How the Brexit Vote Could Impact Everyone
Professors from Korbel and Daniels explain what will happen next
The world woke up Friday to a changing landscape in the European Union. With a majority of Britons voting on Thursday to leave the EU, the Brexit (British Exit) created shockwaves around the world.
The United Kingdom’s decision to split from the EU was followed by the resignation of Prime Minister David Cameron. All the uncertainty is sending global markets into a tailspin. In the U.S. the DOW, S&P 500 and Nasdaq were down more than 2 percent in early trading on Friday. Markets in Japan and Germany closed down more than 7 percent, while markets in the U.K. finished down about 3 percent.
“Global markets will remain unsettled likely only for a few days,” says Jack Strauss, professor with the Daniels College of Business. “Markets will likely stew over the weekend, digesting the economic and political impacts. Overall, investors will likely decide this was a political decision by British voters about bureaucracy in Brussels and very little will change economically.”
Global markets will remain unsettled likely only for a few days. Prof. Jack Strauss, Daniels College of Business
Martin Rhodes, a professor in the Josef Korbel School of International Studies, says it will be some time before the full impact of the vote can be assessed. “The costs for the U.K. are likely to be severe during the two-year purgatory and not just from the uncertainty created in the financial markets, but also because of the legal and economic complications of extracting the U.K. legal system from decades of EU single-market law,” Rhodes explains. Two years must pass before any country can leave the EU.
Rhodes, who is from the U.K. and who received his PhD from the University of Oxford, is DU’s co-director of the Colorado European Union Center of Excellence. He argues that this move could strengthen the capacity of the EU to move forward. “The U.K. has been a constant irritant in Brussels and other European capitals as a source of multiple vetoes on European legislation, and that will now go. At the same time, certain countries that have allied with the U.K. on initiatives for greater economic liberalization will lose a constant ally.”
The Brexit vote result reveals the resurgence of a particular kind of English nationalism. Prof. Martin Rhodes, Josef Korbel School of International Studies
The biggest driving force behind the Brexit campaign was ending the policy of open borders. Currently, migrants from other European countries can freely come into the U.K. Brexit supporters say it has led to financial and safety concerns. Opponents believe leaving the alliance will result in damage to the economy and loss of jobs.
“The Brexit vote result reveals the resurgence of a particular kind of English nationalism,” Rhodes says. “Those voting for Brexit are motivated by fantasies about the British past, discomfort with multiculturalism, changing norms regarding gender equality and LGBT rights, and beliefs that Britain will be economically better off once again as a small island nation.”
The British got into it for the economic gains. Now they are exiting for some of the same concerns. Ambassador Christopher Hill, Dean of the Josef Korbel School of International Studies
Rhodes maintains that the Brexit vote is a threat to the existing world order and any reasons for opposition to the EU need to be examined closely before changes are made. Christopher Hill, a longtime member of the U.S. diplomatic corps and dean of the Josef Korbel School, agrees that the U.K.’s exit does not necessarily signify problems with the EU. “The British were never invested in the DNA of the EU from the 1950s, to build structures between France and Germany that would make war impossible. The British got into it for the economic gains. Now they are exiting for some of the same concerns. The question is whether there will be more such moments on the continent, where loss of national identity and dubious economic gains are front and center.”