Britain has been a key member of the European Union (EU) since 1993. But 13 years later, that may end. 

On June 23, a referendum will decide whether Britain stays in the EU or exits, also known as Brexit. Proponents of a Brexit say that the EU has undermined Britain's sovereignty and failed to boost the country's economy. They fear that the country's economy could be dragged down by problems such as the massive debt and high unemployment rates that have afflicted Greece, Spain, and to a lesser degree, Italy, in recent years. There a also concerns that looser border controls have made it easier for terrorists. 

Those who oppose a Brexit say that the EU has fostered better relations with the other 27 member countries and offers multiple trade benefits. They dismiss the concerns of Brexit advocates about sovereignty and security. European leaders have largely criticized a Brexit. They believe it will undermine unity in a period of political and economic volatility. More than half of British trade is with the EU.

Christine Lagarde, chair of the International Monetary Fund recently said that the Brexit consequences may range from "bad to very, very bad."

The debate underscores Great Britain's sometimes mixed feelings toward the European continent. Still, recent polls have found the majority of voters inclined to remain in the EU

 The European Union was created in 1993 to improve economic and political ties throughout much of Europe. Among its major features, it standardized certain laws throughout EU countries and abolished passport controls among member nations. Six years later, the euro became the official currency of the EU, although Great Britain continued to use the pound. 

Here is a look at some things that might happen if there was a Brexit and if Great Britain remained in the EU. 

Leave the EU

If Great Britain leaves the EU, then it would be free from EU regulations. Proponents of Brexit say that will give it more control over its economy. They say that the Britain would have more opportunities to trade outside the EU and could establish more favorable trade terms with EU countries. It would be able to negotiate deals as an independent nation. 

Leave campaigners say the country would be in a better position to create more jobs and build a number of industries. They say a Brexit would save on costs associated with EU membership. In 2015, the UK's net contribution to the EU was estimated at about £8.5 billion.

Remain campaigners argue that Brexit would prompt other EU members to rethink their own membership and could lead to the dissolution of the EU. That would create economic unrest and upset global markets. British citizens who have been able to work in other countries without permits or visas would face that requirement again. 

They would also lose certain protections and benefits from EU employment laws and social protections. In an article for the The Telegraph, Prime Minister David Cameron, and Chancellor of the Exchequer George Osborne said that leaving the EU would put the UK at risk of a "DIY recession" for the first time since the Second World War.

Those who favor remaining in the EU say that a Brexit would reduce trade and cost the EU three to four million jobs. But the Institute of Economic Affairs, a London-based think tank, says "There is no evidence to suggest that trade would substantially reduce between British businesses and European consumers, even if the UK was outside the EU."

An IMF report highlights that investment in key areas like real estate could be negatively impacted, which could affect Britain's current account deficit. While the immediate effect would be on domestic markets, the contagion could spread to global markets too. But according to Moody's first-time homebuyers in the UK might benefit from a Brexit. The leading credit rating agency also said that if there were a Brexit, the operational and business impact would be "manageable for most rate asset managers."

Remain in the EU

Not everything will remain exactly the same if Great Britain remains in the EU. Earlier this year, Cameron announced that he had reached an agreement with EU leaders that will give his country special status. The deal, which would go into effect if the Brexit is voted down, addresses some of EU critics' concerns. 

Among the high points:

  • Great Britain's financial services industry will receive safeguards from EU regulations. 
  • Caps on benefits payments to the children of immigrant workers, and at least initially on tax credits and welfare that low-paid workers coming from other EU countries have been receiving. Under the new rules, these workers will have to spend some time in the UK to be eligible for these payments. The longer they stay, the more benefits they can receive. 
  • The pound remains the country's currency. 
  • A change to the EU treaty will say that Great Britain is not part of any effort to create an even closer union.
  • A so-called red card clause will make it easier to block legislation. If 55% of countries' object to a law, it will have to be reconsidered. 

Critics of the agreement say that it does not go far enough. 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.