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'Brexit' Vote: Why Britain Could Quit E.U. and Why America Cares

Obama Takes Sides, Tells U.K. To Stay in European Union 1:59

Britain will vote on whether to leave the European Union in a national referendum on June 23 that President Barack Obama said is a decision "of deep interest to the United States."

The "Brexit" debate has divided Britons, who are split on whether the strategic benefits of bloc membership outweigh the costly bureaucracy and erosion of national sovereignty.

Obama spoke out during his visit to London over the weekend, urging British voters to remain in the EU because its economic growth and counter-terrorism efforts will be "far more effective" with the U.K. as a member. But that intervention earned him a rebuke from some senior figures, including the mayor of London who said the president's position was "perverse."

Here's what you need to know about "Brexit."

What is at stake?

In short, the future of Europe and the global order. Britain is the EU's second-largest economy, has a powerful military and exerts outsize influence in global affairs; it would be difficult to interpret "Brexit" as anything other than abandonment of the EU by one of its most important members.

Image: Barack Obama in London on April 23, 2016
President Barack Obama answers questions from members of the audience at an event in London on Saturday. JUSTIN TALLIS / AFP - Getty Images

Some predict a domino effect as other EU members consider their own departures, while other members fear that an EU without Britain would be economically dominated by Germany. Another structural crisis is the last thing Europe needs amid the biggest refugee crisis since World War Two, intractable economic woes and a nebulous security threat from international terrorism.

Why does it matter for the United States?

The United States advocates a strong, stable Europe. Even a smooth "Brexit" would see Washington building a new relationship with both Britain and a Britain-free remainder of the EU. However, some observers fear the rump EU could begin to unravel, weakening America's allies and bringing instability.

Despite a weakened "special relationship" between Washington and London, Britain remains America's primary transatlantic military ally and its role in Europe is strategically important to the U.S.

Why is this happening now?

British Prime Minister David Cameron is fulfilling an election promise to negotiate a better deal for his country in the European Union and to put the new terms to a national vote. It was an act of political expediency aimed at uniting two factions within of his Conservative party, which for decades has been bitterly divided over the issue of Europe.

Image: British Prime Minister David Cameron
British Prime Minister David Cameron launches the "In" campaign to keep Britain from quitting the European Union. Alex B. Huckle / Getty Images

An uptick in immigration and a long period of austerity have eroded British enthusiasm for the EU.

The trading bloc is arguably the modern world's first attempt at creating a "superstate" — a collection of nations that have agreed to give up meaningful aspects of their sovereignty in exchange for greater collective security and economic development.

A series of treaties have given courts and politicians in Brussels the power to change national laws and bring them in line with European standards. Up to 55 percent of Britain's laws and regulations are now set by Europe.

This forfeiture of national authority lies at the root of concern among many British voters.

How could it affect the U.S. election?

A perceived dissolution of the European Union would reinforce the isolationist views of many conservative Americans on the right. Politicians like Donald Trump would likely pounce on a "Brexit" as a reinforcement of the worldview he has championed on the campaign trail — that Europe is weak and its institutions are unable to cope with the realities of the modern age, and that border controls, protectionist trade policies and a reassertion of national sovereignty are essential to deal with the chaos of the outside world.

Meanwhile, internationalists — who in American politics are generally on the left, although there are pockets on the right as well — could only view this as a discouraging development.

Isn't Britain already separate from Europe?

Britain has long had a love-hate relationship with the E.U. While it has supported the European bloc at key moments of its development, it has also kept the project at arm's length in major areas and has negotiated the most opt-outs of any member state. In particular, it is a member of neither the euro currency zone — it retains the pound sterling — nor the border-free Schengen zone that allows travel without a passport.

Who are the key players?

David Cameron, the British prime minister

Cameron went to Brussels in early February to renegotiate the terms of British membership in the EU. He secured some concessions including a cap on government welfare payments to migrants from other EU countries and a guarantee that London's financial industry would escape tighter bloc-wide regulations.

"We will be safer, we will be stronger, and we will be better off inside the EU," he said after reaching a deal with his counterparts — a mantra he will repeat until the referendum takes place.

Iain Duncan Smith, former U.K. Work and Pensions Secretary

A stalwart and former leader of the Conservative Party, Smith holds a big influence. He quit his ministerial job last month, giving him further freedom to campaign against the EU. "The big issue is around control of our borders," he told the BBC. Long a Eurosceptic, he has highlighted the EU's open borders and the Nov. 13 terror attacks in Paris.

Boris Johnson, the mayor of London

London is the financial capital of Europe, and as mayor of the sprawling metropolis Johnson must take into account the large and influential constituency of bankers and brokers there.

