Britain’s Vote on European Union Membership

By STEVEN ERLANGER UPDATED October 27, 2016
nytimes.com

Update: Britain has voted to exit the European Union. It is a historic decision sure to reshape the nation’s place in the world. For more about the fallout, The Times prepared an updated explainer of the basics.

Britain held a referendum on Thursday on whether to leave the European Union, a process often referred to as “Brexit.”

The reasons for and against
Those who favor leaving argue that the European Union has changed enormously over the last four decades with regard to the size and the reach of its bureaucracy, diminishing British influence and sovereignty.
Those who want to stay say that a medium-size island needs to be part of a larger bloc of like-minded countries to have real influence and security in the world, and that leaving would be economically costly.

What are pollsters and bettors predicting?
As the campaign progressed, the odds against “Brexit” gradually became smaller, then they rose again. Betfair, a betting exchange, had the “Remain” camp with an 80 percent chance of winning on the day of the vote.

Who is arguing to stay, and who to go?
REMAIN Prime Minister David Cameron leads the “Remain” camp, and he could lose his job if his effort fails. Behind him are most of the Conservative government he leads, the Labour Party, the Liberal Democrats and the Scottish National Party, which is strongly pro-Europe.
Most independent economists and large businesses favor staying in, as do the most recent heads of Britain’s intelligence services. President Obama, Chancellor Angela Merkel of Germany and President Xi Jinping of China also want Britain to stay in.
LEAVE The “Leave” camp is led by Michael Gove, the justice minister, and Boris Johnson, the former mayor of London. Nearly half the Conservative members of Parliament favor leaving, as do the members of the U.K. Independence Party, or UKIP, and its leader, Nigel Farage. Their main issues are sovereignty and immigration.
Abroad, the French National Front leader, Marine Le Pen, favors Brexit, as do other anti-Europe parties in Germany, the Netherlands and elsewhere.
A vigil in Parliament Square in London for Jo Cox, a member of Parliament who was killed in northern England on Thursday.

brexit-tragedy

Jo Cox, a member of Parliament, was shot and killed outside a library in her district of Birstall, England, last week. With the referendum days away, campaigning was immediately suspended as a gesture of respect. It resumed on Sunday.
Ms. Cox, 41, was a vocal supporter of Britain’s remaining in the bloc. When the suspect in her killing, Thomas Mair, was asked in court for his name, he answered, “My name is death to traitors, freedom for Britain.”

What is the history?
The European Union began in 1951 as the European Coal and Steel Community, an effort by six nations to heal the fissures of World War II through duty-free trade. In 1957, the Treaty of Rome created the European Economic Community, or Common Market.
Britain tried to join later, but President Charles de Gaulle of France vetoed its application in 1963 and in 1967. Britain finally joined in 1973.
Has a vote like this happened before?
Yes. A referendum was held in 1975, two years after Britain joined the European Economic Community, on whether it should stay. More than 67 percent of Britons voted in favor.
London is a major financial gateway, the biggest and busiest in Europe and rivaling Wall Street as a hub of international trading in stocks, bonds, currencies and commodities.
What impact would an exit have on Britain’s economy?
This is an essential and divisive question. The economic effect of an exitwould depend on what settlement was negotiated, especially on whether Britain would retain access to the single market for duty-free trade and financial services. But that would probably require accepting freedom of movement and labor for European Union citizens, which is one of the main complaints the “Leave” camp has about bloc membership.
Most economists favor remaining in the bloc and say an exit would cut growth, weaken the pound and hurt the City of London, Britain’s financial center. Even economists who favor an exit say growth would be affected in the short and medium terms, though they also say Britain would be better off by 2030.
In late October, the chancellor of the Exchequer, Philip Hammond, said that the better-than-expected 0.5 percent growth in gross domestic product in the third quarter was evidence that the British economy was able to cope with Brexit.
Why now?
It has to do with a decades-long rift in the governing Conservative Party. A vocal minority has demanded that Britain leave the European Union since the time of Margaret Thatcher. That minority grew in opposition during the Tony Blair years, and views on Europe have become a litmus test for Tory candidates, because grass-roots Conservatives tend to favor a British exit.
To pacify his party and undermine the anti-European Union U.K. Independence Party, Mr. Cameron promised to hold the referendum should he be re-elected prime minister. Nearly half of all Tory members of Parliament, including six cabinet ministers, now favor leaving the bloc.

Who is voting?
British citizens 18 and older can vote, as can citizens abroad who have been registered to vote at home in the last 15 years. Also eligible are residents of Britain who are citizens of Ireland or of the Commonwealth, which consists of 53 countries, including Australia, Canada, India and South Africa.
Unlike in general elections, members of the House of Lords may vote, as can Commonwealth citizens in Gibraltar, a British overseas territory. Citizens of the European Union living in Britain cannot vote, unless they are citizens of Cyprus, Ireland or Malta.

Is this vote final?
Yes, at least for the foreseeable future. If Britons vote to leave, there will be an initial two-year negotiation with the European Union about the terms of the divorce, which is unlikely to be amicable.

The negotiation will decide Britain’s relationship with the bloc. The major issues would surround trade. If Britain wants to remain in the European Union’s common market — the world’s largest trading bloc, with 500 million people — Brussels is expected to exact a steep price, in particular to discourage other countries from leaving.

brexit-currencies

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