Sirisha Karri IMS 3310

Disaster or Disintegration?

Britain decided to leave the European Union primarily due to their loss of faith in the EUs
economic and political strategies. The 2008 recession was a major downturn for the US
economy, but it made an even more severe impact in Europe. The Eurozone was not able to
escape the recession. While the US was having a steady recovery, Europe continued to fall back
into a recession. During times of despair the federal reserve in the US works to promote
inflation, unemployment, growth and stability. However, the rules of the Eurozone do not
consider all the aspects of a stable economy. As The Guardian wrote in an extract of Joseph
Stiglitz’s The Euro: How a Common Currency Threatens the Future of Europe, the central bank in
Europe only “focus(es) on inflation” and does not incorporate the other aspects of recovery
into their attack on recession making it a weak one. Furthermore, as Stiglitz mentions, the
Eurozone was not made for diversity. Out of the 28 countries in the European Union, 19
participate in the monetary union known as the Eurozone. All these countries use the same
currency requiring them to all to have a common exchange and interest rate. That is not a big
deal until you take into consideration the differences of all these 19 countries. These rates can
not support the needs of all 19 countries at once, so while they may reflect the needs of
majority of the countries there will always be some countries tagging along putting their best
interests behind them.

The European Union’s inherent flaw is that it requires each country to put the needs of the EU
before their own, but eventually no country will want to do that. “The European project was
always bound to fail.”1 The cohesiveness and integration the European Union was supposed to
provide will eventually disintegrate in front of the national pride and responsibility each county
has for its own. Anmar Frangoul argues that Denmark, Sweden and the Netherlands would be
the next countries to take a step towards dividing from the European Union, since they
currently have the strongest political and economic institutions.2 These specific countries are
getting tired of picking up the slack from Southern Europe’s inefficient economies and will
eventually choose to split. But in saying all of that, I believe that the European Union will not
fragment for at least another 8 years.

With Brexit recently occurring, countries will use Britain as a test run. Article 50 of the Lisbon
Treaty gives the UK and EU two years to negotiate the terms of their dissolution, and until UK
officially splits they will have to continue to follow the regulations set by the EU. It has been
theorized that the main negotiation to be made consider trade rights and immigration. The UK
will fight to be a part of the European single market, so they can retain the right to trade
without the hassle of tariffs (one of the key components of the European Union), while the EU

1 Williams, Mark Fleming. “Europe Without the Union.” Stratfor, N.p., n.d. Web. 28 Sept. 2016.

2 Frangoul, Anmar. "Is 'Brexit' the Beginning of End for European Union?" NBC News. N.p., n.d.
Web. 28 Sept. 2016.
Sirisha Karri IMS 3310

will fight for the right of all EU citizens to freely immigrate and work in the UK. 3 One of Britain’s
main concerns for the referendum was to be able to control the number of people coming into
the UK, so it will be interesting to see where the negotiations go. At this moment in time there
is no way of predicting the outcomes of the negotiations considering that Britain is the first
country to ever leave the European Union. Once other countries get a sense of how willing the
European Union is to giving into the wants of Britain will they be able to balance out the
benefits and disadvantages of leaving. One advantage to consider for the stronger economic
nations is the fact that Britain’s economy did not suffer as a result of the referendum. Time
even announces that Britain is having a “post- Brexit economic boom.”4

Overall, I believe that with Brexit other countries will be more motivated to part from the
European Union, but other treaties and less binding agreements will form to replace the hole
created by the loss of the European Union. With the formation of new trade groups and a lack
of unitary monetary regulations each country will be able to tailor policies to best fit their areas
of need giving each country a fair chance to thrive without being held back by the problems of
others.

3Wheeler, Brian, and Alex Hunt. “Brexit: All You Need to Know about the UK Leaving the
EU.” BBC Brexit. BBC News, 1 Sept. 2016. Web. 28 Sept. 2016.

4 Bruce, Andy, and Reuters. Britain’s economy shrugs off “Brexit” impact, for now. TIME.com,
26 Aug. 2016. Web. 28 Sept. 2016.