It’s been a long day without EU, my friend
On July 4, 1776, America gave England arguably the best breakup letter ever written. Two hundred and forty years later, England just divorced the European Union in a much less bloody manner.
In a 52 to 48 vote, the United Kingdom decided to cancel its membership with the EU. While England and Wales both backed leaving the EU, Scotland and Northern Ireland strongly disagreed through their vote counts. More than 30 million people turned out to cast their votes, making it the UK’s highest voting turnout in almost 25 years.
Numerous events have followed the unprecedented decision, each with its own cause-and-effect chain. Though some factors are still up for debate, others cannot be disputed.
First, the ignorance displayed through the UK’s Google searches both before and after the vote demonstrates how politically unaware many members of society really are. Before voting, the top searches on the referendum included questions like, “What is the EU referendum?” and “Where can I vote?” The top searches on the EU were even more disappointing: “Why should we leave/stay in the EU?” and “Which countries are in the EU?”
At least some voters were making attempts to understand what exactly they were voting on, which is more than can be said of other voters. Following the official vote, the top two searches were, as reported by Google Trends, “What does it mean to leave the EU?” and “What is the EU?” How can a country where 30 million voters just made the biggest decision since World War II not know what the EU is?
Sidebar: In case you don’t know what the EU is either because you live in America or just don’t care, the European Union is an economic and political partnership made up of (now) 27 European countries. It initially started after World War II under the concept of preventing war through economic cooperation.
Secondly, British Prime Minister David Cameron is officially resigning as of October. After six years in office, Cameron stated, “The will of the British people is an instruction that must be delivered.” Cameron campaigned hard in the weeks leading up to the vote, encouraging voters to remain in the EU. He announced his decision to resign Friday morning, though he will stay on until October in an attempt to help the country navigate these uncharted waters.
Third, global stocks plummeted in the day after the decision. In American markets, the Dow is down 3.39 percent, Nasdaq by 4.12 percent and S&P by 3.59 percent. Among the top global markets, Japan dropped 7.92 percent, Hong Kong by 2.95 percent, London by 3.15 percent and Germany by 6.82 percent. Double digits in the negatives hit some American companies: Invesco -13.7 percent, Lincoln National -13.3 percent, Charles Schwab -11.9 percent, E-Trade -11.8 percent and American Airlines -10.8 percent.
It doesn’t take an economics major to understand that so many negative stocks in the market aren’t promising signs; however, this is the expected economic response. There will likely be a period of economic instability, as investors and corporations struggle to make sense of what this really means.
Northern Ireland, a member of the UK since 1921, is contemplating the idea of reuniting the whole island of Ireland as one. Scotland, which co-founded the UK with England in 1706, is outraged by the outcome. Scottish First Minister Nicola Sturgeon referred to it as “democratically unacceptable” since Scotland voted to remain in the EU. It’s highly likely that Northern Ireland will vote to join the rest of Ireland, and Scotland will vote to break off from the UK and join the EU on its own.
The actual departure from the EU could take Britain up to two years. The formal legal process allows Britain two years to renegotiate its withdrawal from the EU. Since the agreement allowing an EU member to withdrawal has never been tested, no one knows how the results will play out.
Britain’s exit could lead to the end of the EU itself. Greece, Netherlands and France are likely to seriously consider following the same path out of the EU. This looming uncertainty, political instability and economic anxiety will create a very unstable Europe for the time being.
As for Americans, I’ve already shown how the economy can be negatively damaged. Since the UK and many other countries are close trading partners with the U.S., the troubles of their economies will also hurt ours. Though the economies may go into a bit of a downfall, travel to Europe, especially England, will actually be cheaper for Americans. The decreasing value of the English pound means that Americans can now get more for their dollars.
Whatever the outcomes of Britain’s historic referendum, it’s fair to say that there will be both positive and negative aspects. In the paraphrased words of Charlie Puth, “it’s been a long day without EU, my friend, and I’ll tell EU all about it when I see EU again.”