British Vote To Leave European Union, Sending World Markets Into Turmoil
June 24, 2016
The United Kingdom has chosen to leave the European Union, a bombshell result that roiled world markets, prompted Prime Minister David Cameron to announce his resignation, and sowed deep doubts about the fate of the 28-member bloc.
With results showing British voters choosing "leave" by a solid 1.27 million vote margin, the decision was a potentially devastating blow to the EU, which has spent decades beefing up the ranks of its membership and now encompasses more than 500 million people.
In recent years, however, the bloc has grappled with financial setbacks, a divisive immigration crisis, and perceptions of aloofness and overreach.
The British pound, the euro, oil prices, and stock markets around the world fell on the news of the results.
Cameron, who campaigned hard to remain in the EU, said he would step down in favor of new leadership and hoped a new prime minister would be in office by October.
"The British people have voted to leave the European Union, and their will must be respected," he said outside his office on 10 Downing Street soon after results were announced June 24. "I do not think it would be right for me to be the captain that steers our country to its next destination."
Results showed people nationwide voting 52 percent to 48 percent to leave, a margin that EU leaders said indicated Britain should quit the bloc "as soon as possible."
But results varied widely across the country, with Wales and England opting to leave and Northern Ireland and Scotland wanting to remain.
In Brussels, EU leaders called on the British government to start the process of withdrawing "however painful that process may be." Officials appeared eager to start negotiations well before October, when Cameron's successor is expected to be chosen.
"Any delay would unnecessarily prolong uncertainty," said a joint statement by EU President Donald Tusk and European Commission chief Jean-Claude Juncker. Also signing the statement was EU Parliament leader Martin Schulz, and Dutch Prime Minister Mark Rutte, whose country holds the rotating presidency.
Tusk said the bloc's remaining 27 members would seek to prevent further defections.
EU leaders will hold a summit next week without Britain and will "start a wider reflection of the future of our union," Tusk said.
Across Europe, leaders reacted with dismay and warnings to other member nations not to draw any conclusions from vote, known informally as "Brexit."
"We take note of the British people's decision with regret," German Chancellor Angela Merkel said. "There is no doubt that this is a blow to Europe and to the European unification process."
French President Francois Hollande said the vote was a signal that the EU must make changes in order to move forward, a call echoed by Italian Prime Minister Matteo Renzi who said the bloc needs "renovation.
Speaking at a conference at Stanford University in California, U.S. President Barack Obama said he had discussed the results by telephone with both Cameron and Merkel. Obama said the vote reflected "changes and challenges that are raised by globalization."
"But while the U.K. relationship with the EU will change, one thing that will not change is the special relationship between our two nations. That will endure," he said.
"The EU will remain one of our indispensable partners. Our NATO alliance will remain a cornerstone of global security and in a few weeks we will be meeting in Warsaw for the NATO summit," he said. "And our shared values, including our commitment to democracy and pluralism and opportunity for all people in a globalized world, that will continue to unite all of us."
There was at least one leader who had been widely expected to welcome the British vote: Russian President Vladimir Putin. During the campaign, Cameron alleged Russia had improperly influenced public opinion in Britain, something Putin denied.
Speaking to journalists in the Uzbek capital Tashkent on June 24, Putin said Britain's departure would have both positive consequences for the global economy, and would also affect Russia's economy.
Putin also said he doesn't expect the referendum results to influence the EU's sanctions, imposed on Russia for its annexation of Ukraine's Crimea Peninsula two years ago and support for separatists in eastern Ukraine.
Nigel Farage, whose U.K. Independence Party had campaigned for the "leave" vote, hailed the results, saying "the dawn is breaking on an independent United Kingdom!"
With British politics in turmoil, speculation turned to Cameron's successor after he steps down in October. The man considered to be a leading contender was Boris Johnson, the flamboyant former mayor of London, who said after results were announced that the EU was a "noble idea for its time" and was no longer right for Britain.
In the opposition Labour Party, two lawmakers moved to oust leader Jeremy Corbyn, who has been accused of lending only lukewarm support to the pro-EU effort. Their no-confidence motion on Corbyn will be discussed by Labour lawmakers next week, and could lead to a vote on his leadership.
British Foreign Secretary Philip Hammond said the results also reopened the question for some about whether Scotland should seek independence from the United Kingdom.
In the last referendum on independence held in 2014, Scots voted decisively to stay in the United Kingdom. In the June 23 vote, however, showed Scots overwhelmingly wanting to stay in the EU.
Scotland's first minister, Nicola Sturgeon, said a new referendum on independence was likely.
With reverberations from the vote rippling around the world, political observers speculated what the impact would be on the U.S. presidential race.
Тhe presumptive Republican candidate, Donald Trump, visiting one of his golf resorts in Scotland, called the result "fantastic," saying Britons "took back control of their country."
The British are "angry over borders, they're angry over people coming into the country and taking over," he said.
The leading Democratic contender, Hillary Clinton, said the ensuing economic uncertainty "underscores the need for calm, steady, experienced leadership in the White House." Like Obama and most British leaders, Clinton supported the "remain" effort.
The vote, she said, "underscores the need for us to pull together to solve our challenges as a country, not tear each other down."
Experts looked at whether the British decision could have consequences for NATO. The vote wasn't expected to change British membership in the alliance, something Secretary-General Jens Stoltenberg reiterated.
Britain "will remain a strong and committed NATO ally" as the country "defines the next chapter in its relationship with the EU," he said.
The vote has raised fears of similar referendums across some EU member states, where anti-immigrant, nationalist movements are on the rise.
In the Netherlands, right-wing politician Geert Wilders has called for a similar referendum but Rutte, the prime minister, said he does not see much interest in having such a vote.
The legal device that formally sets the exit process into motion is known as Article 50 of the Lisbon Treaty. There is no trigger mechanism that would automatically invoke it in the event of vote like the British referendum.
Still, political analysts said that with the results' wide margin and extraordinarily high voter turnout, there is now significant pressure on British politicians to formally begin the two-year negotiation process.
The decision is a body blow to one of the world's largest and most vibrant economic spaces, and one of the largest single consumer marketplaces.
Financial markets reeled from the decision, sending the British pound to a 31-year low against the U.S. dollar, and also pushing down the euro, as investors sought refuge in the American currency.
The head of the Bank of England said the bank was prepared to provide more than 250 billion pounds ($330 billion) to aid the smooth functioning of markets.
The London Stock Exchange plunged about 8 percent upon opening on June 24, but closed the day down 2.8 percent. Germany's DAX index ended the day down 6.8 percent, while France's CAC 40 was hammered to close 8 percent lower.
Shares of Britain's biggest banks– HSBC, Barclays, and the Royal Bank of Scotland– also plummeted, as investors anticipated major impacts on profits.
Key Asian stock market indexes also fell.
In the United States, the benchmark Dow Jones industrial average dropped precipitously at the opening bell, but recovered slightly before midday. The other major indexes-- the S&P 500 and the Nasdaq Composite– were also down significantly.
With reporting by BBC, AP, Reuters, AFP, and dpa
Copyright (c) 2016. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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