To Brexit or not?


By the time you read this there will be less than 48 hours on the clock before the referendum on whether or not Britain should leave the European Union. In the last few days, due to the murder of British Labour M.P. Helen (Jo)anne Cox by a gunman with far right connections, there has been a pause in campaigning across the political spectrum. Mrs Cox was a Labour Member of Parliament who wanted Britain to remain in the European Union. That hiatus ended on Sunday, U.K. time. But with only two days left, the electorate appears evenly split.

In the event Britain does vote to leave, what would this mean for New Zealand?

For New Zealand the potential consequences and/or gains are by no means clear cut, not only in terms of what they will be but whether or not there will be any at all. If the vote is to leave, the thought of economists is that initially there will be a slumping of the New Zealand dollar. Whilst I tend to agree with that, it will be short lived whilst the implications of the decision are accounted for. It is possible that a “leave” vote will strengthen New Zealand’s hand with Britain potentially in terms of negotiating power when dealing with trade, travel visas and one on one nation-to-nation relations as they will not have their hands tied by E.U. laws.

If Britain chooses to leave, all U.K. agreements with other nations will have to be revisited in a post-E.U. light to determine their legality. New Zealanders, like other nationalities may also be subject to a wave of anti-immigrant sentiment as the U.K. tries to grapple with a immigration crisis that not a single country currently in the E.U. really knows how to deal with. Britain however will have significant extra control over issues such as defence spending, foreign policy, whom it negotiates agreements with and their terms. A departure from the European Union might also be used to show weaknesses in the North Atlantic Treaty Organization by the Russian Government propaganda machine.

If Britain chooses to remain, although the status quo in most regards will probably still exist, much will have to be done to settle the leave camp. That might mean some significant concessions being made about the extent to which Britain permits European Union involvement in its affairs. How well the likes of the United Kingdom Independence Party and the anti-immigrant Britain First movement whose politics have been described as divisive and fearmongering by Prime Minister David Cameron remains to be seen. Will U.K.I.P. leader Nigel Farage be graceful in defeat?

Regardless of the outcome, politicians have been surprisingly inexact about the pros and cons, which makes me wonder how much investigative work actually got done – or how much advice was actually taken note of. Economists have not been much better, though there is general agreement that a period of turbulence in the event of a “leave” vote gaining the majority, is inevitable.

On Thursday (Friday N.Z. time), we shall found out.

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