Conservatives Promise Referendum on Britain Leaving the EU

Prime Minister David Cameron vowed to hold a referendum by 2017, determining whether Britain should leave the European Union. However, the promise is based on the ability of conservatives to win elections on May 7.

Prime Minister David Cameron vowed to hold a referendum by 2017, determining whether Britain should leave the European Union. However, the promise is based on the ability of conservatives to win elections on May 7.

A withdrawal from Brussels could cost each person 3,500 pounds and cost the U.K. economy 225 billion pounds by 2030, according to think tanks in Germany. In addition, Britain could lose 55 billion pounds a year if officials do not establish trade deals outside of the British Isles. The exit could also cost nations more as they would have to pick up the debt burden lost from Britain’s departure. Countries such as Belgium, Sweden, Malta and Cyprus would take hits in GDP income.

Ireland Worries

Ireland is one of the first nations that would feel a direct pinch from Britain’s exit. Irish officials have been campaigning against Cameron’s campaign promise to hold the referendum because the Irish have a trade deal at stake, which amounts to $1.1 billion each week. Irish exports could also fall 3.6 percent if the EU imposed trade barriers. The leave could also disrupt the peace process in Northern Ireland and change borders in the region, causing further tension.

Britain May Look to Asia

Critics of Britain’s supposed exit note that the report is steeped in assumptions and one-sided facts. Others say a British departure is better in the long-term. Instead of fostering traditional trade deals with the West, supporters contend that Britain should forge closer ties with emerging markets in Asia, such as China and India, and this is backed up by data. The Institute of Economic Affairs states that such ties would add 1.1 percent to British GDP.

Economy Takes Center Stage

The idea of a referendum generates buzz during Britain’s election season, but the conservatives took a hit from the latest economic news. Britain’s economy only grew 0.3 percent in the first three months of 2015. Britain’s service sector grew by 0.5 percent in the first quarter, a decline from 0.9 percent from the previous quarter. Construction dropped by 1.6 percent, including 0.1 percent fall in production. Further, the agriculture sector fell by 0.2 percent.

Finance minister George Osborne stated that he intends to make Britain a stronger exporting economy, but this has yet to happen. Britain needs a vibrant economy that produces enough to pay off its public debt while satisfying an increasingly dissatisfied public that is weary of wage depression and a higher cost of living. Regardless of the outcome of a supposed referendum, officials such as Cameron should focus on getting the economy up to par for the sake of stability.