Understanding BREXIT- Quick Summary

I am sure if you're following international news, you would have heard BREXIT. This term has been in the works since past few years but now at its peak, as UK is set to leave end of October 31, 2019, unless something dramatic happens within next 3 weeks.

In this post, I am drafting basic details of what you need to know about BREXIT- mostly from an Indian perspective- as a tourist, as a potential work permit seeker or as a general public.

What is BREXIT and why BREXIT?
Great Britain or United Kingdom has been part of European Union or EU. EU is platform or a structure wherein several countries in Europe pool in their resources and have several trade/border/employment/social welfare relaxations among themselves (compared to countries not part of EU). UK joined EU some 35 years ago and since then UK being one of the wealthier countries has been contributing lots of money to EU activities compared to several EU member states who are relatively poorer.

However over time UK leaders felt that the amount of money they are pumping into UK is not giving them adequate returns. It is like having to pay insurance premium every year, but never getting to claim anything or any maturity benefit. Workers from EU immigrated to enmass to UK, there were many other reasons due to which majority of British people voted to leave UK, in a referendum conducted in 2016.

Problem with BREXIT- Deal vs No Deal
Leaving EU hasn't been that simple- like pulling a plug or turning a switch off. There were hundreds of complicated scenarios to be sorted out.
Like
- Ireland is EU but there's no hard border between Ireland and Northern Ireland (UK territory)- what to do?
- What will happen to millions of British citizens settled in EU and EU citizens settled in UK- will they have their freedom of movement, work authorization and healthcare access like before or something new is to be set up?
- What kind of border checks, custom inspection are to be set up for people and goods moving between UK & EU?

At a high level, two possibilities are being predicted
NO DEAL BREXIT- which is more likely- is also called as HARD BREXIT

• In this approach once UK leaves EU, UK won't get any concession in EU and vice versa- meaning UK passport holder will have to apply for Schengen visa (like say an Indian tourist) to visit France or Spain)
• Various trade concessions will cease to exist, meaning more delays at borders/customs clearance, more taxes on goods from EU and vice versa etc
• Citizens of EU working in UK and vice-versa will now have to apply for proper work permits like an Indian worker and if their application is denied, they will have to leave everything and go back to their country
• Hard border and checks might have to be set up along UK-Ireland border.

DEAL BREXIT

In this model some sort of concessions will be worked out between EU and UK so that above listed hardships can be avoided or minimized. But for this both EU and UK should agree. 

Impact of BREXIT on UK/EU people

- More border checks, more time at airport immigration counter

- Less duty free allowance

- Potential loss of job if they are no longer allowed to work in EU/UK post hard brexit

- Possible rise in cost of essential goods if current supplies get expensive or prohibited

-Possible protests, disruption if large number of people decide to oppose the BREXIT or how it is implemented

- Some businesses may pack up and shift elsewhere if they can't get required manpower or if cost of doing business goes up heavily post BREXIT

Impact of BREXIT for outsiders

- Long waiting time at airports- At present most EU airports have two sections in immigration- one for EU/UK, US, Australia. Canada passport holders, one for everyone else. If UK passport holders are to join generic line, this could increase the amount of time needed to clear immigration and customs
-Longer visa processing times
-Increased cost of visiting UK

What NEXT?

Current British PM was in the news last month for trying to mislead the queen and shut down parliament to prevent any change of his plans- which is to leave EU on October 31 with or without a deal. Needs to be seen if everything goes as per his plan or will MPs of UK bring in some kind of disruption or delay to the same.

UK Govt is claiming minimum disruption post BREXIT but not many are optimistic about it.
Possibility 1: Deadline to leave UK will be extended (most MPs prefer this)
Possibility 2: Some sort of deal will be secured just in time.
Possibility 3: UK manages to leave without a deal
Possibility 4: Fresh elections/Another referendum etc to decide future action

Tips to avoid BREXIT Impact

- Avoid planning a visit to UK/EU in near term- November/December if you can. Wait and watch how the BREXIT execution happens and its impact on airport waiting times, lifestyle and other aspects
- It is predicted that Pound (GBP) might lose some value. If you're hold on to lots of those in cash, might be good idea to convert to other currencies

- If you are expecting a more serious impact- like if you have a job in UK or a spouse of UK/EU nationality or so on, keep a plan for both hard and soft BREXITs

What are your thoughts?