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Brexit: How it Might Affect Britain, Europe, and the Rest

Whether or not Brexit will have a positive or negative outcome in the future is still unclear, and only well speculated about at present. (Photo credit: Elionas2 via Pixabay under cc0 1.0 Public Domain)
Whether or not Brexit will have a positive or negative outcome in the future is still unclear, and only well speculated about at present. (Photo credit: Elionas2 via Pixabay under cc0 1.0 Public Domain)

Brexit will happen! This was decided by the referendum held in Britain on June 23.

Britain’s decision to leave the European Union (EU) will certainly have an effect on its future, and that of the EU and other countries that are linked economically and socially. What the consequences will look like is uncertain.

The following tweet shows the outcome in percent points of the poll:

Impact on the U.S.

Financial experts speculate that the effects of the Brexit will not really harm U.S. economic interests, but some U.S. officials “worry” that it might.

 Jannet Yellen, the chairwoman of the U.S. Federal Reserve, said Brexit poses a risk of sorts.

Yellen told Congress this week: “The U.K. vote to exit the European Union could have significant economic repercussions,”  according to a PressTV article. She fears it will “usher in a period of uncertainty” and fuel instability in global markets.

As part of that, the Brexit effect on the financial markets could raise the value of the dollar, as fearful investors pull out of the U.K. and European investment markets, and flock to the safety of U.S. assets.

That could also have a major impact on the “corporate strategies of U.S. companies” located in London, according to an article in The Wall Street Journal.

A higher dollar, due to Brexit, could essentially weaken the demand for American exports.

This is one of the most likely outcomes of the Brexit, since the EU is one of the U.S.’s biggest trading partners. The EU and Britain could most likely see their currencies dipping for an unforeseeable period of time.

Federal Reserve Chairwoman Janet Yellen had reservations about a Brexit. (Image credit: Day Donaldson via Flickr under CC2.0

Federal Reserve Chairwoman Janet Yellen had reservations about Brexit. (Image: Day Donaldson via Flickr/ CC2.0)

Some ‘pros and cons’ of Brexit

According to The Week: “Leaving the EU would result in an immediate cost saving.” The U.K. would no longer have to pay a “membership fee,” which contributes to the EU budget.

Britain would also no longer be bound by regulations forcing it to follow an EU “Working Time Regulation“. At present, the Working Time Regulations impose a limit on the number of hours people are legally allowed to work per week.

There are also possible downsides to the newly decided Brexit. Britian might not be able to benefit from the anticipated free-trade deals between the EU and other leading nations.

“The EU is currently negotiating with the U.S. to create the world’s biggest free trade area,” said the BBC, and concluded further that staying in the EU is “something [which would have been] very beneficial to British business.”

Losing a powerful advocate of EU liberty

The EU people might notice the vacuum created by Britain’s exit in the area of measures and regulations imposed on them by the European Council.

In the past, the Brits played a vetoing-roll when it came to decisions made by the European Council.

“The EU would lose an influential, liberalizing member, shifting the balance of power in the European Council. It would become harder to block illiberal measures,” according to an executive summary by the Global Council, on the question of how Brexit could affect the EU.

There is much speculation about the repercussions the British exit from the EU might cause globally, and how it might motivate sleeping dogs to possibly do the same with their respective relationships with the EU.

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