What is Brexit?

What is Bexit? Britain's Exit from the European Union.
What is Bexit? Britain's Exit from the European Union.

What is Brexit?  A 10-Step Explanation

By now, as long as you haven’t been living under a rock and regardless of where you are in the world, you have heard of the landmark decision called Brexit. However, many are still unsure of exactly what this is and how it came to be. The first thing you need to understand is the name of the movement – Brexit. Do you know how this term was created? If not, don’t worry, you aren’t alone. Essentially, this term was used as a shorthand (catchy) way for the media to refer to the situation. It is basically just a shorthand way of saying that the UK left the EU. It is a merging of the words “Britain” and “exit.” Put together (in a rather uninspired way) to create “Brexit.” This was exactly the way that the Greeks created Grexit when they left the EU.

While the purpose of Brexit was to determine if Britain would remain in the European Union, many felt it was more than a vote on membership. In fact, they viewed it as an important step toward social and national identity, the place Britain had in the world, and the overall future of the European project.

The vote, which eventually occurred on June 23, 2016, was monumental. It was one that was watched and anticipated around the world. People took to social media letting their thoughts, views, worries, and concerns be known. It was definitely a time that got Britain quite a bit of attention. If you are still a bit confused about why this vote was even necessary, read on. All the most common questions about Brexit and how it happened are found in this article.

10Brexit Defined

Britain’s leaving the European Union

As mentioned before, Brexit was created by combining the words “Britain” and “exit.” It was actually a referendum that was voted on by the people on June 23, 2016. It asked the voters if the United Kingdom should maintain their membership in the European Union of if they should leave.

The pro-Brexit advocates stated that leaving the EU was absolutely necessary to help protect and even restore the identity of the country, its independence, culture, and even the place the country had in the world. This is an argument that is typically expressed among those who are opposed to immigration into the country.

The “remain” supporters made the argument that staying in the EU was a better option. It would be more beneficial for the economy, and the concerns related to migration were not so important that they would outweigh the economic repercussions of parting ways.

The debate that occurred among supporters of each side is one that further represents the deep class divides present. Voters who had less money and less education are more likely to support the departure from the EU. The debate also became a vessel for anti-elite and anti-establishment feelings against the mainstream British political parties.

During the entire debate process leading up to the final vote, neither side defended the EU as being an admirable or meaningful institution.

9Making a Case to Leave

Britain had to leave their fish-n-chips were under attack.

There was quite a bit implied by the campaign slogan, “Take Control.” Many people in the country were astutely rankled by Britain’s loss of authority over its regulations and economic policies. This led to the creation of an entire genre of various urban legends through the years that were referred to as “Euromyths.”

The stories typically featured some part of British culture that was supposedly under attack. Some claimed that the double-decker buses were going to be banned, while another stated that the traditional meal of fish and chips would have to start being written in Latin on restaurant menus. The subtext is all but subliminal – the Brussels bureaucrats were the enemy of the country’s “Britishness,” and therefore a threat to the identity of the country in all its double-decker, deep-fried glory.

There were two main things happening while the country was gearing up for Brexit. The cultural nostalgia was ramping up because of Britain’s perceived lost place in the world. This was based on the idea that Britain mattered in the past and could do things without first consulting Brussels. The second issue related to immigration. Many citizens felt as though they were losing their national and cultural identity. There was also an influx of people who were all too willing to work for lower than fair wages. As a result, many people in Britain wanted to leave because they felt as though they had lost their country and there was no way to get back without parting ways from the EU.

8Making a Case to Stay

The case to stay? Money.

The other side of the argument is where you had the individuals who wanted to remain in the EU. One of the main things that the “Remain” campaign didn’t do was to counter the arguments made by those who supported leaving. Instead of defending the EU or that immigration was good for Britain, those who wanted to stay warned that leaving would be disastrous for the economy of the country.

While this may not have seemed like a great strategy, most of the economists who were consulted agreed with this claim. Europe was considered the most important export market for Britain and its biggest provider of foreign direct investment. Union membership was crucial in helping to establish London as a worldwide financial center. The exit of Britain (according to those opposed to leaving) would jeopardize this status, as well as all of the high paying jobs that went along with this status.

This fact was actually seen in the weeks leading up to the vote with the referendum alone affecting the economy. The pound plummeted to its lowest valuation ever for the past seven years.

However, even those individuals who wanted to stay made no real argument for the two primary political parties, nor did they show much enthusiasm for the EU. The arguments they posed were focused on the self-interest of Britain, which is just another indication of how unpopular the EU had become throughout the country, even among those who were supportive of staying.

