The UK is leaving the European Union in March of 2019. That could mean the losing of power for many countries and the EU, loss of financial growth and many problems. Brexit isn’t all bad, but it’s certainly not all good, either. Brexit will have consequences, but what will they be, and what side effects will they have?
Brexit and Security
One main concern and consequence of Brexit is the weakening of security and defense in the UK and the EU. The UK and other EU countries both benefit and contribute to the EU Intelligence Analysis Center (EU-INTCEN). That means that countries share intelligence data amongst themselves. By supporting each other’s Intelligence, EU countries are preventing more and more crime. Brexit may bar the UK from access to INTCEN data and thus the UK will not receive data from other countries. Likewise, the UK will not contribute to INTCEN anymore. This could lead to the weakening of both the EU and UK’s defense, and we may see a rise in crime, especially organized crime or terrorism.
The US losing influence
Brexit may impose tariffs between the EU and the UK. This will result in inflation in the UK and thus a lower standard of living. However, could also affect the US. The US has invested over 588 billion dollars in the UK, and uses it as a gateway for free trade with the other EU countries. Brexit could impact the US economy greatly, and not in a good way. The US has also created over 1 million US jobs in the UK, likewise the UK has done the same thing in the US. Millions of jobs could be affected if the UK loses its tariff-free trading state with the rest of the EU.
China gaining influence
China is already gaining a lot of ground and growing fast financially. With the US and the EU losing influence, this makes China even more influential in the global market. Brexit means that globalization slows between the US and Europe. This will result in China becoming stronger financially. All of these speculations are, of course, based on the assumption that post-Brexit Britain will no longer have a tariff-free trading state with the rest of the EU. If there are no tariffs, Brexit will not have such a large financial impact. However, with negotiations being so slow between the UK and the EU, a “hard Brexit” is not a crazy suggestion.
The other side of the story
Brexit will have mostly negative consequences for the EU, the UK and the US. However, there is something to be gained from Brexit. First of all, you may be thinking, why did Brexit even come to be? Why does the UK want to leave in the first place? Couldn’t they foretell all of the negative effects of leaving the EU? Is it because the UK wants to go back to the days of the British Empire? Does the UK want to become an independent superpower again as it once was?
It is hard to answer that question. But we do know that Brexit will have some good impacts on the UK. Let’s look at Brexit from the UK’s point of view. For one thing, Britain won’t have to follow EU regulations anymore. That means that they can impose their own taxes, tariffs etc. The UK can also regulate immigration coming into the UK freely, which is one of the main things that they wanted to achieve with Brexit. The UK won’t have to pay EU membership fees and they can make decisions themselves without the rest of the EU having much of an impact on them.
As for the EU, it does not have the UK impacting EU decisions anymore, and this has the potential to bring the EU closer instead of dividing it. As International Monetary Fund Director Christine Lagarde puts it, “The years are over when Europe cannot follow a course because the British will object.”
Finally, we have the USA. In truth, Brexit can be disastrous for the US economy. However, if the EU and the UK maintain a tariff-free trading situation, the US will break even.
TEXT Mikko Tripakis
PHOTO Flickr
Mikko Tripakis is a 16-year old student at SYK who lives in Helsinki. He is working at the office of JEF Finland this summer.