Sihai network

Why does Britain leave Europe? What is the impact of brexit

Why does Britain leave Europe? What is the impact of brexit in recent days, the brexit event has continued to ferment. Brexit is one of the biggest events in the world last year. Why does the UK want to get rid of the EU? Is brexit good for it? Let's analyze it in depth!

Why did Britain leave Europe?

1. 'isolationism' has far-reaching influence, and does not like immigrants to encroach on welfare

People who are familiar with European history all know that the British people have a sense of superiority in the face of the European continent for a long time, and then derive a tendency of 'glorious isolation'. The popular explanation is: no matter how many countries fight in the European continent, as long as you keep the balance of power and 'fight without breaking', then my UK can live a happy life of its own.

This time the British chose to leave Europe, no doubt foreshadowing the mainstream of 'isolationism' again. At present, the UK's economic situation is better than that of the EU as a whole, and its independence from the monetary system outside the euro area makes the UK avoid the transmission of the EU crisis, which further contributes to the British sense of superiority.

In the eyes of those advocating brexit, the EU has dragged down the UK's economic performance. Immigrants from the European Union also encroached on the welfare of the British.

Immigration is the most persuasive reason for brexits in Britain. Since 2000 (during which EU Member States increased rapidly), immigrants from other EU countries began to enter the UK in large numbers, because the UK economy is more dynamic than that of the EU in the same period and has more employment opportunities.

However, with more and more immigrants from the EU, there are more objections to immigration in the UK. In this part of the British people's view, immigrants from the European Union occupy jobs in their own country, and because most of them are low skilled workers, the British government even needs to provide a lot of welfare.

However, despite the British anxiety about immigration, the International Monetary Fund (IMF) recently published a report on the impact of brexit in the UK. However, the majority of EU immigrants are low skilled workers who do most of the work that the British are not willing to do. In fact, they help the UK improve labor productivity. At the same time, the IMF report says there is no evidence that immigration from the European Union has led to job losses in the UK.

2. The British are very unfair because they have paid the EU 'money' but have not benefited from it

In addition to immigration, Britain's annual contribution to the EU has also caused frequent domestic dissatisfaction.

According to the data in the IMF's latest report on brexit, the UK contributed a net 7 billion euros to the EU budget in 2014, making it the third largest net contributor to the EU (only second to Germany and France).

But with so much money, the British think they have failed to get the level of subsidies from the EU. In 2014, Britain's income from the EU was only equal to that of Belgium and Greece, lower than that of Germany, France, Italy, Spain, Poland and other countries.

However, the IMF disagrees with this view. In the report on brexit released on June 17, the IMF believed that compared with other EU countries, the UK's agricultural sector accounts for a small proportion of GDP, while EU subsidies enter the agricultural sector of member countries in large quantities, which is the main reason why the UK receives less subsidies from the EU.

According to the IMF report, in fact, the UK's contribution to the EU only accounts for about 0.3% of its GDP, which is lower than Austria, Germany, France, Denmark and other countries.

3. The EU's complicated regulatory measures cost the UK 47 billion US dollars

In addition to the above two points, the EU's unified regulatory measures also make the UK dissatisfied. According to a 2015 report released by open Europe, a UK think tank that studies EU issues, heavy EU regulations cost the UK 33.3 billion pounds ($47 billion) a year.

Open Europe's analysis suggests that in the best case, the UK will save on these costs as a result of 'brexit', thus offsetting trade losses and maintaining UK GDP growth.

In addition, the UK is more free to develop trade relations with other emerging economies, so as to stimulate the development of domestic industries without being constrained by the overall trade policy of the EU.

However, open Europe also admits that in the worst case scenario, the UK may not be able to save more than 30 billion pounds a year spent on EU regulation.

4. Britain's trade dependence on the EU does seem to be decreasing

According to the report released by the IMF on June 17, the British economy is in the stage of gradual recovery in recent years, and its dependence on the EU is also declining, which also gives the "brexits" a strong voice.

If you look at the data, the UK's dependence on the EU has indeed decreased. Considering the export direction alone, the proportion of exports between the UK and the EU has decreased from 55% in 1999 to 45% in 2015.

However, if the EU is still the UK's first exporter in terms of aggregate, it is unlikely that this situation will reverse in the short term. According to the official data of the British Bureau of statistics, the return on investment in the EU is relatively stable, while the return on investment in other countries has declined significantly. This has become one of the reasons for the 'stay in Europe'.

The impact of brexit

After brexit, Britain's economy is facing Waterloo

This time, the British referendum decided to officially withdraw from Europe, and what attracted the most attention was the economic prospect of the UK.

In the IMF's previous report on brexit, it pointed out the current situation of the UK economy:

On the one hand, everything is getting better, GDP and employment rate are steadily rising, and the employment rate has reached a record high of 84%;

But on the other hand, everything is like a mirror image. The fiscal deficit is expanding, industrial productivity is improving slowly, the mortgage rate of residents is rising, and the income level is likely to fail to keep up with the changes in house prices and interest rates.

It is clear that the formal choice of brexit will undoubtedly bring great uncertainty to Britain's newly rising economy.

In fact, in the eyes of major global economic research institutions, brexit will have a huge impact on the British economy.

In the short term, no institution believes that the GDP growth will be maintained after brexit; in the long term, most institutions still believe that the UK economy will enter the downward channel.

That is to say, although the British firmly choose to 'leave' this time. But the worries and shocks to the British economy are just beginning.