Poll Question: Do you think that the UK referendum results to exit the European Union will have the implications on international stability?

The Centre for Pakistan and Gulf Studies (CPGS) recently generated a poll to establish the public’s view pertaining to Brexit and the international stability linked with it. Around 46% of the poll respondents viewed Brexit as an apparent fault line leading towards international instability. Only 20% did not foresee the new developments as a major change in the international arena. On the other hand, as many as 34% respondents could not gauge the future implications of Brexit, since they marked “Don’t know”.

UK Exit EU

Implications of Brexit

It is safe to say that Brexit not only caused immediate reactionary implications at least for the UK, but it may also have a long-term impact, both politically and socio-economically. It marks as the first ever instance (notwithstanding Greenland’s plea of remaining outside the EU) of regional disintegration in a regional bloc that has always been presented as a shining example of regional integration for rest of the world.

The British vote to exit from the EU has come as a shock as global markets and UK stocks significantly dropped. Post-Brexit, business investments and other decisions are being taken cautiously as uncertainty prevails much to the dismay of industries in the UK. On the very next following Brexit vote, the Sterling fell by 8% against the US Dollar. Not only did it reach $1.29 on July 6 (13% lower than the rate before it was clear ‘Leave’ would win over ‘Remain’), its lowest in three decades, but it remains vulnerable to further depreciation.

The greatest implication of Brexit may well have to do with the phenomenon of the ‘single market’, which is considered the EU’s biggest achievement (achieved in 1992) in the region to date. It includesthe free movement of people, goods, services and money within the group in order to boost intra-regional trade, create jobs and lower prices. The exit will strip the UK of its access to the single market. Additionally, there may also be a negative impact on pensions, savings, investments and mortgages in the UK.If Britain manages to remains in the ‘single market’, which is unlikely, the Britons will retain free movement and work rights within the EU. If work permit restrictions are imposed, the Britons will have to require visas to work in the EU. Similarly, non-UK residents might also need work permits to work in the UK.

Another potential implication concerns the status of Scotland and Northern Ireland, both of which voted for ‘Remain’ with a significant majority, and are seeking to remain within the EU, with or without the UK.

The government of Spain has also called for joint control of Gibraltar. Analysts opine that Britain will now be ‘less able’ to wield its political power in the world, as it will not be in the room where decisions will be taken. Moreover, it is also feared that Brexit’s impact can even amount to the ‘tearing apart’ of the EU itself. The political ramifications of Brexit are also visible in campaigner,British PM David Cameron’s resignation from his post and the PM-in-waiting, Theresa May replacing him with immediate effect.

The UK’s exit from the European Union will have a landmark significance, one way or another. Until the process is completed, however, the UK continues to be an EU member and will abide by its treaty commitments and laws, but will cease to be a part of any future decision-making.

It is up to the UK government when to invoke Article 50 of the Lisbon Treaty to formally start the proceedings to withdraw the group which may take up to two years.

REFERENCES

Wheeler, Brian, and Alex Hunt. “The UK’s EU Referendum: All You Need to Know.” BBC News, June 24, 2016. Accessed July 14, 2016. http://www.bbc.com/news/uk-politics-32810887.

“After the Brexit Vote (I): Rules and Britannia.” The Economist. July 9, 2016. Accessed July 14, 2016. http://www.economist.com/news/business/21701811-uncertainty-especially-about-regulation-spreads-among-industries-most-exposed-britain-rules.

“Sterling: How Low Can it Go.” The Economist. July 7, 2016. Accessed July 14, 2016. http://www.economist.com/news/britain/21701794-already-30-year-low-pound-vulnerable-further-depreciation-how-low-can-it-go

Foster, Alice. “What is Brexit and what is going to happen now that Britain has voted to LEAVE the EU?” Express, July 12, 2016. Accessed July 14, 2016. http://www.express.co.uk/news/politics/645667/Brexit-EU-European-Union-Referendum-David-Cameron-Economic-Impact-UK-EU-exit-leave

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