Πανεπιστήμιο Δυτικής Μακεδονίας

Τμήμα Διεθνών και Ευρωπαϊκών Οικονομικών Σπουδών

Σχολή οικονομικών σπουδών

What is Brexit?
Εργασία μαθήματος
«Αγγλική Χρηματοοικονομική Ορολογία»

του φοιτητή
Ilia Lazarev

Επιβλέπον μέλος Δ.Ε.Π.:

LL.D. Χαρίκλεια (Χάρις) Σκαλίδη, Καθηγήτρια

Κοζάνη 2024
 Table of contents

Introduction...................................................................................................................3
1. Reasons for Brexit and its consequences to the UK’s economy and worldwide....4
2. Brexit’s impact on the UK relations with other countries.......................................5
Conclusion.....................................................................................................................9
References...................................................................................................................10

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 Introduction

Key-words: Brexit, Referendum, Immigration, Sovereignty, Economic

Implications, National Interests
The “British exit”, also known as “Brexit”, abbreviated for convenience’s sake,
marks the termination of the United Kingdom's membership in the European Union
and related procedures that went alongside it. The reason for the exit was the result of
the consultative referendum on June 23, 2016, when 51.9% of those who voted,
supported the exit of the United Kingdom from the European Union. Brexit took
place at 11 p.m. Greenwich Mean Time, on January 31, 2020. The UK is the only
sovereign country to have left the EU.
The outcome of Brexit was shaped by numerous economic, political, and social
considerations. Since the joining of the UK in the European Economic Community in
1973, its membership in the EU has been a topic of constant debate. Even before the
consideration of withdrawing from the EU many critical moments such as the
Maastricht Treaty of 1992 and the Lisbon Treaty of 2007 had ignited many debates
about national sovereignty, identity, and power within the Union. So even though the
drift was not sudden the vote to leave and its aftermath sent shockwaves across the
continent of Europe and beyond.
At the point of writing this project four years have passed since the Brexit
referendum, but the United Kingdom has neither successfully left nor remained in the
European Union. As a country that occupies a significant position in Europe, the
crisis in the UK is bound to have an impact on those around it. To understand the real
reasons for Brexit and to speculate on how other European countries will react after
Brexit, an investigation into Brexit is inevitable. In this project, I will examine the
five main factors that have a significant impact on Brexit: immigration, sovereignty,
economic implications, national interests, and lastly the potential future outlook.
This project consists of 7 pages: 1 page introduction, 4 pages of main work, 1
page that has the conclusion, and 1 page with the references used.

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 1. Reasons for Brexit and its consequences to the UK’s economy and
worldwide
The decision of the majority to cast their vote for Brexit was shaped by a
distinct set of factors in Britain's history and political landscape. Britain’s history and
mentality quite differs from its European counterparts. Its geographical and national
position as an unconquered island nation brings forth an ingrained sense that the UK
ultimately can look after itself. It merely joined in 1973 cause the EEC represented a
growing economic bloc, offering potential benefits such as increased trade
opportunities and access to a larger market for British goods and services.
Essentially it was because at the time there did not seem to be any other option
than joining the then-prosperous bloc of democracies to further advance its economy.
Even before the UK's entry, there was a lot of negative media coverage towards
European integration. This sentiment was fueled mainly by fear of a loss of
sovereignty, a perceived threat to British national interests, and the suspicion of
bureaucratic overreach by Brussels. In conclusion, the UK was never exactly
sympathetic to the European ideal.
Also, immigration played a significant role in the Brexit referendum, notably
due to the substantial influx of individuals relocating to the UK from both Central
and Eastern European (CEE) states and southern Europe. In places like London and
big cities, where there have been foreign communities for a long time, people who
were more lenient towards immigration often opted to vote to stay in the Union. But
in areas where there were lots of new foreign workers, people mostly voted to leave.
It will take some time for the consequences of the Brexit vote to be fully
realized. Firstly, the decision of a member state to leave the EU has shaken the EU's
self-perception, its global reputation, and the belief in the longevity of the European
project. This raises concerns about the Union's credibility, legitimacy, and political
capacity to act.
Secondly, Brexit adds to the challenges that the EU institutions and member
states are already facing, such as the Eurozone crisis, migration issues, and external
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threats such as ISIS and Russian aggression. The Brexit negotiations put an additional
strain on resources and make crisis management more difficult.
Furthermore, Brexit poses a threat to the single market by potentially
redirecting EU workers from the UK to other member states, which could exacerbate
political tensions surrounding migration and labor markets in nationalist-led states. In
October 2021, government analysts estimated that Brexit would cost taxpayers £32
billion annually, equivalent to 4% of GDP, surpassing the UK's EU membership fee
after rebates, which was £13.2 billion in 2018. A study conducted in 2022 by a
research organization further highlighted that Brexit had diminished the openness and
competitiveness of the British economy.
After leaving the EU, the UK also faced significant financial obligations, with
public debt related to EU membership surpassing £40 billion. Expert estimates
varied, but most agreed that Brexit would have negative economic consequences,
though not overwhelmingly significant. Predictions suggested a potential loss of
0.17% of GDP growth from 2018 to 2030 and an overall reduction in UK GDP
volume of up to 2.2% before 2030. However, some argued that simplifying
regulations could attract more foreign investment to offset these losses.
Initial declines in UK-EU trade in 2021 were stark, with exports falling by 40%
and imports by 28%, while trade with the rest of the world decreased by 20%.
Particularly affected were the fishing and meat industries, with exports declining by
80% and 50% respectively.
Government briefings indicated significant economic impacts post-Brexit, with
potential slowdowns in GDP growth under various trade scenarios. Even with a free
trade agreement, the cost of customs declarations for UK businesses was estimated to
be £7 billion per year, exceeding the UK's annual contribution to the EU budget.

