Economics Explained

The Economics of Brexit

Mar 28, 2023
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INSIGHT

Postwar Cooperation Reduced Conflict

  • Postwar Europe created supranational institutions to rebuild economies and reduce war risk through interdependence.
  • Economic cooperation replaced conflict by making states mutually dependent on trade and industry.
INSIGHT

Customs Union Shifted Trade Incentives

  • The EEC created a customs union that removed tariffs inside the club and placed uniform tariffs on outsiders.
  • This structure strongly incentivised intra-European trade and discouraged external suppliers.
INSIGHT

EU Gained Federal Features Without Being A State

  • The EU added a parliament and lawmaking powers beyond the EEC, making it closer to a federal entity.
  • It still differs from a nation-state in scope of enforcement, budgetary reach, and lack of head-of-state or standing military.
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