The Internet is buzzing with talks of a possible “Brexit” from the European Union- the likes of which have never been seen before. For the Yankees who haven’t heard, Britons are holding a referendum today, June 23rd, to decide if they will remain in the EU or exit.
So, why is the UK considering a departure?
- Money. Currently, the UK sends roughly £13 billion ($19 billion) in membership fees to the EU. Those favoring an exit believe Parliament should exercise control of that money to spend locally on residents of the UK, rather than EU leaders deciding how to divvy funds.
- Trade. Regulations imposed on the 5th largest economy in the world (Britain) by the EU have ruffled the feathers of many Brexit campaigners. An EU-free Britain might have the opportunity to expand trade and negotiate tariffs.
- Immigration. While fees and trade point to an economic-based departure, many campaign for a Brexit based on more emotional platforms. Britain doesn’t always see eye to eye on social issues governed by the EU. For example, immigration laws have left a sour taste in the mouths of many Brits. The EU requires all member nations to accept any EU resident into their country. Because Britain has the most flourishing economy, the country saw a startling 333,000 immigrants in 2015. Add the anxiety over where Syrian refugees are moving, and you have a lot of upset Brits.
- Sovereignty. The UK wants to do things the UK way. The many laws imposed by the EU have been a great source of contention. For the UK to pass a law, France must “OK” it, as well. To Britain, this is absurd.
I live in the U.S. Why should I care?
Here are a few reasons why you should care:
- The European Union is the strongest union and America’s greatest trading partner. A weakened EU could mean trouble for US trade.
- The UK is the only nation to spend more on its military than the US. The EU is a military ally of the US. For the EU to lose the UK as a member would weaken the union as a military force and ally to the US.
- The stock market could experience extreme volatility; gold specifically would likely experience up to a 10% increase in price.
Poll results are expected early Friday morning. A Brexit would certainly be a historical event- the consequences of which are yet to fully be known.