By: Carol Petrov
Great Britain’s citizens are tasked with a major decision next month with wealth management implications. On June 23, the British electorate will vote on whether or not they will leave the European Union, the 28-nation economic alliance. The media has dubbed this vote “Brexit.”
It’s difficult to know what’s at stake. Great Britain already maintains its own currency and is not part of the passport-free zone, which allows Britain control over its own policies in regard to the Middle Eastern refugee crisis. Therefore, the vote will decide whether or not the country continues to pay into the EU budget and adhere to their regulations. Norway is a great example for Great Britain’s potential standing with the EU. Norway is not a member of the EU yet the nation contributes to their budget, adheres to the regulations and seems to get most of the membership benefits.
Currently, the eurozone suffers from high unemployment, low economic growth and a disparity between the richer (UK, Germany) and poorer (Greece, Spain) nations. All EU members are governed by policies created by the European Commission and the European parliament and are subject to the dispute resolution powers of the European Court of Justice. British voters might decide they don’t like the shared sovereignty and ties to the economic problems. After all, despite being considered part of a European Union since 1973, the British never considered themselves European.
Naturally, there has been intense lobbying on both sides leading up to the vote. Economists seem to be uniformly against a Brexit, pointing out that it would be hard for London to continue its role as the financial capitol of Europe if its nation is not actually a part of the EU. Supporters of Brexit say Britain would be in a better position to enter into trade deals with other countries than it is today and there is a strong nationalist sentiment about reducing foreign influence over British affairs.
My opinion on the matter is that short-term the EU countries will stay together, but long-term their cultural differences will tear the Euro family apart. Citizens of the EU do enjoy traveling freely from country to country for work or pleasure, much as we may commute from Virginia to Maryland. In fact, from the mid-90s through mid-2000s, this free movement helped lower employment barriers which encouraged people from the “Eastern Block” to find jobs in Western Europe and entrepreneurs from the “West” found opportunities in developing the “East”. However, this economic boom did not seem to make them feel united as Europeans like we all identify as Americans.
So who will win? The most recent polls show 46% of British voters will cast a ballot to leave the EU, vs. 44% who will vote to remain—and 10% who say they don’t know how they’ll vote. A little more than a month from the actual Brexit election, there appears to be plenty of time for either side to continue pressing their case.