HISTORY AND IMPACT OF BREXIT (SM5)

Introduction

This assignment is about the brief history of the European Union. The European Union was set up to counter the economic and social barriers which occurred due to the events of the Great War which took place in the year of 1942. The Europe was left in ruins after the war. Poverty hunger unemployment decimated the entire continent. The European Union was to unite all of the Europe for the benefit of their citizens. EU today has shaped up the economy of the entire continent. It was made to aid all the population of the continent which suffered heavily after the world war. Eu today not only has contributed to stabilizing the economy but has also contributed significantly to the welfare of the environment. The effort of the EU has been awarded by many prestigious awards till today. This assignment also covers the topic of relation between the EU and the Great Britain its exit from the "Single Market" also known as the Brexit and its effect on the industries of the country and the supporter of the list of those countries which have supported the decision of the Great Britain to terminate its relation with the European Union.

2.1European Union and the UK

History of European union:

After the end of Second World War, the world faced a severe crisis. The European leaders came with a plan that to stabilize the economy they had to join hands and stand as one to fix the problem. So European Union also known as EU was set up in the year of 1950 by the European Coal and Steel Community. The aim was not only to mend the broken economy but also to bring the countries which shredded blood of each other in the Great War .The founding members constitute of five countries, Germany, Italy, Netherlands, Luxembourg, and Belgium. The time did not favor these noble causes as the 50's sawed the cold war raged between Russia and the US. The Hungarians protested against it but their protest was literally crushed by soviet tanks (Wallace et al. 2014, p.08). It not before the year of 1957 Rome who created the European Economic Community better known as EEC or "Common Market" which brought this great concept into dim lights and many European countries participated in this event. The next saw a boom in the economy as the European countries stopped posing taxes on the trade which they did with each other. This made their market more open to each other. This boosted the employment rate and the unemployment rated descended to a good extent .Not only this the shortcoming of food which took place due the great war was abolished and people had sufficient food on their plate as the European countries agreed jointly to produce food for each other. The year is famously known as the 68 generation as the society was changing. Countries like Denmark UK and Ireland joined in the year of 1973 as the brutal and devastating war between Israel and Arab created a severe crisis of energy and economy in the Europe once again. The Portugal joined the EU after the fall of their dictator Salazar in 1974. The Spain joined the EU in the next year after they dethroned their dictator. When these major countries joined the EU it was complete. The EU sends financial aid to the poorer region of the Europe. They send medical aids foods and other necessary survival kits to the people to make their living conditions better. The EU parliament gave their citizen rights for the first time to directly elect their members in the year 1979. They united to fight against social and environmental problems like pollution poverty etc.  They even adopted a law preferably known as the polluter pays for the safety of the environment (Wallace et al, 2015, p.15).

In the 80's the Europe saw many great changes. The fall of the great Berlin wall made a huge impact in the world. Changes like Polish trade union and Gdansk shipyard strike had become a household name. The Greeks joined EU in 1981 and the year of 1986 Single European Act was signed which aimed to create a concept of single market and start a free flow trade among the members of the EU. This also aimed to sort out all the major social economic problems which the citizens of Europe faced within six years. The disintegration of the communism in the 90's in the central and eastern Europe its citizens came closer to each other. In the year two historical treaties were signed they are Maastricht and the Amsterdam treaty. In that very year, the EU announced the freedom of four aspects of single market namely as freedom of movement of goods money service and people (Dhingra et al. 2016, p.24).

 When three more countries like Sweden Austria Finland joined the EU the EU decided to concern on the defense and security. Perhaps the biggest benefit given to the citizens of the Europe was travelling all around the continent without their passport. The communication was made more transparent and the diverse cultural of the Europe was united like never before. The Euro was made the currency of the continent.  This helped the foreigners in the next decade. After the terrible event of 26/11, the whole of Europe decides to fight terrorism as one single force. This even united the different political divisions and more than 10 countries joined in the single year of 2004. When the dreaded recession hit the world economy the EU signed the Lisbon Treaty in 2009 which helped the Europe with better efficient work method to cope up with the recession. The early 2000's saw the expansion of the EU like never before .In the year of 2012, the EU was awarded Nobel peace prize for their contribution for the aid which they provided the world during unstable economic with the formation of Banking Union. At present, the EU leaders are very much concerned with the extreme climate changes occurring in the face of the planet. The leaders are trying to reduce the harmful emissions which are polluting the atmosphere. Perhaps the biggest issue the EU is facing the jingoism religious problem which tearing apart the Middle Eastern regions which is forcing hundreds of thousands of people to take refuge in the Europe (Wallace et al. 2015, p.42).

Relation between the UK and the European Union:

The Britain joined the EU in the year of 1973. It was a major historical decision taken the Government of the country. The country's economy was torn apart from the Great War which shook the country. The country was hugely benefited by the concept of the single market of the EU. But the long relation of EU and UK was never very smooth in fact the UK though to exit the EU just after two years after joining it. Many leaders feared that the UK will try to make their language as a formal language in all of the Europe (Richardson et al. 2015, p.32). Moreover, the relation between France and UK was never really "warm". The decision of leaving the EU was withdrawn when the majority of the members voted in favor of the UK to retain their membership with the EU. But the Uk ultimately decides to leave the EU in the year of 2016 when the majority of the citizens of the voted in favors of the decision. The UK although was the among the poorest country in Union and had the least contribution in the European Union but as time rolled by it became the highest contributing nation in the group (Cini et al, 2016, p.22).

