The Clueless American's Quick Guide to the Brexit

June 24th, 2016

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On Thursday, the United Kingdom voted in favor of leaving the European Union by the narrowest of margins. The 51/49 vote will have massive repercussions in the future, but what those specific consequences will be are still largely unknown. While this may seem mostly like a European issue, every American needs to educate themselves on what this could mean for the future of America, younger generations, and the entire global economy and relations.

Here’s what you need to know about what happened and what may happen.
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  • In the short-term, the biggest worry for Americans is Brexit’s negative effect on the financial markets. This most likely won’t cause a full-blown international financial crisis, but it is making investors more cautious. Stock prices are down and banks are more reluctant to lend, but this is mostly from the initial shock factor of not knowing what’s going to happen next.
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  • In the long-term, very few people can predict what consequences the Brexit will actually have. Some predict that it could lead to other European Union countries leaving, and perhaps marking the beginning of the end for the European Union as a whole.

  • Post-vote, Britain is expected to submit an application to leave the European Union and will have two years to negotiate an exit; this means that we will be hearing about negotiations for a long time.

  • Current United Kingdom Prime Minister David Cameron is planning to resign in the coming months as he does not feel like he’s the one to lead the UK through negotiations.

  • Boris Johnson, the former mayor of London who has drawn comparisons to Donald Trump, could become the new prime minister of Britain this coming fall upon David Cameron's resignation.

  • Although there have been a lot of rumors and talks among other countries about leaving the European Union, the United Kingdom is the first to hold an actual vote on leaving the European Union.

  • The value of the dollar has already strengthened overnight, and could potentially go up even more against other currencies. This could hurt exports to other countries from the United States.

  • The vote was extremely narrow, with an official count of 51.9% to 48.9%. However, a more important split might be the one between the four nations of The United Kingdom. England and Wales voted to leave, while Scotland and Northern Ireland voted to remain a member of the European Union. Why does this matter? Scotland had a vote to leave the United Kingdom, but a major reason why voters chose to stay is because they wanted to remain a member of the European Union. The United Kingdom leaving the European Union means that it is almost inevitable that the Scotland secessionist movement will grow, and that Scotland will have another vote on whether to leave the United Kingdom.
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  • There have been rumors about Northern Ireland attempting to join Ireland or separating from the United Kingdom as well. Northern Ireland voted 56% to 44% to remain member of the European Union.

  • In fact, the entire European Union could collapse in the coming years if the United Kingdom opens the door for other secessionist movements. The United Kingdom was among the three strongest members of the European Union, with France and Germany. The Netherlands could follow suit shortly, and with Sweden often looking at The United Kingdom for leadership, it could pave the way for secessionist talks in their country as well.

  • Most importantly, Brexit might not even happen. It is not completely official, and it is unlikely that it will not happen, but there has already been a petition to re-do the vote that crashed the U.K. government’s website this morning. There are also rumors that the EU might offer more generous terms to convince Britain to stay, which would prompt a second referendum. The overwhelming divide between the nation's voters has already caused controversy, and with massive global repercussions hinging on such a narrow vote, it seems unlikely that such a monumental decisions will go smoothly.