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Britain Votes To Leave European Union, Cameron Resigns As Prime Minister

Brexit Puzzle Pieces

In an historic vote that will have widespread implications for the United Kingdom, the European Union, and the world for years to come, voters in Great Britain voted yesterday to leave the European Union, prompting Prime Minister David Cameron and one of his top lieutenants to announce their resignations in the wake of the defeat and setting into motion forces that could tear Europe, and perhaps even the U.K. itself apart:

LONDON — Britain has voted to leave the European Union, a historic decision sure to reshape the nation’s place in the world, rattle the Continent and rock political establishments throughout the West.

Not long after the vote tally was completed, Prime Minister David Cameron, who led the campaign to remain in the bloc, appeared in front of 10 Downing Street to announce that he planned to step down by October, saying the country deserved a leader committed to carrying out the will of the people.

The stunning turn of events was accompanied by a plunge in the financial markets, with the value of the British pound and stock prices in Asia plummeting.

The margin of victory startled even proponents of a British exit. The “Leave” campaign won by 52 percent to 48 percent. More than 17.4 million people voted in the referendum on Thursday to sever ties with the European Union, and about 16.1 million to remain in the bloc.

“I will do everything I can as prime minister to steady the ship over the coming weeks and months,” Mr. Cameron said. “But I do not think it would be right for me to try to be the captain that steers our country to its next destination.”

Despite opinion polls before the referendum that showed either side in a position to win, the outcome nonetheless stunned much of Britain, Europe and the trans-Atlantic alliance, highlighting the power of anti-elite, populist and nationalist sentiment at a time of economic and cultural dislocation.

“Dare to dream that the dawn is breaking on an independent United Kingdom,”Nigel Farage, the leader of the U.K. Independence Party, one of the primary forces behind the push for a referendum on leaving the European Union, told cheering supporters just after 4 a.m.

Chuka Umunna, a Labour lawmaker, called the vote “a seismic moment for our country.” Keith Vaz, another Labour legislator, said: “This is a crushing decision; this is a terrible day for Britain and a terrible day for Europe. In 1,000 years, I would never have believed that the British people would vote for this.”

In Berlin, the German foreign minister, Frank-Walter Steinmeier, called the news “truly sobering” and said, “It looks like a sad day for Europe and for Britain.”

Britain will become the first country to leave the 28-member bloc, which has been increasingly weighed down by its failures to deal fully with a succession of crises, from the financial collapse of 2008 to a resurgent Russia and the huge influx of migrants last year.

It was a remarkable victory for the country’s anti-Europe forces, which not long ago were considered to have little chance of prevailing.

Financial markets, which had been anticipating that Britain would vote to stay in, started plunging before the vote tally was complete, putting pressure on central banks and regulators to take steps to guard against a spread of the damage. Economists had predicted that a vote to leave the bloc could do substantial damage to the British economy.

Mr. Cameron had vowed before the vote to move quickly to begin the divorce process if Britain opted to leave. But he suggested on Friday that he would seek to calm the atmosphere before taking any action. In the meantime, nothing will change immediately on either side of the Channel, with existing trade and immigration rules remaining in place. The withdrawal process is expected to be complex and contentious, though under the bloc’s governing treaty it is effectively limited to two years.

For the European Union, the result is a disaster, raising questions about the direction, cohesion and future of a bloc built on liberal values and shared sovereignty that represents, with NATO, a vital component of Europe’s postwar structure

For the European Union, the result is a disaster, raising questions about the direction, cohesion and future of a bloc built on liberal values and shared sovereignty that represents, with NATO, a vital component of Europe’s postwar structure.

Britain is the second-largest economy after Germany in the European Union, a nuclear power with a seat on the United Nations Security Council, an advocate of free-market economics and a close ally of the United States.

The loss of Britain is an enormous blow to the credibility of a bloc already under pressure from slow growth, high unemployment, the migrant crisis, Greece’s debt woes and the conflict in Ukraine.

“The main impact will be massive disorder in the E.U. system for the next two years,” said Thierry de Montbrial, founder and executive chairman of the French Institute of International Relations. “There will be huge political transition costs, on how to solve the British exit, and the risk of a domino effect or bank run from other countries that think of leaving.”

Europe will have to “reorganize itself in a system of different degrees of association,” said Karl Kaiser, a Harvard professor and former director of the German Council on Foreign Relations. “Europe does have an interest in keeping Britain in the single market, if possible, and in an ad hoc security relationship.”

As I noted heading into the vote yesterday, the polling on Brexit had been so close in the final weeks of the campaign that it was hard to tell which side had the momentum. Two weeks ago, it looked as though the pendulum had swung decisively in favor of ‘Leave,’ for example, but then the murder of Labour MP Jo Cox, which was motivated at least in part by the same kind of nationalism driving the Brexit campaign, seemed to turn the tide in favor of ‘Remain,’ which had had a slight edge for months before public attention really started to pay attention to the race. In the end, though, the popular support for the arguments of the ‘Leave’, propelled by forces that had been in place for decades now proved to be too powerful.

