LONDON, Jun 24 – Britain has voted to break out of the European Union, national media declared Friday, striking a thunderous blow against the bloc and spreading panic through world markets as sterling collapsed to a 31-year low. Investors scrambled to sell the pound, oil and stocks as Britain took a lurch into the unknown, becoming the first country to quit in the EU’s 60-year history, a culmination of decades of suspicion over European aims of creating an ever-closer political union.
With results in for 350 of the 382 areas that took part across Britain, the result was 52 percent for “Leave” and 48 percent for “Remain”. Britain’s national broadcaster the BBC and Sky News both predicted a clear victory for the “Leave” campaign. Sterling plunged more than nine percent to US$1.33, a 31-year low.
World oil prices skidded by more than six percent. Tokyo stocks plummeted by more than eight percent and Japan’s Finance Minister Taro Aso called an emergency news briefing. “Let June 23 go down in our history as our independence day,” said top anti-EU campaigner Nigel Farage, leader of the UK Independence Party, who promised Britons the chance to retake power from Brussels and rein in high immigration.
Victory for real people
“If the predictions now are right, this will be a victory for real people, a victory for ordinary people, a victory for decent people,” he told supporters in Westminster. A joyous crowd chanted back to him: “Out! Out! Out!” At the rival “Remain” party in London’s Royal Festival Hall subdued supporters stood glued to TV screens clutching beers — some with their hands over their mouths.
Britons appeared to have to shrugged off dire warnings that quitting the 28-nation alliance would create a budget hole requiring spending cuts and tax increases once they lose unfettered trade access to the EU. Their decision will undoubtedly re-awaken fears of a domino-effect ripple of exit votes in EU-sceptic members that could imperil the integrity of the bloc, already struggling with twin economic and refugee crises.
“The eurosceptic genie is out of the bottle and it will now not be put back,” Farage said. Dutch far-right MP Geert Wilders immediately called for a referendum on EU membership. Prime Minister David Cameron, who led the ultimately doomed struggle to sway voters in favour of sticking with Brussels, will face immediate pressure to resign. The bookmakers’ favourite to replace him is former London mayor Boris Johnson, a rival from within his ruling Conservative Party who was the “Leave“ camp figurehead.
Going it alone
The result means the world’s fifth-largest economy must now go it alone in the global economy, launching lengthy exit negotiations with the bloc and brokering new deals with all the countries it now trades with under the EU’s umbrella. European Commission chief Jean-Claude Juncker has warned the EU will “not be bending over backwards” to help Britain in those negotiations.
Analysts say it could take the island nation a decade to secure new trade accords worldwide. In a worst-case scenario, the International Monetary Fund has warned that the British economy could sink into recession next year and overall economic output would be 5.6 percent lower than otherwise forecast by 2019, with unemployment rising back above six percent.
Thousands of jobs in the City could be transferred to Frankfurt or Paris, top companies have warned. The Brexit camp argued that the business world will adapt quickly, however, with Britain’s flexible and dynamic economy buoyed by new economic partners and selective immigration. The campaign has left Britain riven in two, marked by the brutal murder of pro-“Remain” British lawmaker Jo Cox, a mother of two who was stabbed, shot and left bleeding to death on the pavement a week ahead of the vote.
British unity threatened
The vote threatens the unity of the United Kingdom, too. Two years after Scotland voted in a referendum to remain in the United Kingdom, its political leader First Minister Nicola Sturgeon has said a new independence vote is “definitely on the table” after Britain voted against the majority will expressed by Scots.
“Scotland sees its future as part of the EU,” Sturgeon told Sky News after the vote. Northern Ireland, which is part of the United Kingdom, is now faced with the prospect of customs barriers for trade with EU-member the Republic of Ireland. Irish republicans Sinn Fein called for a vote on Irish unity following the referendum. Leaders of Europe, born out of a determination to forge lasting peace from the carnage of two world wars, will open a two-day summit on Tuesday to grapple with the British decision.
German Foreign Minister Frank-Walter Steinmeier warned this month that a British departure would be a shock requiring quick action to avert the “disintegration” of the bloc. Small countries that are economically at least as affluent as the UK are the main ones at risk, especially Denmark and potentially also Sweden,” said Carsten Nickels of the Teneo analyst group in Brussels.
Immigration and an erosion of economic security have become rallying cries for populist challenges that remain scattered across in Europe, just as they have for Donald Trump’s campaign in the US presidential election. The bloc will have to learn lessons not only from events in Britain but from the rest of Europe, Juncker said ahead of the referendum, warning against a rapid push for more integration. He said this euroscepticism is not only present in Britain.