The consequences of Britain’s vote to leave the EU (Brexit) are becoming clear. The UK economy is in trouble and the pinch is being felt at the level of individual households. Medical doctors and nurses are relocating to EU countries thus imperiling the national health system. Likewise, universities are likely to lose faculty and staff in the absence of guarantees of their rights. And Ireland may once again experience border troubles. There is talk of a second referendum, but the UK politics make that unlikely. In short, as John Cassidy puts it, the “Brexit Madness” continues.
An economic BRexodus
New Yorker columnist John Cassidy reports No End in Sight to the Brexit Madness.
The slow-motion self-immolation that is Brexit continues for the U.K. Speaking in Brussels on Monday, Michel Barnier, the senior European Union official in charge of negotiating the terms of Britain’s departure, confirmed that British banks were set to lose their so-called E.U. passport, which currently enables them to offer services throughout the twenty-eight nations in the bloc. “On financial services, U.K. voices suggest that Brexit does not mean Brexit,” Barnier said. “Brexit means Brexit, everywhere.”
As if to reinforce the point, a meeting of E.U. ministers on Monday confirmed that two big E.U. agencies that are currently headquartered in London, the European Banking Authority and the European Medicines Agency, would be moving to Paris and Amsterdam, respectively. “The twenty-seven will continue to deepen the work of those agencies, together,” Barnier said. “They will share the costs for running those agencies. Our businesses will benefit from their expertise. All of their work is firmly based on the E.U. treaties which the U.K. decided to leave.”
To be sure, the country’s economy hasn’t collapsed. The gross domestic product is rising, and the unemployment rate has fallen to 4.3 per cent, its lowest level since 1975. But the rate of G.D.P. growth has fallen this year, and consumer-price inflation has risen because a fall in the value of the pound has made imported goods more expensive. This has hit living standards. Earlier this month, the National Institute of Economic and Social Research, an independent think tank, estimated that Brexit has already cost each British household about six hundred pounds, which is roughly eight hundred dollars. “It is almost certain that the relative deterioration in the UK economy and the accompanying fall in living standards over the past year are a consequence of the vote by the British people to leave the European Union,” Garry Young, a senior economist at the institute, wrote.
And that is just the start of an economic BRexodus and other consequences. Read on for more examples.
If Theresa May’s government had presented a credible path to the prosperity that it claims will accompany Britain’s departure from the E.U., the economic slowdown could perhaps be written off as an inevitable and temporary transition cost. But, of course, no such credible path has been offered. Beset by internal divisions, ministerial departures, and the hangover from a disastrous general election that saw it reduced to a minority in the House of Commons, May’s government has stumbled along, making barely any progress in negotiating the terms of Brexit, which was originally pegged for March, 2019.
In his speech on Monday, Barnier, a former foreign minister of France, appeared to broaden the E.U.’s demands, strongly hinting that, if Britain wanted a favorable trade deal, it would have to abide by European regulations in many areas, even though it would no longer be a member of the Union. “The U.K. has chosen to leave the E.U.,” Barnier said. “Does it want to stay close to the European model or does it want to gradually move away from it? The U.K.’s reply to this question will be important and even decisive, because it will shape the discussion on our future partnership and shape also the conditions for ratification of that partnership in many national parliaments and obviously in the European parliament.”
Although Barnier’s language was polite, his meaning was clear: the E.U. will not countenance Britain trying to set itself up as a haven from regulation and taxes for international companies that want to do business in Europe but don’t like being subject to oversight from Brussels. And, indeed, that is precisely the scenario that some of May’s colleagues—including Boris Johnson, the foreign secretary, and Michael Gove, the environment secretary—have in mind. In their vision, post-Brexit Britain would turn into a European version of Singapore or Hong Kong during the days of British colonial rule. “We may choose to remain identical to the EU or we may embrace a vision more aligned with pro-competitive regulation,” Johnson and Gove wrote, last week, in a letter to May. “Other countries must know this choice is in our hands, and they must know it on day one.”
To give them a bit of credit, May and Philip Hammond, the Chancellor of the Exchequer, seem to grasp that Johnson and Gove are pursuing a fantasy. They understand that the E.U. won’t allow Britain to both have its cake (access to the giant E.U. market) and eat it (freedom from E.U.-style regulation). They also recognize that if companies such as Honda and Nissan no longer have free access to and from Europe for the outputs and inputs of their British factories, they will have little choice but to relocate at least some of their facilities to the Continental mainland. The same goes for big international financial institutions, such as Deutsche Bank, JPMorgan Chase, and Goldman Sachs.
