Business Issues in the Contemporary World

Business Issues in the
Contemporary World

INTRODUCTION
BREXIT is comprehensively defines as the separation of UK from European Union. In
addition to this, it can also be said to be the decision undertaken by Britain to exit from the
collaborative group of countries known as European Union (Goodwin and Heath, 2016). On 23rd
of June in the year 2016, a referendum was passed whereby majority of the members voted in the
favour of Britain leaving EU. This decision taken by the majority of countries that are parts of
the union had since then had severe impacts over the economy along with businesses functioning
within its confines. The current project seeks to explore the concept of BREXIT along with its
impact over the economy of UK. Along with this, it also includes the brief history of EU
(European Union). In addition to this, the challenges encountered by United Kingdom being a
participant of the European Union are also covered.
MAIN BODY
Brief history of European Union
The European Union can be defined as the political along with economic community or
union composed of different member countries. In specific context, it can be stated that there are
27 member nations that are a part of the European Union (EU). These member countries have
been acknowledged to be Austria, Croatia, Denmark, France, Germany, Ireland, Sweden and 20
other nations (Menon and Salter, 2016). EU is effective in elimination of control of border
amidst the participants of this collaboration. This implies that there have had been no restrictions
associated with trade between the members of the union. Free flow of goods and services take
place since the formation of EU between the participants of the European Union. However, trade
restrictions still prevail in the case of drugs which can not be exchanged from one country to
another belonging to the European Union (Evans and Menon, 2017).
It has been recognised that the notion of the European Union was first stipulated during
the year 1951. The sole purpose of creating the union was to ensure positive and beneficial
collaboration of the countries (Kierzenkowski and et. al., 2016). The EU was initially composed
of 6 member countries named Belgium, France, Italy, Germany, Luxembourg and Netherlands. It
is well known that the union was developed by visionaries who came together with the aim to
derive economic and political benefits for all the members. A monetary union was developed in
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the year 1999 that fully came into force during 2002. This was composed of 19 member
countries that took into use the euro currency.
The European Union and European citizenship were known to be created in an instance
whereby the Maastricht Treaty came into force during the year 1993 (Hobolt, 2016). It is further
acknowledged that the origins of the European Union can be traced back to the European Coal
and Steel Community and the European Economic Community.
With the passage of time, the number of members increased constantly with the sole view
of ensuring economic and political benefits for all the members. The free flow of goods and
services inflated the monetary benefits for all the 28 countries that were the part of the European
Union. However, on 31st of Jan in the year 2020, Britain became the very first participant to exit
the European Union. Post the referendum of 2016, the United Kingdom demonstrated its intent
to exit and thereby negotiate the withdrawal agreement (Colantone and Stanig, 2018). United
Kingdom is presently found to be in a transitional stage until 31st of Dec 2020 at least, till the
time which the country remains member of the European Union single market and customs
union, while being subjected to European Union laws. Prior to this, 3 regions of member
countries had already left the union, being acknowledged as French Algeria during the year 1962
upon independence, Greenland during the year 1985 by way of a referendum and Saint
Barthélemy during the year 2012.
Challenges facing the UK as a member of the European Union.
Many challenges have been encountered by United Kingdom being a member state of
EU. These challenges somewhere may have been the reason behind Britain demonstrating the
intention to get separated from the European Union. In this relation, some of these challenges are
briefly discussed as follows:-
Cost – EU charges a large sum of money for the membership. In this relation, it is
ascertained that the cost of entering into the European Union is gross £15b. This is equivalent to
the 0.06% of the total Gross Domestic Product (Disadvantages of EU Membership, 2020). Thus,
it can be seen that cost of membership for United Kingdom is quite high, severely impacting
upon the growth and development prospects of the country. Thus, cost is ascertained to be the
most prominent challenge faced by the UK due to EU membership.
Extensive bureaucracy lesser democracy – The concept of bureaucracy in relation to
the European Union can be referred to as the state whereby the functioning of every member
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