POPULAR AFFAIR OF EUROPE: BREXIT
The European Union was founded in 1993 in the world. One of the top 3 members of this organization is the United Kingdom. But for some reason, the British wanted to leave this organization, and in 2016, the public voted to quit this organization. The separation of UK from this organization is called Brexit. Brexit literally consists of British and exit. The public vote held on 23 June 2016 yielded a surprising result. 52% of the people of England voted yes and government decided to leave from European Union. According to economists, Brexit will affect economy of United Kingdom and European Union on a large-scale,and that includes bad scenarios both of sides.
Last 5 years, Brexit is going to run and run in the World,especially Europe. So many decisions were talked, were voted and it is going on. So what is the Brexit which occupies the agenda? Brexit is an acronym for “British exit”, which refers to UK’s decision to leave the European Union in the June 23, 2016 referendum. In this referendum, 51.9% of public voted to leave from European Union. Prime Minister David Cameron announced his resignation the following day, because he started the campaign of remaining in EU. According to this conclusion, United Kingdom government announced that Brexit process is started and it will be concluded till the 31 January 2020. If history of UK is looked, UK joining the European Economic Community (EEC) in 1973 can be seen. However, Brexit referendum was conducted in 1975,this was the first Brexit referendum and 67% of UK public did not want to leave from EU in this referendum. Let’s turn back to recent history again, after the Mr.Cameron’s resignation,the following month Boris Johnson,who the hardline supporter of Brexit, was elected prime minister. Normally, UK was expected to leave the EU by October 31, 2019,however, UK Parliament voted to force the government to seek an extension to the deadline and also delayed a vote on the new deal. On the other hand,what’s the reasons of Brexit? European Economic Community (EEC) was founded in 1957 helping by USA. EEC’s aimed to create customs union and single market, and also keeping France, Luxembourg, West Germany, Belgium, Italy, Holland together economically.
In 1961, UK applied this community, but French President General de Gaulle opposed it. UK became a member of the European Economic Community in 1973 when General de Gaulle resigned. The European Union was established in 1993 with the Maastricht Treaty after the new duties and responsibilities were established. Although UK was a member of the European Union, it used its own currency and the Schengen visa did not apply to them. The 2008 crisis affected the weak EU member states. Greece, Spain and Ireland were affected by this crisis. Especially the fact that Greece’s economy has come to a very bad point, that Greece needs to be helped and that this will be a burden to the EU and that a large part of the burden will be shared between Germany, France and England has created a problem. The biggest problem here was in UK. An important problem for England was the immigration problem. The rise of racism and anti-immigration in Europe has been effective for UK’s exit from the European Union. David Cameron,who is prime minister, promised to leave the European Union in a referendum if he won an election in 2013. In the referendum, UK’s rural areas, extreme right-wingers and areas of income injustice voted yes. As a result, UK decides to leave the EU. The UK is the fifth largest economy in the world. Their leaving from the EU will be influenced both the UK and the European Union economy.
What will happen in Europe?
Europe and the United Kingdom have been together for more than forty years. Regulations and create according to the European Union system and its functioning. Implementation, markets, tariffs, banking and financial rules according to the European continent have been rearranged. According to the global market has seen a lot of impact. Consistently, the UK’s savings have increased in parallel to this, in order to reduce opportunities for the EU after the Brexit. On the other hand, it may meet tariff increases in foreign trade, and due to uncertainty there has been an assessment of the incoming investments. Concerned about the interruption of initiatives in the European market with a population of 500 million people, some financial transactions aimed to reduce their structuring and planning on the UK and accelerated their various financial plans. In short, the increasing uncertainty has greatly affected the decisions of financial institutions that prefer to make long-term plans in London.
These factors especially affected the European financial markets both positively and negatively. In this case, the growth of the country is also negatively affected. In the event of a withdrawal from the EU, UK national income may shrink from 1 percent to 9 percent in the long run. In the short term, housing prices may fall sharply. Companies ‘borrowing costs may increase. Important Following the announcement of important institutions such as the international monetary fund, serious ambiguities began to emerge in the post-Brexit countries’ financial targets and markets in general. The idea that uncertainty in the financial markets will have negative effects on exchange rates, interest rates, credit outlook and financial stability started to be fair.
Again with Brexit, the volatile increase in the markets and the expectation of portfolio mobility increased. Disclosures emerged that portfolio outflows may have an impact on the financing of the current account deficit in the long run. As London is a global financial center, capital markets may be affected negatively. Similarly, financial institutions in the UK have close ties with the EU business community, and the tight relations between fund managers and the EU financial world have been adversely affected by Brexit, leading to a reduction in transactions in the European capital markets. In the long run, a reduction in investment is likely to occur if international rating agencies have a negative assessment of the UK economy. London was a center for financial services. Therefore, the UK could lose its global policy-making power over financial services in the EU and other economies Financial services and insurance accounted for 8% of the UK’s gross value added. It is likely that the financial services sector, which gives foreign surplus in trade relations with the EU, will face new and additional regulations after Brexit.
