Brexit: Things you are not told

By Murari Sharma

British Prime Minister David Cameron has promised an in-out referendum of his country’s membership in the European Union by the end of 2017.  He wants to complete negotiations on reform before calling the vote. He has recently said he hopes the reforms would be agreed by the time of the EU summit next month.

Britain has publicly demanded greater freedom for it to decide policies on economic governance, competitiveness, immigration and sovereignty. However, behind these public demands, there are at least two fundamental psychological reasons, which are not publicly stated.

In economic governance, London does not want to concede more powers to Brussels, to join the euro and to be part of the ever closer union in Europe. It is widely held in Britain that excessive regulation by Brussels has reduced European, particularly British, competitiveness. Britain wants to curtail the EU’s power to regulate. It also wants to exercise greater control over its border, to impose certain restrictions on the welfare payment to new EU migrants and  to give more powers to national parliaments.

The British cabinet, businesses, and people are divided on the issue. The division in the cabinet is so deep that Prime Minister Cameron, who supports remaining in a reformed EU, has allowed his ministers to choose their side without the fear of losing their jobs. For instance, Chancellor Osborne is for staying while Works and Pension Secretary Smith is for leaving. Several other ministers also ‘flirting with’, as Sunday Express characterizes, the idea of leaving.

Although most British businesses seem to support staying in the European Union, a minority of them want it to head to the exit. Essentially, who is supporting and who is opposing boils down to their expected cost and benefit from Britain’s exit from the EU. For example, the financial sector supports continued EU membership to exploit unrestricted Europe-wide market. On the other hand, manufacturers want to see less competition to them from European producers.

Even though the majority of British voters still want to stay put in the union, their number is gradually dwindling. The unabated flow of migrants from the poorer members of the union and Middle Eastern migrants have frightened them. Those who have lost their jobs blame migration for their woes and support Brexit.

However, for security and economic reasons, the international community is united in its call for Britain to remain in the EU. Evidently, the creation of the European Economic Community, the predecessor of EU, had ended the era of incessant wars — from the hundred year war to World War I and II — in Europe. If Britain leaves, others may follow suit, and the union could unravel. Such development may reopen the old animosities and open the chasm for wars.

In the economic sphere, the rest of the world wishes to see the Europe-wide market remain intact, not fragment. Negotiating a single Europe-wide trade deals is both more efficient and more beneficial than individual agreements with 28 EU member states separately. That is why countries like the United States and China have called on Britain to remain within the union.

While these are publicly stated reasons for and against Britain leaving the European union, there are equally important, if not more important, reasons that are seldom mentioned in public: British elite’s complex and British voters’ ignorance.

Some British elites do not appreciate their German counterparts calling most of the shots in the European Union. Although after World War II Britain has become a second tier military and economic power, they have difficulty acknowledging that fact. Rather than playing second fiddle in Europe, they would rather be their own masters.

Ordinary British voters are terribly misinformed. Those who want Britain out of the EU are responsible for such misinformation. They throw raw meat wrapped in jingoism to their voters by suggesting that Brussels bureaucrats are responsible for all Britain’s woes — burgeoning immigration and migration, loss of manufacturing jobs, country’s continued decline. It is only partly true.

Immigration is a two-way street. If EU nationals have relocated in Britain, British nationals have also moved to the Continent. The number on both sides is roughly on par. If Britain imposes restrictions on the free movement of EU nationals, other EU members will institute similar restrictions on British nationals. Therefore, there is no clear advantage to be reaped her by leaving the union.

Because of the free mobility across Europe, most migrants from the Middle East have been coming through Greece and Italy. If Britain leaves the EU, smugglers will begin to reroute their human cargo to British shores. In that case, the migrant problem will be more acute, not less.

Obviously, Britain has been losing manufacturing jobs over time, which makes the victims angry. But protectionism is not the anser to this problem. First, if Britain institutes protectionist measures, others will complain to the World Trade Organization, or worse, will retaliate with similar measures. Second, as long as there are countries where labor is relatively cheap, British producers will relocate their manufacturing to those nations.

Then there is the British identity crisis. Germany is calling the shots in EU because it is the largest economy in the group. America is calling the shots in the world because it is the largest economy and military power. Britain imperial power, built on being the first country where industrial revolution emerged, is not going to be restored again. In a globalized world, it does not have the resources, population, and territory to repeat that glory again.

It does not, however, mean that Brexit could be all bad and no good. Somethings will be better off, somethings would be worse off, and something would remain largely unaffected. The problem is you would not know what the balance sheet of would be like until Brexit has occurred. In other words, Brexit is a gamble. It should better be calculated rather than blind.

The only thing that is certain in this gamble is this: Britain outside the EU would be less significant in the world stage than inside, where it would have the backing of the group. The British voters should keep this in mind when they go to the voting booth some time in 2016 or 2017.


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