With Brexit Increasingly Likely, Will the EU be Shattered?
Recent polls suggest that the United Kingdom is likely to leave the EU. What does this mean for the rest of Europe?
During the past few months, supporters of the British proposal to leave the European Union have gained traction. This British exodus from the European Union, or Brexit, will cripple Europe’s economy and current political structure.
Oxera, an economic consultant group, has stated that there is 42 percent chance that Britain will leave the European. At first glance, these odds do not seem optimistic for those who are in favor of leaving the European Union. However, the Tory party won the election in Britain last year with harsher odds. In British elections, 42 percent is a favorable figure, so it is likely that the United Kingdom will leave the European Union.
If Brexit happens, European power structures will change, and markets will be in disarray. The long-run effects of Britain’s absence from the EU are unclear, but it is possible that the euro zone cannot exist without the United Kingdom.
Brexit Will Give Other European Nations Permission to Leave the European Union
The loudest pundits and critics in Europe seem to be against the British proposal to leave the European Union, but they may not represent public opinion. According to recent polls that were reported by The Spectator, 35 percent of respondents in the Czech Republic believe that it is beneficial to be a member of the European Union. Similar figures were revealed by respondents in Austria and Sweden. In France, citizens were more favorable of the European Union; 53 percent of French respondents believe that membership is beneficial.
Interestingly, this same poll revealed that 72 percent of German respondents are in favor of the European Union. This statistic may be a direct cause of Germany having the most to gain from the existence of the European Union. After all, Germany is currently the hegemon in Europe.
There are many causes for Europeans’ distaste for the European Union, but fiscal burdens from Italy, Greece, and Spain are among the top candidates. When tax-payers are required to pay for social programs in other countries, feelings of altruism and camaraderie will eventually evaporate. Italy is also plagued with over $200 billion in debt, so Europeans are not optimistic about footing another large bill. The economic woes of the 2008 Global Financial Crisis are still in the back of many Europeans’ minds, so many people just want to alleviate their own hardships.
On top of economic issues, social dynamics from global terrorism and wars in the Middle East have also made Europeans wary of living in a multi-country community. With a seemingly endless influx of migrants, many Europeans are fearfully clinging on to their cultures, religions, and familiar customs. This is a sad reality that often transforms into racism and neo-facism, but it helps explain why so many people in Europe are skeptical of the European Union.
Some people who are critical of the European Union have been accused of supporting protectionist mercantilism, but it is possible that they simply prefer consumers to be able to choose any of the products available on the market. EU-members are often required to favor European products over foreign imports, so a desire to avoid this practice is not protectionism; it is simply giving the freedom of choice to consumers. Critics of the European Union may also wish to restore the principles of sovereignty that were established in the Treaty of Westphalia.
Brexit Will Depreciate the Euro
The stability of the euro is largely affected by interest rates and inflation, but it is also supported by the idea of unity in Europe. According to Express, political unity in Europe keeps uncertainty at bay. If the United Kingdom leaves the European Union, unity would evaporate, and the Euro would become very volatile. This idea is supported by the fact that discussions about Brexit cause currency traders to behave abnormally. The complete failure of the European Union and the euro depend on other countries following Britain’s lead, but Brexit would certainly weaken Europe.
The European Union Will Lose Funds for Bailouts and Collective Programs
Britain is a large net contributor of funds to the European Union. The Telegraph reported that Britain contributed about £13 billion to the budget of the European Union in 2015. With these funds suddenly removed from its budget, the European Union would depend on Germany, France, and other major players to cover costs.
As of June, it is becoming increasingly likely that Brexit will happen. While Brexit itself will not destroy the European Union, it may trigger a series of factors that hamper the European economy. It may also encourage other EU-members to depart from the system.
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