A not so surprising Brexit


When I got home from work on Friday, aside from being tired, I had drawn the conclusion that trying to write a blog article on this would just lead to a muddle of thoughts that would not be altogether coherent, but would probably also not get the right message out. Thus this was deliberately set down for today, and those who read the daily article for Saturday would have been treated to some nice news instead.

I am not altogether surprised that this happened. I have however been surprised by the immediacy of some of the reactions – the resignation of British Prime Minister David Cameron, who has announced he will step down in October and numerous senior E.U. officials in the United Kingdom. I thought that Mr Cameron might have waited until Monday to assemble his Cabinet and discuss the most immediate steps. Perhaps he was bothered by the spectacular plunge of the Pound to a 31 year low and the wiping of hundreds of billions of Pounds from the value of the market.

Nations have always sought to retain their identity and probably always will. The idea of a basic economic union is good in theory, and to a limited extent in reality. By opening borders the freedom of travel throughout the continent and Britain was significantly improved, especially once Cold War restrictions began to be eased and former Soviet Bloc nations were allowed to apply to join. It also enable easier flow of goods from one country to another and passport requirements were waived for those moving between member nations in the E.U.

However when nations start thinking that their people are being forced by politicians in another country that they cannot control to, anti-____________ sentiment is going to start rising. In some parts of major British cities, high levels of youth unemployment especially among immigrants who are becoming disaffected with British society, create ghetto-like environments that have elevated levels of crime and undesirable activity. Relaxed controls on immigration have meant that large numbers of migrants who have not been properly screened, or provided for are able to arrive. This in turn leads to separatist parties beginning to form like United Kingdom Independence Party, but also hard line parties and movements like Britain First and the National Front who openly despise minorities. In some respects this was a necessary correction to stop the more rabid elements gaining a foot hold, or heaven forbid, access to high office.

For New Zealand the only thing we can do is wait and see. Most of my political contacts were absolutely delighted with the result, thinking that it was a great day for British democracy and that by parting ways with the E.U., Britain will get its sovereignty back. However almost to an individual my U.K. contacts and U.K.-based contacts were very much against Britain leaving.

It is too early to tell what kind of repercussions a Britain outside of the E.U. will mean for New Zealand in terms of issues across the board from travel visas, to doing business, to geopolitical relations. The volatility will last for a few weeks whilst markets readjust, and the scale of the losses is assessed. Further high level political resignations may follow as politicians who banked much or all of their careers on staying weigh up whether to stay on. If one is planning to travel like I am next year, perhaps buy up a few hundred Pound whilst the New Zealand dollar is higher against it – it could be awhile before another such spectacular rise happens again.

So now as the dust begins to settle on what probably felt like a magnitude 8.0 earthquake in terms of the political changes wrought, and the aftershock sequence clearly well underway, these are some very interesting – though possibly not for the right reasons – times for the United Kingdom.

 

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