To leave in English: what to expect from the referendum on withdrawal of Britain from the EU

To leave in English: what to expect from the referendum on withdrawal of Britain from the EU

Thursday, June 23, in the UK held a referendum on the country’s withdrawal from the European Union — the so-called Brexit (British Exit, “Exit Britain”). In case of victory of eurosceptic Britain could become the first EU member state that left the Union for all time of its existence. The gap between supporters and opponents of EU membership are minimal, but even in case of a victory the recent decision on withdrawal from the EU could block the Parliament: according to estimates of the British Treasury, independence from European bureaucrats could cost the country at 9.5% of GDP.

Political murder

In recent months, observers have noted the rise of positions of supporters of Brexit. Last spring, the polls showed them behind the supporters of EU membership by 15-20%, but with the beginning of summer, the number of eurosceptics began to fill up the undecided respondents.

The situation changed dramatically at the end of last week after the murder of the British Parliament from the labour party, Joe Cox. On Wednesday, the politician made a speech in London in support of maintaining the UK in the EU, and on Thursday morning went to his home district in Central England on a meeting with voters. Before the meeting on coke is attacked by an unknown assailant with a knife and a homemade gun. The Deputy suffered gunshot and stab wounds, and an hour later died in a local hospital. It was the first murder of the current British parliamentarian since July 1990, when the Irish terrorists blew up the car of Ian Gow, the former Finance Minister and close ally Margaret Thatcher.

Death Cox shocked the society. The campaign — both opponents and supporters of leaving the EU — were suspended for two days. The Prime Minister-conservative David Cameron and labour leader Jeremy Corbyn two performed at the place of murder of the Deputy, urged to combat intolerance. All the main rivals to labour party refused to stand candidates for the by-election for the district of Cox.

The murderer was 52-year-old local resident Thomas Mayor. According to the American human rights group SPLC, since the 1990-ies he bought in the US neo-Nazi organization “national Alliance” extremist literature, including instructions for creating a firearm out of scrap materials. On Friday, police found them when they searched the Mayor’s house. According to eyewitnesses, during the attack, the Mayor shouted the slogan “Britain above all”. On Saturday, police charged the Mayor of the accusations under four articles, the first hearing in his case will be held on Monday, June 20.

The next day after the murder channel CNBC interviewed analysts who said the tragic death of Cox, no doubt, will change the whole psychology of the campaign in favor of the supporters of the European way of development in the UK. “Of course, […] the incident will affect voting in favor in order to stay in the EU. There are feelings, immediate emotional reactions,” said CNBC analyst at Deutsche Bank’s Alan Ruskin. In the afternoon of 16 June, shortly after reports of the death of Cox, the pound rose to one-week highs of $1.40 to almost $1,43.

The fact that the murder of the Deputy could be a turning point of the campaign, confirmed by the sociologists. Last before the murder, Cox survey by the sociological Bureau of Survation, conducted on 15 June, have shown a slight advantage of the supporters of Brexit: 44,9% vs 42,1% with 13% undecided. Following the Survation poll, conducted three days later, 18 June, mirroring changing trends: the share of opponents of withdrawal from the EU increased to 45.5%, the proportion of supporters fell to 42.2%. Then opinion centre YouGov has released similar numbers: 44% for membership in the EU, 43% against. The previous poll from YouGov June 16, showed that for an exit from the European Union were 44% of Britons, against — 42%.

How to vote

This week the British broadcasting Corporation BBC briefly described the procedure of a referendum. In General it resembles an ordinary parliamentary elections. The only difference will be able to vote residents of the British Gibraltar and the members of the house of lords (the parliamentary elections neither one nor the other to take part are not eligible). If a voter is out of town, he’ll be able to vote by mail, if his relative or friend can bring your marked ballot to the proper precinct.

The only question of the referendum reads: “Should the UK remain an EU member, or it must leave it?”. The result is determined by a simple majority of votes. The voting will end at 23:00 in London (01:00 Jun 24 GMT), after which the ballots will be brought in 382 local authority count (where will announce preliminary results), and then pass in 12 regional counting centres. Preliminary results of the referendum will be summed up to 4 am London time, the BBC suggests.

