The historic British referendum on Thursday to leave the European Union raises a question mark on the grand liberal European idea after the Second World War to bring into being a bloc of nations that would act in concert on leading economic, political and security issues by ceding some of their sovereign authority to the larger body. The vote was close — 52 per cent for leaving EU and 48 per cent for remaining. But it appears the larger consideration driving the result was less economic and more nationalistic, under the slogan of “getting back control” and not being governed in key areas by legislation passed by the European Parliament in Brussels.
Under the EU system, people and goods and services moved freely within the bloc of 28 countries. The Britons chafed at the idea of immigrants from European nations coming into their country (although they themselves also lived and worked in other EU countries), and decided in the end to abandon the ship. Their scepticism had abided right through the 43 years the EU was around and UK chose to keep its pound sterling, declining to subsume its currency under the euro.
The political impact of Brexit within Britain is expected to be significant. Prime Minister David Cameron has said he would quit in October since he was the principal campaigner for staying in EU. Scotland and Northern Ireland were strongly in favour of staying. The Europhile Scots are expected to push for a second referendum on becoming a separate country. It is to be seen if a pro-EU vote in Northern Ireland would unleash political forces for its unification with the Republic of Ireland to the south, which is part of the EU.
Britain was the second-largest economy of the EU after Germany. Her leaving could reduce her as well as the EU in the short term. How the longer horizon plays out is to be seen. The UK will now have to engage in bilateral trade and investment deals with the world’s major economies. For India, the EU (with Britain in it) was a key trade and investment partner.
Indian goods and services in significant magnitudes entered EU through Britain. What happens now is uncertain. In fact, uncertainty for a time — as a result of Brexit — appears to be the key motif internationally. Under EU rules, the “divorce” proceeding is to take two years. Until then things remain as before. But this is uncharted territory. The world will watch how matters shape.
