UK Votes to Leave the European Union, These Videos Explain What Is Happening Now
Last night, the results of the UK referendum on leaving the European Union were published: Britain voted to leave. The UK’s exit from the EU, otherwise known as Brexit, is significant. These videos help you to understand the main points.
The video above from the political clarification site Vox touches on a few key points. Notably, this transition will change the way Britain does business with the rest of Europe and the world. Within the EU, member states are free to move goods between countries. This has resulted in many companies’ European headquarters landing in the UK, where they can control their deals across Europe. It is currently unclear whether the companies will move their European headquarters elsewhere and retain only a small presence in the UK, or whether they will keep their headquarters in place and establish small offices elsewhere.
There is also a migration problem. According to EU rules, citizens of member states are free to move across national borders to other member states. This, in the first place, led to disagreements over the EU. More importantly, they can also work in these countries. Some in the UK dislike this, saying that it allows migrants from poorer countries to take advantage of the comparatively higher employment rates in the UK. This was a key factor in the decision to vote.
By the way, British Prime Minister David Cameron may step down as part of this transition. Cameron was a very ardent supporter of staying in the European Union, so his role in post-EU Britain may be questionable.
This video from CNN Money breaks down the next logistics steps further. Yesterday’s referendum only confirmed that the UK population wants to leave ( 51.9% versus 48.1% ). However, the UK still needs to apply Article 50 of the Treaty on European Union , which requires the UK to formally notify the EU of its intention to leave the country.
After that, a two-year process of negotiations on a trade agreement with the remaining 27 countries of the European Union begins. The ultimate goal is to keep Britain’s trade routes open, but it is unknown how easy it will be. The two-year time frame further complicates the task. If the UK and EU cannot come to an agreement within two years, the EU must either vote unanimously to extend the deadline, or the UK could be completely excluded without a proper trade agreement.
This BBC Newsnight video takes a closer look at the impact on UK trade. The trivialities of a trade agreement that the UK is set to negotiate over the next two years could have huge ramifications, not only for jobs in the UK, but for the world at large. The UK is home to the world’s largest banking companies such as HSBC and Standard Chartered. UK financial services will need to be revisited as part of a new trade agreement with the EU.
It is unclear how much this could affect the global financial system. In terms of finance, the UK has its counterparts like Wall Street within its borders. Closing these borders will have long-term consequences that we cannot fully predict until we know the specifics of this deal, which has yet to be negotiated with the EU.