AS the dust continues to settle from last week’s general election in the UK, the possible implications for the future of the European Union are now becoming clearer, and observers Brussels and London alike are becoming increasingly nervous.
The election was a convincing win for Prime Minister David Cameron and his Conservative party, who managed to secure an absolute majority in Parliament by taking 331 of 650 seats. One of the key campaign promises made by Cameron was that before the end of 2017, Britain would hold a referendum on remaining in the EU.
While the Cameron government’s position is that the UK should remain part of the 28-nation bloc, many are taking the outcome of the election as a sign that British voters are against the idea. Over the past few days, analyses of the election and the directions the Conservatives might take their renewed mandate have started to use the word “backfire”—Cameron’s determination to hold a referendum, according to the prevailing point of view, is based on his wish to settle “the EU question” once and for all in favor of Britain’s remaining a part of it, but the British public wants out.
Great Britain is the second country, after perpetually troubled Greece, in which discussion of abandoning the European Union has reached an advanced enough stage for the media to create a stupid-sounding click-bait term for it; “Grexit” is now joined by “Brexit.”
Although the circumstances in the two countries are completely different —for one thing, Greece is bankrupt and the UK is not—there are a significant number of people who believe the same solution, unfettering the country from Brussels’ yoke, applies to both.
In Britain’s case, probably the biggest issue is the large financial contribution the UK makes to the EU. EU membership costs the UK between £14 billion and £15 billion a year, and there is a growing sense that the benefits are not that valuable. Immigration made easier by the (relatively) free movement of people throughout the EU is also becoming a public irritant in the UK, partly because it is being associated, accurately or not, with increasing extremism and violence.
From a business point of view, however, the issue is far more complex than the media makes it out to be, as an interesting, comparatively sober assessment published online by the BBC yesterday explained. The results of a survey among a variety of UK businesses show that opinions about whether or not the “Brexit” should come to pass are evenly divided.
Nobody seems to be satisfied with the status quo, but to what degree the UK should modify its relationship with the EU is debatable. In general, larger businesses seem to favor EU membership more, and some even suggest the UK should join the monetary union and adopt the euro. The ease of labor movement also benefits larger businesses.
Businesses of all sizes rely on the EU as their largest export market, and worry to what extent a “Brexit” would reduce their access to that market.
On the negative side of the ledger, most businesses complain about excessive regulation.
As one executive remarked, businesses are often not certain whether the rules are coming from Brussels or Westminster; particularly contentious are health and labor regulations.
Even those business people who express strong support for Britain’s maintaining or even increasing the level of its participation in the EU suggest that some powers be repatriated, which some analysts in turn view as a sign that the undercurrent of sentiment in favor of abandoning the EU may be much deeper than anyone realizes.
The impact of a “Brexit” on this part of the world should not be significant, but given the sensitivity of local financial markets to outside pressures, the likeliest consequences of a British withdrawal from the EU should not be overlooked. Exchange rates will become volatile for a period of time; whether these will favor the peso or not is something that can only be guessed at now. A possible benefit, although a modest one, is an increase in British investment in this part of the world; faced with more competition in Europe, the prospect of greener pastures in Asia or elsewhere is likely to be appealing.
There will also be a few practical problems facing Filipino workers. Because there is an anti-immigration aspect to the calls to leave the EU, the UK is likely to become a less hospitable place. OFWs already there probably don’t have anything to worry about, but it should come as no surprise if a UK exit results in a decline and possibly, a complete drying up of new job opportunities for Filipinos.
The bigger impact of a “Brexit,” however, could come sometime later, if or when the European Union itself got dissolved. That would be the ultimate result of a British exit, if it ever happened. Even though Great Britain is not part of the euro, it is still one of the pillars holding up the eurozone. The EU as it is now is still evolving, according to its guiding mission; its natural objective is to fully include every country in Europe. The EU could probably absorb the loss of a smaller country like Greece, but removing the outsized influence of the UK from it would be a signal that the ultimate goal has become ultimately unattainable.