As The Guardian’s Rowena Mason notes in her excellent write up of the forces that brought Great Britain and Europe to this momentous crossroads, Europeskepticism has been a part of British politics from the moment that the United Kingdom joined the common market in the early 1970s and only increased as the years went on. What started out as largely a movement among backbenchers eventually became a nationwide political movement that gained voice not only in entities such as Nigel Farage and UKIP but also a large swath of the Conservative Party and even some segments of the Labour Party. In part this was motivated by economic conditions and the belief that the U.K. was getting the raw end of a deal that was benefiting bankers and international financiers on one end, and the “sick” nations of Europe on the other, such as Greece, which better off European nations were constantly being asked to bail out. Added on top of that was the issue of immigration, which has become an especially hot topic in recent years due to the refugee crisis from war-torn parts of the Middle East and Northern Africa and the threats of terrorism that this has brought to Europe itself. Combined together, all of this apparently proved to be all too powerful for the more sober, less emotional arguments for remaining in the E.U. to rebut.

It will be years before the full implications of the Brexit and its economic consequences are known, but already one can see the beginnings in both the United Kingdom and Europe itself. Given that it comes just over a year after a masterful political triumph in the 2015 General Election, David Cameron’s decision to resign as head of the Conservative Party is perhaps the biggest initial political earthquake, but it’s hardly surprising. Cameron went all in on supporting the ‘Remain’ forces, as did most of the leadership of both major parties, and the fact that it lost is a decisive blow against him. Additionally, as Cameron noted in his remarks today, whomever is Prime Minister will be primarily responsible for negotiating the terms of Great Britain’s withdrawal from the E.U. and it would arguably be problematic to have that process headed by someone who had campaigned against the very idea of leaving the E.U. Cameron’s resignation sets up a battle for leadership of the Conservative Party, of course, and it’s widely expected that former London Mayor and current MP Boris Johnson, who was effectively the leader of the ‘Leave’ campaign, will throw his hat in the ring. Whether he has enough support in the party to pull off a win is an open question, though, as is the question of whether a post-Brexit Tory government would last until the next scheduled General Election in 2020. It’s also unclear how these results will impact the future of the Labour Party, which was also split between ‘Remain’ and ‘Leave’ as well as British politics in general, which were noticeably divided on this profound issue.

The bigger implications for the United Kingdom from this vote, though, are the question of just how united it will remain in the wake of the vote to leave the European Union. The best way to start that discussion is by looking at this map from The Telegraph, which shows how ‘Leave’ and ‘Remain’ fared around the United Kingdom, with blue representing areas where ‘Remain’ received the majority of the vote and red representing the areas where ‘Leave’ won:

Brexit Map

Majority support for leaving the European Union was, as this map shows, essentially nearly entirely an English phenomenon, although some pockets in that country, such as the area around London and other parts of the country that rely on international finance and international trade voting overwhelmingly for ‘Remain.” In Scotland and Northern Ireland, the story was completely different, with the majority of people in both regions voting to remain in the European Union, all of which is leading to speculation that the largely English decision to leave the E.U. could lead to the break-up of the United Kingdom itself. Already today, Nicola Sturgeon, the First Minister of Scotland and head of the Scottish National Party has said that her party will push for another Scottish Independence Referendum in the wake of the outcome of the Brexit vote. Given the popularity of the E.U. in Scotland and the promise of the SNP that it would immediately apply for EU membership if voters approve independence, it’s easy to see how the outcome of a second referendum could be quite different from the first. Across the Irish Sea in Northern Ireland, the Deputy First Minister of Northern Ireland reacted to the outcome of the Brexit vote by suggesting it was time to consider a referendum on the unification of all of Ireland. The only part of the United Kingdom that seems as though it will stay loyal is Wales, where voters largely supported leaving the European Union along with their English neighbors. It will likely take time, but it seems clear that the United Kingdom is likely to emerge from Brexit far less united than it is today.

Finally, the most lasting implication of the Brexit vote may be the extent to which it energizes anti-Europe forces in other nations. There are already signs that this is precisely what is happening, with leaders of nationalist parties in nation’s such as France and The Netherlands calling for similar referendums in their countries. It will likely be some time before that happens, but the fact that a nation like the United Kingdom is now going to start the process of leaving Europe suggests strongly that the entire E.U. experiment is about to be questioned in a way that it has not been until now. Whether the idea of a united Europe survives at all is entirely uncertain.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. C. Clavin says:

    What’s that noise???
    Oh…it’s trillions in investment value being sucked down the drain because just over half of the British electorate are xenophobes.
    Britain will go into recession, the EU will soon follow, and then perhaps the US, as well???
    Welcome to Trumps America.

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  2. Lit3Bolt says:

    I don’t know what to think, other than a polling referendum is a stupid way to make decisions of this magnitude for any country.

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  3. Jack says:

    Obama and Clinton on the wrong side of history. Who could have imagined?

