The war over whether the United Kingdom should remain part of the European Union is truly heating up, with both sides dragging out their most aggressive arguments. In many ways, this has become a “devil you know" debate.
Advocates for Britain staying in the EU point out that many of the issues the UK expressed the most concern over have been worked out to Britain's satisfaction. They assert that breaking away would be exceedingly risky and that data suggest such a break would cost upwards of 500,000 jobs and reduce 4% of GDP growth over the next three years. Supporters also suggest that price of houses would tumble by almost 19% and that dozens if not hundreds of businesses would have to close. Such references are the most panicked to date and a clear attempt to get the public in a state of high concern.
Those pushing for the exit are denying these figures accuracy. On the other hand, they have no more access to facts than those who remain committed to the EU. They assert that once British business is free from the meddling of the Europeans, it will surge and actually create more jobs. Exit supporters also scoff at the idea that EU countries will cease trading with the UK and underscore that Europe does plenty of business with non-EU countries such as the United States, Canada, Japan, China, India and so on. Why would be doing business with the UK after the Brexit be any different?
This is the challenge of economic analysis on such a subject. Who is to know what happens in the future? It is not as if the UK is declaring war on Europe and insisting that all trade relations cease. It is not as if the Europeans are going to punish the UK out of spite to their own detriment. The reality is that business people in both regions are motivated as they have always been. If they see money in the transaction, they will engage in it. There are many companies that have developed close ties to their suppliers and customers and will not allow the changed political environment to alter that very much.
--Chris Kuehl, Ph.D., NACM economist and co-founder of Armada Corporate Intelligence