What would the consequences of Brexit be?

By Peter Sain Ley Berry, Treasurer of the European Movement Council of Wales

Let’s start with what we know. Standard and Poor would lower Britain’s credit rating: they have already announced this. Other agencies could be expected to follow suit. This would increase Britain’s borrowing costs and cause the pound to fall. Goldman Sachs reckons it could fall by 20%. It has already fallen by 6% since the Brexit negotiations began. This would set inflation rising.

Share prices are already falling. Uncertainties surrounding possible new trade regimes could send the economy into a slump with inward investment projects drying up and domestic investment put on hold. Jobs would be lost and the Chancellor forced to cut public expenditure further and possibly to increase taxes as well.

Until the EU treaty providing for Britain’s exit is signed no-one is going to want to seek British collaboration in any new European project, whether of university science or anything else. Meanwhile the American President will consult France and Germany over the refugee crisis and the conflicts in Ukraine and the Middle East. Britain will be left out in the cold. Like a beached whale, in effect.

Almost certainly David Cameron will resign as PM following a Brexit vote. Probably George Osborne will too, for there will now be no way of his eliminating the budget deficit by 2020. Other Ministers may well resign too. If Scottish voters have voted to remain in the EU then Scotland will call for a second referendum which could well lead to the break up of the United Kingdom.

After Brexit the government will need to put in place policies to replace those EU programmes of which we shall no longer be part. Agricultural support and foodstuff regulations are cases in point. Given the shortage of time to negotiate new systems with interested parties, the likelihood is that the British Government will have no alternative but simply to continue with the European provisions currently in place. The same will hold true for most business regulation. We shall be out of Europe but Parliament will be busy turning European laws into new Brexited British laws.

Abroad the destabilising effect of Brexit on the rest of the European Union, coinciding with the US Presidential elections, could well tempt Russia into further land-grabbing adventures, possibly in the Baltics. Britain would be in no position to react firmly.

There will be considerable ill-will towards us including from those (eg in Eastern Europe) who have been staunch allies. Britain has turned its back on them, their migrants and our share of funding for their European programmes. They will not be looking to do us any favours. We shall be made to pay for our behaviour. Perfidious Albion will again be the curse on the Continent’s lips.

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