The Brexit issue or Britain’s looming decision to leave or stay in the European Union has been in and out of headlines for the past few months. What went on so far and what’s coming up next? Here’s a quick rundown of the dates you need to take note of.
February 18-19: EU Summit
Earlier this year, UK Prime Minister David Cameron joined other EU leaders to discuss key issues central to the Brexit. These include economic governance, sovereignty, competitiveness, and migration. During this summit, Cameron proposed a draft deal that attempts to address these reform items with a compromise that might work for both the UK and the EU. However, European Council President Donald Tusk and other pro-Brexit campaigners rejected several parts of the draft deal.
February 20: Referendum date set
Almost immediately following the EU Summit in Brussels, Prime Minister Cameron set a date for the referendum, which would allow UK citizens to decide whether or not they want to stay in the region.
Some of the arguments for staying are lower trade tariffs and lesser red tape for UK exporters, among the other benefits included in EU regulation and access to a single market. Those who want to leave the EU argue that the UK can secure better trade deals with other nations on its own, that the membership costs are too high, and that the UK will be better off having control over its own legislation.
April 15: “Vote Leave” Campaign started
The UK Electoral Commission approved the “Vote Leave” campaign as the official one for the EU referendum, getting grants of up to 600,000 GBP and a spending limit of 7 million GBP on campaign broadcasts, free mail shots, and meeting room access.
The official campaigns kicked off mid-April, as events and rallies were held all over the UK. The other campaign “Britain Stronger in Europe” encourages voters to stay in the EU.
May 5: Elections in London, Wales, and Scotland
Elections for local councils in England, Police and Crime Commissioners, the London Assembly, and even for the London Mayor’s spot were held. Pro-Brexit London mayor Boris Johnson stepped down and was replaced by the city’s first Muslim head, Sadiq Khan. Elections were also held for the Welsh Assembly, Scottish Parliament, and Northern Ireland Assembly.
June 7: Voter registration deadline
UK citizens have to be registered to vote in the Brexit referendum and the deadline for registration is around the first week of June.
June 23: Referendum date
On June 23, UK voters will decide whether or not they want to stay in the European Union. Early opinion polls are expected to have a strong impact on sentiment and financial market action leading up to the referendum, as the UK government will need to iron out its exit plan if the leave votes win.
Voters who are away during the actual referendum date can send a postal vote or vote by proxy, but these need to be indicated in their registration.
June 2018: Actual exit date
Contrary to what many are expecting, voting to exit the EU will not result in an instant cessation. Instead, officials will have a two-year period to arrange the transition, as dictated in EU laws. With that, the economic and financial repercussions aren’t likely to take effect immediately but the fate of the economies can still be discussed by leaders.
Among the factors to consider is the membership fee, which amounted to 13 billion GBP for the UK last year. In return, the UK received 4.5 billion GBP in spending, bringing down their net contribution to the EU at 8.5 billion GBP. This membership fee accounts for health benefits, free trade, and inbound investment that benefit the UK economy.
Another main factor is that of trade agreements. Being part of the EU enables the UK to have access to a single market without tariffs on imports and exports, thereby reducing costs for its businessmen. More than 50% of the UK exports go to the EU nations and stands to benefit from other trade agreements that the region can negotiate with other major economies such as the US or Asia.
As for investment, financial analysts are wary that funds flowing into the UK might be dried up in the two years leading up to the actual Brexit. After all, investors and businessmen wouldn’t want to have their money tied up in an economy that is facing a lot of uncertainty. Some worry that this could diminish the UK’s status as one of the world’s financial hubs, although others argue that being free from banking regulations imposed by the EU could enable Britain to strengthen its own.
Lastly, immigration is also a contentious issue. Under EU law, the UK cannot prevent citizens from other member states from working and residing in the country while UK citizens also enjoy the same benefit in other EU nations. Still, the result has been a large increase of immigration towards the UK, especially from the eastern and southern parts of Europe, as many say that the UK has a more generous welfare system. Changes in immigration rules can affect employment in both the EU and UK, as well as border security.
Think-tank Open Europe projected that the worst-case Brexit scenario could shave off around 2.2% of the UK GDP by 2030. However, the firm also noted that the UK can boost its GDP by 1.6% if it is able to negotiate a free trade deal with Europe that maintains the current setup and pursued deregulation in other aspects. This could be at the front and center of discussions among leaders if the referendum results in a leave vote.
Early opinion polls are still showing a tight race between those voting to leave and those opting to stay. The latter could preserve the status quo, resulting in very little volatility and uncertainty in the financial markets. However, this could keep the UK exposed to EU-imposed regulation, keeping several issues in contention.
Source:: Brexit Timeline