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  4. EddieInCA says:

    @Jack:

    History is…. you know… History.

    It doesn’t happen overnight.

    Look at the world markets. I think Clinton and Obama will end up being on the right side of history.

    It’s a global carnage.

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  5. sam says:

    but the fact that a nation like the United Kingdom England (with maybe Wales) is now going to start the process of leaving Europe

    Judging from what I read in the Scottish press. Northern Ireland is going to have to make some hard choices, too.

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  6. Jack says:

    @EddieInCA:

    The “Brexit” vote is probably the most important vote in Great Britain since they chose Churchill as Prime Minister. Possibly the most important and consequential political event since the barons forced King John to sign the Magna Carta at Runnymede in 1215.

    The European Union started out 50 years ago as a simple economic common market, but the people who run it have slowly assumed more and more power and now it is effectively a dictatorship.

    Simply stated, it is a totalitarian government.

    In addition to the authoritarianism, the EU has numerous bureaucracies that have, and continue, to produce vast reams of regulations that micromanage every single aspect of life and business. Those regulations are strangling European competitiveness and business.

    About 10 years ago, no less than Mikhail Gorbachev said, “After we got rid of the Soviet Union in Russia not so long ago, why are Europeans trying to recreate it in Europe?”

    The answer, of course, is that this is the mentality of the Left everywhere: central government and central control, statism rather than individualism, huge bureaucracies that regulate every aspect of life, et al ad nauseum.

    The Brexit vote is over and England has chosen to leave the EU. With the result of this vote, the British people have decided they will live in a free democratic country with self-determination and leave what is effectively the Soviet States Of Europe with it’s attendant bureaucracy, inefficiency, one size fits all mentality, and authoritarian rulers.

    Good on you Britannia. It sucks to be ruled by people who refuse to listen to you in another land. But we already told you that in 1776

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  7. grumpy realist says:

    There’s already a half-serious “Independence for London!” movement.

    That’s the problem with secession movements–where does the splitting stop? Groups have a tendency to join together either due to identity or mutual interest (Germany didn’t seem to have a problem with its first sets of unifications). What the EU is dealing with is the fact that no one wants to join close enough to have a United States of Europe, but they do like at least SOME of the benefits from a close union.

    The problem is–you can’t have it both ways. You have a currency union, then you can’t use devaluation of your own currency to help balance your budget. You have no constraint on the movement of people, then you can’t complain when a bunch of Lithuanians show up next door.

    I think also people have discovered much more love for their national characteristics than they thought they would have. They don’t like this “blending together into a blah Eurocommunity”.

    So if the EU is intelligent, they will immediately go back and see if there’s a way to loosen the ties and impose some national boundaries again. Move stuff back away from Brussels back to the national countries. Think about what really needs to be done at the “Nation” level and what at the EU level.

    And let the Brits go without complaint or trying to keep them back. Like Kansas, we need at least one example of what happens when the belief is actually put into reality.

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  8. grumpy realist says:

    @Jack: P.S. I don’t know if you’ve noticed, but Russia seems to be trying to recreate the USSR. Ahem.

    And independence ain’t going to mean diddlely-squat when you discover you don’t have the weight to punch your way anywhere.

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  9. C. Clavin says:

    @Jack:
    On the wrong side of one un-imaginably stupid vote driven by ignorance and bigotry.
    History will prove this to be a fuck-up of massive proportions.
    Which explains your position.

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  10. Jack says:

    @grumpy realist:

    And independence ain’t going to mean diddlely-squat when you discover you don’t have the weight to punch your way anywhere.

    The UE needs Britain, not the other way around. There are already other nations contemplating leaving the EU now that Britain has left.

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  11. C. Clavin says:

    @Jack:
    On the wrong side of one un-imaginably stupid vote driven by abject ignorance, bigotry, hatred and fear. Welcome to Trump-world.
    History will prove this to be a fwck-up of massive proportions.
    Which explains your position, perfectly.

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  12. Jack says:

    @C. Clavin:

    Did you not read my earlier post? Can you read? Where do you see “abject ignorance, bigotry, hatred and fear”?

    The answer, of course, is that this is the mentality of the Left everywhere: central government and central control, statism rather than individualism, huge bureaucracies that regulate every aspect of life, et al ad nauseum.

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  13. EddieInCA says:

    https://twitter.com/AD7863/status/746250306242154497/photo/1

    From a young Brit, Jack.

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  14. C. Clavin says:

    @Jack: @Jack:

    Where do you see “abject ignorance, bigotry, hatred and fear”?

    Do you understand what the vote was about??? It was about xenophobia. Nothing more. It was a vote driven by ignorant fools just like you who are afraid of anyone who isn’t just exactly like them. You are all living in another world. And you will be left behind by the course of history…doomed by your ignorance.

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  15. Jack says:

    @EddieInCA: Awww, the poor snowflake. I feel so bad for him.

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  16. Jack says:

    @C. Clavin: The sky is falling! The sky is falling!

    I will now call you Chicken Little.

