What the Heck Happened in Britain? Here's a Brexit Explainer
In a stunning and historic move, citizens of the United Kingdom voted Thursday to leave the European Union—a decision colloquially dubbed the "Brexit"—making the U.K. the first country to voluntarily withdraw from the 28-member political and economic bloc.
The vote is seen as a referendum on globalization, combining the economic impact of EU trade regulations with the fearful refrain about immigration, which, for many pro-Brexiters, is bolstered by the Schengen visa agreement that allows those who have gained entry to an EU member state to move freely among other EU countries. Supporters of the Brexit cited the EU's onerous regulations, dissatisfaction with Britain's recovery after the 2008 recession and concerns over immigrant access to Britain's strained resources as their top reasons for leaving.
U.K. Prime Minister David Cameron announced the referendum earlier this year after promising members of his Conservative Party he would hold an "in-out" vote on the UK’s status in the EU if he won reelection. Leading up to the vote, polls suggested voters would likely stay in the EU, but in a huge upset Thursday night, "Leave the European Union" scored a narrow victory, 52 percent to 48 percent.
Friday morning, an emotional Cameron—who campaigned strongly against Britain’s withdrawal from the EU, despite initially calling for the referendum—announced his resignation as prime minister, saying he could not be the "captain to take the country to its next destination."
UK PM @David_Cameron says will step down by October after #Brexit vote https://t.co/xTLIvqj0un https://t.co/imuFvC9yaQ— The Times Of India (@The Times Of India)1466758638.0
Cameron said he and his cabinet will remain intact until a new prime minister is in place, and added that he hopes to have new leadership established by the Conservative Party conference in October.
“The British people have made a very clear decision to take a different path,” Cameron said in a statement. “And as such I think the country requires fresh leadership to take it in this direction.”
“We must now prepare for a negotiation with the European Union,” he added.
That negotiation will be carried out under Article 50 of the Treaty on European Union, the so-called exit clause that lays out the procedures the EU must follow if a member state decides to leave. While campaigning against Brexit, Cameron vowed to immediately trigger Article 50 if the British people determined to leave the EU, setting in motion the two-year negotiation process between Britain and the EU. But in his speech Friday, Cameron said “it is right the new prime minister takes the decision about when to trigger Article 50 and start the formal and legal process of leaving the EU.” The decision to enact Article 50 is solely the prime minister's.
In a joint statement from the president of the European Council and the president of the European Parliament, among other EU leaders, member states said they “regret” but “respect” the U.K.’s decision.
“We now expect the United Kingdom government to give effect to this decision of the British people as soon as possible, however painful that process may be,” the statement said. “Any delay would unnecessarily prolong uncertainty. We have rules to deal with this in an orderly way.”
“We stand ready to launch negotiations swiftly with the United Kingdom regarding the terms and conditions of its withdrawal from the European Union. Until this process of negotiations is over, the United Kingdom remains a member of the European Union, with all the rights and obligations that derive from this,” the statement added.
Those negotiations are complex, to say the least. A new trade deal between the EU and U.K. “requires unanimity and approval by more than 30 European, national and regional parliaments, possibly after national referendums,” the Financial Times reports. The EU could also explore a temporary trade deal similar to the one it shares with Norway, which is granted access to the EU’s internal market and follows around 20 percent of the EU’s laws.
The immediate economic impact of the Brexit vote sent shockwaves through the global market; the British pound decreased more than 11 percent, hitting a 31-year low against the dollar, while gold investments skyrocketed to a two-year high.
“It calls up memories of the worst days of the European political crisis around Greece,” Bo Christensen, chief analyst at Danske Invest, told the Wall Street Journal. Christensen expects a mild recession in the U.K. as a result of the Brexit vote.
“This decision could trigger an emotional rollercoaster right across Europe whose ultimate effects are impossible to predict,” former Irish Prime Minister John Bruton said. The priority for officials is to quell any economic fears that could trigger a bank run across Europe if other countries demand referenda on their membership to the EU.
What does #Brexit mean to the world economy? The Economist: It's grim. https://t.co/i1Q8mdhNd7— ProPublica (@ProPublica)1466778061.0
“This could be a new Lehman moment,” said Saker Nusseibeh, chief executive at HermÃ¨s Investment Management, referring to the U.S. financial services firm that underwent the largest bankruptcy filing in American history in 2008, intensifying the global financial crisis. “If other European countries start talking about referendums, all bets are off.”
