Not only is it insane how Johnson’s political career has gone full circle, but the fact that Johnson can in no way be described as “diplomatic” has caused many to think that the British have simply given up and decided to plunge headfirst into controversy.
The EU and “friends”
At the final EU summit that Britain would attend, former Prime Minister David Cameron informed his colleagues that the major point of contest during the coming time of negotiation would be movement of people. As a sticking point, many Brexit campaigners have been pushing for an agreement between the EU and the UK that would see the British benefit from access to the shared market, whilst also being able to fully control migration. But already signs from Brussels show that the EU are not going to make this an easy journey.
It can be assumed with much certainty that the EU’s intentions going forward are to make an example of the UK, and ensure that no other member state feels the urge to form their own exit plans. Sure enough, a lot can be said about the all together disfunction of the European Union. Often referred to as overly bureaucratic, steeped in corruption, and disconnected from the realities of the average European, the governing body has had a lot to improve on for quite some time.
Coming off of the economic-disaster-in-motion that is Greece, the EU was seen as an imposing maniacal body that cared only for the pockets of its wealth benefactors, a point former Greek finance minster Yanis Varoufakis has made repeatedly since leaving his role. It was this very reasoning that saw the UK leave. However, it goes without saying that the UK stood a better chance of reforming the organisation from the inside, rather than just assuming the whole thing would fall apart in its absence.
Now, as the UK attempts to claw back to normality and security, they face the full might of an organisation that doesn’t particularly care for their success. And with the arrival of more and more immigrants into the European bloc, they will express very little compulsion to negotiate for the movement of people in the manner many British are hoping for, and this can expected on many other issues affecting the continent.
A Sinking Ship?
The world has now settled into the very real reality that the UK is leaving the EU, and for many there is a feeling that the fall still awaits them on the horizon. We can never be sure of what will come from the consequences of Brexit, but there is one constant in all events in the age of hyperbole, and that is that neither side portray any form of reality.
For the Brexiters this is a triumph that has restored the British to their glory days, and with the freedom of independence they will ride off into the sunset on the back of an abundance of jobs and a well funded healthcare system. Indeed the great kingdom can finally cast off the shackles of political correctness, and live freely to claim that they do not want overregulation and would very much enjoy seeing all these odd looking foreigners sent packing to wherever they came from. Probably somewhere with strange food and brown people.
For Remainers it is the end-times foretold in the books of the Bible, or worse Orwell. And the tyranny and oppression of living in a non-EU Britain can only be contrasted with that of a Britain actively in flames. The country will hence descend into a never ending night that will rain down the persecution of the world in the form of poor trade deals, and an infinitely high unemployment rate.
And so the story continues to unfold.
It is more likely that we will see the UK economy descend marginally further over the coming months, and with the cheap pound many British companies are being bought up by East-Asian firms looking for a deal. Does this signal the end of the UK’s prevalence in the world? Probably not.
As affirmed at the NATO meetings, the UK will continue to play a large role in security operations in Europe and the current leadership seem to be cautious in their approach to further drastic changes. This is most likely a sign that at least for the short term the UK are steeped into a buffer zone that sees very little movement possible, resulting in very little consequential decisions.
To further this point, Brexit isn’t even the main concern in the global economy. A rapidly declining Chinese economy poses much more of a threat to global markets than that of the British decision, and could potentially cause a global recession, something that would be a very unlikely result of Brexit.
The question of Scotland’s independence must also be a big question for onlookers (Scotland having voted to remain in the EU), and there will probably be a hefty push for a second referendum on the matter shortly. The results of this, and its effects on the British economy are not at this point affirmable with certainty, but it would strike another unwanted blow to the fragility of the UK economy at this point.
A Very Bad Day in History
Were the reasons for wanting to leave fair? Probably. Was the decision to leave as a result wise? No.
I am not British, and in no way am I attempting to impose an outsiders view on the people who it will actually affect (ironically, the british did exactly that when they went around colonising half the world, including my country). But as I watched the results from the referendum pour in, I couldn’t help but feel that a very bad decision had just been made. At the worst possible of times.
And as I re-watched the campaigns by the Brexiters I couldn’t help but feel that the British people had been lied to more in these few months leading up to the referendum than in any previous election campaign. The referendum was not a small administrative policy change. It was an ideological pronouncement. It was the act of professing to the world that they did not believe in the notion of continental unity. That in a global community the British helped make, the aspirations and dreams of an individual state can be torn and separated from that of its neighbors. That they are paramount.
It will be echoed in the halls of every regional body on the planet, and we will be all the worse for it. The sovereignty of states must stand firm, but it cannot at any point jeopardize the livelihoods of its citizens. And despite there being no immediate danger to the British people, I believe that the nationalistic tone of the result, and its impression to the British people that they are in fact different to the rest of Europe, is a dangerous precedent to set for the future of a nation.
Brexit will do nothing but promote nationalism and embrace far right values. It will in no way change the dynamic between rich and poor in the country, as in most cases, the rich will have the capacity to shield themselves from the failures that might be encountered.
The world does not need a far right Britain. And it most certainly does not need a far right Europe. Unfortunately, with the success of the Brexit campaign, far right movements all over the region seem to be gaining popularity. Citizens all over the region also want to “take their country back”. This will mean further animosity to outsiders, and the closing off of entire nations to the world, and it is all based off of lies.
The far right belief that all those whom are not us do not seek the same things we do. Do not enjoy the safety of their homes, or the sanctity of their churches. That they do not wish for the comfort that comes with the abundance of resources. That they want your jobs, or your house, or your country. That belief that is ages old and scavenged from the refuse of human thought. That belief is a lie. And it s a lie that seems to be catching on.