Trying hard to overcome the current financial difficulties, the European Union is preparing to launch a new stage of integration, which aims to develop a common economic policy and the creation of a federal economic government of the Eurozone countries. London, however, is not going to participate in the transfer of the relevant authority to the central structures of the Community. Moreover, the UK intends to withdraw from a number of common areas of activity of the European Union in order to strengthen the position of the national parliament. Theoretically, the kingdom wants to remain in a single economic zone of the EU, but leave all other areas within the competence of the British Parliament.
Well-known fact, the EU`s current main problems are the Eurozone economic crisis, lack of competitiveness and a significant reduction of public support for the idea of a federal Europe. I would like to refer to the work of Brian Hindley and Martin Howe " Better Off Out: The Benefits or Costs of EU Membership?” dedicated to the consequences of the possible leave of the UK of the European Union, which was published in 2001.
First, UK`s leave of the Union, and an automatic refusal to follow the requirements of agro single EU policy will allow the UK to save from 0.5% to 1% of its GDP. Further, the introduction of tariffs on British export to other European countries in any case would not exceed 0.75% of the UK GDP. Such an insignificant value can be explained because of the requirements of the World Trade Organization, which regulate that the average import tariffs for EU shall not exceed 6%. Another argument in favor of exit could be the abolition of the adopted in the EU import tariff on goods coming into the country from outside the Union.
In turn, there is a possible reduction in foreign direct investment because of the termination of membership of the EU in the UK. Possible reduction in foreign direct investment causes much concern among common people, businesspersons, officials and economists. It is considered that the capital belonging to foreigners in the UK constitutes up to 25% of the UK`s GDP.
Of course, the UK termination of its membership in the EU may cause some reduction of its investment attractiveness. Thus, products exported to other European countries, after leave shall be subject to customs tariffs, and their exporters will encounter local European bureaucracy.
Also in favor of leaving the EU many analytics name such circumstances as the ability of concluding free trade agreement between Great Britain and the Union, similar to that which Switzerland signed with the EU. In this case, the potential benefits from the termination of membership in the EU will increase, and the potential losses, on the contrary, will reduce. In its turn, the United Kingdom will be able to enter into similar agreements with other countries, or simply soften its trade regime unilaterally. The main reason, for which London ties itself to the Union, is the policy.
Works Cited
Hindley, Brian, and Howe, Martin. Better Off Out: The Benefits or Costs of EU Membership. BookZa. 2001. Web. 29 Mar. 2014. PDF file. http://bookza.org/book/960389/425e2d
