Brexit Explained For Those Who Don’t Live In The UK

Brexit "Brexit" is short for British Exit, coined for the British deciding to leave the European Union. Their exit from the union became official as of Jan. 31, 2020. But Brexit started on June 23, 2016, and the repercussions from this move are far from over.  But before we get into that, and even more importantly why you - as a non-Brit - should care, we need to untangle what on Earth any of that actually means. Because the political, geographical, and economic climate of this situation aren’t as simple as they sound.     

What Is The European Union?

The EU and the UK Europe has a union (the EU) that includes 27 countries. I won’t bore you with the whole list, but here are the ones to know:
  • Denmark
  • Finland
  • France
  • Germany
  • The Republic of Ireland
  • Italy
  • Netherlands
  • Portugal
  • Spain
  • Sweden
  • And, previously, the UK
  The UK joined in 1973 and consists of four countries:
  • England
  • Scotland
  • Wales
  • Northern Ireland
  The EU allows for free trade. This means goods and services could be moved without any extra checks or charges between these countries. It also means anyone in any of the 27 countries could move, travel, and work freely in any other country in the union.  Additionally, there are extra perks like healthcare cards that are accepted in each EU country (aka EHIC), EU-only travel queues, extradition to EU countries only, shared law enforcement information, shared fishing waters. The list goes on.  The UK is also responsible for footing part of their bill to the EU, which goes into the billions on any given year. And their electric and water supplies are intermingled as well. Suffice it to say the UK is pretty tangled up in the EU. The EU is made up of several parliaments. How it works becomes a bit muddled without getting too deep into it, but the basic idea is each country can elect a minimum of 6 to a maximum of 96 people (MEPs) to represent them in the EU.  How many MEPs each country or region is allowed is based on the country’s population. The total number of chairs held in the EU cannot exceed 705.  The UK, if you were wondering, previously held 73 seats. Which placed it as the third-highest seat holder below Germany (96) and France (74) at the end of January 2020.  

Wait, But Isn’t Brexit About Britain? 

Map of Britain It’s right there in the name. So why are we talking about the UK?  Understanding the difference between the UK, England, and Great Britain is a complex thing. Here's the cliff notes:  

Great Britain:

  • Is a geographical term for the island, not the name of a country
  • The island includes England, Wales, and Scotland
 

Ireland:

  • Is also a geographical term for an island, not the name of a country
  • The island includes Northern Ireland and The Republic of Ireland - the latter is not included in the UK
 

The UK:

  • Technically called “The United Kingdom of Great Britain and Northern Ireland”
  • Not actually a country, but a country made of countries
  • Consists of England, Scotland, Wales, Northern Ireland, and a few smaller islands that belong to the respective countries that make up the UK
 

British:

  • A term that collectively refers to all citizens of the UK, though not correctly according to each country
  • People who live in Northern Ireland prefer to be called Northern Irish, which is an entirely different thing from being “Irish,” by the way
  • Citizens of England prefer to be called English
  • People who live in Wales prefer to be called Welsh
  • And people who live in Scotland prefer Scottish
  But then… where does the word “Britain” come from? That’s a thing, right?  Yeah, Britain isn't a country either. The British Isles consists of two major islands - Ireland and Great Britain. The British Isles isn’t a country either but refers to the geographic location of these two islands. Because, again, Great Britain isn't a country.  Britain refers to Great Britain which, again, consists of England, Wales, and Scotland. So the word “British” naturally discludes any other nation, country, or island not directly located in Great Britain. If this is still a bit muddled, I found a short video that should help clear up some of the confusion for you.  

Why Is The UK Leaving The EU?

brexit - why leave the EU? When the vote to leave came back 52% leave to 48% stay, it was a close vote. There’s no one clear reason for the decision - for the UK itself or its voters - but rampant speculation and debate arose in the wake of the news. Here’s what we do know…  

The UK’s Quest For Sovereignty

When polled prior to the vote, 32% of pollers cited “Europe” as the biggest issue the UK was facing. All-in-all, “Europe” was voted the third biggest issue from the resulting poll.  In a poll taken post-voting, a large number (49%) of those who voted in favor of the exit cited sovereignty as their main reason. IE: issues in the UK should be addressed by the UK (and decided by the 66 million UK citizens.) They didn’t want the EU - or by the 508 million EU residents - to decide on matters that affected the UK.  Though, it should be noted that each country within the UK technically does have sovereignty, just not as much within the confines of the EU.  

