We thought we would take a closer a look at the implications for expats of the leave vote…
With 1.3 million expat Brits residing in Europe, interest in the referendum is sky high. A vote to leave the EU could have profound implications on all aspects of life for Brits on the continent. The following is a complete run down on the potential consequences of a Brexit.
What is the most likely model for a post Brexit EU?
There are five possible models the UK could adopt should the British leave according to the Global Counsel. They say the following: “The Norwegian model would involve membership of the European Economic Area but would not give the UK the flexibility to justify a Brexit. In contrast a looser model where the UK trades with the EU on a most-favoured nation basis would provide flexibility but would jeopardise trade and investment. The most likely models are a Swiss style series of bilateral accords governing access to specific sectors of the single market or a comprehensive FTA. Both would require extensive negotiations along with compromises and sizeable costs.”
Healthcare
Currently expats over the state pension age living in Europe are allowed to access free healthcare. A leave vote could potentially put this perk of EU membership in jeopardy, forcing expats to pay for their treatment or take out health insurance. Both of these options would come at a significant cost.
However if Britain decides to remain in the European Economic Area (EEA) after leaving the EU, it is likely that very little will change for expats. Currently Britain pays EEA countries to cover British nationals. In 2014/15 according to the Daily Telegraph Britain paid £674 million to cover British nationals healthcare but received £49 million in the same year for the treatment of UK nationals. If countries decided to end this arrangement, it would give the UK reason to do the same to EU nationals living in the UK, thereby ending their right to free healthcare.
Pensions
Currently British citizens who choose to retire abroad are not entitled to yearly state pension increases unless there is a reciprocal agreement in place. This agreement is only in place for countries that were part of the EU before 1981. It means that for retirees in the newer additions to the EU, such as Eastern Europe and Spain could see their pensions frozen in the event of a leave vote.
Employment
Citizens in the EU currently have the right to work and the right to set up a business anywhere in the EU. In the event of a leave vote, British nationals looking to work abroad in Europe may be forced to apply for work permits depending on the agreement reached.
Property
According to the United Nation’s Universal Declaration of Human Rights and the European Convention on Human Rights, Europe will still have to respect individual property rights after a Brexit. However after a leave vote it remains unclear how countries will approach property issues. Countries could decide to make things harder for Brits in the way of increased taxes or other hostile measures. On the other hand some will argue that it will be in countries interests to act friendly to property owners after a Brexit. In Spain for example, British property owners are good for the economy as they help stimulate the construction industry.
Residency
Current EU rules allow freedom of movement across the EU area. Leaving the EU could put that in jeopardy if Britain also chooses to leave the EEA. If however, Britain decides to remain in the European Economic Area like Switzerland and Norway, then freedom of movement will still apply.
Value of the Pound
The Pound has already lost value on the back of uncertainty over the referendum. A leave vote would likely see the Pound fall further. This would be bad news for expats whose main source of income comes from the UK (as would be the case for pensioners) as their spending power would be greatly reduced.
What are people saying about the Brexit implications?
A whole raft of senior politicians and policy chiefs have expressed their opinion on the EU referendum. Here is a selection of their views:
Angela Merkel, German Chancellor: Countries outside the European Union “will never get a really good result in negotiations”
“We work well together with the UK particularly when we talk about new rules for the EU. We have to develop those together with the UK and whenever we negotiate that, you can much better have an influence on the debate when you sit at the bargaining table and you can give input to those negotiations and the result will then invariably be better rather than being outside of the room.”
Photo: 350b/Shutterstock.com
Donald Tusk, European Council President: “Every single one of the 27 member states as well as the European parliament would have to approve the overall result. That would take at least five years, and i’m afraid, without any guarantee of success.”
Wolfgang Schauble, German finance minister: “I hope and believe that the British will ultimately decide against Brexit. The withdrawl of Britain would be a heavy loss for Europe.”
Francois Hollande, French President: “Economically, it would be bad news, bad news for the United Kingdom, as well as the world, not just Europe.”
“There will be consequences if the UK is to leave the EU, there will be consequences in many areas, in the single market, in the financial trade, in development, in the economic development between two countries.”
Photo:Frederic Legrand – Comeo/ Shutterstock.com
Mariano Rajoy, Spanish Prime Minister: “It seems to me that if the United Kingdom leaves the European Union, it would be negative for everybody, for the United Kingdom, for Spain, and for the European Union. But, above all, it would be very negative for British citizens: the European Union is based, ever since its foundation, on the principles of freedom of movement of people, goods, services and capitals.”
“Leaving the European Union would mean that British citizens would lose their right to move freely, work and do business within the largest economic area, the largest market in the world.”
Boris Johnson, leave campaigner: “Think what we can achieve if we vote Leave. We can take back control of huge sums of money – £10.6 billion net per year – and spend it on our priorities. We can take back control of our borders, and install an Australian style points system that is fair both to people coming from the EU and from non-EU countries. “
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The UK’s EU membership referendum takes place on Thursday 23rd June. To help voters on the key issues, The British Government has set up a website.
While not all expats are entitled to vote in the referendum, many others will. Find out how they are likely to vote at our EU referendum blog.
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