On June 23, the United Kingdom will decide in a national referendum whether to leave the European Union. Polls show the vote is too close to call, and the earthquake of a decision to exit the EU might actually happen.
[** Update: Just today (TH) an MP that supports staying in the EU was assassinated on a street corner by a right-wing, anti-immigrant nut. This event could turn the tide against Brexit in the close contest.]
If it does, the consequences could be profound for the UK, the EU, and the rest of the world (which includes us). A Brexit vote would trigger a complicated, multiyear process to divorce the UK from EU laws and rules at just about every level of interaction. The British government would have to change hundreds of British laws and thousands of regulations and formally renegotiate the terms of all of its commercial relations with the EU.
Why leave? The British would gain back some of the sovereignty and flexibility the country voluntarily gave up when it decided – by referendum – to join in
1975 1973 (although not its currency; the UK is not a Euro zone country). It would not have to pay what’s basically an annual membership fee of about $40 billion [update: The exact net amount of annual transfers is in dispute; an audit says about $7B]. It would be free of pesky EU regulations. These include EU requirements to admit a large number of refugees from the Middle East, which is a major driver of the pro-Brexit campaign in the Conservative (Tory) Party and right-wing parties.
But, there is also a huge potential downside, as the articles below brutally explain. There is a huge risk of economic and financial instability, at least in the early stages of a UK-EU decoupling. Great Britain could lose diplomatic and economic leverage. The future of the EU itself might be endangered if other member countries decide to follow Britain’s lead and/or if Brexit induces financial panic or economic recession. For these reasons and more, political and economic elites in and out of the UK pretty much universally oppose Brexit.
But, elites won’t decide this thing; British voters will. Six days from today. Think of this as our Populism, Part II: The Empire Strikes Back meeting.
On Monday, I will start our meeting with a brief description of why the Brexit referendum is even happening. Then I’ll list a few of the best-case/worst-case consequences of a Yes vote, including on the US economy and foreign policy.
DISCUSSION QUESTIONS –
- What is Brexit? Why is it happening?
- Who supports and opposes Brexit inside the UK? What are the main arguments they make? What do outsiders think?
- Impact if Brexit fails (“Remain” in EU wins).
- Impact if Yes (Leave the EU):
- On UK; e.g., econ and finance, immigration, regulatory, foreign policy?
- On EU.
- On rest of world, including USA.
- What are the Big Lessons here? Are any of them for us?
SUGGESTED BACKGROUND READING –
- Simple version. (NYT)
- Harder: Background on Brexit. (Economist) Comprehensive but note mag opposes Brexit.
Pro-Brexit (Leave the EU) –
- It’s all about democracy and independence to decide our (UK’s) own fate. It’s about sovereignty. Recommended.
- An American pro-Brexit POV.
Anti-Brexit (Remain) –
- How a fringe idea went mainstream. Long.
- Consequences of leaving EU are mostly really bad. Recommended.
- Krugman’s opinion.
Consequences of and Lessons for the United States –
- Brexit is bad for the USA. Recommended.
- Climate: Brexit would weaken efforts to enact ambitious carbon targets.
- More broadly:
Next Week: Whatever happened to the Boat People?