Immigration Inflation

Another major issue that the UK faced in the EU was immigration. Which, of course, was free for anyone in the other 26 EU countries to come and go as they pleased. This can cause a lot of willy-nilly comings and goings. But it can also pose a huge financial burden for the countries. 33% of leaver voters in the same poll above said their main reason for wanting to leave was control over immigration.  And it’s not that Brexiters had an issue with immigrants. The one big issue cited was Brexiters had an issue with that level of change taking place all the time.  And here’s some speculation...  

Demographics Might’ve Influenced The Vote

64% of people 18–24 voted, whereas 90% over 65 voted. Some speculate that this massive age discrepancy swung the polls because older voters are more likely to have experience living in the UK prior to 1973 when they joined the EU.  Additionally, multiple sources found a correlation between having a higher level of education and voting 'remain’, while those with lower levels of education had a tendency to vote ‘leave.’ It’s been speculated that those with higher education and higher occupational skills are more likely to value the economic benefits.  Those who lacked in those areas were more likely to see the constant social and economic changes as a threat and voted more conservatively.   

The Identity Struggle

Again, most citizens that reside in the UK don’t love to be called “British,” and instead prefer to be called by their own independent identities (English, Scottish, Welsh, or Northern Irish.) But within the confines of the EU, each country was under pressure to feel “European.” Which was something they felt less than any other country within the EU. Using data from the Eurobarometer survey, some analysts showed that fewer Britains consider themselves European than any other EU nationality. However, with England being the leader in “leave” voters from the UK, some academics have argued that "England's choice for Brexit was driven disproportionately by those prioritizing the English national identity.” Sparking further conflicts they were accused of being a "cluster point" for other attitudes and concerns like "hostility to European integration, the sense of absence of political voice, concern about immigration, and support for parties of the right." Being tossed in with so many other European countries had mixed impacts on their economic and cultural divides, and the rapid changes in the UK seemed to strengthen those effects. It’s theorized additional social change played a large role in leading some voters to vote 'leave'. Polls conducted by Lord Ashcroft showed that "of those who think that feminism, the internet, and the Green Movement are bad for us were, respectively, 22%, 6% and 26% of those polled, and of those groups, 74%, 71%, and 78% respectively were Leave voters".  

What Happened After The UK Exited EU?

UK changes after brexit Immediately after Brexit, nothing major has changed *yet*. As the UK enters its 11-month transition period intended to end on December 31st, 2020, we do expect to see some additional changes.    Here’s what Brexit changed:
  • The UK’s 73 MEP seats were lost and some of the now-free MEP seats were granted to other countries 
  • The UK’s EU department closed and all day-to-day EU functions stopped
  • Passports changed in the anticipation of the free movement agreement that will end from its exit of the EU 
  • Extradition to the UK from Germany will be impossible as Germany only extradites suspected criminals to any country within the EU
  However, a few things have remained the same for the time being:
  • The UK will continue to follow the EU’s trading relationship
  • UK national citizens will still be allowed to queue in the areas reserved for EU-only arrivals
  • Driver’s licenses and pet passports will still be accepted as long as they’re valid
  • EHIC will still be valid in any EU countries
  • The freedom of movement and work is still open to UK and EU citizens
  • The UK is still paying for things within the EU - at least up to £30B
  With that said, many of these things will likely change after the transition period where things are getting sorted out.   