7The Growing Wariness of All-Things-Europe

Britain is over the Eurozone and Euroness

If you spent enough time in the United Kingdom, you are bound to hear someone refer to Europe as “the Continent.” Even travel agencies are advertising flights and various package tours to Europe as though it were someplace else entirely.

According to a scholar from Stanford, Britain even kept Europe at an arm’s length, even during the time when the county was still a favorable member of the European Union.

When the European Economic Community was originally founded in 1957, Britain refused to become a member initially. However, the country later joined in 1973. Unfortunately, a crisis of confidence occurred that led to the creation of a similar exit referendum only two years after they joined. At this point, the pro-Europe campaign was successful and earned approximately 67 percent of the total vote.

This populist opposition to Europe as a whole stayed during the decades after this period. In addition to being disenfranchised with the European Union as a whole, Britain also never joined in with other countries that were using the euro for currency. They also never participated in the Schengen Area agreement for open-borders that was part of the EU’s policies.

The feelings toward the EU only continued becoming worse, as Britain had to go to Brussels for everything. Many citizens became tired of how it was set up, which is what eventually spurred the referendum that would be called Brexit to form.

6The Breaking Point (Why Now?)

The refugee crisis didn’t help things

Euroskepticism was given renewed urgency due to some of the challenges present within the European Union. According to Charles Grant, who was the director at the Centre for European Reform, there would have never been the creation of a referendum if the Eurozone crisis was not present. The crises with refugees did not help the matter, either. It made the EU look as though it was out of control.

The deeper issue was that the union was still an unfinished project, which resulted in the migration and economic issues reaching the breaking point.

No centralized political institutions were ever developed by the European Union that were strong enough to manage the issues at hand. As a result, the individual nations did not have much incentive to make sacrifices that would be for the common good of Europe. This left the European Union at its absolute weakest when it was needed most.

All of these factors led up to the creation of the referendum, which was voted on by the country on June 23, 2016. At this point, you likely know the outcome of the vote; however, it won’t be discussed for a few more steps yet. However, the tensions were so intense that there were many who were ready to throw in the towel with the EU. Even those who understood that economic demise may be a possibility wanted to part ways with this disorganized, controlling body. The EU had dug their grave with all the actions (and non-actions) that had occurred.

5The Potential Ramifications of Leaving the EU

Scotland almost exited too?

The projections that were released regarding what would happen if Britain were to leave the EU differ quite a bit. However, there is a general consensus that leaving would cause financial issues for Britain, at least in the foreseeable future.

If Britain did not have access to the open markets of the Union, then the country may lose investment and trade. Also, while the influx of migrant workers created a bit of anxiety related to British identity and culture, losing this labor force may lead to decreased job opportunities, slower economic growth, and lower productivity. All this was published in a study by the National Institute of Economic and Social Research in Britain.

If Brexit was successful, it may also create a “Scexit.” Before the vote took place, the first Minister of Scotland, Nicola Sturgeon, stated that if Britain votes to leave the EU, that she was going to create a new referendum where Scots could vote to leave Britain and then could rejoin the European Union as an independent nation.

This measure was rejected by the voters of Scotland by almost 10 points back in 2014 but it was believed that a successful Brexit may change this. This is because the people in Scotland fully supported Britain remaining a member of the European Union.

If Scotland did ultimately leave, it may dramatically alter the political character of Britain, as the members of Parliament of Scotland have a tendency to lean to the left.

4Other Potential Ramifications of a Successful Brexit

With Britain gone, Germany will exercise more control than ever in the EU

Before the vote occurred, many speculations were made regarding what would happen if Britain left the EU. With the country making up about a sixth of the economy of the EU, it is comparable to Florida and California being lopped off from the United States economy.

This type of destabilization would affect the U.S. economy. In fact, a week prior to the Brexit vote, the Federal Reserve in Washington stated that the possibility of Brexit was a reason to keep interest rates from going up.

Many speculated that there would be political ramifications of a Brexit, too. If Britain were to leave the union, it may provide momentum to the anti-migrant message and more support of the far-right policies that were already gaining strength all across Europe. Many were worried that this could disrupt the 70 years of peace that Europe had enjoyed.

It would also undermine the trust present between member states that have commitments that seem less and less reliable each time one considers leaving. This exit may result in those in the Eurozone believing that things can be unstuck and entropy may happen. For example, Germany already had too much power and with a British exit, this imbalance would become more pronounced. It would also wind up undermining the legitimacy of the EU and make it more difficult to properly respond to an internal crisis, such as outside security threats, the migrant influx, or issues with the Greek economy.

