A man kisses a woman in a kiss chain holding EU and Union flags organised by pro-Europe 'remain' campaigners seeking to avoid a Brexit in the EU referendum in Parliament Square in front of the Houses of Parliament in central London. Photo: AFPAs Britain votes in today’s referendum to stay or leave the European Union, polls indicate the verdict would be too close to call.
Britain’s exit would probably be the most important decision in post-war Europe, dividing the country that is increasingly becoming Euro-skeptic and anti-immigration.
Europe and America, Britain's traditional ally, are hoping for its continuance in the EU. So is the rest of the world, due to concerns about volatility in the economy and to prevent further fissures in the EU.
The Brexit referendum seems to have brought the worst out of both sides, especially the 'Leave' campaign’s almost xenophobic overtone, causing the unfortunate murder of Jo Cox, a popular labour MP, by her attacker Thomas Mair, who supposedly shouted "Britain First," while stabbing and shooting her.
Irrespective of the result, Europe is at the crossroads and has to reform to remain relevant in the wake of largescale immigration, continued economic downturn and growing nationalism across the continent.
Prime minister David Cameron must be regretting his decision to agree to a referendum, which was done to probably save his leadership. This could be his biggest strategic misstep.
After all, the pressure for a referendum came from his divided Conservative Party that has been historically Euro-skeptic. The 'Leave' campaign is led by maverick Boris Johnson, a former London Mayor, who is probably looking to claim the leadership of the Conservative Party and Nigel Farage, of the UK Independence Party, which is completely anti-immigration.
The 'Remain' campaign is supported by mainstream parties like Labour, the Liberal Democrats and rest of the Conservatives led by prime minister Cameron.
There was a truce for two days after Jo Cox’s murder and the 'Leave' campaign seemed to have toned down its rhetoric, but the damage was already done. The 'Leave' campaign was way out of line, with a controversial poster titled “Breaking Point, the EU has failed us all” depicting coloured refugees supposedly lining up to enter Britain, propagating its ugly message of racism and Islamophobia.
The 'Remain' campaign’s communication has been inconsistent and alarming, at times it has been accused of exaggerating economic data to show the benefits of remaining in the EU and predicting dire economic consequences for Britain if it leaves.
Many in Europe look at Britain to provide a counterweight to the economically powerful Germany, which has become an economic super power.
Why Brexit?
On a recent visit to Britain, an Englishman known to me was unapologetic and frank when he said that immigrants were taking British jobs and he should not be subsidising their welfare. Mass immigration has more than doubled with majority coming from the former Eastern bloc, apparently taking British jobs and depressing wages.
The 'Leave' campaign has stressed on Britain taking control of its borders and national security to control immigration.
Boris Johnson even makes a case for Britain’s inability to make its own laws, citing an example as simple as manufacturing, where EU rules do not allow for changes even in automobile design.
There was genuine concern when EU was unable to handle the 2008 financial crisis. Instead of injecting money in to the system like the US, EU bankers instead increased interest rates. An economy in recession, jobs taken away and stagnant growth prompted many in Europe to look at the benefits of EU.
Although Britain is in the EU, it never joined the Schengen, which adopted a single visa policy. It also continued with the pound instead of adopting the euro.
What happens if Brexit?
Britain will be the first country ever to leave the EU and the terms are still unclear. Their relationship with Europe will need to evolve. Economists, though, warn of dire economic consequences for Britain, which is the fifth largest economy in the world. The pound is expected to fall by up to 20 percent says bankers.
Britain will lose access to the European Free Trade Zone. More worrisome is that it will have to negotiate new trade agreements following WTO rules, even with the US, its closest ally, and that could take a decade, according to president Obama.
Britain will join Switzerland and Norway, who are major nations not in the EU. Norway though is in the European Economic Area and rejected joining the Euro twice. These countries are as good as EU members because they have adopted almost 75 per cent of the EU rules and regulations.
EU is unlikely to offer Britain the same terms as Norway.
London, which has long been one of the global financial centers risks losing its importance if the action moves to mainland Europe. Scotland, which voted to stay in Britain two years ago, could once again head for a referendum to leave Britain as they are pro-Europe.
With or without Britain, the EU needs to address the wide disparity in economic wealth across member countries. The pressure of EU bailouts to the laggards like Greece have not gone well with many of the member countries and the perceived federal structure of EU needs a re-think .
If not, cracks will appear as more nationalist movements raise their voices that usually get more vocal when times are tough.