The issue price

UK is the second largest (after Germany) economies of the European Union. In 2014, its GDP, according to the world Bank, totaled $2.99 billion, or 16.2% of the total for the EU. The country’s withdrawal from the European Union painful impact on foreign direct investment, trade with the EU migration on the British labour market, and, of course, on the budget of the EU.

By the end of 2015, the total external trade of the UK (the import and export of goods and services on balance of payments basis) was estimated at £1.1 trillion ($1.5 trillion). The EU is the main trading partner of the country: according to the British Bureau of statistics ONS, the EU accounted for 44% of British exports (£223 billion) and 53% of imports (£291 billion). The total turnover of the British international trade in the EU takes 48.5 per cent. This is less than other EU member States: normally a trade with the Alliance partners is more than 50% of the total turnover. Over the past 15 years the share of exports of Britain in the EU has decreased over the last 15 years by more than 10 percentage points, says The Guardian.

As a member of the EU, the UK has not only duty free access to the markets of other countries of the Union, but enjoys the advantages of free trade agreements signed by the EU with 53 countries. The authors Gazette “invest in Britain” I remind you that largely due to these agreements, the country was able in 2014 to export of goods and services by more than £500 billion and become the sixth largest exporter in the world, the second (after the US) exporter of services and second exporter of goods via the Internet (also after the US). By 2020 the country expects to double the export volume, says the Bulletin.

Access to the European market — one of the main arguments of the opponents of withdrawal from the European Union. In December Lord Stuart rose — conservative politician, member of the house of lords and one of the leaders of the campaign for the preservation of EU membership — has estimated that the output of the common market will cost the country at least £11 billion annually (exactly 1 trillion at current exchange rates). For this, he made a simple calculation: imposed on the volume of imports of goods from EU standard according to WTO rules, a fee of 5% for “most trustworthy powers.” Taking into account the new ONS data is for the year 2015, this figure will rise to £14.5 billion.

Donor with discount

One of the arguments of Euro-skeptics — the UK contributions to the EU budget in London should pay a multibillion-dollar sums on the maintenance of the bureaucratic apparatus of the European Union, they say. According to the British Ministry of Finance, in 2014 the country had to make to the EU budget of £18.8 billion, and in 2015 — £17.8 billion In fact, Britain pays less: in 1985, Margaret Thatcher was able to negotiate a discount. It is calculated by the complex system, the main factors which customs duties in trade with third countries, the value of VAT and the level of development of agriculture. In 2015, for example, the discount amounted to £4.9 billion in addition, significant amounts to support the British economy spent out of the General budget of the European Union, for example, on the support of development funds. Net contribution of UK to the EU budget last year was more than twice lower nominal — £8.5 billion

Supporters of the country’s withdrawal from the EU, for its part, offered several ways of further development of trade relations. One of the options — Norwegian: Norway, Iceland and Liechtenstein, while not EU members, are included in the European economic area and are taking advantage of free trade. However, these countries have to follow the rules and requirements of the EU, not being able to participate in their development, argue opponents of Brexit. The second option is Swiss: Switzerland is not in the EEA but has bilateral agreements with the EU. This path also has a serious drawback: the agreement between Switzerland and the EU do not affect most financial services, which is a serious disadvantage for London as an international financial centre.

The people of London — the main opponents of Brexit. The British capital is the largest financial center of Europe and one of the largest in the world. Thus, the volume of Bank assets (£10.4 trillion) in 2014 was ranked fourth in the world after China, USA and Japan, the same digest “invest in Britain”. The UK is a world leader in the foreign exchange market (41% of the total volume of transactions), the markets of insurance and reinsurance (20% of all global transactions) and the European leader in total assets managed by investment funds (£6.8 trillion by the end of 2014).

