On June 24, 2016, the people of the United Kingdom made a historic decision: to leave the European Union. It was a close decision: 51.9% leave to 48.1% remain, but a decision nevertheless. As with all new decisions, there has been an outpour of furious criticism, both on social media and in the news. Satire pieces such as The New York Times’ ¨British Lose Right To Claim That Americans Are Dumber¨ and The Onion´s ¨Americans Confused By System Of Government In Which Leader Would Resign After Making Terrible Decision” have fueled people´s fury against the decision. However, contrary to popular belief, the UK´s departure from the EU will not forever ruin the country. There has been a backlash that makes the UK´s decision look bleak, but it is all temporary.
In the wake of the Brexit decision, the British pound fell by 10% and international markets saw decreases in their stocks as well. Critics lamented that this was the beginning of the end for UK supremacy in the financial markets. However, the same financial speculators who crashed these stocks and currencies will, in the coming weeks and months, swoop in again to take advantage of the cheap stocks and real estate. With the volume of stocks being bought, Sterling and the FTSE will be more or less how they were in June 2016.
The elevated tempers of those for and against the Brexit decision will die down in both the EU and Britain. Politicians on both sides of the table will be looking for the most painless way to complete Brexit and to prevent disruption of those who reaped the benefits of the previous EU arrangements. The UK and EU will be under enormous pressure from their citizens currently living abroad to negotiate flexible terms that will leave their lives as unaltered as possible. This means that retired UK citizens who live in the south of Spain or France will continue to live there and EU citizens living in the UK will continue to live in the UK.
Before negotiating trade agreements, EU countries will calculate how much they stand to lose in exports to the UK and they will see that that will be a significant loss. According to fullfact.org, in 2014 the UK was the single biggest export market to the EU at 16%. For context, the US was a close second at 15%. Because of this potentially hazardous economic dilemma, EU companies with substantial exports to UK customers will lobby EU politicians to offer Britain generous terms.
British diplomats will negotiate new trade deals with Commonwealth countries that will open up new opportunities for UK companies. Any trade losses from the EU will be made up from trade with new countries. The UK may even end up with a thriving export market by the time the UK finally leaves the EU.
It looks like in the near future the economic situation in Europe will worsen. Unemployment will rise, taxes will increase and the Euro will fall in value because of these bleak situations. This economic turmoil has already happened in countries such as Spain, Greece, and Cyprus where unemployment is upwards of 25%. It is only a matter of time when other countries will feel the economic hardships of the Euro. Meanwhile, the UK and the pound will be mostly immune from the European crisis.
Finally, Britons will still be engaged with countries in the EU. People will still take vacations and buy EU products. Even if the EU is unable to reform and eventually implodes, Britain will be safely disentangled. If the EU prospers, Britain will thrive alongside it with the EU practices that Britain is comfortable with.
In conclusion, Brexit is not the end of the world. There may be short-term negative consequences because of the vote, but politicians on both sides will be eager to smooth out the issues as soon as possible. And even if the EU loses some exports from the UK, they can always export more to the US, its second largest export recipient. So we should all calm down and try to be as diplomatic as possible.
