For more than four decades, Britain has participated — with varying degrees of enthusiasm — in the grand experiment called the European Union.
On Thursday, British voters will decide whether to call it quits. And the fear of what’s being called Brexit — portmanteau for British exit — is rattling financial markets and cracking British politics along unfamiliar fault lines.
Those eager to leave attack the EU as undemocratic — imposing unwanted laws from afar and compelling Britain to accept more immigrants than the local population is ready to absorb. Meanwhile, their opponents in the “Remain” camp counter that Brexit would almost certainly hurt the British economy and make British families permanently poorer.
Even at this late date, the outcome is unclear; on Friday, the Financial Times “poll of polls” has the “Leave” side ahead by 48 percent to 43 percent, which is considered too close to call. For many in the United States, where a presidential election campaign like no other has dominated public discussion, Brexit has hardly registered.
But if the world awakes Friday morning to news of British secession, the repercussions will travel far and linger long.
Why is Britain even holding this referendum?
It’s the fulfillment of a political promise.
During the last election, conservative Prime Minister David Cameron seemed to be leaking support to a farther-right, anti-immigrant party strongly opposed to EU membership. So to shore up votes, he pledged to hold this referendum.
The maneuver helped Cameron keep power, but the rift among British conservatives has only grown deeper.
Cameron himself opposes Brexit, but he’s been abandoned by most conservative voters and many of members of Parliament in his own party. On the left too, there is official support for the EU, but a fair number of voters are bucking the party — particularly older voters.
When it comes to Brexit, it’s not a battle of left vs. right; more like the center against the fringes.
What are the most divisive issues?
There are two main issues agitating the electorate and stoking calls for Brexit. The first is about Britain’s diminished place in the European superstate, the other about open borders and EU immigrants.
EU Vassalage. Members of the EU have to accept the authority of EU laws, regulations, courts, and the whole Brussels bureaucracy. That itself causes some Brits to bridle, especially given the lack of democratic accountability in the EU.
Yes, there’s a European parliament, but key decisions are often made by appointed officials — and in the past the EU has moved forward with sweeping changes despite strong signs of popular opposition. (When referenda in France and the Netherlands broke against a proposed EU Constitution, the Treaty of Lisbon was used to implement many similar changes by another route.)
One concrete issue getting a lot of attention is the UK’s required annual contribution to the EU, which nets out to about $11.3 billion per year. That’s not a terribly large amount, relative to the size of the UK economy, but for people already skeptical about the benefits of membership it seems gratuitous.
Immigration. Opening borders and letting Europeans move freely across the continent has been a touchstone of EU policy, and it means the UK can’t block immigrants from other EU countries — no matter the homegrown opposition (refugees and immigrants from North Africa are a separate issue where the UK has a lot more latitude to set policy).
Brexit boosters have raised broad concerns about how immigrants from places like Portugal or Romania depress wages and siphon money from public welfare programs including health care.
Such arguments have taken hold despite contrary evidence, and “Remain” campaigners are quick to point out that immigrants generally pay far more in taxes than they receive in public support — not to mention the boost they give to economic growth.
Would Brexit hurt the UK economy?
Ask the UK treasury, the International Monetary Fund, or the Organization for Economic Cooperation and Development, and they’ll tell you the same thing: If the UK votes to leave Europe, the economic damage will be severe.
Short-term uncertainty is one problem. No one has ever left the EU before, so the UK would be starting down an unlit path, forced to reestablish its economic relations not just with Europe but with the many other countries currently covered by EU treaties.
Over the longer term, though, the big concerns are trade and high finance.
About 45 percent of all British exports currently go to the EU, eased by a lack of tariffs and a uniform set of standards. Brexit would jeopardize that smooth connection, putting a severe crimp on the export sector.
Britain’s outsized financial industry also benefits from easy integration with EU banks and investors. Should that dissolve, a London address might suddenly be an impediment. Already, Citigroup Inc. and JPMorgan Chase & Co. have warned that Brexit would probably induce them to move parts of their business into continental Europe.
Add it all together, and the OECD estimates that Brexit would cost the average British household about 3,200 pounds in 2030.
Will the UK really leave Europe?
All signs point to a tight outcome — possibly determined by last-minute events like the shocking murder of MP Jo Cox, a “Remain” supporter.
While polls show Brexit in the lead, surveys of the UK electorate have proved misleading before, including last year when Cameron won reelection by an unexpectedly wide margin.
The precise effect of a leave vote is hard to predict. So much of the aftermath is yet unknown and unplanned. Could the UK negotiate favorable new trade deals with the EU and the rest of the world? Would UK businesses be crippled by their inability to plan for the future?
Not to mention the questions about citizenship and immigrants. What would happen to EU citizens already living in England? Or families with mixed citizenship, currently unified by their common place in the EU?
Looming over all this is the fate of the European project itself. With small, determined steps, the nations of Europe came together after World War II to end the reign of open conflict that had riven the continent for centuries, converting the belligerence of big power politics into the squabbling of bureaucratic compromise.
Britain signed on to this effort in 1973, but its departure today could set that process in reverse. Should other nations choose to follow suit — a struggling Greece or a defiant Hungary — we could see a slow unraveling of the dream of European unity.