Why the UK needs the EU and the EU needs the UK
for a soft Brexit on goods – 47.6% of British exports went to EU-27 countries last year. Brexit supporters have argued that pulling the U.K. out of its most important trading relationship would be damaging politically and economically, especially given the state of the manufacturing sector in the country since the 1990s. Northern Ireland, which voted against Brexit, has strong ties to another EU member, the Republic of Ireland, and Scotland’s continued opposition to Brexit is dredging up old questions over devolution of powers. The strongest and most resilient part of the U.K. economy is its financial sector headquartered in London. The British government is betting London can withstand a hard Brexit because of its dominance in foreign-exchange markets and insurance, and the global respect for English common law.
The biggest concern in both the U.K. and the EU is that both sides are hurtling toward the Brexit deadline without a plan for what happens after. And a veritable cottage industry of economic studies penned by authorities from all political affiliations has emerged supporting every which position: that Brexit will mean catastrophe for Britain, or catastrophe for the EU, or the exact opposite. As the chancellor of the Exchequer showed with his predictions of economic crisis in the U.K., the simple fact is no one really knows what the effect of Brexit will be for either side because no country has done this before. Europhiles and euroskeptics alike view the U.K. as the guinea pig – a successful Brexit could open Pandora’s box, while a disastrous Brexit could keep the EU’s demons at bay (assuming it doesn’t also send Germany’s export industry into a tailspin).
May could fall, or she could pull another rabbit out of her hat. She’s already shown herself to be more resilient than most expected after her election gambit backfired last year. But when it comes to Brexit, it doesn’t really matter who resides at No. 10 Downing St. Any British prime minister would be facing a tough battle at this point: The middle ground has become very thin, and British politics has become a long tightrope. As entertaining as the circus is, the bigger picture is that both Britain and the EU are divided on Brexit, and Britain needs a relationship with the EU just as much as the EU needs a relationship with Britain.
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