Brexit verdict wasn't just about leaving EU, it exposed Britain's wealth gap

The political pundits are confounded, the optimists are floundering, and the younger generation is mighty ticked off with the older voters. For the Europeans, the feeling is sinking in—the UK is exiting the European Union (EU)—as it grapples to deal with potential ramifications of this historic move.[caption id=“attachment_2849110” align=“alignleft” width=“380”]  A supporter of the Leave campaign. Reuters[/caption] Harold Wilson had called the last referendum on Britain’s future within Europe in 1975. He won with a thumping majority. There was no public demand for a referendum on the matter but David Cameron asked for one anyway. The results of the 23 June voting has left quite a bit in disarray: the pound came tumbling down to a 31-year low, an amount of $2 trillion was wiped off the world economy triggered by the Brexit panic, the estimated 3 million non-British EU citizens living in the UK have been left jittery, while some disgruntled leaders of EU countries have called for their own referendums. Scotland and northern Ireland are staring at a possible breakaway. Dutch anti-immigration leader Geert Wilders has called for a similar referendum for Netherlands, the French far-right politician Marine Le Pen supports a referendum for France while the Italian anti-establishment 5-Star movement has officially asked for a referendum on whether to keep the Euro or to have two currencies for Europe. Right-wing parties in Poland and Hungary have roared back into power and have scathingly expressed their displeasure at German-led policy on refugees. This has ended up in a situation with a real possibility of the dismantling of the United Kingdom and the EU, in the middle-run if not in the immediate future. David Cameron declared his resignation on Friday saying that the will of the British people has to be respected and that the British economy is strong enough to weather this storm. His optimism may be misplaced though as it has been in the case of his expectations of the British referendum. Following the outcome, proceedings under Article 50 of the Treaty on European Union—on how to deal in case a member state decides to withdraw from the Union–will have to be launched. During negotiations, the EU treaties and law continue to apply to the UK. However, if no agreement is reached within two years of the UK activating Article 50, the UK would leave the EU without any new agreement being in place. The negotiations between the estranged couple would be tough. The Leave campaigners have vociferously drummed-up the figure of £350 million that it sends to Brussels every week for membership in the EU. The Remain camp had pitched the amount close to £190 million pounds. But Britain would have to pay close to that amount, in any case, to access the EU market unless it comes up with Free Trade Agreements (FTAs). It has to re-negotiate first with the EU, then with all the partners of the EU with which it holds FTAs and finally, even its membership in the WTO, since that was secured as part of the EU. “Otherwise, its exports will be subjected to MFN tariff by the FTA partners. Same thing will happen with the EU’s (imposition of) tariff on the UK. This will restrict UK’s market access,” Abhijit Das, head of the Centre for WTO studies at the Indian Institute of Foreign Trade told this reporter. “At this juncture EU has a common ceiling for domestic support that is applicable to the EU as a whole. After Brexit, UK will require a separate ceiling limit for its domestic support,” he said. “My speculation is that the UK and the EU may have FTA, at least, on goods,” Das said. As far as India is concerned, we have been negotiating a EU FTA. We have to now negotiate with the UK separately. “Even those negotiations will be equally difficult as it has been with the EU, particularly concerning the automobile industry and IP issues,” Das said. “The EU has not granted India the status of a data secure country. India is trying to acquire this through the EU FTA negotiation. But EU is unwilling to do so. UK is also likely to be hesitant in granting India data secure status. In the absence of data secure status, our IT and ITES services exports get constrained,” he said. “The EU Commission would submit recommendations to the Council, minus the UK, which would then adopt a decision authorising the opening of negotiations and nominating the Union negotiator or the head of the Union’s negotiating team,” said a EU press statement. The College of Commissioners will meet on 27 June to assess the situation and prepare the European Council of 28-29 June. But the fight was not only about trade deals and economic implications of a Brexit. The face of the campaign was the immigration issue. The voting patterns are telling. A majority of 64 percent of 18- to 24-year old voted for remaining in the camp. However, the percentage precipitously declined as one climbed up the age-bracket ladder. Only 33 percent of the 65 plus age group wanted to be a part of the EU. The fight was also about national identity. The young voters saw the Leave campaigners as rejecting immigrants while the Remain campaign represented an inclusive cosmopolitanism, with free movement of people and jobs. The fears of the younger people regarding narrower limits of work possibilities were not out of order. Morgan Stanley reportedly wants to move 2,000 jobs out of London though the American investment bank has said it has no official plans to do so.

Absolutely brilliant poll on Brexit by @YouGov pic.twitter.com/EPevG1MOAW

— Tancredi Palmeri (@tancredipalmeri) June 23, 2016

The referendum outcome also seems to be a commentary on economic inequality and wealth gap. There is little wonder that inner London, that is doing well, voted for Remain while south Wales and smaller towns in Britain, that have been left out from tasting the benefits of the economic pie that globalisation helped expand, mutinied against status quo with immigrants, particularly from east Europe, seen as “job-snatchers”.