In case of withdrawal of Britain from the EU the whole system could collapse, economists warn. In April the British Treasury warned that in the event of Brexit the UK through 15 years will miss from 3.4 to 9.5% of GDP, and the budget will be reduced from £20 billion to £45 billion in taxes. City financiers fear that a significant part of the operations due to the increasing uncertainty of the business climate in the country in the event of a Brexit could be moved to other financial centers around the world. According to the internal survey by cityuk lobby group, bringing together the leading financial players in the country, 84% of them in favour of maintaining Britain’s membership in the EU. A study by auditors PwC on order by cityuk revealed that in four years the country’s financial sector will lose up to 100 thousand workers, and the industry’s contribution to GDP will be reduced by 10%.

Despite this, among British financiers there are advocates of Brexit. As the FT notes, this primarily small and medium businesses oriented toward the domestic market. There are exceptions: for example, one of the richest men in Britain, billionaire Peter Hargreaves (18-th place in the Forbes list for the UK). In may, he donated £3.2 million to the campaign in favor of the country’s withdrawal from the European Union.

Half a century of doubt

Britain joined the EU (then the European economic community) in 1973 at the initiative of the Prime Minister-Edward Heath. The following year, during the parliamentary election campaign the labour party promised in case of victory, to find the solution to a national referendum. The labour party won, and in the spring of 1975 voted, the results of which 67% of Britons were in favour of membership of the EEC.

The movement against further integration with continental Europe gained momentum during the time of Margaret Thatcher. Then the UK received the right to Dodge several pan-European laws (the so-called opt-out). This right is used, rejecting the introduction of the single currency, accession to the Schengen area and accession to the European rules for the accommodation of refugees.

The actual initiator of the current referendum — the Prime Minister-conservative David Cameron, in early 2013 in a keynote speech criticized the EU on three main points: the Eurozone financial crisis, falling competitiveness of the economy and the mismatch of actions of EU governments to the wishes of his citizens. Cameron has promised voters to hold no later than 2017 referendum on Britain’s withdrawal from the Union if his party wins the parliamentary elections in may 2015 (victory).

However, in February 2016, after months of intense negotiations, Cameron still agreed with Brussels over the reform of European institutions, according to the wishes of London, but only if the UK remains in the EU. Since then, the government supports the campaign against leaving the EU.

After the referendum

No matter how voted by the British on 23 June, the results of the referendum are not legally binding for the British government. The British Parliament adopted the bill on the Referendum on membership in the EU does not say that the decision of the referendum binding. In the materials devoted to the procedure Brexit posted on the website of the Parliament, explicitly States that the results of the referendum “is likely to be seen as politically but not legally binding”.

As the expert explains the London law firm Preiskel & Co David green in a column in the Financial Times, according to article 50 of the Lisbon Treaty (the main document of the EU) regulating the procedure to secede from the Union, a member of the EU may take the decision to withdraw from it in accordance with their constitutional rules.” In the case of UK it, according to green, must be approved by the Parliament. While green emphasizes that if the authorities will eventually act contrary to the decision of the referendum, it will become “political suicide”.

If the question of withdrawal from the EU after the referendum will address Parliament, then the country has great chance to remain in the EU, contrary to the results of the vote — according to estimates by the BBC, for the preservation of EU membership, act 454 of the 650 members of the house of Commons. Moreover, according to the Agency, members of Parliament are consulting on how to use this majority to prevent Brexit.

If the decision on an exit from the EU will still be accepted, then, pursuant to article 50 of the Lisbon Treaty, will be launched the negotiation process on the terms of withdrawal from the unit. If you agree to these conditions will fail EU membership will automatically terminate two years after notification of withdrawal. This “transition period” the UK will remain a full member of the European Union and within the country will be subject to the norms of the European legislation. Thus, according to David green, to withdraw its notice of withdrawal London.

Brexit in numbers

£8.5 billion paid in London to the EU budget in 2015

41% of the global currency market is concentrated in the UK

The 48.5% is the EU in the structure of foreign trade of Britain

Budget of the UK will miss £30 billion in the event of Brexit by 2020

£2.3 billion was donated by billionaire Peter Hargreaves supporters.

In the event of a Brexit, the Russian economy may be short of 1% of GDP

Sources: HM Treasury, ONS, The Guardian, Sberbank