Following are two examples of the fallout from Brexit.
Drexit: A medical exodus triggered by Brexit.
The NY Times reports on Where Brexit Hurts: The Nurses and Doctors Leaving London.
The short: “Britain’s treasured health care system was used as a rallying cry by anti-E.U. campaigners. Many of its European staff now feel betrayed. Thousands have quit.”
Seventeen months after Britain voted to leave the European Union, many Europeans are voting to leave Britain — with their feet. Some 122,000 of them packed their bags in the year through March, according to the latest figures available, while the stream of new arrivals has slowed.
In London, a city long sustained by European bankers, builders and baristas — “a place that makes you dream,” Ms. Pardela said — the departures are beginning to hurt. Construction companies and coffee shops are struggling to recruit. Top universities worry about retaining talent. And nowhere are the concerns more elemental than in Britain’s treasured and already overstretched National Health Service.
Long before Brexit, the N.H.S. suffered from chronic staffing shortages, and today the country has 40,000 nursing vacancies. But recruiting nurses from the European Union had helped plug the gap — especially in London, where the share of nurses from the Continent is about 14 percent, or twice the national average. King’s College Hospital, the massive institution where Ms. Pardela works, is short of 528 nurses and midwives, and 318 doctors.
Brexit seems certain to make it harder and costlier to recruit from the Continent, assuming that people will still want to come from there. Even the legal status of European Union citizens already living in Britain remains unclear, entangled in the stalled Brexit talks between Brussels and London. Many fear they could lose rights, job security, pensions and access to free health care.
This uncertainty is one reason that some European health care professionals are either leaving, or thinking about leaving. In the year following the referendum, almost 10,000 quit the N.H.S. The number of nurses from other European Union countries registering to practice in Britain has dropped by almost 90 percent.
As yet, there is no mass exodus back to the Continent — the number of European Union staff in the health service even grew slightly in the year after the referendum. But the trends are unmistakable: The number of Europeans leaving the system is rising, and the number joining it is falling.
Ireland after Brexit: A new Berlin wall?
The Guardian reports on How Brexit looms over the Irish border: ‘It’s the Berlin Wall approaching us’. In the communities that straddle the divide between Northern Ireland and the Republic, anxieties about a hard border are becoming very real. Many business owners fear for their livelihoods, while local people warn of a return to the days when IRA smugglers ruled ‘bandit country’.
Brexit has jolted memories and generated new anxieties along the 310-mile border from Donegal to Louth and what locals fear most is that old divisions and enmities will be stoked. It is estimated that one million people live in the border communities, and they are already feeling the impact.
“What you don’t see here is the silent hurt – everyone here was affected,” says Natasha McGrath, community development officer at the Termon Complex, a cross-border sports and community hall across the river. The EU spent €8.3m (£7.4m) on the centre, the second-biggest single beneficiary of peace programme funds after the Peace bridge in Derry.
McGrath fears that the EU funds released after the Good Friday agreement, which have underpinned peace, are now at risk. “We have spent the last two decades building bonds, socially, culturally, economically. The two states are bound together and now they are going to be cut apart,” she says.
Might as well call this one IRexit. Next up is a looming educational exodus (Edexit?).
UK universities “face disaster within weeks”
Educational institutions, like Warwick University, that employ EU staff will suffer from the uncertainty. The Guardian reports that UK universities ‘face disaster within weeks’ without clear Brexit plan.
British universities face “a moment of great trauma” in the next few weeks unless the government makes clear its post-Brexit plans for EU residents in the UK, a leading vice-chancellor has warned.
Prof Stuart Croft of Warwick University said in an interview with the Guardian that the possibility of no deal being struck to exit the EU was “utterly bizarre”, and that institutions needed certainty over residency rights by the end of the year to avoid seeing staff at all levels deciding to leave.
Warwick currently employs around 800 staff from the rest of the EU, out of 6,500 staff in total, and Croft said it was not just professors and senior researchers whose departure would harm the university.
“We have lots of people – we want them all to stay – people who work in all parts of the organisation. We have illustrious professors doing important things, and we have people who work in catering, and they are all really important.
And all this, among many other consequences, was endorsed implicitly by US President Donald Trump when he called Brexit a ‘great thing’ for UK.