The critics of Brexit have a certain point of view – justified by certain arguments. Though we do not have to necessarily agree with them, their points of argument should be understood.
The managing director of the British construction giant JCB, Graeme Macdonald annoyed the constraints of the European Union : “European regulation is a ‘burden’. It’s easier to trade with America than sometimes with Europe. ” This declaration has thrown a wedge into the pond by declaring, while a referendum on membership of the United Kingdom in Europe must be held within two years. While many SME leaders are bothered by the constraints of the European Union, most of the big British bosses are in favor of maintaining the EU and hold an alarmist speech about a possible “Brexit”.
But the confirmed victory and the fully conservative government formed by David Cameron that has just tapped for five years at 10 Downing Street could prove him right. His first mission, and his main campaign argument, will be to organize the promised referendum on an exit from the European Union . In the wake of the parliamentary elections, Cameron wants to “renew the relationship with Europe, (we) ensure a better deal for the British.” The scenario of leaving the Union by the United Kingdom can not be ruled out, polls on the issue yielding results 50/50. In any case, a detachment of the European Union (EU) could be very expensive for the British economy. Explanations.
Net EU Outflow Could Cost € 78 Billion a Year Over Ten Years
The analyzes diverge and the possible scenarios are numerous. The Confederation of British Industry (CBI), which includes 240,000 companies, has already positioned in recent weeks to maintain within the Union quantifying the interest for the United Kingdom to 4 or 5 points of GDP.
For its part, the German foundation Bertelsmann Stiftung is reporting losses of 14% of GDP according to its studies. It estimates the consequences to 3% of GDP per capita by 2030 and a loss of influence of the City. Just that! An exit from the EU would then cost the United Kingdom some 56 billion pounds (78 billion euros) a year for 10 years. Why? Because an exit from the EU means a massive decline in foreign trade for the United Kingdom, with the return of customs barriers.
The EU would also be largely losing out because of reduced trade. The Bertelsmann Foundation anticipates losses of 0.3% of GDP per capita in France and Germany, including a 2.7% collapse in GDP per capita in Ireland!
Trade: A Global Influence Falling Since 1945
To analyze the consequences of a “Brexit”, one must turn to the study of foreign trade. According to the latest annual report published by the World Trade Organization (WTO) , the United Kingdom ranks eighth in the world for merchandise exports and sixth in terms of imports. When one observes the evolution of the British share in world trade since 1945, the observation is clear. While Europe – and then the EU – has kept a constant influence, the kingdom has gone from being the first commercial power to the rank of third, its share in European trade being even down by nearly nine points.
An exit from the European Union could in particular have a terrible impact on the country’s balance of goods, already largely in deficit for two years . Worse still, a “Brexit” could affect the balance of services, a reason for satisfaction in the United Kingdom, which has gradually become the world’s second largest power in terms of service outflows and fifth for admissions.
EU: Number One Partner In the United Kingdom
While the majority of trade went back to the former British colonies in the 1970s, today, according to the latest European statistics, the United Kingdom carries out the majority of its trade relations with members of the European Union. A situation explained by the obligation for the country to establish new commercial links after the emancipation of its colonies. The entry of the British into the European Community in January 1973 will then accelerate trade with the continent. This trend is still true in 2015.
The accession of the United Kingdom to the EU gave it access to the single market: free movement of goods, people and goods is the end of the barriers to trade given the fall of customs barriers. Since joining the Union, the country has increased its trade with member countries by 55% according to the Center for European Reform .
A departure from the European Union would lead to a loss of benefits related to the single market. Barriers to trade would be restored which, according to Open Europe , a liberal European think-tank, would have several consequences with the return of customs taxes. Medicines would rise by 4.5%, the automotive sector by 10%, while the tobacco and food sector would explode by 20%.
Channel Tunnel Beneficial For Trade
When the Thatcher-Mitterand doublet agreed on a new tender for the construction of the Channel Tunnel in 1984, the Eurosceptic sling was real. However, in 2004, ten years after the tunnel was commissioned, the figures spoke for them: doubled exchanges with Continental Europe, 20 million passengers each year via the Eurostar or shuttles, 18.7 million passengers. tons of goods transported). A symbol of the image of the United Kingdom to Europe.
The Most of a “Brexit” for the UK
Nevertheless, a “Brexit” would allow the country to control its migratory flow, a strong UKIP campaign argument, while the majority of Britons consider immigration a major problem for the country. Since the crisis, the growth rate higher in the United Kingdom than in many European countries has attracted a large number of European workers. Argument also often put forward by the Eurosceptics, the United Kingdom would free itself then of the regulatory constraints linked to the EU, nerve of many anger in the House of Commons.
A departure from Brussels would also free the 13.8 billion euros of annual contributions to the European budget, old fight of Margaret Thatcher.
