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In an unexpected result and unprecedented event, UK has voted with 52-48% majority to leave European Union. The result of historic referendum was received with jubilation as well as deep disappointment. The British Pound and stock market collapsed steeply. Other currencies and stock markets have also become volatile.
Background
Brexit= Britain’s Exit from the trading and political block, the European Union (EU)
The referendum was a part of British PM’s election campaign which was called upon to legitimise the acceptance of institution by its population. The population feared that EU was making infringement on Britain’s sovereignty and national interests on issues such as trade, immigration, labour regulation and social security.
Remain or Leave
The British population was put to vote to decide if they wanted to ‘Remain’ or ‘Leave’ the EU.
The result of the referendum went in favour of Brexit with 52-48% majority to leave European Union. On dissection of the votes, t was found that Scotland, Northern Ireland and London had voted ‘remain’ whereas England and Wales voted ‘Leave’. Also, senior citizens were ‘pro-leave’ to avail social security facilities whereas younger generations wanted to ‘remain’ as it opened up job and career opportunities pan-EU. Brexit has divided society, political parties, working class and families in UK. As a leading newspaper objectively put “Great Britain looks today like Little England”.
What prompted Brexit?
Economic impact
Political Impact
Political lesson- Governments are accountable to their population. Previous leaders made promises of critical issues being put to vote but they never did. Treaties like Maastricht treaty, Treaty of Rome, Treaty of Lisbon are example. So, masses were never asked if it was acceptable to them.
Impact on India
However, India is not expected to be too much impacted due to its deep foreign exchange reserves, a high growth rate, somewhat restrained inflation, a not significant current account deficit and fiscal discipline maintenance.
It is too early to comment on all economic, cultural, political bearings and thus, all the anticipations shall be evaluated in due course of time with political and economic developments in coming days.
Conclusion
With such wafer thin majority and divided interests, there are many future possibilities which include second referendum, not abiding by the referendum etc. Scotland wants to remain in EU, and thus, there are high chances of it conducting another referendum for Scottish independence. The future of UK in itself has come into question. Other EU countries were interested in moving out like Greece. EU will have to toil hard to keep the trading and political union intact post Brexit.
Key words:
Labour party ideals- Government plays bigger role in life of people, reducing income inequality gap, more taxes to be paid for public good and public services, communities to promote respect for all and by all. (Left winged)
Conservative party ideal- Less government interference, more freedom to people and businesses, solve the issues of income inequality themselves, less taxation, upholding traditional culture. (free market tilt)
UK Independence party- A right winged populist party of UK which played a crucial role in Brexit by highlighting immigration issues.
Refer:
EU referendum: the big questions for Britain (A detailed explanation)