Image Credit: Nino Jose Heredia/©Gulf News

The formation of the European Union was an epitome for the future unification of the world into one country with different individual states on the model of the EU.

Progress in this respect had already begun by other regional countries coming together to form their own sort of union, like SAARC in South Asia, ASEAN in the Far East and Gulf Corporation Council in Middle East. One of the achievements of the EU was to put an end to all wars between Western European countries.

Then why did Brexit happen?

Historically, there was a small minority of Conservative party MP’s who always raked up the issue of Europe in parliament and would trouble a Conservative Prime Minister. The former Prime Minister, David Cameron, in order to shut them from raising this issue included a referendum in the Conservative party manifesto for the last general election.

The facts at the time were different and the UK was content to be part of Europe. It is now recognised that the real cause of Brexit was the influx of refugees into Europe in early 2016, which frightened voters into thinking that many would in due course obtain the right of residence in the Schengen countries and then travel to the UK.

Another significant factor was the proposed agreement between the EU and Turkey to allow Turkish citizens visa-free travel to Shengen countries. Psychologically, this also affected British voters into thinking that in due course Turkish citizens would have right of residence in the EU and then travel to reside in the UK.

There were of course other reasons — like false messages that Britain would save £350 million (Dh1.60 billion) a week and which could be used for the National Health Service (NHS).


What now?

There is now general recognition in the British establishment that the vote to leave the EU is going to retard the UK’s economic progress. The pound sterling — which was in the region of £1 = over $1.50 — slumped immediately upon the vote and today stands at £1 = $1.22.

Nearly 50 per cent of UK exports go to EU countries and although the country’s exports will become cheaper because of devaluation of the sterling, it will be set off by a higher liability for import tariffs the EU is bound to impose.

Britain and its people are known for their zeal to survive any kind of downward spiral and bounce back. In the late 70s, Britain was known as the sick man of Europe but became one of the most economically strong nations of the EU.

One should not be surprised if Britain bounces back as one of the strong economies, even after leaving the EU. There is of course a real risk of many businesses which wanted to do business with Europe, using City of London as a centre, might now prefer to deal directly with European countries. This would be a loss for the City.


Hard Brexit or soft Brexit?

This is another conundrum which the British Government will have to face and resolve. The underlying importance will be to regain the advantage which exporters had to ship their goods to the EU, which would be lost when Britain leaves. Britain would of course have the opportunity to offset any such loss by developing stronger commercial ties with Commonwealth countries.

The Indian Government, for example, would prefer to see a hard Brexit because India can then deal directly with the UK and get rid of the obstacles it has been facing over the years in exporting food products, which are restricted at present because of bureaucratic EU regulations.

Prime Minister Theresa May made her first overseas visit to India to give a clear signal that Britain out of the EU is going to work hard to develop a more special relationship with India and other Commonwealth countries. The British newspapers considered May’s trip to India as a damp squib, but reliable information from the Indian Government’s side suggests the trip was very productive.


There is an understandable recognition in the British establishment that the only good option for UK is to go for a hard Brexit. This is because if UK goes for soft, there will still be a very substantial obligation on the UK to pay large amounts to the EU every year.

A hard Brexit would mean hard immigration restrictions for those who wish to settle in the UK. However, the fact is that Britain does require quality immigration, but UK will be able to control immigration in a way so as to allow only such people coming to the UK.

— The writer is Senior Partner at UK based law firm Zaiwalla & Co.