Brexit and the crisis that plagues the UK

Theresa May tearfully announced her resignation as the United Kingdom’s prime minister last May 24 after failing to come up with a Brexit agreement thrice. The UK was supposed to withdraw from the European Union last March but failed to do so after UK ministers failed to pass May’s Brexit plan.

What is Brexit?

Brexit is a shorter form of Britain + exit, a term used for the UK’s withdrawal from the European Union economic bloc. David Cameron came up with the concept in 2013 to resolve the question on the European Union’s advantages for Britain. Cameron believed the referendum will solve the intense anti-Europe stance of some members of his Conservative Party, and thus ease his presidency in a country that is plagued by an economic crisis.
The Britons are left with two options—to remain or withdraw from the EU.

Cameron was overly confident that the “remain” option would win. Contrarily, the “leave” option prevailed in the national referendum held on June 23, 2016. The win was attributed to the people’s reaction to the crisis affecting their jobs and austerity measures which have been adversely affecting the country for decades. Far-right parties exploited this sentiment to blame the crisis on UK’s loose policies on migrants.

What is the Brexit agreement?

May’s Brexit plan includes provisions on relations of businesses in the UK and other EU countries; on the rights of its people in other EU countries and vice versa; and on its relation with Northern Ireland which serves as passageway for both products and people from the UK and the EU. The agreement also indicates that the UK will pay its 39 billion euro ($50 billion) loan to the EU. Accompanying the agreement is a statement for UK’s future relations with the EU in the fields of trade, defense and security.

UK ministers failed to pass this agreement thrice. Among the points of contention were the arrangements with Northern Ireland which serve as the border between the UK and EU. The call for “No-deal” Brexit, or UK’s withdrawal from the EU without agreeing to anything and without paying a €39 billion fine, is growing. If this materializes, UK will lose its trade privileges with EU countries.

As of now, nothing is certain about Brexit, making businesses and the people extremely anxious.

Worsening crisis

The new UK prime minister will face worsening political and economic crisis, with or without a Brexit agreement. For now, the economy is estimated to grow only by 4% up to 9% in the next 15 years.

Although the final date for Brexit has been set on October 15, some companies have already relocated their operations to other countries, including Airbus which employs 14,000 workers and supports around 100,000 other jobs. Sony has also been relocated to Singapore and P&Q is also set to leave.

As some foreign investors are backing out, the Society of Motor Manufacturers and Traders reported in April that the industry only produced 70,971 vehicles which is lower compared to the 127,970 produced duing the same month last year. Around 44.5% of these are Jaguar, Land Rover, BMW and Peugeot cars.

The Britons also fear that there might be a food and medical supply shortage without a proper Brexit agreement.