EU referendum: Everything you wanted to know about Brexit but were too afraid to ask

British voters head to the polls later today to decide if the country should stay in the European Union or leave it.

The stakes are high and the issues complex. This is how to make sense of it all.

WHAT IS THE EUROPEAN UNION?

West Germany, France and four other nations formed the European Economic Community in 1957, determined to banish forever the bloodshed of two world wars.

The grouping became the EU in 1993 and has grown into a 28-nation bloc of more than 500 million people stretching from Ireland to the Aegean Sea, with substantial powers over member states' laws, economies and social policies.

It has its own parliament, central bank and 19 EU members use a common currency, the euro.

WHY IS BRITAIN CONSIDERING LEAVING?

Britain joined the bloc in 1973, but many Britons feel their island nation - a former imperial power with strong ties to the United States - is fundamentally different to its European neighbours.

Anti-EU Britons resent everything from fishing quotas to fruit sizes being decided in Brussels.

A Black Cab driver holds a "vote leave" sticker out his window. Photo / Getty
A Black Cab driver holds a "vote leave" sticker out his window. Photo / Getty

The anti-EU view is especially strong in the Conservative Party of Prime Minister David Cameron.

It was partly to appease his party that Cameron promised to hold a referendum on EU membership by the end of 2017.

The prospect of Britain leaving the EU is known as "Brexit" - short for British exit.

WHY DO SOME BRITONS WANT TO STAY?

Watch: The Economy Hub Brexit Special

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Supporters say Britain's economy and security are enhanced by EU membership. They argue that membership makes it much easier for British companies both large and small to import and export goods to other member countries with minimum hassle. Supporters say being part of the 28-nation bloc gives them many more options and makes it easy for them to live and work in other countries.

Labour Party leaders also argue that European rules and regulations and European courts have improved the way British workers are treated. They say removing these protections could lower living standards.

Right now, Brits are bracing themselves for market mayhem and stockpiling Euros in case the value of the Pound suddenly drops.

WHAT ISSUES ARE SHAPING THE CAMPAIGN?

The "remain" - aka "Bremain" side - headed by the prime minister, argues that Britain's economy would suffer a tremendous blow if the country leaves the trading bloc.

This position has been backed by many prominent business leaders who warn of a possible catastrophe.

The "leave" side has focused on concerns about immigration from other parts of the EU since membership in the bloc gives residents of other countries the right to live and work in Britain. They argue that by leaving, Britain can take total control of its borders and set up its own entry rules.

EU leaders have refused to compromise on the EU principle that citizens may live and work freely in other member states. But they have offered Britain an "emergency brake" that will allow it to restrict social welfare benefit payments for a period if it can show its welfare system is under pressure.

WHAT HAPPENS NEXT?

The referendum's outcome is hard to predict, because there is little precedent - Britain hasn't had a referendum on Europe since 1975.

Opinion polls were notoriously inaccurate about Britain's 2015 election, and vary widely.

Some show a lead for the "remain" side, while others put "leave" ahead.

COULD IT IMPACT NEW ZEALAND IN ANY WAY?

Former National Prime Minister Jim Bolger told the Herald he was firmly in the Remain camp.

"In my view it would be a mistake of massive proportions for Britain to leave the EU. And the repercussions and reverberations would reach as far as New Zealand.

"If they vote 'out' on Friday morning our time, you will have the financial markets doing cartwheels immediately afterwards. I think it is in the interests not only of Britain but in the interests of a more stable world that they vote to stay in."

NZ First leader Winston Peters has argued that Britain leaving the EU (a "Brexit") would be an opportunity to reverse immigration restrictions on New Zealanders, given migration from Eastern Europe would probably decline.

Mr Bolger, Prime Minister from 1990 to 1997, didn't agree.

"The arguments to me are not based on economics, they are based centrally on xenophobia. And therefore I cannot see any pluses coming out of that for New Zealand."

The Leave arguments appealed to those with a "deep distrust, if not worse" for Brussels, Mr Bolger said.

"Most of that is based on the belief that we don't want people telling us what we should do. This is coming from a country that as an empire told most of the world what to do."

- news.com.au

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