Will Britain have the strength to come out of economic and political instability after the fateful ‘No’?
In the last six months, the UK all is about Brexit. The forthcoming negotiations with the EU and the future of UK have become the centre of inquiry and inquisitiveness. It was a fateful decision not only for Britain as many emphasize, but also for the EU. Now, only six months after the referendum, several survival challenges have risen; challenges that were unprecedented as well as known. Would they voted differently if they knew all of that they know now?
The UK’s political system has not always been efficient and logical, and sometimes, through history, not even fully democratic. However, it is very pragmatic and has had continuity of almost hundred years. Though, until Brexit, most political parties have a similar view on major issues, today it is not the case. Brexit has brought not only economic, but also political instability. The fateful ‘No’ is costing UK its future.
The statement of May declining a trade-off between free movement and access to the internal market may be a sign that the exit strategy for Britain will be a hard one. This may be a step-back for the UK, and the economy may incur long-term damage. Also, with the Conservative Party wanting to replace the European Convention with a British Bill of Rights in contrast to the Liberal Democrat Party, already shows discontent and disagreements among peers. Though May thinks that Britain, as the independent and sovereign nation, should determine destiny itself, opposition Pro-Europe parties don’t share that view if the price is so high.
This aside, the EU is giving the UK a hard time to leave too. Britain’s deal with the EU will make a significant difference to trade, brotherhood and politics. Free trade will be jeopardized, especially with large and important markets like Germany. So, it all boils down to this: to prepare for either a hard Brexit or a soft one. A loss of more than € 1 billion is expected from a hard Brexit, only to the agri-foods sector. A hard Brexit will be damaging various other sectors, curbing labour movement and will become an unpleasant consequence. a soft Brexit on the other hand will be beneficial to both the EU and Britain. Free trade being the fundamental bargain, there will be other continued benefits like financial contribution to the EU and political strength. In addition to this, there will obviously be lesser confusion regarding the status of workers in the UK, and their future being secure, there are riper chances of investments in every sector.
This is just the commencement of a very long, arduous journey of transition and the beginnings of new relationships with the 27 states in the EU. The UK is now at a turning point, but if the uncertainty further increases, the economy will be further undermined. In a country with high uncertainty about growth or the path forward, investments will always be a tough call. With economic uncertainty in the long-term, in addition to the political instability, bigger problems are foreseen. Though some state that the political uncertainty is only a short-term phenomenon, it is probable that the effect will be for the long term. Thus, business should be prepared to act in different scenarios, especially with a hard Brexit in mind.