2. Brexit’s impact on the UK relations with other countries

The process of breaking away from EU rules and introducing new domestic
laws and trade agreements has been a significant endeavor for the UK since the
Brexit referendum in 2016. Here is an expansion of the main areas affected:
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 Previously, trade rules for the UK were largely determined by the rules of the
European Union's Single Market and Customs Union. After Brexit, the UK had to
introduce its own trade rules, tariffs, and customs procedures. This required the
negotiation of new trade agreements with various countries and blocs, as well as the
conversion of existing EU trade agreements into UK-specific agreements. The aim
was to minimize disruption to trade while taking advantage of new opportunities for
global trade partnerships.
Agriculture is another area that is heavily influenced by EU regulations,
particularly concerning subsidies, quotas, and standards. The UK has had to develop
its own agricultural policy, subsidy regimes, and standards for food production and
safety. This also includes the establishment of framework conditions for
environmental protection, animal welfare, and land management, which were
previously harmonized with EU regulations.
Freedom of movement within the EU meant that EU citizens had the right to
live and work in the UK under certain conditions and vice versa. With Brexit, the UK
has introduced a new immigration system that ends the preferential treatment of EU
citizens. The new system emphasizes skills and qualifications, with different rules for
professionals, students, and family members. This change has significant implications
for businesses that rely on EU workers, as well as for demographic trends and labor
market dynamics in the UK.
In addition to the areas of trade, agriculture, and immigration, Brexit also
required the creation of new regulatory frameworks in various sectors. These include
areas such as financial services, data protection, environmental regulations, and
consumer protection. The UK had to decide whether to retain, amend, or replace
regulations originating from the EU, balancing the need to maintain alignment with
the EU for trade purposes against the desire for regulatory autonomy.
Overall, the process of breaking away from EU rules and creating new
domestic laws and trade agreements was complex and time-consuming, requiring
careful negotiations, legislative work, and administrative changes. Adapting to the

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new post-Brexit landscape presented significant challenges and uncertainties for
businesses, governments, and individuals alike.
The border between Northern Ireland and the Republic of Ireland has been a
key point of contention throughout the Brexit process. Historically, this border has
been a focal point for conflict and division, particularly during the Troubles, a period
of ethno-nationalist conflict in Northern Ireland from the late 1960s to the late 1990s.
The Good Friday Agreement of 1998, which helped to end the Troubles,
introduced open borders between Northern Ireland and the Republic of Ireland. This
agreement was conditional on both countries being members of the European Union
(EU) and therefore part of the Single Market and Customs Union. However, with the
UK's decision to leave the EU through Brexit, concerns arose about the impact on the
border.
To prevent the reintroduction of a hard border between Northern Ireland and
the Republic of Ireland, which could potentially reignite tensions and undermine the
peace process, the Northern Ireland Protocol was drawn up as part of the Brexit
negotiations. The Protocol essentially provides for Northern Ireland to abide by
certain EU rules, particularly those relating to the movement of goods, in order to
maintain an open border with the Republic of Ireland.
However, the implementation of the Northern Ireland Protocol has proved to be
extremely controversial. Critics, particularly unionists in Northern Ireland and some
sections of the UK government argue that it creates a border along the Irish Sea that
separates Northern Ireland economically from the rest of the UK. This has led to
concerns about the integrity of the UK's single market and Northern Ireland's
constitutional status within the UK.
Trade disruption and bureaucratic hurdles have also proved to be challenges
arising from the Protocol. Some businesses in Northern Ireland have faced increased
costs and delays in importing goods from Great Britain, while others have struggled
with the new customs procedures and paperwork. These issues have strained relations
within the UK and between the UK and the EU, with both sides accusing each other
of not fully implementing their obligations under the Protocol.
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 The negotiations between the UK and the EU aim to find pragmatic solutions
to the practical challenges posed by the Protocol. However, the underlying issues of
sovereignty, identity, and economic integration remain deeply entrenched, making the
resolution of the Northern Ireland border issue a complex and sensitive matter in the
wider context of Brexit and the UK-EU relationship.

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 Conclusion

Brexit, the United Kingdom's exit from the European Union, is due to complex
factors such as immigration issues, sovereignty, and economic impact. The 2016
referendum reflected deep-seated feelings about national identity and the perceived
impact of EU membership on British interests. Despite ongoing negotiations, the
consequences of Brexit are still uncertain and have implications for EU credibility,
trade dynamics, and the geopolitical landscape. The UK's post-Brexit relationship
with the EU includes complicated trade agreements, regulatory adjustments, and
contentious issues such as the Northern Ireland Protocol. Ultimately, Brexit is an
example of the complicated interplay of domestic politics, economic considerations,
and international relations on a global scale.

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 References

1. Brexit and the UK: Overview by EBSCO Information Services

(EBSCO): https://www.ebsco.com/sites/default/files/acquiadam-assets/UK-Ireland-
Points-of-View-Reference-Centre-Topic-Brexit-UK.pdf
2. Brexit: Causes and Consequences by Alan Riley, Senior Fellow, Institute
for Statecraft, and Francis Ghilès, Associate Senior Researcher, CIDOB:
https://www.cidob.org/es/publicaciones/serie_de_publicacion/notes_internacionals/
n1_159/brexit_causes_and_consequences
3. "Brexit: UK leaves the European Union". BBC News. 1 February:
https://www.bbc.co.uk/news/uk-politics-51333314

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