Britain Filed for Divorce From the E.U. Today

Great Britain has began the formal process to leave the European Union. This came after residents of the country voted for autonomy last June with a vote of  51.9-48.1 percent in favor of the “Leave” campaign. The election boasted a historic 77.2% turnout. Following “Leave” campaign’s success, Prime Minister David Cameron resigned and his fellow Conservative Party member Theresa May assumed the prime minister role.

Today, Article 50 of the Lisbon Treaty –which has never been invoked before — will be used to begin Great Britain’s formal divorce from the E.U. This will initiate two years of lengthy negotiations with respect to autonomy and trade–with a formal British exit expected by March 2019. If no formal agreement is reached or agreed to by the remaining EU countries within two years’ time, then Great Britain will be under the duress of the World Trade Organization and have tariffs imposed on all goods the nation sells to the E.U.

Here are the provisions for Article 50 of the aforementioned treaty, which would theoretically penalize any member that decides to leave:

1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.

4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.

A qualified majority shall be defined in accordance with Article 238(3)(b) of the Treaty on the Functioning of the European Union.

5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.

For context as to why the vote took place, I recommend watching “Brexit The Movie”:

Why Brexit? The Brits were tired of taking decrees from Brussels–the epicenter of the E.U. How can a continent-wide entity decide the fate or best represent all 27 countries? It clearly can’t. And we’ll see more countries attempt to defect and similarly regain autonomy.

Plus, for Americans, travel to Britain is expected to become cheaper — an expected 20 percent in savings.

What will other tangible benefits of Brexit be? We are expected to have better U.S.-U.K. trade relations and a renewed friendship that soured under the last administration.

For those asserting Brexit in any way, shape, or form is an endorsement of pro-Kremlin activists should be dismissed. Both the European Union and Putin’s attempt to create a Eurasian Union are terrible arrangements which fail to promote autonomous countries, free market ideals, and limited government. This dichotomy musth be rejected when thinking in terms of Brexit.

Overall, Americans should welcome Brexit. Countries desiring to be autonomous and more freedom-minded should be embraced in the 21st century. Cheers to our friends across the pond!

 

Long and Short-Term Consequences of Brexit

The vagaries of European politics have been shaken badly by the Brexit vote. Deep in their hearts, nobody in the EU really thought the Brits would go through with it. Like a husband coming home to his wife greeting him at the door with “I want a divorce,” it’s no longer a threat, but now it’s a reality.

What does that reality mean? Aside from the markets reacting negatively as money managers reposition their assets and currency traders make their plays, the short-term effects are basically nil. The markets will recover and capital will position itself accordingly.

David Cameron will leave as PM and likely Boris Johnson will replace him. The celebrations (and horror from some) will die down. Then the nasty business of disentangling the U.K.’s economy, laws, labor, and politics from the EU will begin.

It will be a slow, arduous process, with minutiae of negotiating points on every possible issue. It will take years (there’s a technical two-year deadline in Article 50, but no real timeline, and negotiations could extend far beyond two years).

Triggering Article 50, formally notifying the intension to withdraw, starts a two-year clock running. After that, the Treaties that govern membership no longer apply to Britain. The terms of exit will be negotiated between Britain’s 27 counterparts, and each will have a veto over the conditions.

It will also be subject to ratification in national parliaments, meaning, for example, that Belgian MPs could stymie the entire process.

Over those 24 months, companies will react faster than governments–as my London-based college friend told me. Companies with business in the EU who maintain offices in England will trim staffs and move to continental-based operations. That means U.K. employees will lose jobs. Brits working on the continent will see their opportunities for advancement start to dry up.

There will be a period of wailing and gnashing of teeth as the reality of divorce sinks in. Divorce sucks, for anyone who’s ever been through one.

But this was a political choice, not an economically rational one. The U.K., in the long run, should be better off divorced from continental politics. The island nation has never really fit in with the polyglot culture across the channel. There’s more Indian culture in England than French or Flemish or Walloon. Britain had her empire, and those Commonwealth ties are stronger than the legal continental strings that Brits just voted to break.

It’s going to be tough for a while, but if Johnson and the other Conservatives who favored leaving the EU do the right thing and open up innovation, capital will flow in. There’s no shortage of smart people in England, and the stiff-upper-lip culture has much to be proud of. The boogeyman of xenophobia will not manifest itself as the fear-mongers in the Remain camp pitched, because Brits are very aware of their place in the world (much more so than Americans).

The big unanswered question is: Will continental EU now finish their move toward a completely socialist, integrated polity, or will Germany be the next country to chafe at its outsized responsibility of playing Atlas? The next immigration crisis may move that to the front of the line faster than the pin-striped lawyers in London and Brussels can dot their i’s and cross their t’s.