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Impact of Brexit on European Union
The withdrawal of United Kingdom from the European Union or the term “Brexit”
puts a huge impact on every stage of the European Union. This will result in social
and economic changes to the Union, but also longer term political and
institutional shifts and many more.
Now we will discuss about some major impacts of this deal on European Union.
Economic impacts
Trade among UK and EU:
While the trade impact of Brexit on the UK is likely to be significantly negative, its
impact on the EU is also expected to be negative, but small. The UK and the EU
would become each other's biggest trading partner but some member states,
notably Belgium, Cyprus, Ireland, Germany and the Netherlands, are more
exposed to a Brexit-induced economic shock.
The sectors across the EU that would be most hit by the UK's withdrawal are
motor vehicles and parts (the UK is a large manufacturer and depends on an EU
chain of supply for parts), electronics equipment and processed foods. Export of
raw materials from the Ruhr valley would also be impacted.
Migration:
The impact of this would be felt most on eastern European member states who
have approximately 1.2 million workers in the UK by the end of 2015; the largest
groups from Poland (853,000), Romania (175,000) and Lithuania (155,000). A year
after the Brexit vote, net annual immigration to the UK fell by 106,000 with most
attributed to EU citizens leaving for other states, with the biggest drop among
those from the western European states.
The Polish government is encouraging its young emigrant workforce to return to
Poland, but due to regulatory or political reasons many would either stay in the
UK or move to other western cities such as Amsterdam or Berlin. Other western
European member states may see much of the flow coming from eastern states in
future. The influx of workers from the east would be economically beneficial to
countries such as Germany, but may be politically problematic.
Institutional Changes
Agencies located in the UK:
In 2017, the UK was currently hosting the European Medicines Agency and
the European Banking Authority. As an EU agency could not be located outside
the Union, the Council began a process to identify new host cities for the
agencies. Hosting an agency is seen as a valuable prize for a city, so the process
was hotly contested by nearly two dozen cities not just on the objective criteria,
