It's been in the news for months, so you may be surprised to learn that today is the official start of campaigning on the Brexit referendum. At stake in the June 23 vote is the future of the United Kingdom's role in Europe, and possibly the fate of the European Union itself.
What Is Brexit?
Brexit is an abbreviation of "British Exit" from the European Union. A national referendum will be held June 23, 2016 in the United Kingdom (Britain, Scotland, Wales, and Northern Ireland.) Gibraltar is also participating in the referendum, since as a British Overseas Territory, the UK is responsible for handling its foreign relations.
This will be the second national referendum to determine ties with Europe. In 1975, political pressure forced a vote on remaining in the European Common Market. Britain had joined the European Economic Community when it signed the Treaty of Rome two years prior. This ignited a furor claiming that something with such wide-ranging effects should be decided by the British people themselves.
Why Do Britons Want to Leave the EU?
Many of the people who want the UK to leave the European Union chafe under what they see as a loss of sovereignty to the EU government in Brussels. Many EU laws have superseded British law, and judgements by the European Court of Justice trump rulings of the British Supreme Court.
A substantial portion of Britons are against the EU's rulings on "freedom of movement," claiming it will allow the UK to also be inundated with refugees and migrants, as has happened on the Continent.
Another point of contention is the UK being forced to cope with the red tape and extra expenses that occur from complying with EU mandates. The "Leave" group maintains that the UK sends £350 million to Brussels every week, at a time when Britain's National Health Service is overwhelmed and under-funded.
Why Do Britons Want To Stay in the EU?
People supporting the UK's continued membership in the EU point to the economic advantages it confers. 44% of the UK's trade is with EU nations, smoothed by the need to negotiate separate trade deals. It is estimated that 3 million jobs are dependent on EU membership. "The City," London's financial sector, could be devastated from suddenly being cut off from EU operations. Profits would tumble as advantages accorded EU nations are withdrawn, which would force many large banks and multinational corporations would be forced to relocate to the mainland.
They also point out that, in order to keep doing business in the EU, they would have to deal with the same red tape that the "Leave" side says would be eliminated is a Brexit. Leaving the EU would mean that the UK would lose any leverage over these laws that they would still have to comply with.
Who Is Leading in the Brexit Vote?
As has been the case throughout much of the unofficial campaigning, the "Leave" and "Stay" sides are virtually tied. However, the recent victory by Dutch Euroskeptics in defeating a EU move for closer ties with Ukraine has given new energy to the "Leave" side. Leaders hope this will increase turnout of enough pro-Brexit voters to tilt the outcome.
Recent fireworks on the "Brexit" side erupted when the UKIP-supported "Grassroots Out" was passed over by the Electoral Commission when choosing the official "Leave" campaign. Threats of lawsuits were quickly soothed by UKIP leader Nigel Farage, who called for unity among all "Leave" campaigns.
UK election rules give the official campaigns of each side £600,000 in public campaign funds, and allows it to spend up to £7 million on total campaigning. All other groups, regardless of side, will not get public grants, and will be limited to only £700,000 in total expenditures.
On the "Remain" side, public distrust of Prime Minister David Cameron may be hampering efforts to persuade the public that the risks of leaving the EU outweigh any benefits. In an effort to boost Cameron's efforts, US President Barack Obama is flying to the UK to lend his support "as a friend." Many large corporations have also been lobbying in support of a "Remain" vote.
Cameron won concessions from the EU in February, giving Britain more autonomy. However, these measures would only go into effect on a Brexit vote to stay in the EU.
"Please Don't Go, UK"
Trepidation in Germany and elsewhere over the fate of the EU on a Brexit has led to a "Hug A Brit" campaign. People are seeking out and literally hugging British citizens to express their hopes that the UK stays in the EU.
Warnings of "Brexit Contagion"
On a less light-hearted note, a successful Brexit vote could spur Euroskeptic parties across the EU to push more forcefully for an EU exit for their own homelands. This is already occurring in the Netherlands. This unrest could lead to political fragmentation across the continent, making the formation of coalition governments even more difficult. Areas such as Spain and Portugal could see a resurgence in violent separatist movements, as a "go your own way" ripples through the fabric of the EU.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product