For centuries, the love-hate relationship between Great Britain and the European continent has been palpable. From wars to economic union, both sides have been both wary and in sync with one another. Former President of France Charles DeGaulle refused to allow Britain to become a member of the EU, believing it had ulterior motives in doing so. Then British Prime Minister Margaret Thatcher made sure that her country did not adopt the euro at the expense of the British pound and British pride. And yet geography, and at times, political, military and economic necessity have made the United Kingdom and the European continent strong allies.
With that backdrop, the referendum deciding whether to leave the EU after 43 years is rocking world capitals and corporate board rooms alike. While every interested analyst has a take on the consequences of leaving or remaining in the EU, the actual quantitative results are hard to pin down. Dozens of studies have used different assumptions and sometimes questionable statistics to predict the short and long-term impacts on both the country and the EU. Clearly it has been difficult to gauge what withdrawal will mean for Europe’s second largest economy after Germany, not only to the continent, but to the world.
The question of “Brexit” has long centered on Great Britain’s simmering frustration over “faceless bureaucrats” in Brussels imposing regulations and collecting net revenues amounting to about .05% of the country’s GDP. Despite these frustrations, however, it was not enough to sway the British electorate to vote for secession just a matter of weeks ago. What did the trick was the sudden influx of hundreds of thousands of immigrants and refugees (Britain had 333,000 in 2015) that reminded the electorate of being subject to forces and borders beyond their direct control. At the same time, some saw the possibility of Turkey entering the EU in the near future as a threat. Recent polls now question the outcome while usual partisan allies are at odds with one another on what is best for Britain.
If Brexit does win the day, it will be a messy divorce. There will be both economic and psychological consequences that will unfold over several years, not overnight. Global corporations that have used London as their front door to the European Union will need to rethink their business models and consider relocating to the continent. Great Britain will need to assess the rules it has lived under all these years. Trade, investment and other agreements that have governed the U.K. as part of the 28-country EU will need to be readdressed. Focusing on such logistical complexities within the U.K., throughout the EU, and around the world, will take away from other pressing issues now on the front burner. To say that the immediate future will be complicated is an understatement.
For Europe and the United States, the ripple effect on the future of the continent has even greater significance over the long term. The Europe the world has known for more than two generations will be changed forever. In turn, not only will forces in other countries flirt with secession, but even provinces may feel emboldened to move towards independence, everywhere from Scotland to Catalonia.
Adversaries of the EU would like nothing more than to see Brexit as the opening to a “divide and conquer” strategy. Imperfect as it may be, a unified EU has provided an anchor in responding with economic sanctions to an aggressive Russia and sharing information, seriously lacking as it has been, to transcontinental terrorist plots. There is such a thing as strength in numbers, and rather than trying to forge consensus among states outside the rubric of the EU, it is far easier and more effective to do so within.
While the world has long admired the pride, pluck and resilience of the British people, it also has built a healthy respect for its practicality. Whatever happens within the Brexit referendum, it is clear that a new chapter for Europe and the world is about to be written.
James P. Moore, Jr. is a managing director of the Business, Society, and Public Policy Initiative at Georgetown’s McDonough School of Business.