Question

Why did British voters decide to leave the European Union by voting towards Brexit? Please identify some major reasons. What were the economic and financial markets impacts of the Brexit decision vote? Would you have voted to stay or leave? Why or why not? What are the counter arguments? What are the impacts of your position? How will your position affect other European countries?

*Please answer ALL parts in DETAIL*

*Please type your response, thank you so much!

Answer 1

The main reasons the British voters decided to leave the European Union were:

a Immigration reaching a breaking point- Economic and social impact of uncontrolled immigration resulting from Free Movement.

b. Uncapped migration of workforce between European union members, over which 'Britain is not able to make its own laws or controls' due to the European Union Membership. The regulations and laws that applied above our own were either unwanted, over extensive or less relevant to our needs than other EU members

c. Losing control of setting British rules/laws/quotas, to 'Brussels'. The inability of the public to vote for meaningful members of EU institutions that could enact the will of the people, or be removed from office should they detract from that

d. Amount of British money being sent to the EU-  Each member country needs to contribute money to the EU, UK contributed $19 bn a year. This is approximately $300 per person.

e. It is believed that the adoption of the common currency, the EURO was the primary reason of the 2008 global recession. It lead to huge unemployment rates in countires like Spain and Greece. Even today, approximately 7 years after, these countries still have an unemployment rate of more than 20%. UK never chose to accept the EURO, but the unemployment fact alone acts as a catalyst for those supporting the “Leave” campaign.

2. The economic and financial markets impacts of the Brexit decision vote were as below:

a. On 24 June 2016, the first trading day after the referendum, the stock returns were mainly driven by the sharp depreciation of the pound and the expectation of an economic slowdown. Exporters and firms reporting earnings in foreign currencies experienced higher abnormal returns, whereas importers saw lower returns.

b. firms with more affiliates in the UK, and hence greater exposure to the domestic market, experienced more negative abnormal returns; by contrast, share prices of companies in sectors that traditionally outperform the market in recessions, such as consumer staples or utilities, did significantly better on 24 June 2016. This points to investors expecting a significant economic slowdown or even a recession, in line with many pre-Brexit economic forecasts and the sharp deterioration in indicators of business confidence observed in the month following the referendum. economic growth has slowed relative to other major economies since 2016

c. Following the Brexit referendum, many companies shifted assets, offices, or businesses operations out of Britain and to continental Europe

d. Trade in cars in particular has had a large impact, with falling exports amid rising global trade tensions and weaker consumer demand in China and the eurozone. Business activity stalls amid Brexit uncertainty.

e. Record numbers of unfilled job vacancies across Britain appear to have strengthened the bargaining power of workers to demand higher wages, despite mounting concern among business leaders over the growing skills shortages. The number of vacancies in the British jobs market rose by 16,000 to an estimated 870,000 in the three months to January, with unemployment at the lowest levels since the mid 1970s

3. I would definitely voted a stay and not a leave as there could be an economic hit to the country by leaving. But there would definitely be some counter arguments that the immigration level is increasing this leads to unemployment in Britian and many such arguments, however all these are matters that can even be resolved without Britian having to leave the European Union. Brexit would eliminate protections of equal pay, maternity leave, and safe workplaces. It would change the perspective of Britain being the “gateway” to Europe. Reduce the amount of foreign direct investment that Britain receives. Taking a position of staying in the European Union will be taken positively by the remaining European countries. Each country has a unique relationship with Britain as far as the movement of goods, services, people and capital. There would be no disruptions in trade to costly tariffs to fragmented supply chains and restrictions on services.