3The Vote: A Breakdown

The vote

A referendum, which is what Brexit was, was a vote where everyone (or almost everyone) who was of voting age can have a voice. It occurred on Thursday, the 23rd of June in 2016. This is the vote that decided whether or not the UK should remain a member of the European Union. Those in favor of leaving were successful and gained 51.9 percent of the vote, compared to 48.1 percent who voted to stay. The turnout for voting on the referendum was 71.8 percent, with over 30 million people showing up to cast their vote.

The breakdown throughout the UK was similar to the overall results. In England, Brexit was voted for by 53.4 percent of voters, while 46.6 percent voted against it. In Wales, the people were also for Brexit, with 52.5 percent voting to leave, and those who voted to Remain was 47.5 percent. Northern Ireland and Scotland both voted to remain in the EU. In fact, Scotland voted to stay with a vote of 62 percent to 38 percent and Northern Ireland also voted to stay with a vote of 55.8 percent to 44.2 percent.

As you can see, in the majority of areas of the country, it was clear that the people wanted to leave. However, there were several areas that voted to stay; however, they were unsuccessful with the final vote being that Brexit was successful and that Britain would leave the European Union.

2The Effects of the Referendum

Will Brexit be positive?

After the vote, Britain got a brand new Prime Minister, Theresa May. She was the former home secretary and took over for the previous Prime Minister, David Cameron. Cameron announced that he planned on resigning if the referendum was lost. Just like Cameron, May was also against the country leaving the EU; however, she only played a very low-key role in the overall campaign and was not ever seen as an EU enthusiast. May became the PM without having to face full Conservative leadership contest after her main rivals from the “leave” side decided to pull out.

While a single person’s opinions on the success or lack of success is insignificant, there have been some polls grading the new Prime Minister’s performance. According to the polls, the Conservative Party has a significant lead over the biggest opposition party, which is Labour. Also, May became the very first Prime Minister to gain the opposition seat during a by-election in over 35 years. The main message that Theresa May has stood behind is that “Brexit means Brexit.” She has made the pledge to begin the process of leaving the European Union by the end of March 2019. Some of the details of her negotiation hopes have been outlined in the key speech she gave on Brexit.

While there were some from the “Leave” side that were not happy about her appointment, only time will tell if she is able to stick by what the British people one and achieve the goals set by Brexit.

1State of the New Economy

Is there be a Brexit bounce? Will it last?

Before the vote regarding whether or not Britain would leave the European Union, there were many predictions about what would happen if it was successful. Many senior figures, including Chancellor George Osborne, David Cameron and others, who all wanted to remain in the EU, make the prediction that the UK would face an immediate and severe economic crisis if the vote to leave was successful. Prices of housing would fall, there would be a large recession, and a huge increase in unemployment. Also, an emergency budget would have to be created to wrangle in all the spending cuts that would be necessary.

While the pound did slump a bit the day after the referendum vote and even though it is still about 15 percent lower than the dollar, and 10 percent down compared to the Euro, all the predictions of immediate doom were not proven as accurate. The UK economy only grew by about 1.8 percent for 2016, which was second to only Germany, which grew by 1.9 percent among the G7 leading industrialized nations.

In February, inflation had reached 2.3 percent, which is the highest it has been in three and a half years; however, unemployment has continued to drop and is now at an 11 year low of just 4.8 percent. The cost of housing has fallen by 9.4 percent according to ONS figures.

So all these predictions of gloom and doom were not exactly accurate, according to the current state of Britain’s economy.

Conclusion

The European Union, which is often just referred to as the EU, is a political and economic partnership that involves 28 different European countries. It was started after World War Two to help and foster economic co-operation. The idea was that countries that would trade together were more likely to avoid getting into a war with each other.

The problem that Britain had with the EU is that it eventually became a “single market,” allowing people and goods to move as if all the member states were a single country. It uses its own currency, the euro, which is also used by the 19 member countries, has a separate parliament and sets the rules in many areas regarding things such as transportation, environment, consumer rights and even things such as charges for mobile phones.

As the EU continued to grow in power, the British people began to become disenfranchised feeling as though their culture and status as an individual country was being lost and absorbed by this larger, more powerful entity. Thus, the Brexit referendum was created.

As seen by the outcome of the vote, the decision to leave the EU was one that was not reached by a large margin over those who wished to stay. However, it was successful and therefore Britain has begun taking steps to fully leave the EU.

Even though the vote was successful, Britain is still not going to fully leave the EU until the summer of 2019 depending on the exact timetable that is established.