Brexit Case Study

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On June 23, 2016, the United Kingdom’s people decided to vote in favor to leave the European Union to become a sovereign and more private country. The word “Brexit” comes from the blend of the words Britain and Exit, which was used for the first time in reference to a possible withdrawal of the UK from the EU by Peter Wilding in a blog post on May of 2012. The Ex-Prime Minister of Britain, David Cameron never agreed to the possibility of a referendum to leave the European Union, that is why, a day after the people voted in favor of Brexit, he resigned to his charge, leaving Theresa May as the new Prime Minister. Mrs. May didn’t agree with the idea of separating the country from the EU as well, but, after realizing that the people of the UK …show more content…

According to Dr. Ulrich Schoof (2016), there could be two types of exit, and therefore, two types of outcomes regarding the costs to Britain from exiting. The first type is the Soft exit, where if the UK decides to go with this solution, the will see changes in real income that can go from -0.6% to -0.4 based on the base year. Whereas, if they would opt to use the Deep cut, they would have losses that can range from 1.5% to 2.5%. The image below shows more in depth the costs of Brexit in different scenarios and involving all countries that are part of the European Union.

Source: Schoof, U. (2015). Costs and benefits of a United Kingdom Exit from the European Union. P. 43 Retrieved from https://www.bertelsmann-stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/BREXIT_EN.pdf One of the arguments mostly used by the people of Britain is that the EU held their country back. The United Kingdom is the third country that pays more to the Union for memberships fees and getting too little in return. In the years 2014/15, their contribution to the EU was of £8.8 billion, almost doubling the amount that they paid on 2009/10. That being said, generally speaking, the parts of the economy that could be more heavily impact by Brexit are the automotive, mechanical engineering, and the chemicals industry because of the EU’s import taxes in those specific

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