CRS INSIGHT
The United Kingdom and the European Union: Stay or
Go?
May 4, 2016 (IN10449)
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Related Author
Derek E. Mix
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Derek E. Mix, Analyst in European Affairs (dmix@crs.loc.gov, 7-9116)
In-or-Out Vote Set for June 23
"Should the United Kingdom remain a member of the European Union?"
In-or-Out Vote Set for June 23
On June 23, 2016, British voters are expected
to answer
this question. Prime Minister David Cameron set the referendum date in February 2016 after completing
months of negotiations with his fellow European Union (EU) leaders about securing a "special status" in the EU for the
United Kingdom (UK). The resulting agreement
exempts the UK from committing to further integration in an "ever closer union";
reassures the UK that Eurozone decisions will not discriminate against the interests of non-euro EU countries;
pledges that the EU will enhance economic competitiveness and decrease regulatory burdens; and
allows temporary restrictions on full access to social welfare benefits for EU nationals living in the UK.
These developments follow through on Prime Minister Cameron's 2013 assertion that, if reelected as prime minister in
2015, he would renegotiate the UK's relationship with the EU and put the result to voters in an in-or-out referendum by
the end of 2017 at the latest.
The outcome of the vote on whether the UK should exit the EU (often referred to as "Brexit") is difficult to predict.
Polling results have varied from week to week and continue to suggest a close race with a significant number of
undecided voters.
Prime Minister Cameron is leading the question "Should the United Kingdom remain a member of the European Union?" The outcome of the referendum remains difficult to predict. Polling results have varied from week to week and continue to suggest a close race with a significant number of undecided voters. Some polls in mid-June have shown a late shift in favor of the Leave campaign.
Arguments For and Against
Since joining the precursor to the modern European Union (EU) in 1973, the United Kingdom (UK) has been considered one of the most "euroskeptic" members. The UK has "opted out" of several major elements of European integration, including participation in the euro currency and the passport-free Schengen Zone.
Prime Minister Cameron is leading the campaign to remain in the EU, but the issue has sharply divided the
Conservative Party he leads. In January, Prime Minister Cameron announced that members of the party, including the
Cabinet, would be free to campaign as they wished: 6 Cabinet ministers and London Mayor Boris Johnson announced
their support for the exit campaign, and some 130 Conservative Members of Parliament (out of 330) are likely to go
against the prime minister on the issue.
Conservative Party he leads. The opposition Labour Party, Liberal Democrats, and Scottish National Party all broadly support the UK remaining in
the EU, whereas the United Kingdom Independence Party strongly advocates leaving.
Arguments For and Against
Since joining the precursor to the modern EU in 1973, the UK has been considered one of the most "euroskeptic"
members. The UK has "opted out" of several major elements of European integration, including participation in the
euro currency and the passport-free Schengen Zone.
Proponents of Brexit argue that
Proponents of the United Kingdom exiting the EU (often referred to as "Brexit") argue that
the EU has eroded national sovereignty by shifting control over many areas of decisionmaking from national
leaders to Brussels;
the EU lacks democratic legitimacy and accountability because many of its decisions are made behind closed
doors by non-British and/or unelected officials;
EU bureaucracy and regulations stifle the UK's economic dynamism;
the UK would be better off freed from the EU's rules and regulations and able to focus more on expanding ties to
growing and dynamic emerging economies elsewhere;
the UK's contributions to the EU budget are too expensive;
high levels of immigration to the UK from Central and Eastern Europe mean fewer jobs and lower wages for
British citizens; and
Brexit would have a minimal effect on security cooperation and defense issues because the UK would remain a
leading member of NATO.
Advocates of staying in the EU maintain that
membership is essential for the UK's economic fortunes, as half of the UK's exports go to the EU "single market";
EU membership serves as a launchpad for the UK's global trade;
Brexit would mean losing out on the benefits of the prospective U.S.-EU comprehensive free trade agreement, the
Transatlantic Trade and Investment Partnership (T-TIP);
the EU has many shortcomings, but the UK is "better off fighting from the inside";
EU membership gives the UK a stronger voice and more influence in foreign policy;
the EU has important transnational security dimensions, and Brexit would "divide the West," weakening its ability
to deal with threats such as terrorism and Russian aggression; and
Brexit is a "leap in the dark," with uncertain consequences and no clear vision of what a post-EU future would
look like.