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  17. Modulo Myself says:

    @EddieInCA:

    I think people like Jack would gladly lock away the young. Part of the hatred of the ‘elite’ is hatred of twenty-somethings having experiences outside the horizon of failed middle-managers with 33 handguns and distorted prejudices concerning immigrants and everybody else.

    Brexit & Trump are the same thing: older shopkeeper types with diminishing economic influence terrified that their children will be okay in the new world, even if they aren’t raking it in.

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  18. SKI says:

    Don’t be so sure on Wales staying happy about Leaving.

    Wales gets more money from the EU than anyone else and they were “promised” that that would be maintained even after Leaving.

    It won’t be – in the same way that Farage is already saying that the claims – plastered everywhere by the Leave campaign that the UK should fully fund the NHS instead of sending £350Million/week to the EU was a “mistake”.

    Serious rumblings of remorse already. Wonder what the odds are that Article 50 never actually gets tripped – especially with Boris making comments in that direction?

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  19. Gavrilo says:

    I have to admit that I did not follow this issue at all. Before the murder of Jo Cox, I didn’t even know the vote was happening. I was going to do some research on the pros and cons of the “leave” and “remain” positions, but that’s so hard! So… XENOPHOBIA!!

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  20. Slugger says:

    Many of the largest enterprises that we call British are actually world-wide businesses. This includes BP, Glaxo, and AstraZeneca. On lists of biggest British companies, Shell is listed in the top five; I thought they were Dutch. How does all this impact the multinationals? Aren’t most important businesses multinationals these days? It is my impression that a lot of nationalism is not consonant with the realities of the international economy.

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  21. PJ says:

    @Gavrilo:
    Well, you could get informed. But then, why should you? You have never shown any interest in learning things before, so why change…

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  22. An Interested Party says:

    The sky is falling! The sky is falling!

    Actually, that would apply more to people who spout…

    …the mentality of the Left everywhere: central government and central control, statism rather than individualism, huge bureaucracies that regulate every aspect of life, et al ad nauseum.

    Ooooooooooo! Scary stuff! The Cold War is over, sweetie, do try to get over your fear of “the Left”…

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  23. grumpy realist says:

    @Jack: Oh come ON…..you’ve got a handful of loudmouth politicians in other countries in Europe making hay of the situation and you think this means that the EU is going to fly to pieces?!

    Britain has always had a streak of “no, we’re not like those guys over there on the Continent” and is now indulging its separation passion to the hilt. The fact that Scotland will probably split off from Britain so as to remain with the EU (ditto Northern Ireland) and London is making independence noises as well seems to have totally flown over your head.

    Have you noticed that Britain doesn’t “rule the waves” any more? That it doesn’t have its collection of colonies? That whatever oil is coming from the North Sea the Scots (if they chose to go for independence) have a better claim on than the Brits? That Rolls-Royce was sold to an Indian company a long time ago?

    Have you also noticed that the rest of the EU does not want to do Britain any favors at this moment? That they are saying all the protection stuff that was negotiated this February is now in light of this Brexit vote null and void? That they’re not waiting until a new Prime Minister is elected but they’re expecting Britain to get the rest of the “bye-bye” paperwork filed ASAP?

    I also suspect that financial London (the independence movement won’t go anywhere) will simply up its roots and move somewhere on the continent. Or maybe Edinburgh, if the Scots get their way. So bye-bye London as financial hub of Europe.

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  24. EddieInCA says:

    @grumpy realist:

    I also suspect that financial London (the independence movement won’t go anywhere) will simply up its roots and move somewhere on the continent. Or maybe Edinburgh, if the Scots get their way. So bye-bye London as financial hub of Europe.

    JP Morgan is already discussing leaving tor Paris.

    http://www.efinancialnews.com/story/2016-06-24/jp-morgan-moves-brexit

    BNP Paribas is also looking at relocation to Paris.

    This is a disaster for the UK. And the very people who voted to leave will be the ones most hurt.

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  25. C. Clavin says:

    @Jack:

    I will now call you Chicken Little.

    Yeah…given the way you cry about ISIS and Ebola…you should talk about anyone diaper-boy.

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  26. Todd says:

    @Jack:

    Obama and Clinton on the wrong side of history. Who could have imagined?

    How shocking, almost a word for word quote of the Breitbart headline.

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  27. Mu says:

    Minor correction, Rolls Royce is owned by BMW. You’re thinking of Rover that was sold to the Tata group.

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  28. HarvardLaw92 says:

    @Mu:

    Also Jaguar. Tata bought Land Rover and Jaguar. BMW owns Rolls and Mini. GM owns Vauxhall and Ford owns Ford. AFAIK there isn’t a British owned auto manufacturer left, other than possibly Morgan. Aston is mostly owned by an Italian investment bank.

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  29. Todd says:

    @EddieInCA:

    This is a disaster for the UK. And the very people who voted to leave will be the ones most hurt.

    That’s the real irony isn’t it. A U.K. recession will likely hit hardest exactly the people who voted for leaving.

