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BREXIT: what the heck does it all mean?
A lot of people have no clue why Europe is currently in a state of uproar and the only word people seem to be saying is “Brexit” so here’s a not-so-quick and easy-breezy explanation on the past 24 hours of CHAOS that has ensued:
The European Union (EU): an organisation of European countries that follows similar laws, allows for freedom of movement/labour, easy travelling (@people who planned on doing Eurotrips, not sure if you can count the UK in that anymore!) and trade with each other. The EU is important because before it was formed, the European continent was ravaged by 2 world wars, and a division because of the Cold War. This organisation has provided all the stability we’ve seen in the past 40-odd years.
So what the heck is a “Brexit”? Basically, the UK has just voted to leave the EU. Now this doesn’t seem like a TERRIBLE thing, but there are some serious political and economic consequences.
Economic implications:
- The British pound crashed from 1.5 to 1.3 in 6 hours, the lowest value in 30 years, which in turn affected the US dollar which affects all other global currencies. I wish I was joking but I’m not: South Africa, Poland, Norway, Mexico. Hungary, Australia, Switzerland all saw their currencies plummet. Countries that don’t rely on exports as their means of production cannot have a devalued currency. IT’s not good. The Japanese Yen which has been strengthening reached an all-time high which is terrible because Japan is trying to reverse its deflationary state. The Bank of Japan is now out of options and Japan literally STOPPED TRADING IN BRITISH STOCKS/INVESTMENTS.
- A devalued GBP means that the Bank of England is going to have to hike interest rates to prevent inflation (domestic prices going up even further) whicH WILL CAUSE A RECESSION. SOUND FAMILIAR ANYONE? YEAH. FINANCIAL CRISES.
- The UK leaving the EU means its market has gone down a LOT in size making them a less attractive destination for trade partners/investors. They’re going to have to draw up new trade agreements with basically the whole world since all their trade was previously tied to the EU. This will be tricky because countries liked having a market with a population of ~500 million compared to the UK’s size of ~50 million.
- GDP will go down. Retirement income will go down. The British economy is in a state of panic. The global economy is basically, fucked. For now at least.
The thing is, given the precarious nature of the economy right now with markets out of control and stagnant growth practically everywhere, it was a really really bad time to have this referendum - a lot of countries have been banking on a “Bremain” before making their next move when it comes to monetary/fiscal policy. The IMF has predicted that 2016/2017 will see the worst years for growth, but we might see upward growth trends from 2018 onwards.
So how does it still get worse?
- Scotland showed an overwhelming majority of votes to remain in the EU. It’s likely that they’re going to call for a referendum (again) to leave the UK so that they can join the EU as an independent country.
- Northern Ireland also wanted to stay in the EU. It’s likely they’re going to join the Republic and join the EU.
- Not sure about Wales. They could go “haha fuck it mate” and potentially leave the UK too.
- David Cameron has just announced that he will be resigning in 3 months which means that extreme conservatives who managed to sway the vote in favour of Leave could come to power. That’s right. We’ll be stuck to suffer with the likes of Farage and Johnson.
- Brexit triggered a lot of nationalist/extreme right-wing movements in the rest of Europe. Some leaders already calling for “Frexit” (France), “Itexit” (Italy) and..”Dexit” (Netherlands)? We may see more in the next few days.. A disintegration of Europe is risky business because Europe has not been able to remain stable until the EU was formed. This could give way for an aggressive Russia too, who would want to take advantage of weak/vulnerable European states. An aggressive Russia will trigger US skepticism and we all know how that goes.
SO HOW DID THE GOVERNMENT LET THIS HAPPEN?
Basically David Cameron came up with the idea for the referendum because he was desperate to gain support from anti-EU parties like UKIP during the general elections last year. Except now he’s resigning. So.
During the campaign, Michael Gove, Boris Johnson (conservatives) and Nigel Farage (UKIP) stressed on immigration laws if the UK leaves the EU because immigration/refugees have been a big problem for the UK as its reducing jobs being given to UK locals/residents and they think the UK is becoming “overcrowded” so the Leave campaign was like WE WILL TIGHTEN OUR BORDERS! YEAH! Except now they’ve displaced millions of UK citizens living/working in the rest of the EU. Let’s see how they figure that one out.
Additionally, they talked about the economic benefits because if the UK were to leave, they would be able to allot the money that goes to the EU to other things like the NHS (national healthcare) etc. The Leave campaign went on about how the UK spends 350 million pounds a week on the EU but actually it spends less than half of that, so really, their campaign was built on scaremongering and lies.
Article 50, aka the means of exiting will be triggered in 3 months when the new Prime Minister is announced (most likely one of the extreme conservatives/Farage who are riding high on their “Independence Day” fuckery which is even more proof of xenophobic, colonialist bullshit) after which the UK will have 2 years to complete its official withdrawal so hopefully that will provide short-term stability.
But the world is in a dark place right now and everything is terrible.
I KNOW ITS LONG BUT PLEASE READ. THIS IS IMPORTANT. THIS IS GOING TO GO IN HISTORY TEXTBOOKS.
i love the older generation the way they just [clenches fist] vote us out of the eu and die before they have to see any consequences
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The UK has left Europe. Which means we’ve also left behind all the laws Europe put in place for the protection of LGBT people and a shit ton of other good laws as well. The pound is at its lowest worth since 1985 meaning that thousands will loose their jobs as major companies try to save money by cutting the number of staff they employ, and a loaf of bread will probs cost more than fixing the teeth of everyone who’s ever been on Jezza Kyle ever. So no, we’re not really alright but it’s our own fault tbh.
On Thursday British voters willfully walked off a cliff when they decided to leave the European Union. The “Brexit” victory is a defeat for Britain, Europe and the global economy.
We find ourselves in a moment of global fear. The democratic identities of Britain and the United States are under threat — not from immigrants or even changing values, but from nationalists and xenophobes exploiting citizens’ darkest worries with populist projects, including Donald Trump’s campaign for the U.S. presidency and Brexit. Unsurprisingly, politicians of many stripes are capitalizing on our fears to rally voters against trade, immigration and international cooperation.
The costs will be substantial. Economists, business leaders and scholars almost universally agree that Britain’s retreat from the EU is a self-inflicted economic blunder. Recessions are contagious, and given London’s place as a global financial hub, Brexit will give Britain a particularly virulent cough. The British treasury estimates that the nation’s households each stand to lose an average of £4,300, or about $7,000. And yet, tens of millions of voters were willing to take that hit.
The quintessential anti-EU voter, an aging unemployed white working-class citizen in northern England, might feel a certain solidarity with a similar Trump voter in rural America. Both have reason to feel victimized by a global economy that has left them behind. Both have concluded that the culprits are out-of-control immigration and an unresponsive government far away, in Washington or Brussels. And both have decided the answer is disengagement, solving problems alone at home rather than preventing them through cooperation abroad.
This is the glaring contradiction in the muscular nationalism of right-wing populism, blended with isolationism, that seeks to withdraw from international unions: It cannot shape a better world by shutting the world out. The same people who cheer when Trump laments the decline of American leadership want to ignore key global issues and put “America First.” The people who voted for Brexit, attempting to create a border between Britain and challenges such as the refugee crisis, seem to think Britain can solve such problems without consulting Germany or France or, worst of all to them, Brussels.
Britain narrowly succumbed to isolationist populism Thursday. Let’s hope Americans don’t make the same mistake by voting for a Trump presidency come November.
[more at source]
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