BREXIT- Worth catching a glimpse…

Britain's leave from the Eurozone - BigOption Blog

The idea got iterated for the first time in 2014 by David Cameron and is now to probably take effect as soon as next year. A referendum campaign for the Brexit is to set off by next month and global financial actors await the ultimate decision which is to fall by the end of 2017. But, what is the Brexit all about and is it good enough as a proposal? Let's see.

A little history

European Economic Community History - BigOption Blog

The European Economic community (EEC), known as the European Union now, was founded by the Treaty of Rome in 1957.

After being rejected membership twice notably in 1963 and 1967, the United Kingdom became a member of the EEC in the year 1973 along with Denmark and Ireland, to add to the team of 28 (presently) member states.

It is believed that Great Britain joined the EU in a bid to escape an economic debacle. Interestingly, an improvement in the country's per capita GDP was noted after 1973. U.K being a member of the European Union, is not a member of the Eurozone though. This implies that Britain still possesses complete sovereignty over its fiscal and monetary policy.

The matter

This is kind of a deja-vu experience. The Grexit, and now the Brexit. Most of you might have probably understood the basic idea behind this term. Brexit makes allusion to the British exit from the European Union. Back in 2012, the Greek financial crisis made analysts believe that Greece would be removed as a member from the EU given that it was not able to meet its debt obligations. The Grexit did not actually take place. As such, a Brexit would imply the departure of an EU member for the first time ever. The difference is that U.K wishes to leave by its own free will.

In 2014, the actual British Prime Minister, David Cameron from the Conservative Party (famous as the 'Eurosceptics'), announced with determination, his will to renegotiate membership terms with the EU if he won the 2015 general elections and to hold an 'in and out' referendum on the status of the membership by the end of 2017. The matter has presently arrested the attention of many and remains a burning issue worth following given that Cameron won the 2015 legislatives.

Why leave?

Simply because too much legislative power has been endowed upon the European Parliament in Brussels. Precisely, legislative power over the British health care and cultural policy, heavy industry and fishing rights have been given away. Nevertheless, it is also believed that the U.K benefits better while remaining an EU member in terms of stronger trade links, lower trade tariffs amongst others. The referendum shall separate those voting for the leave from those voting against. Meanwhile, online campaigns and website are already actively debating their opinions among which, reasons to support the Brexit are as such:

Possibility to make stronger trade deals with other countries. Freedom to control national borders. Restoration of the British legal system. Improving the British economy, generating more jobs, regenerate fisheries and many more.

Brexit's Situation - BigOption Blog

What about Cameron?

The British PM communicated to Donald Tusk, president of the European Council, through a letter, the principal changes he wishes to bring about. Four objectives remain the key priorities of the Brexit. First of all, Cameron wants economic governance. In simpler terms, he wants it to be recognised that the euro is not the only currency of the European Union, thus ensuring that non-eurozone countries are not at a disadvantageous position. As such, U.K wants to no longer be bound to contribute to eurozone bailouts. His second reason- competitiveness. Cameron wants to considerably reduce excessive regulation. Also, immigration remains another point of focus. The aim is to restrict access to in-work and out-of-work benefits to EU migrants. Sovereignty is another fundamental driving force behind this issue as it shall allow the U.K to escape further political integration. U.K's parliaments, will then, possess more powers able to counter EU legislation.

However, it is to be noted that Cameron will be in favor of remaining on the EU if certain terms and conditions are amended in Britain's favor.

What's happening now?

David Cameron, on the 20th of January 2016, speaking at the World Economic Forum in Davos, said he will urge business leaders to lend him a helping hand in keeping Britain in the EU. The PM wants these leaders to get over their fears of entering a political domain and voice out their will of U.K to remain in the EU in the referendum campaign starting next month. Cameron believes that Britain will be at a better position in a reformed EU rather than out of it.

is Brexit an advantage to Eurozone? - BigOption Blog

Actually, campaigns advocating the exit claim that the financial industry and bankers are far yet to be affected from the phenomenon. Arguments point out that U.K is a leader in financial services and is not really dependent on the EU.

The closing line

The Brexit might well not happen but nothing is yet to be concluded. Meanwhile, Northern Ireland's Prime Minister Enda Kenny reportedly claims that an exit shall put Ireland into great trouble as its peace process was partly linked to the UK and the Irish Republic's joint membership of the EU. Now, let's just wait and watch.

Warren Tancredi By: Warren Tancredi
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