My last blog posted expressed the commonly held belief that Britain would vote to remain as a member of the EU, boy was I wrong. I honestly thought it was a slam dunk.
With polls showing that it could go either way my rationale was simple. When a vote of a contentious nature comes up, I figure the masses will vote for the status quo. Its the old better the devil you know line of thinking. I will say the results somewhat restored my faith in the democratic process. I considered it very possible that there was going to be Florida style vote counting to tip the results in favor of remain if the exit side was winning.
But even though the Brits voted to leave in their referendum I still think expect Britain to stay in the Euro Zone for a number of reasons. In no particular order here are some:
- While just over 70% voter turnout is amazing when compared to traditional participation levels, it still means that about 1 in 4 voters stayed home. It also means that as a percentage of eligible voters only about one third of the total voted to leave.
- Scotland and Ireland voted heavily to remain. Proceeding to negotiate with Britain's exit from the ECM could result in Ireland and Scotland leaving GB, certainly Scotland.
- Younger voters overwhelmingly voted to remain, while older voters were more likely to vote to leave. That means those who will have to live the with decision the longest wanted the employment and mobility freedom that comes with staying in the Euro Zone.
Ultimately, if Britain proceeds based on the results of this contentious referendum, its going to be messy. This is a divorce, and it will get ugly.
Here's hoping calmer heads prevail, A second referendum would by my preferred option.
100% agree.
ReplyDeleteThere's a long list of signs that everyone, even the Leave campaign MPs, will work hard to prevent Article 50 being activated:
1. Boris Johnson became a ghost after this huge victory. Pro-Leave MPs have willfully stated the promises they made were not achievable. Maybe U.S. politics is different, but instead of glorifying and pushing their win they are all becoming evasive, saying Cameron should remain PM for longer, and completely avoiding feeding any notion that Article 50 should be declared now... or ever.
2. The vote was close. Weather reduced turnout in pro-remain London. A margin of "Leave" voters have said they regret voting Leave. Some because they thought it was only an opinion vote, not a decree. Some because they see the reason they voted Leave was confirmed as false by their politicians afterword. Some because they didn't think the "fearmongering" of remainers and experts was accurate... but already see it was (even though current market reaction is mild compared to the moment Article 50 is actually activated).
3. Cameron very intentionally set-up a "fall on your own knife" situation for the next PM. He has bought several months for Scotland, Northern Ireland London, EU leaders, and the 80% of MPs that are pro-Remain to coordinate. By the time there is a new PM the consequences of "going 50" will be, without a doubt, the action that will create a market crash, impoverish the UK, break up the UK, and will mean that PM's career ended just as soon as it began. No politician wants to hold that bag. It is all bad with zero benefit.
4. Cooperation between these various parties in the Parliament, UK regions, and EU leaders will create a near-term situation where markets, especially in the UK, experience significant losses. EU leaders will say whatever they can to create immediate negative consequences for the UK markets and currency to foster a "What have we done" view among many Leave voters that were on the fence, and to inspire those who didn't vote because they thought it wasn't meaningful or important.
My hypothesis is that markets will be tumultuous, and the UK especially will experience months of negative realities - from a dropping currency to job losses, higher prices, and, generally, everyone being worse off.
There will be an election and sides will be drawn that is essentially a 2nd referendum with lines drawn on "We cannot leave if Parliament doesn't allow it. I will ensure we stay" and vice versa.
If the election favors a Parliament that is "pro-Remain" then a 2nd referendum will be called. Results of that referendum settle the issue.
Maybe it is confirmation bias, but, knowing the very, very severe consequences of "going 50" I think the political class, including most of the Leave supportes who only wanted more political clout with a narrow loss, will do what they can to ensure Article 50 is never genuinely activated.
That being said, the current goal is to make the near-term as painful as possible to make people realize how incredibly destructive and serious a genuine Brexit would be.