Here’s a Breakdown of What Brexit is and What it Means for the U.K., European Union
On Thursday, June 23, the people of Britain voted for their country to leave the European Union (EU), otherwise known as “Brexit.” More than 30 million people voted, and those in favor won by a narrow margin of 52% to 48%, signalling the beginning of what may be the disintegration of one of the world’s largest economic alliances.
Formed after World War II, the EU was created as a pact of economic unity between Germany and France. Ultimately more European countries joined in the later decades, including the United Kingdom, for a total of 28 members.
Global Economic Shitstorm Ensues
Almost immediately after the vote, the value of the British Currently plummeted down to $1.32, levels that haven’t been this bad since 1985. The Euro also fell 3% to $1.11. David Cameron, the Prime Minister of Britain, tearfully resigned shortly after.
Stock markets around the world have since been in freefall as one of the world’s largest economies leaves Europe alone to deal with the migrant crisis, Greek bankruptcy, conflict in Ukraine, and slow economic growth and massive unemployment since the 2008 financial crisis.
“The Dow Jones industrial average .DJI fell 463.63 points, or 2.57 percent, at 17,547.44, the S&P 500 .SPX lost 57.03 points, or 2.7 percent, at 2,056.29 and the Nasdaq Composite. IXIC was down 153.38 points, or 3.12 percent, at 4,756.67.”
“MSCI’s all-country world stock index .MIWD00000PUS fell 3.8 percent.”
“The British pound dived by 18 U.S. cents at one point, easily the biggest fall in living memory, to its lowest since 1985. The euro slid 3 percent to $1.1050 EUR= as investors feared for its very future.”
“Sterling was last down 7.6 percent at $1.3751 GBP=, having carved out a range of $1.3228 to $1.5022. The fall was even larger than during the global financial crisis and the currency was moving two or three cents in the blink of an eye.”
“MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slid almost 5 percent. Tokyo’s Nikkei .N225 saw its worst fall since 2011, down 7.9 percent.”
Why is everyone flipping out?
Because Britain will no longer be apart of the EU, they will now have to make new trade agreements with the rest of the world, whereas before, the EU already had established trade deals in place.
While Brexit supporters argue that countries in the EU will still have incentives to continue trading with the U.K., others argue that foreign companies will be less likely to invest their money into the country and could even move their headquarters out of Britain.
Britain’s Treasury says that Brexit would leave their country “permanently poorer,” citing factors like lower GDP, less trading, and lower productivity.
Why did this even happen in the first place?
Brexit supporters believed the EU held Britain back due to the many rules on businesses they imposed and the billions of pounds the country had to pay every year in membership fees — which gave a low return. They were also concerned of the amount of foreigners entering the country and wanted Britain to leave the EU in order to take back control of its borders.
Who are the idiots that let this happen?!
Millennials mostly voted in opposition to Brexit (75% of voters opposed), while baby boomers mostly voted in favor (61% in favor). So it’s the older generation’s fault.
Celebrities and influencers have voiced their opinions on Twitter:
I can’t get my head around what’s happening in Britain.I’m so sorry to the youth of Britain. I fear you’ve been let down today x
The U.K. can initiate the formal process of withdrawal by invoking an agreement called Article 50 of the Lisbon Treaty, giving the country two years to negotiate new terms.
The U.K. will continue to abide by EU treaties and laws, but will not take part in any decision-making as it negotiates the terms of the withdrawal agreement with the now 27 nation bloc, according to the BBC.
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