The major certainty about Great Britain’s exit from the European Union is uncertainty — but that quality has known repercussions that are playing out this morning as the 52% to 48% vote to do so became clear: stock markets are plunging worldwide, the pound fell to its lowest level since 1985, British Prime Minister David Cameron will resign by October and business leaders are scrambling to formulate strategies that will protect their interests and reassure stakeholders that all will be just fine in the long term.
“Quitting the EU could cost Britain access to the EU's trade barrier-free single market and mean it must seek new trade accords with countries around the world. The United Kingdom itself could break apart, with politicians in Scotland — where nearly two-thirds of voters wanted to stay in the EU — calling for a new vote on independence,” write Reuters’ Guy Faulconbridge and Kate Holton
“The EU for its part will be economically and politically damaged, facing the departure not only of its most free-market proponent but also a member with a U.N. Security Council veto, a powerful army and nuclear capability. In one go, the bloc will lose around a sixth of its economic output,” Faulconbridge and Holton continue.
Meanwhile, the events “stunned investors who were counting on early polls as a reliable predictor,” Matt Krantz and Nathan Bomey report for USA Today. “Futures on the Dow Jones Industrial Average were down by 518 points, or 2.9%, at 6:19 a.m. ET as investors attempted to measure the fallout for global trade.”
“If stocks were to drop as much as predicted on Friday, it would be the sixth worst daily point dive in Dow history. The five other worst days came during the 2008 financial crisis and the 2001 dot.com bust,” reports Stephen Gandel in Fortune. A large part of the “problem,” he writes, is “there is a growing portion of Wall Street that makes money on volatility and, therefore, is determined to feed it.”
“There was no concealing the sense of alarm spreading through the EU’s political elite. Brexit was a ‘political earthquake for Europe,’ said Sebastian Kurz, the Austrian foreign minister,” Guy Chazen reports for Financial Times. “Sigmar Gabriel, Germany’s deputy chancellor, was more terse: ‘Damn! A bad day for Europe,’ he tweeted.” And Gianni Pittella, leader of the European Parliament’s Socialist and Democrats group, said, “The nightmare scenario came true,” and called on pro-EU forces to “relaunch the EU integration process.”
Observers were pointing to the results as indicative of a grassroots movement worldwide that is rooted either in fear and xenophobia or anger and national pride, depending on whom you are paying attention to.
“The debate laid bare the high levels of anti-EU sentiment and distrust of the political establishment among some in the U.K., expressing a frustration with the status quo that has similarities to the forces fueling support for Donald Trump in the U.S. and populist parties elsewhere in Europe,” writes Jennie Gross in the Wall Street Journal.
Trump, for his part, was in a congratulatory mood in a session with reporters at his Turnberry, Scotland, golf resort, Jenna Johnson and Jose A. DelReal report for the Washington Post. “They’re angry about many, many things. They took back control of their country. It’s a great thing,” he said.
“Ahead of the vote, executives said they were readying for an early wake-up call to check results, watch for market impact and reassure clients and employees,” Robert Wall writes in a walk-up piece for the Wall Street Journal.
“Paul Frampton, chief executive of Havas Media Group UK, a unit of French advertising giant Havas SA, said he planned to be up by 5 a.m. to check results. He is expecting to fly to London on Friday and wants to be available to communicate to clients and employees depending on the vote.”
“The uncertainty is the biggest thing and offering reassurance is important,” he said.
Exactly what those assurances would be is left unreported.
Riffing on a report from the British Influence think tank, former Irish president Mary McAleese last week warned against Brexit in a speech reported by Lesley-Anne McKeown in the Independent. “Reassurances that nothing will change … are wishful thinking at best and bluffing at worse,” she said.
Hold on to your bowlers.