Brexit: Britain votes to leave EU in historic divorce

More than three years after David Cameron unveiled his strategy to reform Europe and put it to a referendum, Britain has voted to leave and the Prime Minister has resigned.
It is the greatest disaster to befall the block in its 59-year history. The road ahead is unclear. No state has left the European Union before, and the rules for exit  – contained in Article 50 of the Treaty of Lisbon – are brief. 
Mr Cameron resigned as Prime Minister shortly after 8am, announcing that he thinks Britain should have a new Prime Minister in place by the start of the Conservative conference in October.  He will leave the task of triggering Article 50 to his successor.

The stunning turn of events was accompanied by a plunge in the financial markets, with the value of the British pound and stock prices plummeting.
The margin of victory startled even proponents of a British exit. The “Leave” campaign won by 52 percent to 48 percent. More than 17.4 million people voted in the referendum on Thursday to sever ties with the European Union, and about 16.1 million to remain in the bloc.
Europe will have to “reorganize itself in a system of different degrees of association,” said Karl Kaiser, a Harvard professor and former director of the German Council on Foreign Relations. “Europe does have an interest in keeping Britain in the single market, if possible, and in an ad hoc security relationship.”
While leaders of the Leave campaign spoke earnestly about sovereignty and the supremacy of Parliament or in honeyed tones about “the bright sunlit uplands” of Britain’s future free of Brussels, it was anxiety about immigration — membership in the European Union means freedom of movement and labor throughout the bloc — that defined and probably swung the campaign.
With net migration to Britain of 330,000 people in 2015, more than half of them from the European Union, Mr. Cameron had no effective response to how he could limit the influx. And there was no question that while the immigrants contributed more to the economy and to tax receipts than they cost, parts of Britain felt that its national identity was under assault and that the influx was putting substantial pressure on schools, health care and housing.
The campaign run by one of the loudest proponents of leaving, the U.K. Independence Party, flirted with xenophobia, nativism and what some of its critics considered racism. But the official, more mainstream Leave campaign also invoked immigration as an issue, and its slogan, “Take control,” resonated with voters who feel that the government is failing to regulate the inflow of people from Europe and beyond.

Article 50 – and a new deal

Triggering Article 50, formally notifying the intension to withdraw, starts a two-year clock running. After that, the Treaties that govern membership no longer apply to Britain.  The terms of exit will be negotiated between Britain’s 27 counterparts, and each will have a veto over the conditions.
It will also be subject to ratification in national parliaments, meaning, for example, that Belgian MPs could stymie the entire process.
Two vast negotiating teams will be created, far larger than those seen in the British renegotiation. The EU side is likely to be headed by one of the current Commissioners.
Untying Britain from the old membership is the easy bit. Harder would be agreeing a new trading relationship, establishing what tariffs and other barriers to entry are permitted, and agreeing on obligations such as free movement. Such a process, EU leaders claim, could take another five years.
Business leaders want the easiest terms possible, to prevent economic harm. But political leaders say the conditions will be brutal to discourage other states from following suit.

Diminished global voice

Britain’s Foreign Secretary Philip Hammond told Al Jazeera the UK's exit would diminish Britain's global voice.
"We will be less influential on the world stage," he said, but argued that the clear result of the referendum was that Britons are much more focused on issues closer to home.
"We have to listen to that message and we have to respond accordingly, protecting as best we can Britain's interests and the interests of Britain's people."
Hammond said Farage, who emerged on Friday as the face of the Vote Leave victory, "must not be allowed to hijack the victory of the Brexit campaign".
In moving forward, London must focus on “negotiating the best arrangements we can for Britain’s future trading relationship with Europe, reassuring our friends and partners around the world that Britain is not retreating into a Little England, as perhaps Nigel Farage would like".
But it must "remain an engaged, internationally focused player, and that, if I may call them this, the middle of the road voices in the Brexit campaign will prevail in terms of setting the tone of where that group wants us to go in the future".

Financial turmoil

The pound plunged and world stock markets slumped on Friday after in the wake of the referendum result.
Sterling crashed 10 percent to a 31-year low at one point and the euro also plummeted against the dollar, as the Brexit result caught markets by surprise.

London's benchmark FTSE-100 index plummeted 7.5 percent after opening but began to recover some of the losses after the British Prime Minister said he would step down.

The European Central Bank said it was ready to provide additional liquidity for the markets if necessary, while the Bank of England said it would pump more than 250 billion pounds ($370 billion, 326 billion euros) into the financial system if needed.
Oil prices fell sharply. Benchmark US crude lost $1.93, or 3.8 percent, to $48.18 a barrel in New York. Brent crude, the international benchmark, fell $2.07, or 4.1 percent, to $48.85 a barrel in London.

Brussels reels

The focus in Brussels now turns to holding the project together.
Proposals for closer defence integration, prepared by Federica Mogherini, the EU’s High Representative for Foreign Affairs, were due to be sent to national governments today. That is likely to be put on hold. But building up the EU’s defence co-operation is regarded by France and Germany as an obvious way of rebooting the project.
Jean-Claude Juncker has called for tighter integration in the event of a Brexit, and has laid out plans for integration of the Eurozone, including a treasury, in order to prevent a recurrence of the Greek crisis. Hitherto, member states have not been ready for that conversation – but the crisis of Brexit is likely to push it up the agenda.
At the same time, leaders fear that Brexit could trigger a domino effect as the bloc without Britain becomes less attractive to liberal, rich northern states such as Denmark and the Netherlands, where demands are growing for copy-cat plebiscites.
The Dutch elections are held in March next year, the French in April and May and Germany in the Autumn. If an independent Britain proves to be a success, the bloc could quickly unravel.
On March 25, 2017, European leaders will mark the sixtieth anniversary of the signing of the Treaty of Rome, the EU’s founding document. It will be a fraught celebration./.

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