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  30. gVOR08 says:

    @Modulo Myself: Balloon Juice shows a table on the Brexit vote by age:
    Age / Remain / Leave
    18-24 / 64 / 24
    25-49 / 45 / 39
    50-64 / 35 / 49
    65+ / 33 / 58
    The kids, who will have to live in it, aren’t afraid of the future.

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  31. HarvardLaw92 says:

    @gVOR08:

    Yet anyway. I suspect that they will be once things they thought they’d keep start changing / disappearing.

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  32. stonetools says:

    How does this f&*k-up happen?

    1. Impose an austerity program that chokes off social and infrastructure spending that will trickle down to the poorer sections of England.
    2. Ignore the problem of growing inequality.
    3. Pooh-pooh the the fears of the public about globalization and immigration.
    4. Hold a popular referendum on all of this.

    If you live in a bubble where you only read the Economist and the London Times, then, like Cameron, you think this referendum is a good bet. Guess Cameron should have spent more time listening to people from Yorkshire and Nottingham.
    I see Cameron is stepping down quickly and is moving to hand things over to Boris Johnson and the Conservatives who pushed for Brexit. Good. Let them own the mess they wanted.

    Talk about butterflies. Who would have thought that not intervening and letting the Syrian civil war burn would lead to Brexit?

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  33. Lit3Bolt says:

    @Todd:

    But the fact they got to flip off those snotty elites will make all those cold, hungry nights worthwhile.

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  34. EddieInCA says:

    What leverage does the UK now have in their negotiations with either the EU when it comes to trade?

    What leverage does the UK now have in their negotiations with the US when it comes to trade?

    Who needs the UK?

    I say this as someone who loves the UK, who lived in London for two years, who goes to London almost every year.

    Seriously, the old folks in England are hoping that it suddenly becomes 1950 again, but that ain’t gonna happen. Instead, they’ve voted to become Venezuela.

    They’re an ISLAND. What happens when they get screwed on trade deals? What happens when the world’s large banks decide to move to Paris or Brussels or Munich?

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  35. ptfe says:

    Some “wagers” for the near term:

    1. Northern Ireland will vote to be at least a nominally separate state from the rest of the UK, no longer fully tied to England. I’d guess the NI referendum happens near the end of the year, shortly after a new PM is selected, but it will definitely be done by next March. The separation period will take longer. (I won’t wager on whether NI and Ireland reunify; my gut says no, but my lack of intimate knowledge of that situation says not to put that in firm terms.)

    2. Scotland will agitate for another referendum, but the timeline isn’t right. They won’t get their vote and will stay (grudgingly) with the UK until official exit. (I actually think they’ll get their next referendum in 2018, and because the English economy will still be languishing, they’ll vote to leave.)

    3. England’s economy has entered a dangerous zone; the pound will dip under $1.20 (well below its recent low of $1.30 from 1985 and an exceedingly sharp drop) within 4 months. The typical dead cat bounce will actually be a partially rotted cat splat, since there will be no obvious good time to re-enter the British market in the next year (or more!).

    4. The EU will suffer a lesser decline, and the Euro will drop a little — let’s cap it at $1.04 just so there’s a line — over the next 3 months. It will re-stabilize around $1.08 within 6 months (that’s still a few percent lower than today) after the immediate consequences of this vote have worked through the system.

    Longer-term wager: The new conservative PM lasts no more than 2 years.

    Discuss!

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  36. Scott says:

    A minor prediction: When the UK economy heads south, inflation increases (because of the pound declining), and generalized economic disorder, there will be further scapegoats created to blame the results of this bad decision. Shadowy international bankers, Jews perhaps, Illluminati, etc.

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  37. grumpy realist says:

    @gVOR08: Which probably boils down to: the 65+ group HAVE their pensions and wee little homes and want to return to the England, dear old England of their childhood. The young ‘uns realize that they’re going to need the access to Europe to find jobs and it’s the network with Europe that is helping support the British economy.

    Sort of like how we have a bunch of sentimental idiots here in the US who want to return to the 1950s (Leave it to Beaver, I Dream of Jennie, etc). The fact that their 1950s is the image from TV shows and wasn’t real at all totally escapes them.

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  38. Scott F. says:

    @Jack:

    It’s the same myopia we see time and time again.

    “We don’t need union with the EU – they need us more than we need them!”

    “Wait, what do you mean the price of all the European goods I enjoy are going to cost more? What, my vacation to Spain just doubled in price? Why is it so hard to travel to France now?”

    “I thought this vote was to shove out the Poles and Latvians who took my job.”

    Coalition with other nations brings significant benefit, though we all should know that it requires compromises and compromises always feel like oppression to the small minded who can only see the inconveniences they have to deal with and wilfully ignore that they’re no longer left to do it all on their own.

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  39. HarvardLaw92 says:

    @ptfe:

    The pound just lost something like 11% of its value – AFAIK the single largest intraday drop in its history.

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  40. Jen says:

    The Financial Times had a piece a week or so ago that said this referendum isn’t legally binding–it’s direction from the public, but that Parliament actually has to vote to make the exit happen.

