Understanding Brexit

What is it?

Britain’s referendum on whether to leave the EU.

Why?

Main issue is immigration. Europe has been the main driver of a surge in immigration into Britain over the past decade.

These immigrants mostly come from other countries (mostly post-Communist countries in central and eastern Europe) relatively poorer than the UK) which have gained accession into the EU. They seek more prosperous conditions to live in and eventually settled on Britain. Poland is the 2nd-largest source of immigrants to the UK, behind India. It is these ‘accession’ countries that were a major driver of European immigration to Britain in the past decade.

A related issue is the subsequent eurozone crisis which impoverished some historically wealthier countries like Spain, Italy and Portugal. As unemployment increases in these countries, they start to look to other EU nations for employment and the British labour market was relatively easy to break into.

The influx of immigrants sparked anti-immigrant sentiment with a majority of Brits believing that immigration levels should be reduced. This argument is dominating the case for Brexit.

Which politicians are on which side?

Remain

Conservative PM, David Cameron

Leave

UK Independence Party (UKIP) leader, Nigel Farage (focused excessively on threat from immigrants)

Conservative former mayor of London, Boris Johnson

>Believe that Britain can’t reduce immigration without leaving the EU, pushing Brexit to one of their top priorities.

Current poll status?

Remain has a majority by a very small margin. Hence, to close to call. Polls may not reflect actual results.

Implications if Brexit occurs?

It could trigger a currency crisis due to impact on Britain’s economy. It is estimated that value of British Pound could fall by 15% and since British companies tend to price their exports in foreign currency, that would mean more expensive exports and therefore, dampening exports. This results in a trade deficit. To finance this deficit, foreign investors would be required to pour billions into the British economy

People of Gibraltar (2.5 sq mile peninsula at tip of Spain) that has been under British control for >300 years. Spain really wants this territory back but its people (who are British citizens who hold British passports) were adamant that they remain under the control of the Brits and not be a part of Spain (not even a shared sovereignty). Gibraltarians are likely to vote remain due to the economic prosperity being part of the EU has brought to them. If Brexit occurs, Gibraltar would also be out of the EU. Gibraltar would not be able to reapply to join the EU since it is not recognized as a sovereign state. Also, Spain may then try to reassert its claim on Gibraltar or tighten border crossing restrictions/ close the border altogether.

http://www.vox.com/2016/6/23/12012962/brexit-eu-referendum-time-polls-close-chart

http://www.mirror.co.uk/news/uk-news/eu-referendum-2016-poll-results-7699714

Here’s the Brexit Worst Case Scenario

http://www.vox.com/2016/6/23/12005364/brexit-vote-gibraltar-britain-spain

http://www.vox.com/2016/6/23/12005814/brexit-eu-referendum-immigrants

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