United Kingdom’s Possible ‘Brexit’ Could Have Global Effects

The United Kingdom will vote sometime prior to the end of 2017 in a referendum that will decide whether it and Gibraltar remain part of the European Union. Obviously, the potential “Brexit” will affect the residents of both the United Kingdom and Gibraltar, the country’s only overseas territory on the European mainland. What is not so obvious, perhaps, is the effect the outcome of the referendum, should the voters decide to leave the EU, on everyone outside of Great Britain.

Before one can understand the far-reaching effects a British exit from the EU could have globally, one must understand the United Kingdom itself. The United Kingdom is comprised of Northern Ireland and the three countries that make up Great Britain, England, Scotland and Wales. In addition, the United Kingdom has sovereignty over 14 overseas territories. While most of the territories are scattered across the Atlantic and Pacific Oceans and the Caribbean, Gibraltar is firmly attached to Europe near the southern point of the Iberian peninsula.

For the residents of Northern Ireland and Gibraltar, a United Kingdom vote to leave the EU could have serious consequences. In Northern Ireland, peace between Ireland’s Republicans and Northern Ireland’s Unionists came with the Good Friday Agreement, which was reached in Belfast in 1998. According to a report in the International Business Times, a Brexit has the potential to damage the still-delicate balance. To further complicate matters, especially for those living south of the border, the Republic of Ireland and Northern Ireland have close economic ties that could suffer if the United Kingdom leaves the EU. Economically, the Republic of Ireland has struggled since the recession that began in 2008, and a Brexit could put further stress on its already unstable economy.

Gibraltar does not share Northern Ireland’s concerns when it comes to a potential for violence. However, the territory does share its economic concerns. Gibraltar is a financial center dependent upon banking and the online gambling industry for the bulk of its capital, and the presence of these companies in Gibraltar is dependent upon Gibraltar’s status as a member of both the United Kingdom and the EU. According to a report in The Telegraph of a meeting between Gibraltar’s Chief Minister, Fabian Picardo, and delegates from the House of Commons, Picardo believes a Brexit could be economically devastating for Gibraltar.

To further complicate matters for Gibraltar, a United Kingdom decision to leave the EU could affect the territory’s workforce. Gibraltar is home to about 30,000 residents, but its population swells every morning as thousands stream across the border from Spain to go to work. BBC News reported that approximately 4,300 Spanish residents from La Linea and the surrounding areas were employed in Gibraltar. This number does not include the thousands of expatriates from the United Kingdom and other European countries who also commute to Gibraltar from homes in Spain. If the United Kingdom votes to leave the EU and Gibraltar cannot broker a deal to remain an EU member, the nearby economically hard-hit areas in Spain could see a drastic rise in its unemployment rate, which in 2015 was already Europe’s highest at a rate of 34.8 percent.

Unfortunately, the effects of a United Kingdom exit would not be limited to Northern Ireland, Gibraltar and Spain. The effects have the potential to reach around the world. British expatriates living throughout Europe could find themselves stripped of the right to live and work outside the United Kingdom, and the thousands of European nationals living within the borders of the United Kingdom could find themselves forced to return to Europe. Should this occur, the European real estate market could crash, as thousands of Brits put their homes on the market, forced to move back to the United Kingdom.

A Brexit could also affect the United States in more ways than many realize. The close ties the United States has with Europe – economically, politically and militarily – weigh heavily on the support of the United Kingdom. Without the United Kingdom’s influence on the European Union member states, talks of potential economic agreements, like the Transatlantic Trade and Investment Partnership, could collapse. Similarly, military alliances, like the U.S.-led coalition in the Middle East, could suffer.

Until the people of the United Kingdom and Gibraltar vote on whether to remain part of the European Union, the effects, both inside Britain and globally, remain largely unknown. The opponents of a Brexit may be hoping that it is that very thing, the fear of the unknown, that keeps the United Kingdom in Europe.

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