European Union

With Brexit, Britons Would Lose Out

FILE - Britain's Prime Minister David Cameron arrives for a two-days European Union leaders summit in Brussels, Belgium, 17 March 2016. EPA/STEPHANIE LECOCQ (zu dpa «EU, Soziales, Kronprinz-Streit: Britische Tories in der Krise» vom 20.03.2016) +++(c) dpa - Bildfunk+++
British Prime Minister David Cameron is battling for his country's place in the E.U.
  • Why it matters

    Why it matters

    The British decision on E.U. membership will have far-reaching consequences for the country’s relations not only with other E.U. states but also with the United States.

  • Facts

    Facts

    • A referendum on British membership of the European Union will be held on June 23.
    • The E.U. and the U.S. are negotiating a trans-Atlantic trade partnership known as TTIP but struggle to agree on key issues.
    • According to a poll from earlier in March, the British public is split on the issue.
  • Audio

    Audio

  • Pdf

 

While much has been written about “Brexit “or “Bremain” and its ultimate effect on Britain, Europe, the United States and the rest of the world, the key question which will determine whether Britain exits from or remains in the E.U. is how ordinary Britons perceive the effects on their lives of either course.

It is important they understand the detrimental effects on them, and that those, like us, who oppose a British exit address our arguments to them, and not just to the political class and economic elites.

Ordinary Britons should be most concerned by the uncertainty that exit from the European Union would create. There is no guarantee after an exit what the relationship would be between Britain and the E.U., which could have serious economic consequences for all Britons.

Article 50 of the Lisbon Treaty provides that if a member state intends to withdraw from the European Union, the European Council must agree to the terms of the withdrawal within a two-year time frame. If no agreement is reached within two years, the time period can only be extended with the consent of all member states.

There is no direct precedent which provides guidance on the substantive terms of a member state’s withdrawal.

An exit from the E.U. would leave Britain isolated and a much less effective player on the global scene.

This leaves an indefinitely long gulf of uncertainty, which would be highly detrimental to the British economy and British workers. It is impossible to predict what Britain’s status would be with respect to the European Union and with respect to trade agreements and other financial arrangements.

Until an agreement would be reached, if at all, it would be impossible to know whether Britain would remain a member of the single market and get full advantage of the free, unrestricted movement of goods and services; whether banking and financial rights would remain the same; or whether investors could continue to have confidence in Britain as a safe place for investment.

Today Britain is a major location for foreign investment and is a major financial center. However, there are similar amounts of foreign investment in countries such as France, Ireland and Holland.

 

How Business Sees Brexit-01

 

The French Minister for Economy, Finance and Industry has already said that Paris would “roll out the red carpet” for bankers wanting to relocate from London. Britain might no longer be considered a safe place for investment or the conduct of financial services, which could result in substantial loss of jobs that would hurt the economy and ordinary citizens.

Even in the best case, where Britain would have the same standing as Norway and Switzerland, what would Britain have gained by an exit? It would be a member of the single market, but would have to conform its laws to E.U. legislation and would have no say regarding those decisions.

From an economic standpoint, an exit from the European Union has a lot of downside with no upside.

Some favoring a British exit have argued it would enhance Britain’s relationship with the United States. Quite the opposite would be the case.

The U.S. and Britain would no doubt continue to have a strong relationship, but it would not be nearly as effective as is today.

The E.U. is the United States’ strongest partner on a myriad of global issues, from Iran to Russia. Britain’s membership in the E.U. has a multiplier effect on Britain’s special relationship with the United States. The United States today can work closely with Britain and other members on issues of critical concern on both sides of the ocean.

Nor should ordinary Britons think the U.S. would simply negotiate a separate free trade agreement with the U.K. when all U.S. energy is devoted to completing the Transatlantic Trade and Investment Partnership (TTIP) with the entire European Union. An exit from the E.U. would leave Britain isolated and a much less effective player on the global scene.

The political message must continue to be sent from Washington, including the White House and Congress, from other capitals, and from within Britain itself, that a Brexit would be a huge mistake for the average British citizen.

It would threaten their livelihood and the country they rightly love. Although appealing on the surface to many Britons, an exit would be seriously detrimental for all concerned.

 

To contact the authors: gastautor@handelsblatt.com

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