The term Brexit, coined by former lawyer Peter Wilding, is a blend of two words - "Britain" and "exit". He wrote about "Brexit" in May 2012. As the name suggests, the United Kingdom’s divorce with the European Union is known as Brexit.
What is the European Union?
The European Union (EU) is a grouping of 28 countries that trade and allow their citizens to move freely between nations to work and live. Initially, it was built on the ruins of World War II to end centuries of bloodshed and to integrate economic power.
How and why the UK ended up planning a divorce with the EU?
The UK joined the European Economic Community (a regional organisation that aimed to bring about economic integration among its member states) in 1973, which then became part of the European Union when it was created in 1993.
However, the UK always had always maintained a distance from the EU. It has its own currency - the pound sterling and refrained from joining the Schengen agreement, which removes internal border controls within the EU. The political fraternity in Britain always included people who were opposed to the idea of EU,and this opposition intensified after the 2008 financial crisis. Immigration of migrants from poorer EU states and the fear of refugees from Syria, Africa and the Middle East further intensified scepticism among voters and the politicians.
In 2012, the then-Prime Minister David Cameron promised to hold a referendum on whether the UK should remain in the EU or leave it. He kept his promise and the UK held the referendum on June 23, 2016. Soon after the result was announced, Cameron resigned.
Why hasn't Brexit happened yet?
Brexit was originally due to happen on March 29, 2019, two years after then Prime Minister Theresa May triggered Article 50 - the formal process to leave. But she had to push the deadline twice after MPs rejected her Brexit deal.
The deadlines continued to be extended even after Boris Johnson became the prime minister. The deadline now is January 2020.
Both Theresa May and Johnson have till now failed to win the approval of lawmakers for their Brexit deals, leading to extensions in deadlines.
This is basically due to differences among the MPs. Some lawmakers favour a "hard" Brexit where the UK withdraws from the EU customs union and single market that allows member states to act as a trading bloc, to pursue its own trade deals with other countries.
"Soft" Brexiteers want to maintain some trade ties with the EU. Some lawmakers are staunch 'remainers' and some believe the country should hold a second referendum.
Why would a no-deal Brexit be so bad?
If the European Union does not agree to the UK's terms, the country has the option of going for a no-deal Brexit. But, this has been avoided until now as it is expected to damage the economy.
For example, the EU will start carrying out checks on British goods, leading to delays at ports. This will cause disruption to supply routes and hurt the economy.
Why is Brexit such a big deal?
For Britain, Europe is the most important source of foreign investment and its membership in the EU has helped London cement its position as a global financial centre.
Threats from major businesses to leave Britain over Brexit have become quite frequent. According to government estimates, the country's economy would be four to nine per cent smaller under Brexit (subject to how it leaves the bloc). While a successful Brexit could be a boon for the working-class that sees immigration as a threat to their jobs, young Britons who dream of studying abroad are apprehensive.