Academic journal article Journal of Economic and Social Development

The Case of Brexit: An Analysis of the Political and Economic Factors

Academic journal article Journal of Economic and Social Development

The Case of Brexit: An Analysis of the Political and Economic Factors

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1.INTRODUCTION

On June the 23rd the people of the United Kingdom (further used: UK) delivered a powerful message to the entirety of the European Union (further used: EU) and to their own political establishment. The message at least 52% of them delivered was that they were deeply unsatisfied with the establishment force they perceived the EU to be. There are very few other rational explanations why the people of the UK would choose to inflict economic selfmutilation and bring about a long-term period of political and economic instability, as predicted by Ottaviano et al. (2014) that economic growth would slow down, Springford and White (2014) that it would have a detrimental effect on London as a centre of commerce, as well as the fact that it would have a negative impact on various segments of the economy, especially agriculture as stated by Lang and Schoen (2016), and would not be viewed favourably by any of the UK's most closest allies (Oliver, 2016:13). All of these predictions, made between several months and two years prior to Brexit, are now coming true. The promises of the Leave Campaign were constantly refuted by all relevant economic experts, as well as the fact that they were deeply contradictive. Even accepting the absurd claim that leaving the EU would mean 350 million pounds more for the UK every week, the Leave Campaign promised to distribute this money to: maintaining the level of scientific and research work, maintaining European-level payments for less developed regions, ensuring that the NHS would be funded with an increase of 350 million pounds and many other absurd claims that seem difficult to believe that the public accepted.1 The pure level of ignorance involved is displayed by the fact that the next day, the second most searched phrase in the popular search engine google was, 'what is the EU'.2

Indeed, both the political and the economic backlash of this decision will be felt in the period of at least 5 to 10 years. Of all of the many accomplishments that a country strives towards in such a period, it is difficult to understand why should it spend its time renegotiating trade deals and ensuring that it somehow retains access to the EU Single Market while at the same time not having to adhere to the principle of the free movement of labour. If this seems as an unlikely scenario, especially in the current circumstances where Marine Le Pen is one of the frontrunners for the French 2017 presidency,3 it is that more difficult to understand the unusual decision of the people of the UK. The Brussels institutions will not allow the UK to specify what it desires from post-EU membership because the number of countries that would follow might cause the complete and total dissolution of the European Union.4

So while trying to understand the decisions of the public, one can perhaps correctly state that part of them were deceived by the blatant lies presented by the Leave Campaign and were seduced by an optimistic vision where they could ''Take back their future''.5 It is highly difficult to understand how they plan to have these promises ensured and why the people have such high regard for the concept of the nation-state that has so clearly failed them. But perhaps even less understandable is the decision of the Conservative Party, mainly the former Prime Minister David Cameron, to ever propose such a referendum when he should have been aware of the dangerous and adverse effects that it would have on the economy of his country. Kux and Sverdrup (2007) explained the potential benefits of Norway and Switzerland as non-EU member-states, yet through the arguments presented it will be clarified that the case the United Kingdom currently faces is not comparable to that of Norway or Switzerland. This article will attempt to assess the long-term political fallout of Brexit, as well as empirically asses the short-term economic shortcomings of such a decision. …

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