On the other side is United Kingdom
For the UK, leaving the EU without an agreement (no-deal Brexit) will be challenging enough. Brexit-induced concussions will shake the UK in business, security, legal, cultural, political, and especially economic aspects.One of the biggest impacts of the Brexit deadlock is in the economical way. The increase in foreign investments, the expansion of supermarket chains’ import stocks, causes the UK Government to make decisions to increase customs duties. UK-based companies are stocking everything as much as possible. United Kingdom Warehousing Association (UKWA) said that: “We are facing an incredible storm in the storage and logistics sector.”
Although the UK is one of the largest financial centres in the world, the government’s acceleration of its work for the no-deal Brexit continues to lead the UK to a dead end in the money market. To illustrate this, the British pound traded at 1,50, against the US dollar on June 23 2016, and is now down to 1,30.
According to British Finance Minister George Osborne, if Britain leaves the EU, it may be permanently impoverished. In an article published in The Times newspaper, George Osborne said that the country’s economy could downsized to 6 per cent by 2030 if the country left the union, according to a research conducted by the Treasury Department.
The world’s 5th largest economy and the world’s most vibrant financial movements the British economy, based on 2018 data*, the total growth of only 1.4 percent. The growth rate of 0.2 percent in the last quarter and the 0.4 percent contraction in December can be considered as one of the biggest proofs that Brexit plays a major role in the UK economy. The British economy has downsized by 2 percent since the announcement of the Brexit referendum result. According to a joint survey of large firms in the UK, around 56 percent of the business community said they suspended some of their relations with the UK because they considered Brexit a serious risk.Most British media have said they expect expectations of a slowdown in the UK economy or a reduction in investment within 2 months. Given the uncertainty in investments, the UK suffers a lot of trouble. “The Brexit deal will reveal some deferred spending, but we will lose some forever,” said Mark Carney, Governor of the Bank of England. The Bank of England’s negative outlook for investments is forecast to decline by 2 percent this year and by 1.5 percent in 2020. Moreover, it is not difficult to understand that most of the momentum loss in the economy is caused by Brexit. Despite Brexit, the revival in the economy is expected in the last quarter of 2019, but the idea of leaving the EU is expected to cause a serious decline.
As a result, Brexit’s targeting the UK in many ways, especially in economic terms, and the deterioration of its consequences, will adversely affect European citizens living in the UK and British citizens living in Europe. It is a question of whether the steps taken by Britain, which has problems in both domestic and foreign trade, especially after Brexit has affected the economy so much, will prevent the damage.
AS A RESULT
The European Union established in 1993, has been shaken by Britain’s decision to leave. England is the most important 3 countries in European Union. These are Germany, France and England. 23 June 2016 Britain voted the leave European Union. This situation will affect the British and European Union economies.
After David Cameron’s say to ‘leave’, this topic too discussed. And 23 June 2016 made referendum. In referendum %51,9 ‘yes’ vote. The Britain people decided to leave the European Union.After the David Cameron, Theresa May takes over. however, Theresa May failed Brexit. So takes over Boris Johnson. Boris Johnson supports Brexit. The Brexit decisions passed through the House of Commons. And England plans to leave the European Union in the new year.Germany and France do not support the Brexit decision. They know that this decision will affect them bad. That’s why they try to keep England out. They want the UK for taxes and tariffs so far. This money is a billion euros. Britain reject this money and says than the Brexit will be.
England is leaving European Union. This leaving will bad affect both the UK and the European Union. So that England will excluded from trade agreements. These are implementation, markets, tariffs, banking and financial rules. They made in European Union, will have to make new ones.This situation will affect the British economy in terms of foreign trade. For example tariffs, in European Union these tariffs are affordable but when UK leave the union, the tariffs will change and new ones will come. Will probably be more expensive. In this case the British economy will be affected.
In conclude,The European Union is losing a big economy. The world’s leading financial center and the second largest economy in the union. Also London financial center is losing such an important place. This is the heart of trade in Europe. They are many transactions such as crypto currency, stocks. In this case, the return to the European Union will be quite negative. Actually, the European Union is going through difficult economic and political times. Separatist policies spread across in Europe. Economy is bad in European Union countries Italy, Spain, France. These countries are important countries of the union. Brexit will adversely affect the European Union and may even lead to chaos.We will see more clearly what changes are taking place in both the European Union and England, after the UK has left the union how they have been affected.