Seduced by the siren song of isolation, Britons have opted out of the European Union, with “leave” prevailing in a 51.9-48.1 vote. The impact of the referendum is already being felt around the world — but this is only the beginning. No one knows what Brexit will mean to Britain, Europe and the wider world, but the omens are not good.
The United Kingdom has always been ambivalent about Europe. Historically, it has seen itself as separate from the continent, an offshore balancer that would prevent any single country from dominating that land mass and threatening Britain. It joined the European Economic Community, the precursor of the EU, in 1973 but never took full membership, maintaining the pound rather than adopting the euro, the EU’s common currency, and its own border controls, rather than embracing the Schengen border-free system.
Nevertheless, many Britons believed that the EU eroded their sovereignty, buried them in bureaucracy, cost them economic opportunities and threatened their safety and security with open borders and a flood of immigrants. Seeking to quell a noisy and fractious sentiment within his party and his country, British Prime Minister David Cameron announced three years ago he would call a referendum on British membership in the EU, a vote that was supposed to be an easy win for him and fellow supporters of the U.K.’s continued membership.
Instead, he now faces the prospect of going down in history as author of one of the greatest blunders in modern British history. Cameron has announced his resignation; he has said he will not begin the formal process of leaving the EU and leave it to his successor, whoever that will be. The Conservative Party is deeply split. The only certainty is that Cameron’s successor will reap the wind.
As signs of a Brexit win emerged, the pound plummeted, suffering its worst one-day loss ever on Friday, falling 10 percent against the dollar and reaching 1985 levels. The pound lost 14 percent against the yen and the euro fell to its lowest level since it was launched in 1999. Markets around the world plunged; economists reckon British companies lost $150 billion in value as the mere prospect of a leave vote materialized earlier in the month. That sell-off continues. The International Monetary Fund has forecast that Brexit will push Britain into recession within two years and the British Treasury has estimated that each household will lose an average of £4,300.
The survival of Great Britain itself may be at risk. With 62 percent of Scottish voters opting to remain in the EU, the disparity between it and Britain may force a second referendum on Scottish independence. Scottish First Minister Nicola Sturgeon said the vote “makes clear that the people of Scotland see their future as part of the European Union.” Meanwhile, the chairman of Sinn Fein, the largest nationalist party in Northern Ireland, said the British government had “forfeited any mandate” to represent Northern Ireland since 56 percent of the province’s voters wanted to remain in the EU.
Euroskeptic parties elsewhere in Europe have been heartened by the results. Like-minded politicians in France, Italy and the Netherlands have all demanded similar referendums in their own countries. That demand will be difficult to ignore.
Particularly worrisome for many British is the prospect of damage to relations with the United States. London has maintained a “special relationship” with Washington that reflects a similar cultural outlook, shared values and ideas, and a deeply intertwined history. While the EU vote does not change any of that, the Anglo-American alliance has also assumed that the U.K. would extend its influence into European councils, that it could speak for an ally and partner that had no vote in EU decisions. That is no longer true.
U.S. President Barack Obama warned the British that a decision to leave the EU would impact their economic relationship. The U.S. and the EU are negotiating the TransAtlantic Trade and Investment Partnership, a counterbalance to the Trans-Pacific Partnership. Obama cautioned that the complexity of such negotiations means that Britain would not “jump the queue” and become a priority negotiating partner if it left the EU. With a GDP more than three times that of the U.K., and a population eight times bigger, the EU will remain a more inviting target of U.S. intentions and energy.
That, however, is for the future. Now, Britain’s most immediate task is healing the internal rifts that intensified during the referendum campaign. The results of the vote reveal a country deeply divided by age, class and geography. The simplest, yet still accurate, assessment is of a nation that is profoundly suspicious of its political establishment and prepared to challenge many of its most deeply held beliefs. At their root, the forces behind Brexit are fears of loss — of autonomy and opportunity. Ironically, those fears have been triggered by the victory of ideas that Britain has championed for decades, if not centuries: globalization and openness. It is a warning to other nations and politicians who back those same concepts and are likely to face a similar backlash.
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