What is Brexit?
Brexit means Britain’s exit.
Actually, Britain was formerly a member of European Union (EU), a politico-economic union of 28 member states that are located in Europe, prominent member countries of which are, France, Italy Germany, Sweden and so on, of which Britain(UK) was also one of them. On June 23, 2016 by a referendum people of UK opted to exit itself from the EU and Brexit is the modern nomenclature gifted by the social medias from around the globe for this exit. The expanded form entails Britain’s exit.
UK has been one of a prominent member of the EU. It is the second contributor after Germany(20%) to the EU’s GDP giving in every fiscal a 17% of contribution. France 14%. Italy 11%. UK has always been so open among the other countries. Liberalization was at its peak, but however to majority Of Britishers such liberalization seemed a harm to the nation. Issues ranging from job to immigration to education made them worried. So, as a result they decided to move out of the union.
Pros and Cons of Brexit
- Free International trade: Leaving the EU, Britain will be able to independently access the international trade deals.
- No membership cost: You no longer have to pay for EU membership fee
- No more EU trade regulations costs: Exit from EU will allow Britain to set its own regulations for the members.
- Reduced red tapes: Reduced policies have enabled firms to increase their productivity potential.
- Lower Costs: Lower supermarket costs reduced barriers to customs and tariffs and other trade costs.
- Control immigration: The UK government will be able to control and regulate the immigration of individual in its member state.
- Security: The new immigration laws will make it difficult for a terrorist to enter the UK and also make it easier for the UK to deport violent criminals.
- Independent: Britain will have a chance to influence world decisions as an independent nation.
- Better Employment: Increased wages and job creation. Exit from EU will lead to fewer regulations in the workplace environment.
- Opportunity for Companies: Britain companies will no longer have the mandate to follow the strict laws set by the EU.
- Loss in Business: Membership to EU will make Britain attractive for foreign investment and exit from EU, they will lose 45% and 50% of UK’s Export and import.
- No Free Trade Negotiations: Britain will not take part in the world largest free trade negotiations between EU and the US.
- Loss of influence: Leaving the EU will limit Britain’s opportunity to take part in EU’s decisions concerning world affairs or in setting European laws.
- Barriers to EU workers: With the implementation of Brexit, there will be a skills gap in the market because of the barriers put in the workplace.
- Impacts on the economy: Leaving EU has an impact on the economy, businesses and individuals will have a hard time raising funds for any developments.
- Increase Energy Bills: EU negotiates for energy bills for its member state, leaving EU will increase energy bills for Britain.
- Less Educational Funds: EU offers support funds to a lot of educational programs in the UK. Exiting EU will have an impact on students since the Britain government regulates the costs for EU students.
- Less Educated Manpower: Controlling immigration by Britain will affect its economy and the society at large.
- Reduced investment fee: Most of the jobs in the UK are due to trade with the EU making the UK receive an investment of £66 from the EU jobs.
- More Policy in Ground: Exiting from EU, Britain will have the responsibility of setting policies to protect human consumption.
What is the global impact?
- UK has been a very open country to the other countries across the globe. It has significant business and trade connections all over the world. It has gathered so much of strengths with its association with the EU over the past decades, which it held a strong grip on the world economy. After the exit it now can be said the nation now holds a lesser grip than before. This may likely cause a degeneration of the trust worthiness among the global traders towards the nation.
- Exporting to UK and importing to UK will now not be a piece of cake. Stringent policies and strict regulations are now awaiting the roads.
For existing investors, they probably gonna see a scenario where all the global investor withdrawing their investment from UK and Europe, at least for the time being now thus resulting crash of stocks in the international market inviting the Pounds to play at low level. To obtain the same value of goods and services as they were taking before resulting more outflow of GBP thus causing a loss to them.
Also, new investors may get profit even after the Brexit.