    The next few weeks will be telling. If the UK public suddenly gets a massive case of buyer’s remorse, would it be possible that Parliament says “thanks for the advice folks, but we’re staying in”?

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  41. Scott says:

    @HarvardLaw92: The sinking of the pound has both positive an negative implications. There will be inflation. On the other hand, exports may increase, and tourism will increase (a great time to visit the UK). How long it will take to reach equilibrium is the question. Will UK rebound like Iceland because of revaluation or will it go in another direction?

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  42. ptfe says:

    @HarvardLaw92: I’d seen last night that it dipped when it looked like the “Leave” side would win, but it was at $1.45+ as of 10 p.m. I was just now looking up the final tally. It dropped to $1.32 within hours of the results, and I expect it to just keep sliding.

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  43. HarvardLaw92 says:

    @Scott:

    The biggest problem that I see for the UK re this drop is its external debt. The country is carrying external debt somewhere around 550% of GDP, or around 9.5 trillion dollars. Servicing that debt is about to get a great deal more expensive. It’ll proportionally require a much larger slice of the British fisc, and that can’t help but be offset by massive cuts to those social programs the British populace almost certainly thinks they’ll get to keep, massive tax increases, increased borrowing or some combination of all of the above. I’m not seeing a win here for anyone – not in the UK and not in Europe.

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  44. HarvardLaw92 says:

    @ptfe:

    As do I. We haven’t reached the bottom of the slide, IMO.

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  45. Stormy Dragon says:

    The one thing that amuses me about this is that the US left on one hand is screaming about how only racist xenophobes would be in favor of Brexit while on the other hand arguing that all of US’s trade deals are plots by evil corporations to destroy the middle class.

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  46. ltmcdies says:

    @EddieInCA: that is the real irony….the voters with least wiggle room economically voted to leave.

    and they are the ones most likely wear this vote

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  47. Hal_10000 says:

    People are panicking. It’s not time to panic yet. There will be plenty of time for that later. I strongly suspect that, over the next two years, an agreement will put together that basically replicates much of the EU with more sovereignty for the UK. If that can happen fast enough, it might be enough to keep the union together, possibly, maybe, if they’re really lucky.

    I would shy away from the pat explanations of xenophobia. This was a lot more complicated than that. A lot of Labour bastions supported Leave (although most voted Remain) and, talking to Leave supporters, there were many more issues involved here.

    I wish we’d step into to create a US/UK common market. But I don’t think anyone in our political leadership has the skill for that.

    Also, another good example of why we should trust polls rather than “models” or “gut” when it comes to predicting elections. The polls have mostly been right in 2016.

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  48. Pch101 says:

    @Jen:

    For one thing, Parliament would have to repeal the European Communities Act of 1972. As it stands, there probably aren’t the votes to do that.

    It would seem obvious that it is not possible to comply with the Article 50 requirement of exiting the EU within a two-year timeframe. Article 50 was intended to make it difficult to leave, and the EU leadership is making it clear that it does not intend to facilitate a smooth transition for the sake of the Brits. Part of the motivation may be to force Parliament’s hand to reject result of the referendum, which is indeed non-binding.

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  49. grumpy realist says:

    And I’ve noticed that all the usual suspects (and some not so normal) are doing The Happy Dance over at TAC about this “having stuck it to the elites”.

    So much for conservatism as being “prudent and taking things slowly.” It looks like the american Conservative mentality has dwindled into nothing more than a belligerent “I’ll show those elites!” even if the action is a) stupid b) reactionary c) an obvious case of emotion over reason.

    Yeah, based on this mentality, Trump may win.

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  50. Jc says:

    UK just shot themselves in the foot. There is no easy way forward negotiation wise for trade. I read where the something like 50% of UK exports are to the EU and 10% imports come from the EU. That’s not good for their negotiations. The oldsters can pat themselves on the back and raise their pints, but in the long run it may be a foolish victory.

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  51. PJ says:

    @Hal_10000:

    People are panicking. It’s not time to panic yet. There will be plenty of time for that later. I strongly suspect that, over the next two years, an agreement will put together that basically replicates much of the EU with more sovereignty for the UK. If that can happen fast enough, it might be enough to keep the union together, possibly, maybe, if they’re really lucky.

    I would shy away from the pat explanations of xenophobia. This was a lot more complicated than that. A lot of Labour bastions supported Leave (although most voted Remain) and, talking to Leave supporters, there were many more issues involved here.

    I wish we’d step into to create a US/UK common market. But I don’t think anyone in our political leadership has the skill for that.

    Also, another good example of why we should trust polls rather than “models” or “gut” when it comes to predicting elections. The polls have mostly been right in 2016.

    The UK has/had a special agreement, it won’t get another. If it did, more would want to leave, it’s as simple as that.

    I find it more likely that the UK, or what’s left of it, will reconsider and want to rejoin the EU in the future, and when it does, the terms will be a lot worse than what it had.

