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Brexit - the aftermath

Abhishek Jadhav News October 03, 2016

So a new fuss to join the trending topics around the globe is the Britain’s exit from the European Union. A question here arises is what is European Union (EU)? Well EU is a political economic union consisting of 28 member states which are in Europe. Which means an internal single market system which applies to all the members of the state. A free trade zone for all the fractious states of Europe.

The second question arises here is why U.K. voted to leave the union which it joined in 1973? Well the Brits saw that the union and its interests no longer serve their needs, so they opted out of EU and decided to live outside of it, as Norway and Switzerland already do.

The main reason for Britain to exit is that EU was a drain on the British economy. Last year Britain has paid £13bn out of which it received £4.5bn, making a £8.5bn net contribution of UK to EU. That’s just about 7% of what the UK government spends on its National Health Service each year. The EU was a threat to nation’s identity and economy amongst other things. The UK hospitals were open to other EU members which would cost the UK billions each year, including the immigration cost from the EU for work relations. There were talks that the Britain was going to be a part of new monetary change, making the UK people use Euro instead of Britain pound.

As a coin has two sides, leaving EU have some cons as much as it had the pros. EU was a regional security guarantor. The original aim of EU were “make war not only unthinkable but also materially not possible”. In a simple language, this means that no member state of EU have gone on a war with another member state, having a lasting peace between all the members. Another advantage was having access to 480 million customers, which was a great opportunity for the business sector. There were no delays in all the heavy legal paper work by the customs which reduced the delivery time making it efficient. From next year onwards British students have to pay approximately £9000 for the tuition, which in comparison with the EU countries, much more costly, or as Demarks case, it is free.

Well apparently the total voting turnout was 72.2% out of which 51.9% voted to leave the EU while 48.1% voted to remain in EU. The outcome is a victory for the former mayor of London, Boris Johnson, who helped lead the way out of the union.

As far as India is concerned, UK was the entry point into EU but UK leaving EU is a major disadvantage for India. But the bright side is there will be increase in FDI by UK in India, which means it is profitable for India. Nevertheless there are many pros as well as cons regarding the Brexit, which will be seen over the few years.