The European Union (EU) has grown from 6 founding members in 1957 to 28 member states in 2016. The original aim of the EU was to prevent future conflict among its member states. To meet this aim, the EU holds the principles of free movement of goods, finance, and labor within the EU as core tenets to increase cohesion. The free movement of goods and finance has traditionally been widely accepted by member states due to the economic advantages associated with it. The free movement of labor has been less accepted by member states as EU migrants can live in other EU states indefinitely through EU citizenship. This lack of acceptance of the free movement of labor is most noticeable in the post-2004 period, particularly in the United Kingdom (UK).

In 2004, the largest and most contentious enlargement of the EU occurred, with 10 new member states joining the 15 existing member states. This enlargement was controversial, as the new members were from countries in Central and Eastern Europe (CEE) with significantly lower GDPs as compared to existing members. These countries include Hungary, Latvia, Lithuania, Czech Republic, Slovakia, Slovenia, Cyprus, Malta, Estonia, and Poland. Due to a lack of established social networks, language barriers, and the physical distance between the CEE countries and the UK, the British government anticipated 5,000 to 13,000 CEE migrants entering the country in the post-2004 period and opened its borders from the date of accession, May 1, 2004. In contrast, proximate countries, such as Germany and Austria, used EU transitional arrangements and opened their borders to CEE migrants in 2011.


Economist Brexit interactive poll tracker

From 2004 to 2011, over 1 million CEE migrants entered the UK, with approximately 70 percent of those migrants coming from Poland. As EU citizenship allows these migrants to stay in the UK indefinitely, the UK has sought to change policy regarding future EU enlargement periods. Bulgaria and Romania joined the EU in 2007, but their migrants were only able to enter the UK for work purposes in 2014. A similar arrangement has been enacted for Croatia, which entered the EU in 2013. Even with these policy changes, the British Government is constrained in “turning off the tap” of migrants from the EU due to the tenet of free movement of labor outlined above. As a result of the inability for the UK government to add more constraints to EU policy regarding migration as well as other matters as well as the general public’s concern over the economic impact of migrants, the UK has been questioning the need to be a part of the EU moving forward.

On June 23, the UK will hold a referendum to determine if it will stay in or leave the EU. Both the leavers, part of “The Out” camp, and the stayers, part of “The StrongerIn” camp, identify significant economic and social changes that will occur if the UK leaves the EU. These changes are outlined below.

Brexit TopicLeaver's ArgumentStayer's Argument
EU MigrationThe UK can only control migration—particularly from EU countries—when it leaves the EU. EU citizens would no longer be able to live in the UK indefinitely. Unauthorized migration will increase as border controls are moved, leaving the UK vulnerable. UK citizens living in the EU would no longer be able to live in the EU indefinitely.
TradeThe UK is safe with EU trade and therefore not concerned with capitalizing on emerging markets. Diversification of trade markets is key for future growth. 45 percent of all UK exports go to the EU, worth $329b (USD on 5/31). The UK imports $418b (USD on 5/31) from the EU. Trade would be taxed more substantially for existing agreements with member states in future.
JobsThe UK can incentivize investment through low corporation tax and other benefits to attract jobs. Approximately 3 million jobs in the UK are linked to the EU, meaning that business would be less likely to invest in the country if Brexit occurs.
FinanceLondon will remain a leading center for finance due to low tax rates and low regulations. Similar to the jobs argument, banks will leave the UK if they cannot benefit from the EU free movement tenets.

Sources: The Guardian 2016, The Telegraph 2016, The BBC 2016

The Data Team at the Economist has provided an interactive poll tracker that explains the polling numbers by UK country, age, gender, and political affiliation over time. Until the morning of June 24, projections of this kind on the future of the EU will have to suffice.