When the BREXIT vote was concluded in June 2016, it was an emphatic vote in favour of seceding from the EU. Over the last 30 months, there has been doomsday scenarios painted that the BREXIT could be disastrous for the UK. The problem is there is still not much of clarity on the BREXIT front. But the appointed time is fast approaching. Now there is less than 100 days for the UK to leave the European Union on March 29. From all possible perspectives, neither the UK nor the EU is really prepared for a post BREXIT scenario.
There have been some interesting developments on the political front. British Prime Minister Theresa May, who took over from James Cameron after the BREXIT vote, is perhaps a little stronger than she was a month ago. May did not manage to pass the withdrawal agreement through the House of Commons but it has managed to get some specific assurances from Brussels. There are two main questions at this point of time. Question 1 is whether the votaries for staying in the EU managed to squeeze another referendum. Question 2 is whether the UK will be finally forced to just walk out of the EU without any worthwhile treaty, which many claim could be really disastrous.
Interestingly, most catastrophe stories about BREXIT may be wrong
As of now, the only thing that is certain is that there has to be a decision on the method of secession by March 29. But will it be as bad for UK as it is made out to be. For example, some sceptics have pointed out that foreign investments may leave, factories will shift out of UK and London will cease to be a global financial centre. As of now it does not look like anything that bad could really happen. More than the policy makers, it is the critics and doomsayers who are noisily salivating at the prospect of the U.K. leaving without a deal becomes more likely.
Some of the likely scenarios are actually weird. For example, it is already being sounded that British shops may run out of food and medicines and that aeroplanes will be grounded. In fact, there is even a Cassandra prediction that the British economy could shrink by as much as 8 percent if UK leaves the EU without a deal in place. In fact, the Chancellor of the Exchequer and the Bank of England are already talking about contingency planning.
While Britain will be impacted, the world is not coming to an end
To be fair, there will certainly be some instability in the case of a no-treaty withdrawal but most experts believe that such a bout of instability will at best be short-term. Nothing as drastic as products vanishing from markets or planes being grounded or the economy shrinking by 8% is going to happen any time soon. It is true that Britain has EU has its largest trading partner, but the hit is going to be both ways. Trading restrictions work both ways, so any attempt by EU preventing UK from exporting agricultural goods to the EU will face a backlash from the British government. For example, EU may be blocked from the UK financial markets or UK may stop the import of German motor cars, Irish beef and French wine. Nothing as drastic as that is likely to happen for sure!
Good news for the UK is that EU itself is in trouble
Even as the deadline for UK approaches, EU itself is in a spate of problems. Germany is getting politically unsure while Spain is facing secession problems from Catalonia. EU has a serious problem of immigrants even as the EU is trying hard to avoid Italy seceding from the common currency. With a $3 trillion debt on its books, Italy could be the real point of worry. There is nothing as drastic as putting curbs on UK that the EU would want to do.
Ironically if there no deal UK may end up with a tremendous advantage. As of now UK is still tied down from negotiating treaties with other nations due to uncertainty on the EU front. No Deal will allow UK to immediately negotiate and sign trade deals beyond Europe. It would force May’s government to cut taxes and tariffs so as to make the economy more competitive. Ironically, UK may end up actually benefiting from the same. Remember, the EU has its own set of problems on the anvil. If most of the BREXIT dooms day predictions turn out to be wrong and UK actually prospers outside the EU, it may force a lot of other EU nations to do a rethink. The Southern European nations are anyways unhappy and countries like Spain and Italy are economically quite powerful.
A hundred days is a long time in global politics and a lot could happen between now and March 29th. One thing is becoming clear. The EU is not in such a strong position right now to dictate terms to the UK. The bottom-line is; deal or no-deal, UK is really not going to face any crisis due to BREXIT. That may be the good news!