While today's results from Britain's EU referendum is not legally binding, it will send the United Kingdom into deeply uncertain waters.
Diplomats have admitted it’s so unprecedented, no one really knows what’s going to happen. No country has ever left the 28-member economic and political union.
Here’s what’s in store now voters have sent the British government down the Brexit path.
A crash in the British Pound
This has already happened. Economists from the UK, Britain and around the world warned of a significant negative economic impact if the country voted to leave the trading union.
Currency traders appear to agree, the result has pushed the British Pound to its lowest levels in decades. The Euro and the Australian dollar also plummeted on the news.
The British Pound crashed today on the news that the Brexit vote had won. Source: www.tradingeconomics.com
Walls up around Britain, confusion for ex-pats
Migration was a key issue in the Brexit campaign. Britain is host to millions of citizens of other European countries able to live and work in the UK without visas because of freedom of movement provisions mandated by the EU. No one has any idea what this will mean for those citizens, or the million or so UK residents who live visa-free in other European countries.
The end of David Cameron?
Numerous commentators have said this referendum posed a major risk to David Cameron’s leadership of the Conservative Party, and therefore the country. While he was opposed to a British exit from the Union, he agreed to the vote as a way to appease others in his party.
With the vote lost and his credibility damaged, his leadership is at a critically weak point. He risks a leadership spill in the near future, if he doesn’t resign before then.
British Prime Minister, David Cameron delivers a speech urging Britons to vote Remain in the European Union. Source: AAP
Australia left stranded
The European Union, with its 500 million inhabitants and €14 trillion GDP, is one of Australia’s most significant trading partners. Our government often relies on our close relationship with the UK to give us eyes, ears and sometimes a voice within closed door EU meetings.
Now Britain’s on the way out, Australia is left without its most significant partner.
With more diplomats in London than any other European capital, Australia was counting on British support for an EU-Australia FTA scheduled for negotiation in the coming years. The UK's exit from the bloc will likely weaken Australia's position in those negotiations.
Thủ tướng Malcolm Turnbull Source: AAP
A renegotiated relationship
As part of the EU, Britain has automatic trade relationships with its 27 other member states. This allows for the free movement of goods, people and finance.
British Prime Minister David Cameron recently renegotiated terms within the EU which he said gave Britain a better deal. Now that the UK will be on the outside, it will have to renegotiate its relationship again.
That’s not all, the UK currently relies on trade agreements signed by the EU with other countries. Going it alone will mean British diplomats may have to negotiate new agreements around the world.
A business exodous
Jason Collins, CEO of the European Australian Business Council, spoke with The Feed before yesterday’s vote. He told us that a huge number of businesses used London as their European headquarters, with a Brexit possibly forcing them to move staff and offices to mainland Europe.
Depending on the renegotiated terms of the UK’s relationship with the EU, businesses may be flocking to the continent to take advantage of open-border trading within the downsized bloc.
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