What Needs To Be Sorted Out?

post-brexit changes A 27-page document called the political declaration outlines the objectives of the UK and the EU’s negotiations for Brexit. But, in short, a ton still has to be sorted out. You can follow along with updates here if you want to stay in the loop. However, the pressing concern is the UK’s removal from the EU’s free market. If they’re not allowed to trade under the same terms they’ve been trading under, this will mean any goods going through the any EU countries will likely have tariffs and be subjected to other barriers like checks.  Both of these pose serious financial risks.  However, taxes and border checks aren’t the only things that need to be worked out before 2021.    For example:
  • Law enforcement, data sharing, and security
  • Aviation standards and safety
  • Access to fishing waters
  • Supplies of electricity and gas
  • Licensing and regulation of medicines
  • Immigration and work restrictions
  However, there's yet another document that outlines the actual withdrawal terms of the UK. The so-called Brexit Deal (or the withdrawal agreement.)  This document outlined the terms of the transition period, but the firm deadline laid out within it is December 31st, 2020. Which is non-negotiable and can’t be pushed back.  That means if agreements aren’t made between now and then, the UK will face whatever loss of benefits every other country faces from not being a part of the EU.   

What Does Brexit Mean For The EU, UK, and US?

brexit changes EU & US How big of an impact this will have, how long it will last, and how bad it will be hinges a lot on the remaining negotiations and how those are settled. However, we do know for sure that the EU, the UK, and the US will all see at least some ripple effects from this move.  

How Is The UK Impacted By Brexit?

Post-Brexit, the UK’s economic growth slowed. The British pound fell from $1.48 on the day of the referendum to $1.36 the next day. While this helps exports, it drastically increases the price of imports. And, as a result, many businesses are moving from the UK to the EU. This makes the job market in the UK ever more precarious as businesses move out. As is, Germany is expected to have a massive shortage in its workforce in the next decade. These jobs will no longer be easily accessible to UK citizens.  And if the trade agreement falls through, the price of exports would also increase. Putting the UK in a particularly precarious position. It would not only add to inflation and increase the price of living but also put the UK in an even more vulnerable place for exports.  Without the agreement, the U.K. would also lose the advantages of the EU’s technologies. The EU grants these to members in environmental protection, research and development, and energy. The inability to bid on public contracts could raise the cost of banking, airfare, internet, and even phone service. Mind you, all of this could go down while there’s a massive shortage of employment. Outside of the issues everyone in the UK would face, Northern Ireland, London, and Scotland each have their own unique economic challenges post-Brexit. And, of course, there are issues around basic things like electricity, food, water, and medication.  And then there’s this whole business with Scotland.  

Scotland Wants Out Of Brexit

Scotland voted against Brexit and was taken along for the ride. If you remember, England was the main leave vote that sparked the whole thing.  The Scottish government has been pushing the U.K. government to allow for a second referendum for its independence from the UK. Once that passes, Scotland could then apply for EU membership on its own. But, in the meantime, they’d have to go along with whatever deal (or lack of deal) the UK manages to strike up with the EU.  

How Is The EU Impacted By Brexit?

The Brexit vote has strengthened anti-immigration ideals and parties throughout Europe. If these parties gain enough ground in France and Germany, these countries might take the path of leaving the EU as well.  If either of those countries left, the EU would lose its most robust economies and dissolve. Those are the EU’s two biggest chairholders. Germany holding 96 MEPs and France (post-Brexit) holding 79 chairs. Collectively, this is almost 25% of the voting power in the EU. And without the UK to add to its roster as a buffer, either Germany or France leaving could bring the EU to a standstill.  And the effects of that would be felt in nearly every country that’s still within the EU.   

How Is The US Impacted By Brexit?

Like most other countries, the US isn’t immune to Brexit’s ripple effects. In the wake of the euro and pound falling, the dollar has gained in value. This sounds great, but it’s less than ideal for getting foreign cash into the US stock market since US stocks are now more expensive. Additionally, the US has an $18.9 billion trade surplus with the U.K. Brexit could turn our surplus trade with the UK into a deficit versus a profit. And it could make US import demand drop since UK imports will likely be more competitive than the US’. U.S. companies invested $758 billion in the U.K. and U.K. businesses invested $561 billion in the United States. Brexit puts jobs - and the invested capital - in both countries at risk. But - more to the point - Brexit was a vote against globalism and globalization, which are two things that the US relies heavily on. If more countries decide to follow their path, this could have disastrous results for the US economy. If you want to learn more about these topics, you can read our articles on: Globalization Global Interdependence Antiglobalism Capitalism Imperialism

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