UK's exit from EU 'a story about global uncertainty'
Editor's note: This story from The Bloomington Herald-Times is being published here as a courtesy for readers of IU in the News.
By Michael Reschke
Shock about Britain’s vote last week to leave the European Union has given way to questions on everything from which country is next to whether the United Kingdom could change course and stay.
“This is really a story about global uncertainty,” said Elaine Monaghan, a professor of practice at Indiana University’s Media School who has worked as a foreign correspondent for Reuters and the Times of London. “It’s incredibly unsettling and unnerving when a country with as much economic might as the U.K. makes a decision like this so abruptly.”
While the vote has sparked several negative consequences, such as a dip in global financial markets on Friday, it’s good news for Americans heading to the United Kingdom in the near future. The value of the British pound has hit a 31-year low, said Tim Hellwig, director of IU’s Institute for European Studies. That’s contributed to a strengthening U.S. dollar as investors pull out of pounds and even euros because they believe there is a connection.
“Your dollar will go a lot further now than it did last week,” Hellwig said.
That may be good news for U.S. consumers of foreign goods, but it’s bad for exporters, something that could be disproportionately detrimental to the Hoosier state. With about 17 percent of Hoosiers employed by manufacturers, Indiana leads the nation in manufacturing employment. Last year, the state exported more than $33 billion worth of manufactured goods, according to the National Association of Manufacturers.
“Indiana is a manufacturing state, and Indiana does a fair amount of trading with Europe,” Hellwig said, adding that Britain’s vote to leave the European Union “might have an effect on Hoosiers, but that’s quite speculative.”
A spokeswoman with the Indiana Chamber of Commerce said in an email no one was available to speak about the possible implications of what’s being referred to as Brexit, shorthand for British exit. Anne Bono, director of advocacy and public policy for the Greater Bloomington Chamber of Commerce, said in an email she hasn’t heard anything about the situation affecting members.
The “Brexit” vote has left some people wondering whether other European Union countries will follow suit. Padraic Kenney, chairman of IU’s department of international studies, who was in Ukraine earlier this week, doesn’t think so.
“First, Britain will be treated sternly, and their economic distress will be evident,” he said in an email. “Second, Britain is a special case. No other country has been so ambivalent about the EU and the European project from the very beginning, going back to the 1950s.”
It might fuel other separation movements, though. Kenney thinks it’s clear there will be a new referendum on Scotland breaking away from the United Kingdom. Scottish voters rejected the 2014 referendum, but with about 60 percent of Scots voting last week in favor of the United Kingdom remaining in the European Union, it might be time to try again. Scottish First Minister Nicola Sturgeon is taking a cautious approach to this possibility, Monaghan said.
“If you rush into a second referendum, you risk alienating a large chunk of the Scottish population,” Monaghan said. “It’s also been pointed out that if the United Kingdom does leave the EU and a large majority of Scots want to stay, the question of independence has to be on the table.”
At this point, Britain is still part of the European Union, and there is a contingent of British citizens who believe it’s not too late for the country to decide it wants to stay after all. The process for leaving requires the other 27 European Union countries to negotiate and approve the terms of Britain’s exit. European Union law professor Michael Dougan, of Liverpool University, told the British Broadcasting Corp. that while these negotiations are meant to be completed in two years, he thinks 10 years is a more realistic estimate.
In the meantime, there’s been speculation that many who voted to leave didn’t understand what they were doing. Several news outlets pounced on a Google analytics report that showed an uptick in searches involving questions such as “what will happen if we leave the EU?” and “which countries are in the EU?”
In addition, some voters may have used the referendum for a secondary purpose. Monaghan said for some, the referendum was an opportunity to express unhappiness with the government over issues including wage stagnation and an influx of refugees.
“Is the average British voter intimately familiar with how the EU works? Definitely not,” she said. “Was it an opportunity to express unhappiness? Certainly.”
It’s hard to say whether a large number of people regret voting to leave, but there is a petition with nearly 4 million signatures on the United Kingdom’s Parliament website calling for a second referendum. However, that’s a drop in the bucket compared with the more than 30 million people who voted in last week’s referendum. British Prime Minister David Cameron, who, after the results were announced, announced his intention to resign, on Monday ruled out the possibility of a second referendum.
All of this comes after polls showed those in the “remain” camp winning by margins of about 6 percent. While the full impact of the vote has yet to be seen, Hellwig believes it serves as an important lesson for U.S. citizens.
“It’s a reminder to Americans that elections matter,” Hellwig said. “So often people check out because they don’t think their vote can make a difference, as if the outcomes are preordained. Clearly, that’s not the case.”