What UK and EU risk if Brexit “wins” these elections

Mr Cameron is surely undergoing some big stress in view of Thursday's elections. This photo of Mr Cameron, UK's current Prime Minister is taken at last EU Council in April (Council TVNewsroon, 23/04/2015)

Mr Cameron is surely undergoing some big stress in view of Thursday’s uncertain elections. This photo of Mr Cameron, UK’s current Prime Minister is taken at last EU Council in April (Council TVNewsroon, 23/04/2015)

The British general elections are just a few hours away, and uncertainty is bigger than ever. The people and – above all – the governments of Europe are watching anxiously, eager to know what the future will bring to one of the most populous and powerful countries of the continent, as well as one of the leading economies in the bloc. The UK has been often under the spotlight in the past twelve months for the possible post-election scenarios and where the various coalition makeups might take the country itself and the whole European Union.

A hung parliament to come?

On a more political side, we can say that this is most likely going to be one of the tightest elections in UK’s history, which could trigger an unprecedented phase of political instability for the country. With neither party likely to gain an absolute majority, governing will likely require the support of other parties to form a coalition or minority government. The final Opinium/Observer poll before Thursday’s general election, which was recently published by the Guardian, found that the country is firmly on course for another hung parliament with the Tories and Labour neck and neck.

What polls are saying

The Guardian’s poll findings show how the Conservatives are on 35% while Labour is on 34%. Nigel Farage’s Ukip is reportedly stable on 13%, well ahead of Nick Clegg’s Liberal Democrats on 8%, with the Greens on 5% and the pro-independence Scottish National Party on 4%. It’s clear how this situation would eventually trigger days or even weeks of turmoil with both sides fighting to persuade small parties to support them in government, something the UK is not exactly used to, unlike other EU members like, for instance, Italy.

What UK-EU relations to come?

Experts say Britain will look quite different after the election depending on whether the Conservatives or Labour get in. The weight the “winner” will have inside a coalition is the main point of the whole question. As broadly discussed and largely renowned, the upcoming vote has a crucial importance for the role that the UK will play inside (or outside!) the EU, as the whole “Brexit” matter – and so the chance of Britain quitting the European Union will largely depend on the outcome of the general election.

David Cameron’s promise

If the UK’s two-party system was still intact, the analysis would be quite easy to be done. Now, if the Conservatives are still in government after May 7, current Prime Minister and conservative leader David Cameron has promised to renegotiate Britain’s relationship with the EU and then give the people a vote on whether to stay in. He has repeatedly vowed in the past months that he is determined to seek a better deal from the EU and so to re-design Britain’s involvement in the bloc’s affairs. If a Labour-shaped coalition will guide the Country after May 7, the UK will likely be more leaning towards EU.

What the markets perceive

Given those preconditions, it is clear that the markets are looking at the UK elections nervously. As reported by Bloomberg, Moody’s Investors Service said last month that while uncertainty over the election outcome isn’t affecting Britain’s credit profile, an increased likelihood of leaving the EU “could result in negative rating pressures over the medium term”. Another hefty example could be that, only last month, HSBC, one of the world’s biggest bank, said it was considering moving its headquarters outside UK, partly because of the EU debate.

Nervous Sterling

Moreover, as unveiled by the International Business Times, the British Pound has erased most of its April gains in the last week, as investors weighed risks of a hung parliament and the UK leaving the European Union ahead of the election. Last Wednesday (27 April), the sterling touched a two-month high of 1.5499 against the US dollar where the pair was up 2% from the previous week’s close. However, the GBP/USD dropped to 1.5133 as of Friday’s (1st of May) close, translating to a 0.36% loss on the week. Traders said that such heavy fall is related to the doubts around UK’s membership of the EU after the election. These are all signs that cannot simply be ignored around Westminster.

Do the Brits want to stay?

From a more “European” perspective, the question does not look less complex. Historically, Britons have mostly desired to remain part of the EU. A poll conducted by Ipsos MORI last October found that the majority of UK’s citizens would vote to stay in the European Union in a referendum, indicating the highest support for British membership since 1991. Some 56 percent of respondents said they would vote to stay in a referendum, while 36 percent would vote to get out. This translates to 61% support for Britain’s EU membership and 39% opposing after excluding ‘don’t knows’.

It’s a matter of conditions…

With that being said, it’s also deserved to say that while the U.K.’s EU membership comes with advantages – like the access to a 13.9 trillion euro ($15.5 trillion) market, with Britain sending almost half of its exports of goods and services to the EU (227 billion pounds last year) – it also comes with conditions that many in Britain are now finding too onerous. Particularly for the British voter it is one of the EU’s founding principles, the one that allows citizens of any EU country to live and work in any other member state. After the EU expanded into former communist countries of Eastern Europe in 2004, Britain saw a huge increase in migrants seeking work, something that during the long economic crisis has played an important role in gathering support for a Brexit. The EU simply cannot ignore those signs too.

