Re:
I've been reluctant to write this, but here it goes anyway.
If the UK's population votes to leave the EU, that will trigger article 50 of the Lisbon treaty. The UK would have to leave the union within 2 years. No re-negotiations, no option for a second referendum. Out = out, and it's going to be forever. There is a procedure for re-entry, but that'll need a unanimous vote and the UK will never get that.
During those 24 months the UK will have no seat at the EU's decision making table, except for things directly affecting its departure from the union.
All current trade deals will also be off the table. The current agreement has an auto-destruction clause, which means there will be NO new negotiations about trade deals based on the ones currently in effect. New negotiations would have to start from scratch.
So Boris Johnson's idea about using the Brexit as leverage to get the current agreements amended is beyond stupid. It's just not going to happen, and if he had actually read the agreement he would have known that.
A relationship like the EU has with Norway, Iceland and Switzerland (which all have access to the EU's internal market without being EU members) is not an option. All 3 of the aforementioned countries also contribute to the EU budget and apply most EU laws, 2 things that the UK has always complained about.
You wouldn't find anyone willing to negotiate either, a lot of European politicians and member countries have been really fed up with the British attitude for years now and a Brexit won't make it any better. The UK will be able to negotiate new trade deals with some of the individual countries, but it will never have any influence in the EU or access to the EU's internal market anymore.
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The end of the trade agreement also means the UK will lose access to the EU's internal market (I briefly touched on that above). That means there will be red tape involved to import/export goods between the UK and EU, as well as import and export taxes on said goods.
If you wonder how such a change affects the UK-based Retrobike members : you'll not only be paying import taxes on bikes and parts you buy in the US like you do now, but on the ones you buy in all of Europe too. With the expected devaluation of the Pound (I'll mention that very briefly later) added to that, expect prices to basically increase by half or more.
The Centre for European Reform (a London-based think tank) has calculated that the UK's export to the EU is now 55% larger than it would be if the UK wouldn't be a EU member. Let's dive into that number a bit ...
The UK's total export is estimated at $503 billion, which translates to roughly £350 billion (annually, of course).
If 51.4% of that goes to the EU (see the chart above), that means the UK exports £179.9 billion in goods to the EU.
"55% larger" actually means that the number would be just under two thirds of what it is now. (100/155 = 0.64519 or 64.5%)
That puts the UK as a non-member of the EU at a total export of ( £179.9B x 0.64519 = ) £116 billion, or roughly £63.9 billion less than now.
£63.9B is about 2.2% of the UK's GDP (estimated $2,849 trillion or £1,971 trillion)
Are you sure you don't want to pay that £13 billion contribution to the EU budget? You'll be losing £50 billion more in trades to the EU alone if you don't.
If you think the CfER has it all wrong, the Economist noted (can't find the page anymore, sorry) that before the UK joined the EU's internal market, around 30% of the exported goods went to the EU. They also quote a number of "over 50%" for current export numbers.
Assuming that the export to the EU would drop back to that 30% whilst globally remaining equally large, I made a quick calculation and came up with a loss of £70B, so that's a little higher still.
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Moving on from EU-UK trades and on to global trading :
The EU has trade agreements with South Korea and Canada (both of which boosted the UK export to those countries by a couple billion) and is finalizing trade agreements with the US and Japan. Moving out of the EU means that the UK will have to negotiate their own agreements with those countries, and that'll be from a much weaker position than the EU (the UK is a market of only around 64 million people, the EU would be around 508 million with the UK or 444 million without it).
I'm not saying that these agreements are always good or that I support them. In fact I don't like what I've read so far of the TIPP. However they are better than no agreements at all and most likely better than anything that the UK will be able to come up with on its own.
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The world's financial system currently has 3 major centers : New York, Tokyo and London.
In the case of London, some of it is because the UK used to be a world power. Now though it's mostly because of the combination of being inside the EU with the fact that the banks have always had good tax breaks in the UK. A Brexit would only leave the tax breaks, but the access to the EU market is just as important to the big banks because that's where they'll make their money.
- JP Morgan Chase has already announced that they'd move a number of jobs to the mainland if the UK leaves the EU. Rumoured numbers are in the 4-digit range. (
source)
- Deutsche Bank would move some of their operations from London back to Germany. (
source)
- Citygroup's CEO mentioned that they would probably be moving some operations to new EU cities, including all of the European trading business. (
source)
- Goldman Sachs is already looking at relocating part of its business to Frankfurt. (
source)
- Even HSBC (I don't think I have to tell you that that's a British bank) has announced that they'd move a fifth of their jobs to Paris if the UK votes to leave the EU. (
source)
- ING has declared that if the other banks leave, they'd do the same. (
source)
The rest of the major banks will most likely follow during or after the 48 month transitional period, meaning that London would play a much smaller role in the financial world.
Not only will such a banking exodus cost thousands of high-end jobs in London, it will affect the housing market's bubble and the general economy (fewer bankers means a lot less money will be spent in the local shops) and it will significantly impact the importance of the British Pound in the world.
HSBC estimates a devaluation of about 20%. Goldman Sachs comes up with the same number. (
source)
By the way, the banks pay an estimated £27 billion in taxes. If they move 20-25% of their staff to the EU and do all the European trading from there, expect that number to be anywhere between 25 and 50% lower. So that's another £7-13 billion gone each year.
EDIT : And it's not just the banks that would leave. A large number of IT, technology and even manufacturing companies are considering moving at least part of their operations out of the UK if the latter leaves the EU. (
source)
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Currently there are UK border patrol agents in France and Belgium. This is also because of the agreements in place between the UK and mainland Europe. These people are allowed to check travelers and passports to make sure no illegal immigrants get to the UK. A vote for "leave" would end that agreement too. The first chance these agents would get to check someone, would then be on British soil, making it a British problem rather than a French or Belgian one. Basically you'd lose that first line of defense and would have to spend money to get them out of the country again.
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Various :
The Confederation of British Industry estimates that a Brexit will cause a loss of 950.000 jobs and £101 billion annually. In their calculations the unemployment rate in 2030 would still be 3% higher than it is now.
George Osborne ordered a study which also calculated a loss of GBP of 6%, costing the average British family around £4200 over the next 15 years
The London School of Economics estimates a reduction of the GDP of 2.2% in the best-case scenario and "6.3% or more" in the worst-case scenario.
The above post is made purely based on the numbers I came across online. Some articles were in Dutch, so I didn't provide sources for that. It shouldn't be that hard to find English versions though, but I reckon I've written enough for now.
Personally I'd rather have a Brexit because it would make things in Europe a lot easier. With the UK as an EU member, working out legislature is like going to the supermarket with a child that has constant tantrums.
Also, if the above numbers are correct I'll be picking up parts a lot cheaper even with the import tax.
Actually ... the UK may stay as far as I'm concerned, but only if they start behaving.
But hey, look at the bright side. If you leave the EU, you'll get rid of an international set of stupid rules and replace them by a local set of stupid rules, made by people who are just as untrustworthy.
sorry for the wall of text. If you did read it all the way, here's a cute kitten :
