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Vote is just the start, complete Brexit will take 2 years or more
LONDON: If Britain wakes up on Friday and finds itself voted out of the European Union, the actual process of extricating itself will take nearly two years, and
LONDON: If Britain wakes up on Friday and finds itself voted out of the European Union, the actual process of extricating itself will take nearly two years, and the most immediate impact will be visible on the economy.
Given London’s pre-eminent global position in the world of finance, the pound will most certainly take a hit, sending ripples across other global financial capitals. Similar will be the story on stock exchanges.
Inflation is likely to rise, including a rise in the Bank of England’s interest rate. Chancellor George Osborne has already mentioned the possibility of presenting an emergency budget, which would include further cuts in public spending.
But apart from the impact on finance and markets, no one is quite sure what the future holds for a Britain outside the EU. Its tariff-free access to the 500-million strong European Single Market will be severed, for instance, hitting 45% of its exports.
Until the process of withdrawal is complete, Britain would continue to be a EU member-state.
Article 50 of the EU’s Lisbon Treaty provides an exit mechanism, under which any EU member state “may decide to withdraw from the union”. A state that decides to withdraw “must notify the European council of its intention”. Thus, a withdrawal will not begin until a formal notification is lodged in Brussels by Britain.
Article 50 says the leaving state ceases to be an EU member two years after a notification, unless an extension of negotiations has been agreed unanimously by the European council and by the leaving state, or the withdrawal agreement sets an earlier or later date.
Both Remain and Leave sides agree that the referendum is a once-in-a-generation one, and any outcome would be implemented. Juncker said on Wednesday that Britain will not be able to return to the negotiating table if it votes to leave the European Union:“Out is out”.
