In the past week, the European Union (EU) that we once knew might have changed with no return; and that is just the beginning. Britain has had a referendum (the referendum was called Brexit to imply Britain’s exit from the EU) on whether to stay in or out of the European Union, a politico-economic union founded in 1993 with 28 member states all of which are located in Europe. The majority votes in the referendum were 51.9% to leave the EU, while 48.1% voted to remain as part of the union.

Britain has never really accepted to be fully tied to the Union, and that is clearly visible through refusing to join the Schengen area that eliminates internal European control, and by also refusing to join the common financial currency, the Euro. Britain’s reluctance and doubt over giving up control of British institutes to a governing body like the European Union has only increased post the 2008 economic crisis; many European countries had to pay the cost of other member states of the union’s bankruptcy and economic failure. Although the economic crisis hit everyone, the European countries got hit very strongly in comparison.

The Good

One of the main positive highlights is that the United Kingdom (UK) will no longer be fully economically tied to other European countries; by joining the EU, the member countries not only agree to open their borders to one another, but also to share a common market. The UK, and other member countries, send money to the EU’s HQ in Brussels, which is distributed to other members of the Union. Many believe that they shouldn’t be paying for another country when that money can be spent internally on roads, social benefits, hospitals, and public schools (Beckerman, 2016).

Although the exit of Britain from the EU means there will no longer be an open immigration policy, it also limits the entry of people with a record. Theresa May, British Home Secretary, said: “free movement in the EU makes it harder to control immigration” (Britton, 2016). Another issue is that other Europeans are coming to the UK and taking the scarce public jobs and resources (Beckerman, 2016).

The Bad

The clearest negative outcome of leaving the EU has been the economic downfall. Traders will not be able to trade goods as easy and freely as they used to. The pound has dropped in value within 24 hours of the votes announcement, reaching its lowest value since 1985 (Shaffer, 2016). As I write, the UK economy lost 255 billion pounds, which is equivalent to 40 years worth of EU contributions, making the UK slip to the 6th largest economy.

Furthermore, the economic dip has hit everyone, from the stock market to the banks; HSCB Holdings PLC and Standard Chartered PLC have both suffered in the Hong Kong stock market (Liu, 2016). This proves that the economic fall is not limited to the UK, but it could easily impact other countries as well, seeing as how much our economies are connected and intertwined.

The Ugly

In every situation, there are pros and cons, but there are also the ugly truths; the inevitable consequences of any decision made. For the UK to leave the EU, the consequences are many, but three stand out very clearly. 62% of the votes from Scotland were for the UK to remain in the EU (Ramaswamy, 2016); although the UK overall doesn’t support a membership in the EU, Scotland clearly values the unification, which will most probably lead to another referendum on Scotland’s independence and becoming a sovereign state. Another referendum is being called upon for the unification of Ireland; Northern Ireland has been under the United Kingdoms control since 1801, while Southern Ireland has been politically independent as the Republic of Ireland since 1949.

Another ugly reality is that the far-right nationalists are now calling for a referendum and the end of the EU. The far-right political wing are known as nationalists, anti-communists, and also anti-mass immigration (Chrisafis, 2016). Far-right parties in many European countries, such as France and Austria, are calling for an EU exit which could possibly lead to the dissolve of the EU itself.

Conclusion

The referendum results of Brexit are still fresh and have already shown the impact that the UK’s exit could have once it actually leaves. Markets have fallen, economies have lost billions, and the instability is being transferred to other countries as well demanding the same. World economists and politicians can go on and on about what could happen next, and what would happen to us. We can only wait and see.

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References:

• Austrian far-right figure warns of ‘Auxit’ vote within a year (2016). Reuters. http://www.reuters.com/article/us-britain-eu-austria-idUSKCN0ZC0K4
• Beckman, C.(2016). Bustle. http://www.bustle.com/articles/168688-why-does-britain-want-to-leave-the-eu-understanding-the-brexit-beef
• Britton, B. (2016). CNN. http://edition.cnn.com/2016/06/24/europe/brexit-britain-good-idea/index.html
• Chrisafis, A. (2016) The Guardian. https://www.theguardian.com/world/2016/jun/24/european-far-right-hails-britains-brexit-vote-marine-le-pen
• Ramaswamy, C. (2016) The Guardian. https://www.theguardian.com/commentisfree/2016/jun/25/scotland-eu-leave-uk-european
• Nelid, B. (2016). CNN. http://edition.cnn.com/2016/06/24/europe/uk-referendum-what-next-for-eu/
• Liu, A. (2016). Bloomberg. http://www.bloomberg.com/news/articles/2016-06-27/hsbc-standard-chartered-extend-losses-in-hong-kong-on-brexit
• Staffer, L. (2016) CNBC. http://www.cnbc.com/2016/06/26/pound-sterling-set-to-fall-further-as-brexit-uncertainty-continues.html