On 23 June 2016, an event of historic proportions will occur. The people of the United Kingdom (UK) will vote on whether their country should leave or remain in the European Union (EU). Millions of people will vote in this historic referendum which will, regardless of its outcome, impact European politics and the global economy. The Logical Indian attempts to explain in simple terms the EU referendum.
1. What is a referendum?
A referendum is a vote by the citizens of a nation on a single question which has been directed to them for decision. It is also called a plebiscite.
2. What is the EU membership referendum?
Popularly known as the vote on “Brexit”, the UK EU membership referendum is a plebiscite on the question of whether the UK should continue its membership in the EU. It will take place on 23 June 2016 with the official question being “Should the United Kingdom remain a member of the European Union or leave the European Union?”
3. What is the European Union?
Throughout history, European countries were always at war with each other. After the Second World War, Europe was in ruins, its economy in shambles, and its political authority in the world diminished. European countries realised that to survive in the post-War world with stability and relevance they could not afford more wars. For this, they had to find a way to come together and resolve differences. This led to the formation of the EU. In the historic Schuman Declaration of 1950, European leaders declared that peace can be achieved only through economic integration. Basically, countries that traded with each other would be less likely to fight with each other. The EU was initially known as the European Economic Community (EEC). The Maastricht Treaty of 1993 established the EU in its current form. The EU has greatly expanded since its inception in the 1950s when it had only 6 member States. The Union particularly enlarged after the end of the Cold War when the former communist-ruled countries of Eastern Europe joined it.
4. Britain and the EU
The UK declined to join the EU as a founding member. However, in spite of a veto on British membership by then French President Charles de Gaulle in 1961, Britain finally joined the EU in 1973.
5. Why is Britain having a referendum on EU membership?
It is important to note that this is not the first time a Brexit plebiscite is taking place. A British referendum in 1975 regarding EU membership resulted in 67% of the British people approving UK’s EU membership. As to why a referendum will be held in 2016, the simple answer would be that British Prime Minister David Cameron promised one when he ran for re-election in 2015. However, the more explanatory answer is the rise of Euroscepticism in the UK.
6. What is Euroscepticism?
Euroscepticism is opposition to the EU and the notion that integration with a multinational politico-economic union weakens a member State. Euroscepticism is neither a new ideology nor is it limited to the UK. However, it has seen more popularity in recent years due to various issues which will be described later in this article. In Britain, its unique history in the EU – mainly revolving around its late membership – has meant that politically Europeanism and Euroscepticism have never been predictable ideologies. For example, Britain’s Left (mainly the Labour Party) was initially opposed to Britain joining the EU. 1973 saw ugly splits in the Labour Party over this very issue. Today, however, Labour is one of the strongest voices for Britain staying in the EU. The Conservative Party has many Eurosceptic elements; nearly half of Conservative MPs have publicly
declared their support for Brexit. The debate has threatened Party unity under David Cameron – who remains convinced that a vote to Leave would be “the gamble of the century”. Much of British Euroscepticism stems from nationalism, opposition to the EU’s immigration policies and British contribution to the EU budget.
7. What are the main issues revolving around Brexit?
The issues revolving around Brexit are numerous and onerous. Below are the three major issues involved:
- The economy: Economic growth, bureaucratic red tape, corporate independence, EU membership fees, the EU budget and fiscal policies are contentious issues.
- Immigration: One of the founding principles of the EU is free movement for European citizens between EU member States. The increase in migration into the UK is a controversial topic. Pro-EU parties cite evidence for the positive economic benefits of immigration while anti-EU parties argue that immigrants take away local jobs and hurt individual wages.
- Sovereignty: The primary slogan of the Leave campaign is “Take Back Control”. The relevance of EU laws over British ones and decreased national autonomy are the main talking points of the Leave campaign while the Stay campaign has advocated Europeanism and oneness. Conservative and pro-EU MP Kenneth Clarke famously wrote: “I look forward to the day when the Westminster Parliament is just a Council Chamber in Europe.”
8. The arguments for and against Brexit in a gist:
The Economist argued that a vote to leave the EU would diminish both Britain and Europe, writing that “A vote [in favour of Brexit] would do grave and lasting harm to the politics and economy of Britain. The loss of one of the EU’s biggest members would gouge a deep wound in the rest of Europe. And, with the likes of Donald Trump and Marine Le Pen fuelling economic nationalism and xenophobia, it would mark a defeat for the liberal order that has underpinned the West’s prosperity.” Economist David Malpass contended that “The European Union is too big and is
sinking. The EU is just too big. It’s too expensive. It doesn’t work … They haven’t even made progress on their mission, which was fiscal responsibility, banking reforms, defending the external borders. They’re just not doing the job. These opportunities come along once in a generation where people actually get to vote on what they want.”
9. Brexit and Europe.
The short-term effects of a vote in favour of Brexit (which, taking into account current opinion polling, is likely to happen) are bound to have negative implications on British and world economy. Even the Leave campaign accepts that in the aftermath of Britain leaving the EU, jobs would be affected and trade with the rest of Europe would be hit. However, the long-term impact of
Brexit is difficult to predict.
10. Brexit and India.
As far as India is concerned, it is incontrovertible that the outcome of the 23 June referendum will affect the fastest growing economy in the world which also happens to be one of the EU’s biggest trading partners. Some analysts say that Britain leaving the EU could set the stage for a Free Trade Agreement between Britain and India. Indian companies are the third largest source of foreign direct investment for the UK and the FICCI has warned about “considerable uncertainty for Indian businesses” and “adverse impact on investment” if Brexit were to occur. British Indians are the single largest ethnic minority population in Britain, and the 1.4 million-strong community will no doubt be affected by the vote. Prime Minister Narendra Modi has spoken in favour of Britain remaining in the EU, calling the UK India’s “gateway to Europe” and affirming that “India always
stands in support of a strong and united Europe.”
The implications of the EU membership referendum will undoubtedly affect European politics and the global economy. The nature of this effect only time can tell; presently, it can only be predicted with varying levels of certainty. For now, all eyes are on Britain as the British people vote on this crucial issue on 23 June 2016.