This Thursday, one of the most significant geopolitical events of the decade will occur. Citizens of the United Kingdom will vote upon continued membership in the European Union. A vote to leave will irrevocably change the complexion of the economic and political confederation and could be the first crack in the foundation of a flawed institution foundering under the weight of its own sclerotic bureaucracy.
Christopher HopkinsThe term Brexit derives from British Exit, the previously unthinkable idea that an EU member state might choose to depart. Prime Minister David Cameron, an opponent of leaving the EU, pledged during his last campaign to allow a vote on the matter. His promise seemed harmless enough at the time, but support for leaving has steadily gained momentum and is narrowly leading in opinion polls.
The idea of economic cooperation on the Continent was born of war weariness. In the aftermath of World War II, leaders recognized the benefits of trade in overcoming centuries-old hostilities and capitalizing on efficiencies of scale. The European Coal and Steel Community was formed in 1951, the precursor to the European Common Market founded in 1957. The present configuration of the European Union was formalized in 1993 by the Maastricht Treaty, which officially removed barriers to free movement of goods, capital and people across borders of member nations.
Ironically, Britain’s application for membership in the old Common Market was initially rejected when French President Charles de Gaulle exercised his veto. The UK ultimately became a member in 1975.
Britain’s relationship with the EU has always been somewhat strained. When the Euro currency was introduced in 1999, the UK was one of the members that chose to retain its own money and refused to surrender its monetary sovereignty to the collective will of Europe. Despite much criticism, the decision proved to be the correct one and allowed Britain to insulate its economy and financial institutions to some degree from the rest of Europe’s banking crisis.