Possible Aftermaths
Analysts suggest that a UK exit could undermine the EU in a number of ways, including by prompting membership
referendums or "opt outs" by other countries. Given the UK's foreign policy clout and defense capabilities, a UK exit
could diminish the EU's role and influence as an international actor. Others suggest that the EU could emerge as a more
like-minded bloc, able to pursue deeper integration without UK opposition. A vote to stay in, on the other hand, could
give Cameron and future British leaders a freer hand in supporting EU initiatives and restore the UK as a key player in
the EU.
Should the UK vote to leave, it would likely need to begin complex negotiations to define its future association with the
EU. A Norway-style agreement granting access to the EU single market would require the UK to continue applying
many EU regulations, without having a vote to influence how the rules are made. The UK would also need to negotiate
new trade agreements with countries around the world to replace the existing agreements it has as an EU member.
Meanwhile, some economists assert that a decision to exit the EU would likely leave the UK facing weaker economic
growth, higher inflation, and sharp depreciation of the pound. Observers additionally suggest that a vote to leave could
fuel a renewed push for Scotland to separate from the UK and join the EU as an independent country.
U.S. Views
President Obama and other U.S. officials have conveyed a preference for the UK to remain in the EU. During his April
2016 visit to the UK, President Obama firmly reiterated this view. With the UK commonly regarded as one of the
strongest U.S. partners in Europe and one that frequently shares U.S. views, senior Administration officials have
expressed concern that a UK break from the EU would reduce U.S. influence in Europe, weaken the EU's position on
free trade, and make the EU a less reliable partner on security and defense issues.
Possible Aftermaths
Technically, the referendum is only advisory for Parliament, but the government has asserted that it "would have a democratic duty to give effect to the electorate's decision." There is no precedent for a country withdrawing from the EU, so a high degree of uncertainty exists about how the separation might work.
A vote to leave is unlikely to force the UK out of the EU immediately. Under its treaty framework, the way for a member country to withdraw from the EU is to invoke Article 50 of the Treaty on European Union, opening a two-year period in which the two sides would attempt to negotiate a withdrawal agreement.
There is no preset time frame for the notification that begins this process. The timing of the notification would be a political decision that could be delayed by holding a Parliamentary debate on the exit beforehand, for example.
The main purpose of the withdrawal agreement would be to settle transition arrangements in policy areas covered by EU treaties. Until the negotiation is concluded, the UK would remain a member of the EU and subject to its rules. Details about the future arrangement of the relationship between the UK and the EU likely would be negotiated as a separate agreement.
Many observers believe that the process of negotiating these agreements would likely take considerably longer than two years to complete. As expressed by the UK government itself, "a vote to leave the EU would be the start, not the end, of a process. It could lead to up to a decade or more of uncertainty."
Analysts have expressed concerns that a vote to withdraw from the EU could cause an economic shock that would leave the UK facing weaker economic growth, higher inflation, and depreciation of the pound, with potentially significant negative consequences for the U.S. and global economies. The UK might face a period of domestic political instability if a Brexit vote imperils the position of Prime Minister Cameron or fuels a renewed push for Scotland to separate from the UK.
Some are concerned that a Brexit could prompt a wider unraveling of the EU. At a time of growing skepticism toward the EU in many member countries, a UK departure could lead to more calls for special membership conditions or referendums on membership in other countries. Others suggest that the EU could emerge as a more like-minded bloc, able to pursue deeper integration without UK opposition. A vote to stay in, on the other hand, could give Cameron a freer hand in shaping EU initiatives and restore the UK as a key player in the EU.
U.S. Views
President Obama and other U.S. officials have conveyed a preference for the UK to remain in the EU. During his April 2016 visit to the UK, President Obama firmly reiterated this view. With the UK commonly regarded as one of the strongest U.S. partners in Europe and one that frequently shares U.S. views, senior Administration officials have expressed concern that a UK break from the EU would reduce U.S. influence in Europe, weaken the EU's position on free trade, and make the EU a less reliable partner on security and defense issues.