By Kevin Gikonyo
“You are the weakest link, Good bye!” – the last words to a failed contestant by Anne Robinson in the award winning British game show that is popular all over the world, casted by BBE entertainment known as The Weakest Link. Do not fret if you are not familiar with this, it took many years to sail the English men to the shores at the coast of Mombasa and today some Kenyans speak and write better English than its natives.
Like the source of where many words in the English dictionary emanate, so is the new colloquial word Brexit, to mean British-Exit. The United Kingdom (also referred to as Britain) has had a very heated debate lately, whose outcome could have magnanimous ramifications to its geo-political influence, economic status of its resident’s and those of its dependents.
On June 23rd this year the eligible voters in UK will choose whether to remain or exit the biggest economic bloc in the world, the European Union (EU). It commands a combined economy of €14.303 trillion according to IMF latest reports, currently with a population of over 500million people.
The EU was formed in 1993 following a Maastricht treaty. The initial 12 member states gathered in this well-cultured town South- East of the Netherlands in Limburg province and appended to be part of the EU. Those present were; Belgium, Denmark, France, Germany, Greece, Italy, Luxembourg, The Netherlands, Portugal, The Republic of Ireland, Spain and Britain. The EU later on, enlarged Four times when it added; Austria, Finland and Sweden in 1995, in 2004 its biggest addition of 10 new members mostly from the former Soviet bloc namely; Czech Republic, Cyprus, Estonia, Hungary, Latvia, Malta, Poland, Slovakia, Lithuania and Slovenia. Romania and Bulgaria were admitted in 2007, followed by the latest entrant, Croatia, in July 1st 2013.
Turkey is in the process of joining EU, to make it the 29th state to be governed by the EU Council headquartered in Strasbourg located East of France near the France-Germany border. The EU Council makes sure each country before assimilation, satisfies the following conditions;
One must prove to be a stable democratic state, which respects human rights and the rule of law.
One should have a functioning economic market, capable of competing within the EU.
One has to be ready to accept the EU obligations and laws.
One must be capable of maintaining long-term interest rates within 2% of National inflation rate and within 1.5% of the three best performing EU member states, in terms of price and stability.
One should maintain a public debt at no more than 3% of the gross domestic product.
Also, you must be able to maintain a total government debt of not more than 60% of gross domestic product.
The birth of EU was a culmination of various trade and political engagements that sought to merge and harmonise their efficiencies. The 28 member political and economic federation was cradled in 1950 by the then French foreign minister Mr Robert Schuman. The voluntary unification unlike that of Napoleon Bonaparte was a long journey to heal the infrastructural and economic damage post World War II.
With a clamour for inter-dependency among European countries in trade of steel and coal, the European Coal and Steel Community (ECSC) was formed in 1951. Two similar outfits, one to foster atomic energy revolution was instituted in 1957, to be named European Atomic Energy Community (EURATOM) and the European Economic Community (EEC) designed to harmonise the tariff barriers among member countries. By then, only Belgium, France, Germany, Italy, Luxembourg, The Netherlands were in this formative stage of unifying Europe. All this time, Britain did not see the reason to belong to this small economic bloc, as it was enjoying mammoth economic benefits from the periphery of the World’s remote lands, through a well-orchestrated “international colonisation gluttony”.
Where the Union Jack flew high, so was the level of depletion of human and natural resources, to better the once mega-powerful United Kingdom.
This geo-political immersion by Britain was never to be for long and in the start of 1950s the colonised countries began to reclaim their sovereignty in earnest until late 1960s.
Britain realised its dwindling global dominance and sought to join the EEC (European Economic Community) in 1961 to improve its economic status, albeit with “chest-thumped” conditions to maintain certain privileges of trade, within commonwealth countries. After lengthy negotiations and evaluations that lasted 2years, the EEC could not take some of Britain’s conditions thus it was declined as a member in 1963. In 1967 the EEC, ECSC and EURATOM merged to form the European Community (EC). By the early 1970s, the EC was becoming a force to reckon with in Europe and Britain had lost ground in most of the commonwealth’s direct rule. It had no option, but to drop from its “high horse” to be accepted as a member of EC in 1973.
EC drew a road map to strengthen its currency in 1979, so as to have a single monetary system. Eight years later, a European Act was passed to strengthen the EU’s economic, social and foreign policy of its member states. In 1993 EC took its largest leap towards a unified Europe, to what is now known as the “Maastricht Treaty “after which the European Union (EU) was born.