FROM FEB. 22: How Could London's Mayor Trigger a Run on the Pound? 1:25

Many banks are unhappy with the degree of regulatory control exerted by the EU over their activities, and this dissatisfaction has found a voice in the New York-born Johnson, popularly known simply as "Boris."

That Boris has joined the "Out" camp is a big blow to Cameron, his rival and one-time Oxford University friend.

He led an outcry at Obama's intervention in the "Brexit" debate, describing the president's comments as "incoherent" and "downright hypocritical."

"The Americans would never contemplate anything like the EU, for themselves or for their neighbors in their own hemisphere," he wrote. "Why should they think it right for us?"

Image: Britain's newspaper The Sun reported Obama's Brexit intervention under the headline "BARACKMAIL."
Britain's newspaper The Sun reported Obama's Brexit intervention under the headline "BARACKMAIL." Alastair Jamieson / NBC News

His sentiments were echoed in conservative newspapers during Obama's visit to London. "BARACK TURNS BULLY BOY," ran a headline in the conservative Daily Mail. The Murdoch-owned tabloid, The Sun, ran its coverage under the headline "BARACKMAIL."

Jeremy Corbyn, Labour Party leader

Often compared to Bernie Sanders, Corbyn's left-leaning leadership and grassroots support gives him an important influence over the vote. He supports the "Remain" campaign, saying the EU offers protection of workers' rights. However, other left-wingers view the EU as a capitalist project whose free trade has damaged Britain's blue-collar workers.

Nigel Farage, the UK Independence Party leader

UKIP was founded to campaign for Britain's withdrawal from Europe and secured 12.6 percent of the vote in the 2015 general election (but only one member of parliament under Britain's constituency-based first-past-the-post electoral system). Its folksy leader has become a popular spokesman for immigration-weary Britons, particularly those who fear the impact of the influx of migrant labor.

Image: Nigel Farage
Nigel Farage, leader of the United Kingdom Independence Party, on Feb. 18. YVES HERMAN / Reuters

The party has managed to get lawmakers elected to the European parliament, railing against Brussels bureaucracy from within the heart of the EU project. However, it remains a marginal force whose reputation as a home for far-right supporters with rabid anti-immigration views has been a double-edged sword.

Who will win the referendum?

Opinion is almost evenly split, but as of Apr. 17 — before Obama's intervention — a Financial Times poll tracker indicates support for "In" averages 44 percent against 42 percent for "Out." With 14 percent undecided, it means both campaigns have all to play for and the result could be uncomfortably close for Cameron.

What happens next?

The referendum will take place on June 23. Voters will be asked: "Should the United Kingdom remain a member of the European Union or leave the European Union?" They will tick a box against either "Remain a member of the European Union" or "Leave the European Union." The result will be decided by a simple majority, based on total votes.

A "Brexit" will be uncharted territory as no nation state has ever left the EU — although Greenland, an overseas territory of Denmark, left in 1982.

A contentious issue in the campaign will be trade deals. "Out" campaigners say Britain could easily trade with the likes of the U.S. on its own terms. However, Obama specifically warned that Britain would "go to the back of queue" behind EU member states in negotiating new trade deals if it voted to quit.

Image: A pro-"Brexit" campaigner
A pro-"Brexit" campaigner smiles at a public meeting in London on Feb. 19. NIKLAS HALLE'N / AFP - Getty Images

The history of the EU

There have been numerous attempts to create workable institutions that superseded national interests. The first serious attempt came in the wake of World War I. That bloody conflict reinforced the view among internationalists of the day that a binding pact among the nations of the world was necessary to maintain peace and stability. This resulted in the League of Nations, which died an unhappy death amid the rise of militant nationalist regimes in Europe and Asia in the 1930s.

The next serious attempt came at the end of the most disastrous conflict in human history, the Second World War. The United Nations was founded in 1945. Despite serious flaws in its conception — it was largely designed as a vehicle for maintaining the postwar geopolitical order — it continues chugging along. The UN has evolved into a sprawling bureaucracy with a lot of "soft influence," but no hard power. Lacking in mechanisms for enforcement should any of its five permanent security council members disagree with the others, the UN has proven unable to carry out its primary function: stopping conflicts.

Enter the most recent attempt to shift power away from the nation state, the European Union. The EU has its roots in the Cold War, when Europe was dominated by the nuclear superpowers of the late 20th century, the United States and the Soviet Union. With the horrors of the Second World War still fresh in their minds, a collection of European intellectuals and politicians fought for the creation of an organization that transcended the ethno-nationalist rivalries, which had led to so much bloodshed.