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|Posted on May 21, 2016 at 6:48 PM||comments ()|
The British Chancellor (George Osborne) has suggested that the consequences of Britain leaving the European Union would be 'catastrophic'.
I have just tried to weigh up some of the eventualities, and how they would affect people in Britain.
First of all, I imagine there would be the requirement for visas for Britons visiting any E.U. countries, unlike now, and that would be quite a nuisance, incurring costs and spending time applying for visas.
Likewise, people from the E.U. would need to obtain visas to visit Britain, so the nuisance for them would be similar.
As you know, there is a huge trade between U.K. and the European Union block, accounting for about 40 to 50 percent of annual trade both ways. If this trade is affected, then I am afraid Mr Obama would be correct, we will be at the end of the que, losing preferential treatment which we currently receive. And if goods are sent to somewhere else instead of United Kingdom, could you imagine, there could be shortages on British supermarket shelves. Lots of food items currently imported from Ireland, a European Union nation, may suddenly not be available to us. Half empty supermarket shelves are what people have experienced in Zimbabwe and Venezuela, to site two examples, and of course it is a dreadful picture.
Also, of course, the E.U. nations may start to import from other nations in preference to importing from Britain, as currently. This would curtail production in the U.K., and I can imagine factories closing and workers being laid off. I have no reason to sound alarmist; it is merely the consequences I imagine.
This would bring about a contraction in the British economy; some of the European Union nations who trade with us may also face a similar fate.
Socially, a lot of goodwill would be lost, the various E.U. nations feeling bereft of the friendship and support they have come to take for granted. It may have some impact on the NATO alliance, and the Russians would be cheerful at that : they have on several occasions made incursions in British airspace in the last two years, and recently their fighter-jets were escorted out of the airspace over Estonia by the British jets over there. Just as Scotland saw it wise to stay within the United Kingdom, so I hope the British will see the wisdom in staying together with the European Union. In a dangerous unpredictable world, safety must be of the utmost importance.
Economically, the consequences would be quite savage, nothing less. The huge Foreign Direct Investment coming from the E.U. to U.K. (last year amounting to £469 Billion or so) may find home somewhere else - and there are many nations that would welcome such funds, needless to say.
Similarly, a lot of business with the City of London would be lost - the insurance policies the E.U. takes out here, and the financial dealing in instruments. At a time when the German bourse is tying up a deal with the London Stock Exchange, it would be a deterrent to the whole deal, if I am not mistaken.
All told, the Chancellor is not wrong in saying the impact would be catastrophic. It would be pretty serious at the very least, losing substantial amounts of trade, losing goodwill, cutting jobs, and making each nation feel vulnerable : this would be the environment for all the E.U. members post-Brexit (were it to happen) as well as for Britain.
I have honestly tried to weigh up the points, and I don't like the idea of a Brexit at all. To protect us from quite unnecessary pain, it may be best for Britons to vote In on 23rd June. If that consensus feeling permeates the public consciousness and the media in the coming days, I think it may prove a bonus and inject some positiveness and confidence in the markets and the economy in the coming weeks. Frankly, the idea of a Brexit seems to have been carried a bit too far, and hope it can be quashed. I imagine the vast majority of people will wish to vote In, for security and mutual support, rather than an uncertain future.
Durudarshan H. Dadlani
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