The journey to unify Europe has not been easy, just like the unification of the East African community; both have had their highs and lows. To date, according to recently published statistics, these are the most successfully integrated political, economic blocs in the world, to the envy of many. Whether the respective citizenry are alive to the super advantages they accrue or not, are juxtapositions to be dismayed in awe.
The EU is now on the edge, trying to hold together its most influential economic member from leaving an “eco- political void” in the region. Analyst have subtly expressed that, most EU countries will not be able to survive Brexit effects, economically. Britain has been a catalyst for most EU goods and provider of the so vibrant services, that contribute almost a third of its over $3trillion GDP, pitting others to become the 2nd largest exporter of services in the world after US. The country that once almost begged to join a unified union in Europe, now wants to leave after making a good show, both politically and economically.
Statistics indicate that Britain imports nearly 230£Billion from its EU members and exports goods worth close to 130£Billion.These figures are exclusive of its main jewel of service exports (No official figures exist to quantify service exports to EU) of financial, education and legal services among others, these could easily make Britain run on a trade surplus against the whole EU market. The Seven overall main British export market countries include; Germany 10.8%, United States 10.4%, Netherlands 8.1%, Switzerland 7.2%, France 6.5%, Ireland 6.4% and Belgium at 4.5% respectively. Almost the same list is duplicated for its imports market, lest for China with 9%, second to Germany’s 14% share of all goods entering Britain.
ParcelHero, a leading global logistics company based in UK, with international courier service connections to over 220 destinations published a detailed 30page report titled: Delivering Brexit; The True Cost of Leaving EU. The company gives a detailed analysis by market segment of how a 23rd June No decision, could affect every British household. It claims that post Brexit, every household in UK will pay an additional £4,300 per year and its importers will experience a 30% rise in costs from any EU country. E.g. for every £100 import pre-Brexit, it would now cost £130 post-Brexit. This cost will comprise increased;
Import Duty, Taxes, Red tapes, Shipment costs occasioned by delayed document processing of cargo and boarder checks among other non-tariff barriers.
With a Brexit scenario in mind, most investors in UK are beginning to eye which other EU country they are better placed to domicile. France is already adjusting its investment climate and has gone on record to say it will welcome all the Brexit affected companies with open arms. The stock market is already becoming jittery and is seeing the unbelievable outcome as polled in April, now beaming closer to become a reality. According to Telephone polls of polls by YouGov IPSOS Mori , May 2016 results show a drop in the 20% lead in April in favour to remain, down to a paltry of 5% lead. This is a Deja vu to Scott’s referendum vote, to remain or exit the UK. The former won, but the polls were a nail biting experience, up to the last second.
Most “Londoners “ and other metropolis dwellers say, they prefer Britain to remain due to increased human rights activism especially for the non-indigenous Brits, reduced commodity prices, high employment rates brought by EU companies that have set shop in Britain. “We (Non-Brits) feel safer under EU and have more confidence of being treated with dignity due to EU laws that protects most immigrant families” said Mr Victor Karaba, a Kenyan living in the UK and is now a naturalised citizen. He attested that although most British citizens feel their basic welfare services are being overly shared with EU countries without guard; it was not worth cutting the ties over small teething problems. He concluded by saying he appreciates concerns raised by the Brexit camp and that more needs to be done by the government, to protect their basic privileges first as UK citizens.
Prime Minister David Cameron is leading the Remain EU camp. He has since received an equal measure of opposition from unlikely quarters, his own conservative party and would be successor, former London mayor Mr Boris Johnson. Mr Johnson claims EU is behaving like the German Nazi dictator Adolf Hitler, by trying to create a super state. He told The Sunday Telegraph that Europe is trying to emulate the Roman Empire in bringing states together like Napoleon and Hitler did and that all of them had tragic endings. He was backed by Mr Nigel of Independence party but received criticism from pro-EU, Hilary Benn, the main Opposition Party Foreign Affairs spokesman.
The Prime Minister is scheduled to come for a state visit in Kenya in June and could be compelled to exit his position, if he fails to extinguish the Brexit locomotive. The ultimate losers ironically, would be the British citizens. It would go down in annals of history that UK was privileged to join one of the most progressive unions at its time, made the most, if not the best, but ended up “taking the shorter side of the stick”, by choosing to exit. Their lives will be more expensive and fall behind the 27 member queue in trade pacts with big economies like US who have on record stated UK will have to take the last carriage on trade matters, since it has no specific trade pact between them.
As uncharacteristic as it would be for any human being to deny something good, so it would be for Ms Anne Robinson of the weakest link show to say to Britain, in company of other 27 EU contenders, “You are the strongest link! Good bye!”
