Britain set To determine Europe’s future

David Cameron

David Cameron

The spill-over effect (of the British decision) will be unfortunately felt, deeply felt. It would be bad either way.
Either way, the European Union will not remain the same after next week’s, June 23, referendum in Britain to determine whether it remains within the EU system or takes an exit.

If the British decides to remain, it surely would come out of a negotiated settlement, which would cede more autonomy and flexibility to Britain; principally a dominant place for the British pound. Other EU-member states are most likely to take a cue and seek for more concession. Conversely, if Britain chooses to exit, the decision would have a strong domino effect on other member states, particularly those with considerable population of anti-EU sentiments, that ‘exit’ is achievable and increasing the tempo of exit agitation.

“The spill-over effect (of the British decision) will be unfortunately felt, deeply felt. It would be bad either way. It might affect other EU member states that will say: ‘Well if they can leave, maybe we should also have referendums and maybe we should also leave,” Margot Wallstrom, Sweden’s foreign minister, recently told The BBC.

“If they stay, it might also lead to other countries saying: ‘Well, they negotiated, they asked and demanded to have a special treatment so why shouldn’t we?’” she said.

As at Wednesday, opinion poll suggests that 40 percent will vote to remain, 47 percent will vote to exit and the rest either undecided or not going to vote. “Except a miracle happens, we would wake up on Friday next week to discover that Britain is out. Unfortunately that’s the voice of the local people,” Posi Olatubosun, associate professor of Accounting at the Richmond University, London, told The Guardian.

The free market area, according to him, has led to synergistic growth in the economies of the 28 countries, favouring the United Kingdom, Germany and France more than the others.

“The pool of accessible talents in the EU is one of the main reasons why I don’t support Brexit. In 2014/15 about 1,000 nurses were hired from Spain and Portugal at short notice. That would no longer be possible, although the UK can always source its human resources from the commonwealth,” Olatubosun said.

But according to figures derived from the British parliament, the EU seems to be a major source of foreign investment for the UK. In 2014, the 27 other EU countries invested €620 billion (£496billion) in Britain –– 48 percent of all UK foreign investment.

Also, the UK exported €288 billion in goods to the EU in the same year and this represents 45 percent of all British exports. In the same period, €394 billion in goods and services (representing 53 percent of imports) came from the EU.

Consequently, the fear among pro-EU advocates is that getting out would mean that import levies would be imposed on British exports, except the UK individually bargains with each of the remaining 27 EU countries.

Various statistics have indicated that between 50-60 percent of the British exports terminates in the EU, and consequently about 4 million jobs are likely to be at risk if the country exits.

Olatubosun told The Guardian that research institutes, like the University College London, Imperial College, and Kings College, rely on up to 10-20 percent of their annual income, on funding from the EU. “It has been forcast that property value are likely to crash by 15 percent since the Europeans would move back to their countries,” he said.

Chancellor of the Exchequer, George Osborne, warning of dangers of British exit, disclosed that he would have to slash public spending and increase taxes in an emergency budget to tackle a £30bn “black hole” if the UK votes to leave the EU.

The chancellor said this could include raising income and inheritance taxes and cutting the NHS budget. “We know all too well what happens when Britain loses control of its public finances. We’re agreed that a vote to leave risks doing the same thing to Britain all over again,” he said.

According to Osborne, leaving the EU would be an “irreversible” step that would cause “financial instability” and leave the UK “with no economic plan”, demanding an immediate response from government.

“There would have to be increases in tax and cuts in public spending to fill the black hole,” he said.

The UK, he suggested, would not be able to “afford the size of the public services that we have at the moment” outside the European Union and would have to “cut its cloth accordingly.”

But then, the relationship between the UK and its European neighbours has always been uneasy; due to political reason.

Some of the reasons why the UK was not a signatory to the Treaty of Rome in 1957 were that it has commercial, political and sometimes sentimental attachment to the commonwealth countries, and also there’s a belief that the common market would ultimately lead to the loss of sovereignty, whereby laws would be made from Brussels and imposed on Britain, thereby putting a question mark on the sovereignty of Parliament. However, the country was admitted with effect from January 1, 1973.

In 1975, a referendum was held on whether the UK should continue its membership, with 67 percent voting yes and 33 percent voting no. Since then, the issue of EU has always been either a major or minor election issue.

For instance, in the 1983 general elections, the Labour Party campaigned for the withdrawal of the UK from the then European Economic Commission (EEC). They lost the election against the Conservative party headed by Mrs. Margaret Thatcher, and the Labour Party has since then become pro-EU.

In 2010, the Liberal Democratic Party promised to hold an “in-out” referendum. On the strength of this promise, they were able to increase their seats in parliament and ultimately they formed a coalition government with the Conservative party. Since then, the UK Independent Party had grown in popularity due to its call for the UK to leave the EU.

However, the reasons for dissatisfaction with EU membership include, uncontrolled migration from less wealthy EU-member states, mainly in the East of Europe. Other reasons include, fear of pressure on social services like healthcare, education and housing, heavy financial burden arising from subscription to the EU budget, as well as, the likelihood of Turkey, with a population of 75 million joining the EU in the future.

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