Market Watch

What is Brexit and why does it matter?

Brexit basicsGetty Images
Brexit basics
The United Kingdom is due to leave the European Union at 2300 GMT on Oct. 31. Below is an explainer of the Brexit basics:
Brexit?Getty Images
A blend of "Britain" and "exit", the word was coined by former lawyer Peter Wilding four years before the vote for the UK to leave the EU took place. The EU, built on the ruins of World War Two to integrate economic power and end centuries of European bloodshed, is now a group of 28 countries which trade and allow their citizens to move between nations to live and work. In the June 23, 2016 referendum, 52 per cent of British voters backed leaving while 48 per cent voted to remain in the bloc. Prime Minister David Cameron, who called the referendum, resigned immediately afterwards.
Why is it taking so long to leave?Reuters
Why is it taking so long to leave?
The referendum was a simple yes or no vote. It left lawmakers to grapple with the mechanics of how to leave the EU in a country divided over everything from secession and immigration to capitalism and modern Britishness. In order to leave, the UK had to invoke Article 50 of the EU treaty, which outlines the steps for a member state to withdraw.
Why can’t UK lawmakers agree on a deal?Reuters
Why can’t UK lawmakers agree on a deal?
Parliament has to ratify the deal agreed by the government. But, 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. Some lawmakers are staunch remainers and some believe the country should hold a second referendum.
The Irish borderAP
The Irish border
A sticking point to parliament approving a deal has been the border between Northern Ireland, part of the UK, and Ireland, which remains part of the EU. Since the 1998 peace deal, which ended three decades of violence between Irish unionists and nationalists, free trade and movement of people between EU member states has meant there is virtually no border between Ireland and the UK. The so-called Irish backstop solution, vehemently opposed by the Conservative Party's allies, the Democratic Unionist Party (DUP), and hardline Brexiteers, has been replaced in the new deal Prime Minister Boris Johnson sealed with the EU this week.
What happens now?Agencies
What happens now?
Now it is up to UK lawmakers to approve Johnson's Brexit deal. Parliament sat on Oct. 19 - the first time it has convened on a Saturday since 1982 when it discussed the Argentine invasion of the Falkland Islands. Johnson, whose Conservative Party has no majority in the 650-seat House of Commons, will face a divided parliament where his opponents are trying to force both a delay to Brexit and another referendum. If approved, Johnson can proceed with his plan to leave the EU on Oct. 31. If rejected, he has said he will leave the EU without a deal on Oct. 31. But if he loses a vote on a deal and does not get approval for no-deal, he is required by law to write to the EU requesting more negotiating time, delaying Brexit until Jan. 31 2020.
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