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Brexit Just Made All of Britain’s Problems Worse

Trading On The Floor Of The NYSE As U.S. Stocks Tumble Amid Global Selloff After U.K. Brexit VoteTrading On The Floor Of The NYSE As U.S. Stocks Tumble Amid Global Selloff After U.K. Brexit Vote
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, June 24, 2016.Bloomberg Bloomberg via Getty Images

James P. Moore, Jr. is managing director of the Business, Society, and Public Policy Initiative at Georgetown’s McDonough School of Business.

In between jaws dropping around the globe over the Britain’s decision to leave the European Union, pundits are scrambling to understand what the results mean in both the short and the long term. For generations to come, historians and political scientists will view this seminal moment as a visceral response to frustrations over the march toward globalization, the perceived loss of self-determination and the overwhelming desire to recapture past stature and glories. In the annals of history, this single decision will be seen as a watershed not just for Great Britain and the European Union but, for the world.

Having just celebrated the 90th birthday of Queen Elizabeth, the world was reminded that when the Queen ascended the British throne she did so in a century when her country boasted that the sun never set on its empire. At the same time, it also began to see its former colonies like India, Australia, Canada, South Africa and countries across Africa, Asia and the Caribbean begin to develop their own independent identities in a changed world after World War II. Nations do not sit in stasis but evolve to meet new challenges in critical areas of national security and economic aspiration.

At a time when anemic economic growth and terrorist threats plague Europe, Brexit has jolted world governments, financial markets and global corporations into diverting their attention to a new political and economic order. What had originally been voiced as concerns over faceless, intruding bureaucrats in Brussels a few months ago has burgeoned into much more from the sudden flood of Middle Eastern refugees leading to an overwhelming sense of disenfranchisement by the average Brit with its own government elites. This latter concern has become endemic in other countries around the world, including the United States.

Despite assertions to the contrary, the ramifications and next steps in secession are anyone’s guess and the distraction could be significant. Complicated and politically charged treaties and agreements now will need to be negotiated and renegotiated between the UK and the EU, as well as with other countries. Global corporations who used London as their front door to the EU now will have to reassess their business models. At the same time, the issues of yesterday like terrorism, agriculture subsidies, refugees, environmental concerns, and more will not have gone away. Rather than addressing those challenges from within the EU tent as the EU’s second largest economy after Germany, the UK will be doing so from the outside.

The question now comes down to what new walls will be built and what bridges will remain. Even more profoundly, the very notion of an organic, politically unified group of nations as an unbreakable, formidable bastion forging its way in a world of globalization has been dispelled. The UK has showed the world it intends to chart a new future course on its own, and the new economic and political order that will be erected is anyone’s guess.

At the same time, it cannot be underestimated how Brexit has so abruptly opened other doors to the “go it alone” approach. Other EU countries and even provinces within those countries will feel emboldened to consider their own detachment from national and transnational unions. Collateral ramifications could even include a new Scottish independence referendum that secedes from the UK only to join the EU as its newest member.

It is clear that an important chapter in economic and political history has just come to an end. The question of the hour is how the next one will be written.