Long time coming story

The variables to consider are uncountable in such a matter, but I guess it would be no mistake to say that exiting the EU would be bad for Britain and for the EU as well. A British exit from the EU could cost the UK as much as 14% of GDP, according to a German study published by the Guardian, and on the other hand it would divide Europe both economically and politically. The EU would lose one of its most significant members, and the UK would probably lose the chance to be a player in the largest economic and political stage of the world, as a resident.

Almost 27 years ago, in 1988 Margaret Thatcher said: “Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe, as part of the Community”. However, she also added, very carefully: “That is not to say that our future lies only in Europe”. Maybe the whole question began a long time ago after all.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

EU to gain the most from the agreement with Iran

Statement by OECD Secretary-General Angel Gurría on the outcome of COP 25

5G networks: to slice or not to slice?

It’s not enough to respond to crises. We need to take action before they happen

France fails again the exams. Kindly requested to sit in on Commission’s class

6 surprising side effects of this year’s global heatwave

UN mourns death of former Secretary-General Kofi Annan, ‘a guiding force for good’

‘No other possibility but to leave’: UN News special report from the Nigeria-Cameroon border as 35,000 newly-displaced seek safety

‘Collective endeavour’ needed to strengthen peacekeeping further, says top UN official

Is there a cure for corruption in Greece?

A safer, more dignified journey for all migrants, tops agenda at global conference in Marrakech

A money laundering case on Vatican Bank’s road to renovation

‘No country, no region’ can tackle global challenges alone says UN’s Mohammed

This Chinese tech giant’s latest gadget is… a bus

We’ve lost 60% of wildlife in less than 50 years

OECD joins with Japan to fight financial crime by establishing new academy

Yemen: Tackling the world’s largest humanitarian crisis

Mental health problems costing Europe heavily

Appreciation of euro to continue

Spirit unlimited

Terrorist content online should be removed within one hour, says EP

Roxane in Cambodia

‘Laser-sharp focus’ needed to achieve Global Goals by 2030, UN political forum told

Releasing trapped value is key to success in the digital world

These are the 4 most likely scenarios for the future of energy

A Sting Exclusive: China’s Foreign Minister Wang Yi on South China Sea issue at the ASEAN Regional Forum

European Commission statement on the adoption of the new energy lending policy of the European Investment Bank Group

How cities can become more resilient to climate change

Zhua Zhou: Choosing The Future

EU Trust Fund Bêkou for the Central African Republic extended until 2020

Here are the biggest cybercrime trends of 2019

‘Two pack’ austerity package in force but with less vigor

FROM THE FIELD: Murals help heal wounds of bloody conflict in Guatemala

EU fundamental rights under threat in several member states

Zeid calls for ICC probe into Myanmar Rohingya crisis

A young student discusses the determinants of migration in the European Union

Electronic or conventional cigarettes – which is safer?

Building climate resilience and peace, go hand in hand for Africa’s Sahel – UN forum

False promises to Small and Medium Enterprises

EU guidance on the handling of visa applications from residents of Ukraine’s Donetsk and Luhansk regions

International trade statistics: trends in first quarter 2019

Iran: women hunger strikers entitled to medical care, UN rights experts urge

UNICEF delivers medical supplies to Gaza in wake of deadly protests

UN human rights report cites ‘multiple root causes’ of deadly Chile protests

Antisemitism, intolerance, can be unlearned, Guterres tells New York commemoration

Trade in counterfeit goods costs UK economy billions of euros

Germany to re-invent its security position in Europe and a chaotic world

3 charts that show how global carbon emissions hit a record high in 2018

Access to healthcare: what do we lack?

European Youth cries out: Sustainable Development Goals ambitious, but lack focus on youth

G20 LIVE: G20 Leaders’ Communiqué Antalya Summit, 15-16 November 2015

Seize the opportunities of digital technology to improve well-being but also address the risks

Governments urged to put first ever UN global migration pact in motion, post-Marrakech

Why capital markets have no more reservetions about Eurozone

In dreams and in love there are no impossibilities

Russia can no longer be considered a ‘strategic partner’, say MEPs

Forests ‘essential’ for the future, UN agriculture chief spells out in new report

7 key challenges for the future of ASEAN – and how to solve them

Close to 7,000 evacuated from Syrian towns after enduring nearly 3-year siege

EU continues targeting on Chinese steel imports instead of the revival of its own economy

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s