2.2 Brexit

What is Brexit

Brexit is the short form of British and exit. This term was used in the year of 2016 when the Uk decided to leave the European Union. It is derived from the word of Grexit when the Greeks terminated their membership the EU. Although the process of leaving the EU stated in the year of 2016 after the referendum vote the government officials stated the process in the following year of 2017 in the month of March and the whole process will be completed by the year 2019.the decision was made public by the Prime Minister Theresa May in the year of 2017 which was based on a 12 point plan of negotiating the objectives that Britain was going to end their membership and would not continue to contribute in the "Single Market" (Obstfeld and M., 2016, p.360).

Origin of Brexit

The relationship between the European Union and the United Kingdom was never smooth and there were a frequent up and downs between them. The year 1977 saw a dramatic turmoil between them. Although the majority of the UK communities voted in the favor of staying and continuing their membership in the year of 1977 but in 1985 almost 70% Margaret Thatcher's team voted against the membership with the European Union. The Prime minister of the UK Tony Blair in 2000 supported the act of masking Euro as the unified currency because in that very year the country was facing the burden of immigrants. But this didn't stay for long. In late 2015, the then Prime Minister again evoked the idea of terminating the membership of the European Union. Due to two main issues; safety of the countries who were not included in the European Union and the illegal immigrants in the United Kingdom (Kreindler et al. 2016, p.530).

In the year of 1975 United Kingdom held a national referendum where the topic whether the UK should continue their membership with the European Union or not held. The labor party which was in the opposition at that time held a general campaign and stated that the government should renegotiate with the terms and conditions for the continuity of membership with the EEC. but the majority of the population supported the continuity of the membership with EU so this proposal was discarded. But unfortunately a great division within the ruling party occurred and seven out of 23 ministers raised their voice in favor of leaving the European Union. The then Prime Minister Harold Wilson clearly asked the electorates to vote in clear yes or no to the question of staying or leaving the common market. The majority went to the option of staying with the Union. So it is quite clear that the country was itself was in a dilemma to either stay or leave the Common market. The final nail in the coffin of the decision was put in the late 70's and in the early 80's during the reign of Margaret Thatcher. In the early 80's the opposition party again brought the limelight to the opinion to leave the EU when they again held a campaign. Although Ms Thatcher was successful to blow it away but due to the pressure by her senior minister she had to join the pound sterling attached to the Deutschmark. The act of pound sterling act came to a halt when Margaret Thatcher resigned from her post and the currency speculators heavily opposed it. The Maastricht treaty forces the European Community to be converted to the European Union in the year of 1991. The final referendum started in the year 2012 under the reign of Prime Minister David Cameron. The final result was announced on the morning of June 24 where the decision to leave the European won the majority by 51.9%. Thus ending the relation between the European Union and the United Kingdom which lasted more than over four decades.

Debate about Brexit

Since the decision of the Britain to leave the comfort of the common market turned into reality the citizens have stated the debate among them. The list of both positive and negative effects of the decision is given below;

●       Positive effects:

1.      The best way to get better jobs with a better salary is by having an economy which is very competitive in nature. Having just a single market within the country would not be able to create a competitive economy. As a matter, in fact, the Greeks although is a founding member of the EU still lacks a competitive economy and now the country is plagued by unemployment. Countries like South Korea are not a member of the European Union which now can export their electronic goods to the outside countries. Being outside the EU the Britain may enjoy the similar freedoms as well.

2.      In a long run, the economy of the country may become more stabilized after leaving the common market (Begg et al. 2016, p.32).

3.      The UK, unlike other European country, has never suffered the external crisis of euro. Although the sterling itself has been deprived but the Government officials claim that they will survive this crisis.

4.       After leaving the common market the country is again open to the open the market. This gives the Britain to trade with the outside world more freely. This can increase the wages of the employees and may be enough to reduce the inflation which is now haunting the country in every corner.

5.      The Brexit claimed huge amount money can be spent on the welfare of the citizen. Although the figures don't match with their claims but the statement still has some amount of genuinely in it.

6.      The last positive outcomes of the Brexit decision is that the country may get more freedom now to do business with other countries .At a glance, it may seem that the decision of Brexit is quite beneficial for the country, but it also comes with some cons as well. They are listed below as well;

1. Although the immigrants may be a big burden to the economy of the UK it is an undeniable fact that they do contribute a huge amount profit to the economy as well. As the restriction of the travelling of these immigrants increases the economy of the country is bound to suffer.

2. The biggest problem the country is now facing due to the Brexit is the inflation. This affects not only the industries but the common household as well. As the common man pays more than what they used to pay for the same commodity they are now turning away from purchasing more than they used to do before.

3. The cost of production has increased due to the inflation. The organisation has to spend more to convert the raw material into finished goods. So the cost of the finished goods has also increased. Not only this the inflation have forced the organisation to go through a major cutting off their employees which is hampering the organisation itself (Baker et al. 2016, p.12).

●       Which countries support the decision of UK to leave Brexit?

According to a survey conducted by the Germany, there is possible chance five other countries may leave the European Union as well. This will further weaken the Union. The countries are mainly France, Italy, Greece, Netherlands and Spain.

●       How can the United Kingdom exit the European Union?

The Britain under the authority of their Prime Minister David Cameron cast a vote on the debate of whether the country should leave or stay within the EU and the result favor the previous decision. The debate was stated in the 70's. The UK had never smooth relations with the EU. The decision just puts final coffin in the decade-long relation between them.