Brexit/Consequences

CONSEQUENCES OF BREXIT

This page looks at the consequences of the UK withdrawal from the EU. Immigration Immigration was cited as the second most important reason for those voting to Leave. However, forecasts indicate that immigration flows to the UK will remain relatively high after Brexit. Theresa May believes that if immigration stops there will be no negotiation between the UK and the EU. Several thousand British citizens resident in other EU countries have after the referendum applied for citizenship where they live, since they fear losing the right to work there.

Academic research The UK received more from the EU for research than it contributed with universities getting a large proportion of their research income from the EU. All funding for net beneficiaries from the EU, including universities, was guaranteed by the government in August 2016. Before the funding announcement, a newspaper investigation reported that research projects were reluctant to employ British researchers due to uncertainties over funding. Currently the UK is part of the European Research Area and is likely to wish to remain an associated member.

Scotland Before the referendum, leading figures with a range of opinions regarding Scottish independence suggested that in the event the UK as a whole voted to leave the EU but Scotland as a whole voted to remain, a second Scottish independence referendum might be precipitated. In response to the result, on 24 June 2016, the Scottish Government said officials would begin planning for a second independence referendum. On 28 March 2017, the Scottish Parliament voted 69–59 on Motion S5M-04710, in favour of holding a second referendum on Scottish independence.

The EU Shortly after the referendum, the German parliament published an analysis on the consequences of a Brexit on the EU and specifically on the economic and political situation of Germany. According to this, Britain is, after the United States and France, the third most important export market for German products. In total Germany exports goods and services to Britain worth about €120 billion annually, which is about 8% of German exports, with Germany achieving a trade surplus with Britain worth €36.3 billion (2014). Should there be a "hard Brexit", exports would be subject to WTO customs and tariffs. The trade weighted average tariff is 2.4%, but the tariff on automobiles, for instance, is 9.7%, so trade in automobiles would be particularly affected; this would also affect German automobile manufacturers with production plants in the United Kingdom. In total, 750,000 jobs in Germany depend upon export to Britain, while on the British side about three million jobs depend on export to the EU. The study emphasises however that the predictions on the economic effects of a Brexit are subject to significant uncertainty. According to the Treaty of Lisbon (2009), EU Council decisions made by qualified majority voting can only be blocked if at least 4 members of the Council form a blocking minority. This rule was originally developed to prevent the three most populous members (Germany, France, Britain) from dominating the EU Council. However, after a Brexit of the economically liberal British, the Germans and like-minded northern European countries (the Dutch, Scandinavians and Balts) would lose an ally and therefore also their blocking minority. Without this blocking minority, other EU states could overrule Germany and its allies in questions of EU budget discipline or the recruitment of German banks to guarantee deposits in troubled southern European banks.

Financial effects With Brexit the EU would lose its second-largest economy, the country with the third-largest population and the financial centre of the world. Furthermore, the EU would lose its second-largest net contributor to the EU budget (2015: Germany €14.3 billion, United Kingdom €11.5 billion, France €5.5 billion). Thus, the departure of Britain would result in an additional financial burden for the remaining net contributors unless the budget is reduced accordingly: Germany for example would have to pay an additional €4.5 billion for 2019 and again for 2020. In addition the UK would no longer be a shareholder in the European Investment Bank, in which only EU members can participate. Britain's share amounts to 16%, €39.2 billion (2013), which Britain would withdraw unless there is an EU treaty change. After a Brexit, the EU would lose its strongest military power, one of its two members that possess nuclear weapons and are permanent members of the United Nations Security Council.

Tim Oliver report A report by Tim Oliver of the German Institute for International and Security Affairs expanded analysis of what a British withdrawal could mean for the EU: the report argues a UK withdrawal "has the potential to fundamentally change the EU and European integration. On the one hand, a withdrawal could tip the EU towards protectionism, exacerbate existing divisions, or unleash centrifugal forces leading to the EU's unravelling. Alternatively, the EU could free itself of its most awkward member, making the EU easier to lead and more effective." Some authors also highlight the qualitative change in the nature of the EU membership after Brexit: "What the UK case has clearly shown in our view is that for the Union to be sustainable, membership needs to entail constant caretaking as far as individual members' contributions to the common good are concerned, with both rights and obligations."

British MEPs As of 15 November 2016 the President of the European Parliament is considering moves to exclude British MEPs from key committee positions ahead of the exit talks. The President has written to the head of the conference of committee chairs asking him to gather information on how Britain's imminent departure will impact various EU documents passing through the parliament's committees. Among the issues that should be considered, the letter states, are the possible impact of the British departure on the legislative files currently under discussion in various committees, the impact if the files are not concluded before Britain leaves, and whether any of the files are likely to feature in the EU-UK withdrawal agreement.

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