Britain has voted to leave the European Union, with the Leave campaign securing around 51.8 per cent of the vote.
The UK has been a member of the European Union (and its precursors) since 1973, and the British government now faces the gargantuan task of unraveling decades of legislation, treaties and deals between the UK and the EU, the single biggest market in the world.
The EU referendum vote itself is not a legal notification. The formal announcement to the EU is expected to happen at a meeting of the European Council (the EU’s heads of government) on Monday, June 27.
Once that happens, it will trigger Article 50 of the 1973 Treaty of Rome, which gives both sides two years to reach an agreement.
However, because the UK is so intricately entwined with the EU, it could take many years longer than that. Liam Fox, a pro-Leave British MP, estimates it would take up to 2019 to renegotiate policy from issues on immigration to trade, security and more.
What will happen to the EU?
The UK is the first bona fide country to leave. The closest thing to this is Greenland, which is part of Denmark and left in 1985. (The rest of Denmark stayed.)
Greece has thought seriously about it though. That would be Grexit (another story altogether). But think about the precedent it sets. With the UK’s decision to leave, other EU countries might start eyeing the door too. That means the EU will slowly fall apart. And that’ll have huge consequences for the economy and stability.
Jan Techau, director of foreign policy think tank Carnegie Europe, says the EU is sure to play hardball when it comes to negotiating the UK’s exit.
“First off, they will try to play it hard vis-a-vis the UK. It’s quite clear they will have to unify around a position that will make it quite painful for the UK to negotiate this exit so that everybody sees what happens to you if you try to do the same thing,” Techau said.
While that’s a short-term tactic, Techau said the EU will also need to find a deeper solution to the problems plaguing the EU such as the refugee crisis.
What are economic views on Brexit?
The most immediate risk to global markets is Britain leaving the EU, warned Bank of England Governor Mark Carney pre the EU referendum.
The pound has fallen to levels not seen since 1985. However spporters of Brexit argue that EU countries have every incentive keep trading with the UK, which is a large importer of goods and services.
There is some uncertainty over what will happen now Britain has chose to leave the EU as new trade agreements with the rest of the world will have to be made.
Europhiles are concerned that foreign companies would be less likely to invest here and could move their headquarters elsewhere if Britain loses access to the single market.
A breakup for the UK?
Friday’s vote could also see a break up of the UK — which is composed of four countries: England, Wales, Scotland and Northern Ireland.
Scots, a majority of whom want to stay, have said they will call for a referendum for their own independence (remember the 2014 Scottish referendum? That vote to stay prevailed by 55% to 45%) — so it can join the EU.
Northern Ireland leaders called for a referendum too after the vote results.
“The British government can no longer claim to represent the political or economic interests of the North in Europe,” Declan Kearney, Sinn Fein National Chairperson told CNN.
“There is clearly a democratic imperative for a border poll in the North.”