Far-reaching consequences of Brexit

18 June 2016
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Europe is having a tough summer (thankfully not because of Greece this time). The threat of Brexit is a huge challenge to the European endeavor and the murder on Thursday of British Labour MP Jo Cox may turn the tide toward remaining in the European Union. History, especially during periods of flux – such as the present – is often shaped by random events.

The danger of Brexit remains, however, and the European Union does not appear to have any particular plan to deal with the eventuality. And even though everyone in Brussels is scrambling to draw one up, we all know that if Britain decides to leave the bloc, no Plan B will be enough to deal with the fallout.

It is expected that the economic impact would be limited on a European level, as it has been estimated that the EU’s gross domestic product would dip by 1 percent a year for a few years. But no one can predict how it would affect global markets or the exchange rate of the euro against the US dollar. After all, if there is one thing we have learned from the Lehman Brothers incident, it is that the effects of such an event can be unpredictable and very rapid.

On a geopolitical level, we can be certain that the consequences of Brexit would be huge. Europe is already losing its clout and the departure of the United Kingdom would be a huge blow to its international image. Europe without the Britain would be nothing in terms of security, intelligence and sheer military force. It is believed that European leaders would try to keep this part of the relationship intact if the UK were to go, but the damage would have already been done.

Another likely problem is the weakening of the prestige of Europe’s institutions. Brexit would cast them into doubt and possibly lead to other such referendums being held in countries such as Denmark or Hungary, or even France. Countries looking to enter the EU, like Turkey and the Western Balkans, will feel that the European structure is weakening and possibly becoming destablized. Some analysts consider it a certainty that in such a scenario Russian President Vladimir Putin would try to cozy up to countries such as Serbia.

Brexit would also further exacerbate the sense of doom and gloom hanging over Europe, providing a boost to the forces of extremism and nationalism, and stoking anti-systemic sentiment.

The British people may ultimately decide rationally and avert all of the above. It would be a great thing for Europe, irrespective of the fact that it still needs a good shaking to wake up and find its path again.

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