The United Kingdom’s decision to end its European Union membership has wide-ranging implications for the country, Europe and the world at large, particularly India.
Here are some takeaways from the Brexit decision:
1. The decision in favour of leaving the EU will put the leadership of David Cameron in a serious crisis. As Prime Minister and the main campaigner for the ‘remain’ camp, he has been travelling across the country, campaigning to convince people to stay within the EU. The fact that people have gone against that advice raises serious questions about his ability to lead, not only the leading Conservatives but also the country. His party colleagues, like former London Mayor Boris Johnson will now definitely initiate a move to change the leadership of the Torries. Whether this leads to finally a change in the leadership of the party and subsequently, also a new PM for UK, will remain to be seen. But that is now a strong possibility.
2. The Brexit decision has already had a significant negative impact in the global financial market that had been struggling to recover from the 2008 worldide economic recession. This volatility in the markets all over the world is likely to continue for the next few days and a lot to stabilize it will depend on the decisions the British leadership takes in re-interpreting its relations with the EU.
3. Within the UK the vote for the Brexit referendum has shown deep divisions. Scotland and Northern Ireland have shown clearly signs of staying within the EU. Therefore, UK’s divorce with Europe may force them to rethink their own relation with the United Kingdom. The possibility of the Scots and people in Northern Ireland seeking similar referenda on whether to remain within the UK or not in the coming days cannot, therefore, be ruled out.
4. For the EU leadership which had remained apprehensive of such a decision and its impact in the event UK withdrew from the Union for the past weeks, dealing with similar demands from other EU members is a very strong possibility. Right-wing, ultra-nationalist parties which have been ‘Euroskeptics’ all along, are now going to demand that similar moves be initiated in their respective country to decide their future relation with the EU. A dominoes effect in this direction can seriously jeopardize the very idea of a united Europe and can lead to the disintegration of the EU.
5. India has large number of people staying and living in the UK for some decades now. The concerns over immigrants from other parts of Europe and elsewhere coming into UK, making available jobs scare and the job market more competitive is a serious concern for the Indians living and working in the UK. Besides, India has huge investments in the UK. It is the third largest source of FDI in the country. The UK is also India’s third largest foreign investor. But much of this had happened since UK became part of the EU and took advantage of its single market. Moreover, EU is also among India’s largest trading partners. India, will, therefore, have to re-negotiate many of its trade and investment pacts with both the UK and the EU to safeguard its interests and the privileges it enjoyed.
6. But one of the most important things will be to see who becomes the ‘negotiator’ for the UK to work out a new deal with the EU. After today’s referendum results, the UK Prime Minister will have to inform the EU leadership of the decision. It is likely to take two more years after that to work out a new agreement between the UK and EU. By all indications, it will be a lengthy and tiresome procedure. But most countries, including India, will be keeping a close watch on how it proceeds since a lot of their own future negotiation and agreements will depend on that outcome.