A month has passed since the Brexit referendum results were announced. Britain has categorically told the Euro union that it wants to exit and as majority of its citizens are convinced that they can make it on their own. When the final outcome was announced both the FTSE and the value of pound plunged in value with gold gaining nearly $ 100 an ounce. Calmness have since returned to the stock market and has recuperated most of its losses. Gold after touching $ 1375 an ounce has now backtracked to $ 1350. The pound is still in the dumps trading around 1.30 to a dollar from a high of 1.49. This is a conversation between a student and his professor.
Student: Professor. I notice that nearly 48% of British citizens wanted to stay in the Euro Union relationship. Do you think that a small majority of citizens who desired to quit should have the benefit.
Professor: Your question is very valid. The rule to decide in my opinion was wrong. It should have been a two third majority for a break up. Unfortunately PM David Cameron was willing to accept a simple majority. The outcome destroyed his political career. He had to resign to accommodate the new successor namely Theresa May. She is now authorised by British citizens to negotiate a new deal with the euro union.
Student: Professor. When things were going OK, why did they choose to take this path?
Professor: This issue was simmering for nearly two years. Unfortunately all people went about thinking that nothing serious was going to happen. But now the government has no choice but to fulfill the expectation of the people.
Student: What do you for see as possible outcome?
Professor: I am not sure as to how long this process will take. The political pundits are expecting 2 years. Remember that the new rules of cessation must be acceptable to both the British and the European parliament.
Student: What really was the bilateral agreement that they have to break-up?
Professor: When the agreement was entered into in 1970s, there were several of them. First is the freedom of people in the 28 countries including Britain to settle in any country of choice without a visa work and raise the family. For example, polish citizen could easily walk into Britain setup a home and live continuously and apply for British passport.
Next raw and manufactured goods moved across the countries without customs duty and tariff. For example, a fisherman from Britain could sell his freshly captured fish to a French company without any hassle. Next is the movement of capital. London became one of the largest financial centers because of this. Now all these arrangements will be looked into. Only time will tell us how all this will pan out. Currently we have 17% of our trade with the Euro union. We hope that our trade is not affected. This is a vast topic and more about it later. OK.
Student: Thanks, Professor.
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