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Brexit-An Analysis

1) Economic recession in the late 2000s led to job losses in the UK and an influx of European immigrants, fueling discontent and contributing to the Brexit vote. Scotland and Northern Ireland opposed Brexit. 2) The 2016 Brexit referendum saw 52% vote to leave the EU, split along age and geographical lines. Younger voters preferred remaining while older voters chose to leave. Scotland and Ireland strongly supported remaining in the EU. 3) The main driver of Brexit sentiment was perceived competition over jobs and housing from immigrants, especially from Eastern Europe after the EU's 2004 expansion. However, job losses were a broader EU issue as companies moved operations to lower cost countries like China.

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62 views3 pages

Brexit-An Analysis

1) Economic recession in the late 2000s led to job losses in the UK and an influx of European immigrants, fueling discontent and contributing to the Brexit vote. Scotland and Northern Ireland opposed Brexit. 2) The 2016 Brexit referendum saw 52% vote to leave the EU, split along age and geographical lines. Younger voters preferred remaining while older voters chose to leave. Scotland and Ireland strongly supported remaining in the EU. 3) The main driver of Brexit sentiment was perceived competition over jobs and housing from immigrants, especially from Eastern Europe after the EU's 2004 expansion. However, job losses were a broader EU issue as companies moved operations to lower cost countries like China.

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salmanyz6
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Brexit – The forces compelling Britain to leave the


EU-An analysis
Mushtaq Ahmad Mahindro

Economic recession and the meltdown of 2007-8 had a significant impact on the UK.
Loss of jobs in the UK, and the influx of European immigrants mainly from East European
countries, being poorer economies played a vital role in the Brexit phenomenon. However,
Scotland and Northern Ireland already not so happy with England and Wales cast their vote against
Brexit. Brexit would not have been a reality had the jobs, and the economy of the UK could be
like that of pre-world war two and pre 1980 period. As a matter of fact depletion of jobs not only
in UK but all over the Europe with the exception of Germany happened on account of shifting of
Trans National Corporations (TNCs) mostly to China, India, and other emerging economies of
East and South East Asia where labor and other expenses were far less than the home country.
2

Going a little bit in detail of Brexit phenomenon we see that during the June 2016
referendum 52% of voters voted for the exit of Britain from EU against 48% to remain. The vote
split was mainly on the fault lines of age and geography. The young voted for ‘remain’ while aged
voted for ‘leave.’ As per geography, Scotland 62% and Ireland 56% voted for ‘remain,’ and
England and Wales voted for the exit. Historically Scots have never been entirely satisfied with
England domination. During 2014 the pro-independence referendum 44% Scottish voted for
independence of Scotland from Britain. It seems to have a very adverse effect on the unity of
United Kingdom, as Northern Ireland may ask for a vote on Irish unity to remain part of EU, and
likewise Scotland for independence in the years to come.

Briefly speaking the referendum was between people favoring globalization and those
fearing globalization. Analysts believed that the main reason behind Brexit was the entry of
European immigrants into Britain mainly from Poland and Lithuania, and other East European
countries after the inclusion of East European countries into the EU in 2004. In the beginning, it
was visualized that immigrants would be around 100,000, but the number rose to one million.
During the economic meltdown of 2008 and period of austerity that followed, although there was
a role of the imprudent strategy adopted by the bankers in the meltdown, most of the people blamed
it was all due to the massive influx of immigrants. Subsequent immigration of people from Syria
and Iraq added fuel to the fire.

This inflow of immigrants taxed the British housing market, its public services, and jobs.
Whereas, joblessness was not only the issue of Britain but most of the EU countries except
Germany which alone acted as the land of opportunity for many EU members. Germany’s fast
resilience to the economic shock during the recession period owed its better financial management
and its high Teck including Daimler-Benz, Volkswagen, BMW, Siemens and Bosch products for
which there was little competition in the world. During the economic meltdown many immigrants
from the worst hit countries like Italy around 45,000, Spain, 37,000, and Greek, 35,000 moved to
Germany for jobs. This financial meltdown also affected Ireland forcing its approximately 87,000
people to leave for Australia and New Zealand. So much, so tens of thousands Portuguese have to
seek work in the former colonies of Angola and Mozambique in Africa. This all was a
manifestation that EU as regional block failed to address the economic woes of the region.

As regards Britain it had to give away the control of immigration within the EU to the EU,
and retaining the power to control only the migration of non EU countries that meant mostly from
the Commonwealth countries, which the British government managed to a great extent. The most
damaging effect to the EU was its principle of free movement of people within the EU countries.
Every citizen of EU country has the right to live and work in any state of the EU. The result was
net movement from economically developing countries to the financially sound countries.
Concerning Britain, around 1.2 million left to other EU countries while about 3 million came to
live in Britain.
3

This all resulted in anti-immigrant sentiment almost in all European countries but more
pronouncedly in Britain. Anti-immigrant sentiment as observed in Italy during March 2018
elections for its economic woes was another manifestation of the Brexit phenomenon, as there was
a surge of anti-European Union parties.

The real problem:

When we look into the real problem of the whole European economic downturn except
Germany, and to some extent France it surfaces that the economic ailments of Europe including
Japan in the East started with the industrialization of China, ASEAN, and India. They created such
an investment-friendly environment that all European companies with their technology and
finances moved towards the Asian regions creating a lot of jobs there and depleting the same in
their own countries. There is no blinking the fact that investors move to countries where labor,
land and other utilities are cheap, and unions are weak. If Germany and France survived better
during this episode that was on account of their competitive edge in specific high tech products.

The era of protectionism has breathed its last. We cannot block the Free trade, the movement
of capital and investors across borders now. If President Trump plans now, that would be a short-
lived luxury. The best option under the circumstances for the survival of the Western nations will
be to invest and capitalize upon their core competent areas, i.e., high tech and research-based
industries and services. It is not only valid for the Western nations but for all the countries of the
world to remain and develop their respective core competent areas in which they have a
competitive edge over others, and not trying to become someone else. “Take back control,” is just
a hollow slogan and promise. Under the circumstances, only ‘exit’ or ‘entry’ into EU does not
seem to bring any significant change in the lives of the people of the UK.
………………………………………

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