Britain’s exit from the EU, referred to as the “Brexit,” will have long-lasting ripple effects throughout the global economy. Though no one knows exactly how this political drama will play out, leading economists and political scientists are forecasting plenty of doom and gloom. The bottom line is that Britain’s decision to return to isolation puts the EU in uncharted territory.
How Brexit Could Damage the Global Economy
Though the prospect of a Brexit was somewhat anticipated, involved parties are woefully unprepared for the aftermath of this monumental event. According to College of Professional Studies Professor Steven Billet at The George Washington University, the United Kingdom’s post-Brexit unwinding process is just the beginning of an undoubtedly strenuous quest to return to a semblance of normalcy. As students in George Washington University’s Graduate School of Political Management have learned, no such model exists for this process as Brexit is the first of its kind. With the Lisbon Treaty’s Article 50 serving as the EU’s sole guidance, most countries are a bit confused as to what the future of the union will look like in the ensuing years and decades. The Article directs Britain to engage in a negotiating process during the next two years. If the negotiations go beyond this deadline, the 27 other EU participants must fully agree to the terms of a potential exit deal. If such negotiations reach a stalemate, the UK will be subjected to tariffs. This would be extremely bad news for the UK, similar to how Brexit is bad news for the economies of the remaining EU countries. Additional restrictions to trade rarely result in any sort of economic progress. It is clear that Britain’s choice to isolate itself will negatively impact Europe’s economy as a whole.
Brexit’s Impact on the Global Hegemon Known as the United States
The United States is widely considered to be the world’s dominant force in terms of military and economic might. The so-called hegemon might not suffer the same post-Brexit economic and political consequences as EU members. Most economists believe that Brexit will strengthen the United States dollar while simultaneously weakening the euro and the British pound. An array of United States-based multinational corporations does big business with the UK. Furthermore, the Brexit could change the manner in which the United States conducts diplomatic and defense efforts with the EU and Britain. The Brexit decision will alter the dynamic of the Western alliance in ways that we can only imagine at this point.
How Brexit Will Impact the EU’s Remaining Members
It is unlikely that the remaining EU members will be offered a new treaty. However, the effects of Brexit could prompt many EU members to alter their immigration policies. The hot-button issue of immigration will only continue to scorch in the short-term as EU members consider the implications of opening their borders to a seemingly never-ending influx of political refugees. It is possible that Brexit will prompt EU members to clamp down on border security. Furthermore, Brexit could spur the EU to become more democratic in nature, empowering national parliaments with more agency in the context of the union’s decision-making.
A Domino Effect?
According to the finance minister of Italy, Pier Carlo Podoan, Brexit could create a domino effect in which numerous EU members exit the continent-wide alliance. Podoan has suggested that France might have its own “Frexit” after the country’s 2017 presidential elections. It is quite possible that more and more anti-EU parties will garner support throughout Europe in the next couple of years. Yet Britain will likely encounter some major hurdles in its post-Brexit attempts to negotiate trade agreements with other nations. If trade deal complications prevent Britain from getting its economy back on track, it might dissuade current EU members from considering an exit.
Brexit Is a Global Drama That Will Slowly Unfold Before Our Eyes
Britain will soon learn that isolationism has its own unique costs. Only time will tell if Britain’s departure from the EU proves prudent. One thing is for sure: The next couple of years will be incredibly interesting to observe as Britain goes rogue, and the EU proceeds through its inevitable growing pains. Stay tuned. Things are about to get interesting.