    And that what happens to the UK will severely damper the support for leaving in other EU countries.

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  52. Jc says:

    @Hal_10000:

    I strongly suspect that, over the next two years, an agreement will put together that basically replicates much of the EU with more sovereignty for the UK.

    I would bet against this.

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  53. An Interested Party says:

    That’s the real irony isn’t it. A U.K. recession will likely hit hardest exactly the people who voted for leaving.

    In much the same way as middle and working class people voting for Republicans who implement policies that hurt those two groups that voted for them…

    The polls have mostly been right in 2016.

    Oops, bad news for the GOP…

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  54. PJ says:

    @Pch101:

    For one thing, Parliament would have to repeal the European Communities Act of 1972. As it stands, there probably aren’t the votes to do that.

    It would seem obvious that it is not possible to comply with the Article 50 requirement of exiting the EU within a two-year timeframe. Article 50 was intended to make it difficult to leave, and the EU leadership is making it clear that it does not intend to facilitate a smooth transition for the sake of the Brits. Part of the motivation may be to force Parliament’s hand to reject result of the referendum, which is indeed non-binding.

    It does seem that the EU wants to speed up Brexit:

    Mr Juncker went into crisis talks with European parliament president Martin Schulz, president of the European Council Donald Tusk and Dutch PM Mark Rutte on Friday morning.
    They then released a statement saying they regretted but respected the British decision.
    They called for the UK “to give effect to this decision of the British people as soon as possible, however painful that process may be. Any delay would unnecessarily prolong uncertainty”.
    They added that the deal agreed with Mr Cameron in February to protect London’s financial markets, curb immigration and opt out of closer union “ceases to exist” and “there will be no renegotiation”.

    While Boris Johnson wants to take it slow.

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  55. Jen says:

    @PJ:

    And then, there’s this:

    The majority of the UK’s 650 MPs are in favour of Britain staying in the EU and while they will have to respect the will of the British people, they will not be silent bystanders.

    There are already moves among the 450 or so MPs who want to stay in the EU, across the Labour, Conservative, SNP, Plaid Cymru and Green parties, to keep the UK in the single market in any exit negotiations.

    This would mean Britain would have to keep its borders open to EU workers and continue paying into EU coffers.

    I think we’re in for a bit of a bumpy ride. Buckle up…

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  56. Pch101 says:

    @PJ:

    Per The Guardian:

    Martin Schulz, the president of the European parliament, told the Guardian that EU lawyers were studying whether it was possible to speed up the triggering of article 50 of the Lisbon treaty – the untested procedure for leaving the union.

    As the EU’s institutions scrambled to respond to the bodyblow of Britain’s exit, Schulz said uncertainty was “the opposite of what we need”, adding that it was difficult to accept that “a whole continent is taken hostage because of an internal fight in the Tory party

    http://www.theguardian.com/politics/2016/jun/24/top-eu-leader-we-want-britain-out-as-soon-as-possible

    This is the conflict in a nutshell. Cameron promised to have this referendum as part of a campaign pledge in order avoiding losing Tory voters to the UKIP. Cameron didn’t want Brexit to happen, he was just trying to use a vote to pacify the populist voters within his party. (Sound familiar, Republicans?)

    So this vote was held for the benefit of one political party in Britain. Obviously, the EU would have preferred that there hadn’t been a vote in the first place.

    Now the Conservatives are stuck. They would prefer to take a passive-aggressive approach to this because they would like Brexit to either go away altogether or else become the basis for the negotiation of a third way, such as the sort of status that Norway has.

    The EU leadership sees no reasons to do any favors for the Tories when they were cause of the problem in the first place. Those leading the EU also have an incentive to discourage other EU members from doing something similar, so they have no reason to be nice about it.

    So at least for now, the EU is going to take a hard line with the full knowledge that it is the Tories that will suffer the brunt of the repercussions when Brexit falls apart. They may be more open to a third way later, but that certainly won’t be the case over the short run.

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  57. SenyorDave says:

    @Hal_10000: I wish we’d step into to create a US/UK common market. But I don’t think anyone in our political leadership has the skill for that.

    Given that the people of the UK just pulled out of what was by all accounts a pretty good deal, why would we (US) want to enter into such a deal? I don’t see much of an upside.

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  58. gVOR08 says:

    @Hal_10000:

    I wish we’d step into to create a US/UK common market. But I don’t think anyone in our political leadership has the skill for that.

    Why would we want to do that?

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  59. Rafer Janders says:

    @Hal_10000:

    I strongly suspect that, over the next two years, an agreement will put together that basically replicates much of the EU with more sovereignty for the UK.

    What on Earth would be the EU motivation to do that? It’s in their interest to punish not reward the English. There’s no more motivation to do them any favors.

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  60. C. Clavin says:

    @grumpy realist:

    american Conservative mentality

    There is no such thing as American Conservattism any longer.
    Republicanism is all that is left.

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  61. Hal_10000 says:

    @Rafer Janders:

    Because “punishing” the English punishes them as well. That’s how trade and commerce work.

