An economic union is an economic integration arrangement under which countries engage in economic engagement by allowing free flow goods, services, capital and often people across the borders. The European Union (EU) is the highest level economic integration as an economic union. The EU had 28 members including Britain and it has been reduced to 27 with its exit. In the 59-year history of EU, no state has exited and Britain is the first. With Brexit vote, Britain is out of the European single market where goods, services, people and capital moves freely.
Economic implication on EU
The world’s largest economic union- the EU has to take Brexit as a no-confidence vote. Over the last few years, especially since the Greek crisis, people were questioning about the stability of an economic arrangement between countries that are in asymmetric development stages. Hence, the Brexit will give the EU an opportunity for consolidation by making necessary corrections.
Many experts believe that Britain’s exit from EU could encourage other nations to follow suit with referendums of their own. At least many developing countries in the bloc may demand more to stay in. in all these context, EU’s stability has been affected by Britain’s exit.