What is the EU?
Before going over the complexities of the issue, lets address the elephant in the room. The European Union is a form of economic integration, called the economic union. Economic integration is the agreement between countries to reduce trade barriers, such as tariffs or non tariff barriers, and possibly allow free movement of goods and labour. An economic union is the strongest form of economic integration, and therefore The European Union is the strongest form of integration there is. An economic union is so closely interrelated that is has its own monetary and fiscal policy. In simpler words, monetary policy deals with money supply and fiscal policy deals with issues such as taxation, public expenditure and so on. When it comes to The European Union though, it does have a monetary policy but not a fiscal policy. So it does have a unified monetary policy (common currency; Euro) but the fiscal policy matters such as taxation and public spending have been largely left to the respective countries.
The European Union is an integration of 28 countries, (Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK) and it aims to have an 'ever closer union' with the potential of moving towards a "United Countries Of Europe". Be that as it may, European Union is a pretty huge international organization and it plays a mammoth role in world politics and economics.
How does EU work?
In order to make it simpler to understand, we shall study 4 European Union organizations. First is the European Commission. The European Commission is made up 28 commissioners (one from each country) and it performs duties such as debating over money supply and forming new laws. The next one is the European Parliament, which takes over proposals from The European commission for new laws. Here the debating for the laws takes place, pretty much same as the legislature of a democratic government. The third organization we are going to look at is The European Central Bank. The European Central Bank is responsible for controlling money supply and formulating a monetary policy. Lastly we take a look at The European Court Of Justice. This is where the EU countries go to for settling disputes or if they have problems with any EU regulation.
So in a nutshell, that's how EU works.
What is a referendum?
A referendum is a vote, usually answered in a 'yes' or a 'no' answer by everyone who is above the voting age. The side that gets the most number of votes is believed to have won. The last referendum held in the UK was not that long ago. It was when Scotland voted in the referendum to be a part of the UK. When you think about it, a referendum as a concept is not complicated really. You just have to mark a 'X' to yes or no, whatever you desire. An example is given below:
So that's how easy it is. Scotland eventually voted to not be an independent country. It was a close shave though, with 55% saying no and 44% choosing yes. The question in the referendum matters a lot, as it happened in the case of the Scotland's referendum. The original question was, "Do you agree that Scotland should be an independent country?". The elections watchdog scrapped it, citing the reason the 'do you agree' phrase puts it in an overwhelmingly positive light. It should be plain and simple.
What is the EU referendum and why is it happening?
The UK is about to hold a referendum on June 23rd, on whether it wants to stay in The EU or not. Britain PM David Cameron had largely made England's EU membership his rallying point during the 2015 election campaign. Mr. Cameron said, "It is time for the British people to have their say. It is time to settle this European question in British politics". The last referendum was held by the UK back in 1987, where the British public voted for them to stay in the EU. Many decades have passed since then and the EU has undergone a lot of changes. The main talking points are the huge amount of membership fees, market regulations and the idea of an ever closer union advocating the free movement of migrants. All of this are being frowned upon by those who want Britain out of the EU.
The proponents and the opponents
Initially, David Cameron wanted England out of the EU. In the months leading up to the referendum, he struck a deal with the European Union leaders for a reformed Britain membership, which he says would be put immediately in effect once the UK votes to be in the EU. Therefore, he does not want out of the EU, now that he has secured deals against issues such as uncontrolled migration and inability to run affairs, which were largely the cause of the referendum in the first place.
Excerpts from his deal on key issues are given below;
Child Benefits: Migrants workers in the UK are allowed to send child benefits payment to their own countries. Mr. Cameron wanted to end this, but he couldn't. Instead, according to the new deal, they will be able to send child benefits but it will be on the basis of the cost of living in their country and not the UK's.
Migrant welfare benefits: The benefits that low paid workers from other EU countries got while staying in the UK was one of the main reasons as to why they migrated in the first place. David Cameron put an end to this. In addition to this, migrants will not be able to get tax credits and other benefit payments straight away, but they will gradually, the longer they stay.
Pound sterling: Mr. Cameron asserted that Britain will never join the euro. At the same time he also got confirmations that the Pound will not be discriminated by other EU countries.
London: The British PM also got assurances that the city of London will not be subject to any unwanted EU regulations.
Ability to run affairs: Britain will never be part of the EU principle to have "an ever closer union". This will be secured by an EU treaty change. He was also successful in obtaining a "red card" system for national parliaments, wherein if 55% of the national parliaments of EU countries object against an EU legislation, it will be rethought.
So, one would think that these would be enough to change the mindsets of those who want to opt out, but there still remains a steady albeit gradually increasing interest in a Brexit. Brexit is nothing but the compilation of two words, Britain and exit. So let us have a brief look at those who want Britain out of the EU and those who don't and their respective reasons.
Who wants Britain out of the EU and why?
The UK Independence Party, about half of Conservative MPs, including five cabinet ministers, several Labour MPs and the DUP are in favour of leaving. They say that the EU imposes a lot of regulations and charges a lot of money for very meagre in return. They want Britain to gain power over all of its borders, and restrict the number of people coming in, especially due to the "free movement" of people across the EU countries which does not require a visa.
Who wants Britain in the EU and why?
British PM Cameron wants Britain to stay in the EU, now that he has managed to secured a deal for terms of a refined membership. The Conservative party has decided to remain neutral in the campaign but The Labour party, Scottish national Party and Lib Dems have pledged to stay in the EU. Barrack Obama, and other EU countries such as France and Germany also want the UK to stay. The opinion polls in the UK have reported that the UK public are evenly split on the issue.
They imply that the membership to the EU makes trade and movement of goods easier to the EU countries. They argue that the flow of migrants fuels economic growth and adds to the government's tax revenue. Britain's reputation in the world would be damaged in the world and the strength of UK's terms of trade and foreign policy would be weakened by going alone.
So there we have it, a brief account of the basic things that you must know in he run up to the referendum. A more detailed approach will be posted soon, focusing on the pros and cons of each policy change that is being cited as a reason for the UK to leave the EU. The race is now heating up, with the 'stay' and 'leave' campaigns working tirelessly to sway the votes in their favor. One this is certain though, whatever the result may be, it is bound to leave a mark on the global economic and political stage.
Subscribe to our weekly newsletters.
Get all our posts, blogs and video content via e-mail.