Few lifelines before Brexit
Mains Paper: 3 | Economy
Prelims level: Brexit
Mains level: Post brexit consequences
- The moment when Britain would officially exit the European Union (EU)
is still some months away.
- The source of the foreshocks are the unstable machinations of the
British Prime Minister Theresa May’s Brexit ‘war cabinet’.
- Without a clear plan to counter the unsociable environment being
created by an increasingly unempathetic EU, Ms. May’s assurances as yet have
not been productive.
- The trade terms that Britain set for the Commonwealth, post-war
and post-independence, are not simply there now because some of them are
almost ready to supersede the U.K. economically.
- There are also fears that the U.K. might end up leaving without a
final deal in hand.
- There are whispers from Ms. May’s Brexit camp that she might agree
to an extension beyond 2020 in order to assist Britain in establishing
transitional arrangements to ensure a hold in the single market as well as
the customs union.
The next steps
- Brexiteers are hoping for a turnaround in negotiations at least by
December even as the EU is convoking a special meeting in November to wrap
up a final deal.
- In december will be the time for the final opportunity before
which the text of the withdrawal treaty has to be cleared by a supermajority
of EU leaders.
- There are a minimum of 20 out of 27 remaining members of the EU
representing at least 65% of their population.
- The deal will also have to be ratified at a plenary by the
European Parliament. If any differential clauses persist.
- Parliament might refer them to the European Court of Justice.
- If all this happens before December, the British Parliament will
take it over.
Post brexit consequences
- The vote on which the minority government in London hopes to get
the deal through hinges on Northern Ireland’s Democratic Unionist Party.
- Ms. May’s government might need to unconditionally embrace many,
if not all, of Belfast’s predilections.
- There is also confusion raging in the British Parliament as
two-thirds of its MPs are still in favour of remaining in the EU despite a
majority of their constituencies having voted to leave.
- Speculation is rife that angry Tory backbenchers might also press
for a leadership change, and that Ms. May may face an exit before Christmas.
- Border negotiations for custom clearances and travel would also
take long despite optimum use of advanced technology.
- In addition to the chaos which could descend on markets and
investors if no deal is reached in December.
- Ms. May has also rejected the demand for a second referendum.
- If Brexit happens without a deal, she has now announced, in order
to win trust, tax cuts for 30 million citizens, with effect from April next,
a year earlier than fixed, amid claims that a deal is almost done. No one
The Indian angle
- An independent crossbench life peer and anti-Brexiteer Karan
Bilimoria has stated that Indian-run businesses would suffer phenomenally
with or without a deal.
- Tejinder Singh Shekawat, a construction entrepreneur and president
of the Indian Chamber of Youth Entrepreneurs attached to the India High
Commission in London, says, “The current status is that the Europeans have
already started leaving.
- As a result, the rental and property prices have come down,
whereas labour and material prices have gone up by 25%.
- Almost every business is struggling even before the Brexit
- A large portion of Indian businesses in the U.K. are dependent on
the free European market.
- They are watching the developments with bated breath.
Q.1) “Lisbon Treaty” was recently in news with reference to
a) Brexit referendum for leaving European Union (EU)
b) Model Foreign Account Tax Compliance Act (FATCA) to be adopted by G-20
c) Modification of Iran’s nuclear programme under pressure from P5+1 nations
d) Retrospective taxation on foreign investors in WTO member nations
Q.1) What are the aftermath consequences of brexit? What are the matter concerns