What’s Brexit?

A portmanteau of “British” or “Britain” and “exit”. A referendum was held to decide whether Britain should remain or leave the European Union. Nearly everyone of voting age can take part.

Why is this happening?

Prime Minister David Cameron announced that he would hold a referendum if he won the 2015 general election. This is in response to growing pressures from several parties, including his own Conservative party, who believe that Britain is being held back by the European Union.

What is the European Union (EU)?

The EU is an economic and political partnership involving 28 European countries, enforced after World War II, sparked by a desire to prevent member countries from going to war with each other. Member states function as if they are one country – hence the introduction of the euro currency (used by 19 out of the 28 members), amongst many other policies on transport, environment, and even mobile phone charges. The EU also has its own parliament.

What are the arguments for Brexit?

  • The EU has gained too much control over its member states and this undermines national sovereignty. The UK has to enforce EU rules and policies and leaving the EU is the only way to regain full sovereignty.
  • The EU charges billions of pounds every year on membership fees (an estimated GBP 8.5b in 2015) and Britain gets little in return. This money could be used for other priorities deemed important by the UK.
  • The EU’s “free movement” policy – that a visa is not required to live in another EU country – is causing an immigration problem in the country.
  • Small to medium businesses say that there’s too much red tape and “petty regulations” imposed by the EU, making goods and services more expensive.

What are the arguments against Brexit?

  • The UK’s status as a country is stronger as part of the EU than alone, and the UK has veto power in many important areas.
  • In return for the billions of pounds in membership fees, the UK gets to trade with other EU countries more easily.
  • The influx of immigrants – many young and keen to work – fuels economic growth as they pay more taxes than the cash they take out of the country.
  • As a member of the EU, it’s easier for big businesses to move people, products, and money around the world.

What’s the results?

It’s official – Britain votes to leave the EU. London, Scotland, and Northern Ireland stood clearly in the Remain camp, while the rest of England and Wales voted for Brexit.

Meanwhile, the British pound has fallen to an all-time low since 1985.

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What next?

Technically, referendums are not legally binding. Prime Minister David Cameron, who opposes Brexit, could ignore the results. If he chooses to honour the process however, he will have to invoke Article 50, which represents a formal notification of leaving the EU. The UK will then have to negotiate with all the other member states on the terms of its departure, a process with a deadline of up to 2 years.

Mr. Cameron has announced that he will step down by October this year.

How will this affect Malaysia?

This will affect not only UK-Malaysia but also relations between Asean and Europe in business, trade, investment and tourism. When people are uncertain, they won’t make business decision easily. They will wait for the uncertainty to blow over until the situation has stabilised.” – Tan Sri Ramon Navaratnam, Former Finance Ministry deputy secretary-general.

[Malaysian businessmen] have been seeing UK and other EU countries as a single market. If UK wants to be on its own, then Malaysian businessmen will have to approach the EU market separately which would pose logistical and financial difficulties for them.” – Malaysia International Chamber of Commerce and Industry (MICCI) president Datuk Jalilah Baba

 

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Source: bbc.com

Words by: Ching Yee