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  62. PJ says:

    @Hal_10000:

    Because “punishing” the English punishes them as well. That’s how trade and commerce work.

    Not punishing the UK, and especially offering the country sweeter deals, would punish the EU more than if the EU punishes the UK for leaving.

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  63. Pch101 says:

    @Hal_10000:

    In the short run, the greater threat is that the UKIP et. al. inspire a deevolution movement across the continent. Containing the cancer will take greater priority, at least for now.

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  64. Tillman says:

    @Hal_10000: The strategy is pretty basic. Sure it will hurt the EU, but it most certainly will hurt Britain more. The EU figures it can weather the damage while Britain can’t, not with the precipitous drop in currency value and social unrest the referendum has caused. Even if the EU is in a weaker position than I imagine, they don’t have much choice. Either they give Britain good trade deals and establish precedent that leaving a weak supranational economic union is a fair bet, leading to further dissolution, or they punish them and drag everyone down with them, possibly leading to further dissolution.

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  65. Rafer Janders says:

    @Hal_10000:

    Because “punishing” the English punishes them as well. That’s how trade and commerce work.

    Britain negotiated many favorable trade, finance, and immigration deals over the last decades as a sweetener to keep the UK in the EU. With that incentive gone, there’s no more reason for the EU to give the English preferential treatment. Merely treating Britain as it treats every other non-EU trade partner will be punishment, as London will no longer gets its special deals.

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  66. HarvardLaw92 says:

    Any speculation on what Scotland and NI do going forward? I could easily see Scotland having another independence referendum. Sturgeon is already cranking up the rhetoric in that regard. NI I’m less sure of, but we could be looking at the beginning of the end of the UK as we know it.

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  67. MikeSJ says:

    I hope this doesn’t lead to a severe downturn in the economy of the U.K. Hopefully trade agreements that benefit both the EU and the UK can be kept up and running.

    Now if I had been a voter I’d clearly see the need to vote “Remain”. But despite my personal preferences I do think the E.U. made some tremendous mistakes.

    Allowing Greece into the E.U.? A debacle. The Greeks don’t pay taxes as a national sport and retire on full pensions at 50. Now what could go wrong with allowing them into the E.U.?

    Then crippling Greece with crackpot austerity programs to make matters even worse.

    Merkel’s insane decision to allow a flood of Middle Easterners and Africans to pour into Europe was the straw that broke the camels back. I suspect the Breaking Point ad that showed a tsunami of migrants tipped the average person into thinking “Dear God, make it stop”

    Again, I don’t agree with the vote to leave but I certainly understand the drivers behind it.

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  68. Jen says:

    @HarvardLaw92: I’ve already seen one NI politician say that the only logical thing for NI to do is to join Ireland. There’s simply no way, short of building a wall on the border, that trade, hiring, etc. doesn’t become a nightmare between Ireland/Northern Ireland.

    The timing on a possible Scottish referendum is probably the only thing up in the air at this point.

    What a mess.

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  69. grumpy realist says:

    @Jen: As I mention in the other thread, the Scots are PISSED at what’s happened. One of the ooga-booga-booga threats that Britain held over them when the last independence vote took place was “you secede, you’re going to get kicked out of the EU!”. Now that the Brits have voted for Brexit, the Scots aren’t happy at all, especially since they voted to remain. Hence I think we’re going to see a vote for the Scots coming up pretty quickly.

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  70. Just 'nutha ig'rant cracker says:

    On the other Brexit post here–the one where the discussion is too rarefied for the likes of jack–a post on the comment thread mentioned that the current PM of Northern Ireland has already announced that reuniting with the free state has to be evaluated as an option for the future. That’s already a step that no one would have considered taking a week ago.

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  71. Just 'nutha ig'rant cracker says:

    @gVOR08: I think Hal is wishing that it would happen because his tea leaves are telling him that the Conservative government won’t even last to the end of Brexit negotiations and he wishes that “socialists” in the US would come to the rescue.

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  72. JKB says:

    worth remembering that no European country has had an election/referendum explicitly pitting national vs EU where EU won. None.
    Austin Goolsbee

    Not exactly firm democratic grounds the EU stands upon.

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  73. PJ says:

    @JKB:

    worth remembering that no European country has had an election/referendum explicitly pitting national vs EU where EU won. None.
    Austin Goolsbee

    Not exactly firm democratic grounds the EU stands upon.

    I’m assuming the weasel word here is “explicitly”, because otherwise the man behind the tweet is quite uniformed.
    There have been a number of referendums on joining the EU. Ireland, Denmark, Austria, Finland, Sweden, Malta, Slovenia, Hungary, Lithuania, Slovakia, Poland, The Czech Republic, Estonia, Latvia, and Croatia have all voted yes to join the EU. Norway, on the other hand has voted no. Twice.

    There has also been a number of referendums on treaties, etc.

    Finally, the UK voted no to leaving in 1975.

    But would guess that Goolsbee has some issue with the wording of the questions.

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