The initial reaction to #Brexit looked a lot like the 2008 financial crisis https://t.co/0vhS2OnDB2 | Getty https://t.co/ay8qv7BOvR— POLITICO (@POLITICO)1466789646.0
Indeed, far-right leaders across Europe are already pushing for parallel votes on EU membership. The Dutch anti-immigration leader Geert Wilders told Dutch radio Friday he hoped the “historic” Brexit vote will incite calls for a Netherlands exit from the EU.
“I think it could also have huge consequences for the Netherlands and the rest of Europe,” Wilders said. “Now it’s our turn. I think the Dutch people must now be given the chance to have their say in a referendum.”
French National Front president Marine Le Pen said she was “very happy” with the vote.
“I would have voted for Brexit,” Le Pen said Friday. “France has a thousand more reasons to leave than the U.K. because we have the euro and Schengen [passport-free zone]."
"This result shows the EU is decaying, there are cracks everywhere,” she added.
Le Pen’s niece, rising nationalist figure Marion Le Pen (whom former GOP vice presidential contender Sarah Palin once called her “political crush”), also praised the decision, adding "the French should have the right to choose.”
The referendum renewed calls in Scotland for independence from Britain. Scottish voters rejected a 2014 referendum to secede from the U.K., but on Thursday, Scotland voted to remain in the EU, 62 percent to 38 percent.
Scotland's first minister, Nicola Sturgeon, said the disparity exposed a clear fault line between Scottish and English voters, insisting it is “democratically unacceptable” for Scotland to be taken out of the EU when voters overwhelmingly supported staying. London and Northern Ireland also voted to remain.
In his speech Friday, Cameron promised “there will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold.”
For Britain's greatest ally, the United States, the vote seemed to lend credence to the nationalistic talking points that have permeated the 2016 election. But President Obama, who argued against Brexit during his visit to the U.K. earlier this year, affirmed his support for the British people.
“The people of the United Kingdom have spoken, and we respect their decision,” Obama said in a statement Friday. “The special relationship between the United States and the United Kingdom is enduring, and the United Kingdom’s membership in NATO remains a vital cornerstone of U.S. foreign, security, and economic policy.”
Republican frontrunner Donald Trump, who is running on an anti-globalism, anti-immigration platform that is similar to the one that propelled Brexiters to victory, said the U.K. vote is a model for his campaign.
"People want to take their country back. They want to have independence in a sense. You see it with Europe, all over Europe," Trump said Friday.
"They've taken back their independence" -- Trump on #Brexit https://t.co/C3rzhFF4IF https://t.co/eVwBjMUNWI— CNN (@CNN)1466767812.0
“So I think you're going to have this happen more and more,” Trump continued. “I really believe that, and I think that it’s happening in the United States. It's happening by the fact that I've done so well in the polls.”
Indeed, the parallels between the policies supported by Brexiters and those esposed by Trump are striking.
As Howard Fineman of the Huffington Post noted, "The pro-Brexit vote in the U.K. is a cry of defiance by what’s left of that Anglo-American white tribal faith, and the decision to leave the European Union should send a shudder through those who think that Donald Trump is a xenophobic, racist nationalist with no chance to win the U.S. presidency."
For Britons, those perhaps most impacted by the Brexit vote are the people who wanted it the least (a trend paralleled in the United States as young voters overwhelmingly declare their hatred of Trump's nationalistic bloviating). An incredible majority of younger voters opted to stay in the EU. Among 18- to 24-year-olds, 75 percent voted to remain, according to a YouGov poll, as did a majority of voters aged 25 to 49.
66 percent of UK voters, aged 18-24, voted to remain in the EU https://t.co/5Nc7iuzL9t #Brexit https://t.co/nLQyaLrX1h— Roll Call (@Roll Call)1466790763.0
British Lib Dem leader Tim Farron criticized the Brexit generational divide. “Young people voted to remain by a considerable margin, but were outvoted,” he said. “They were voting for their future, yet it has been taken from them.”
If the U.K. is plagued by a case of buyer’s remorse, the Parliament could pass a motion instructing Cameron not to trigger Article 50 to avoid starting the separation clock. But in the absence of any such drastic measures by the U.K. government, Brexit is set to move forward.
Dear UK, good luck. I am afraid you are going to need it, love Neil.— Neil Gaiman (@Neil Gaiman)1466743399.0
"There are no good options, no turning back,” a senior EU diplomat told the Financial Times. “The best we can hope for is an amicable divorce and a long-term relationship that is constructive, as opposed to bitter and dysfunctional.”