…The implications for Nigeria, the UK, EU and the world
“The trouble with committing political suicide is that you live to regret it”
—Sir Winston Churchill
In a passionate plea to Europeans on 19th September, 1946 in Zurich, Switzerland, then Prime Minister of Britain Sir Winston Churchill, one of the proponents of a united Europe, gave his homespun analysis on a United States of Europe, and noted that the need for Europe to come together under one umbrella as one family is too good to ignore.
“There should be no going back in creating a united Europe where millions who want to be happy and free, prosperous and safe can live in,” he said.
Intriguingly, it is Britons who first voted to leave the same union their war-time hero and Prime Minister so beautifully eulogized. The ‘Leave’ vote shocked UK European neighbours and its key ally, the United States of America, and caused volatility in the market. Certainly, Brexit will lead to unimaginable consequences for Britain, and the rest of the world. But first, what is Brexit?
It simply means Britain has left the Union. It is a shorthand way of saying the UK leaving the EU — merging the words Britain and exit to get Brexit. Following the ‘Leave’ vote, though the UK will continue to abide by EU treaties and laws, it will not take part in any decision-making, as it negotiates a withdrawal agreement and the terms of its relationship with the now 26 nation bloc.
Implications for the UK
Though unfolding, the implications, which are varied, hinge on the kind of deal the UK inks with the EU. If it remains within the single market, it would almost certainly retain free movement rights, allowing her citizens to work in the EU and vice versa. But if the government opts to impose work permit restrictions, then other countries could reciprocate, meaning Britons would have to apply for visas to work anywhere in Europe. Indeed, the inscription of “European Union” on the cover of British passports confers the right to live and work in any EU nation.
Soon, UK citizens will lose that right. Add this to British expatriates in other EU countries which could in theory become illegal immigrants overnight if Britain does not maintain some form of freedom of movement as part of its settlement with the EU.
Economically, a recession in Britain seems likely. Corporate investments will be hurt by uncertainty about future access to both the single market and other zones where Britain has piggybacked on trade deals negotiated by the EU. In unsettled times, businesses defer whatever spending they can and this will hurt the economy.
For example, the fear that Brexit might mean recession, plus sheer uncertainty, sent shares in Barclays and Lloyds down by almost 30% when the market opened. European banks were not spared: Deutsche Bank shed 21%, Credit Suisse and UBS 13% each. Shares in American banks with bases in London fell at the start of New York trading. Added to that, the Pounds Sterling fell to its lowest in over three decades.
Britain’s financial industry could also face severe difficulties. This is because it thrives on the EU’s “passport” rules, under which banks, asset managers and other financial firms in one member state may serve customers in the other 26 without setting up local operations. That is how the British subsidiaries of non-EU banks are able to do business throughout Europe from London, and a big reason why London became the EU’s financial capital. The city might lose this privilege. According to the JPMorgan Chase boss, Jamie Dimon, jobs could be lost. HSBC is mulling shifting 1,000 people, around one-fifth of its staff in London, to Paris. Most people are of the view that clearing euro transactions in London would become harder.
What is more, Britain may also quit the European Health Insurance Card (EHIC) which covers Britons for urgent health treatment in Europe either free or at same cost as that of a country’s citizens. With Brexit, membership of EHIC will be negotiated.
There are also fears that Brexit could lead to the fracture of the United Kingdom as we know it. If Scotland 