For weeks, the United Kingdom’s referendum on whether it should leave the European Union, a scenario known as “Brexit,” has dominated discussion in the media. The ups and downs of the debate have had a corresponding influence on financial markets.
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The excitement generated can produce shudders as strong as a Hollywood thriller might. But the threat of the UK leaving the EU is being used to distract the public from other issues.
Worrywarts furrow their brows. Know-it-all Euroskeptics – from within the EU and without, and on both sides of the Atlantic – as well as good-old nationalists, hypocritically express concern. Their schadenfreude and hope for the demise of the bloc is thinly veiled.
For many reasons, I hope that the British remain in the EU; and I think it is likely they will.
Should a Brexit occur (the referendum would have to be followed by an act of parliament), it is likely to be damaging, but it will not be the downfall of either the EU or the UK. Nor will it cripple the global economy or financial markets.
Brexit could become an opportunity
It will be very important to see how the various institutions responsible for managing a Brexit react. Revenge would be harmful. If they analyze the situation dispassionately, other EU members are likely to realize the necessity of, and implement, reforms that would take the bloc in the direction of more decentralization and subsidiarity. Under such circumstances, the UK would take on the role of a close neighbor. Brexit could become an opportunity.
On the other hand, a referendum result that legitimizes Britain remaining in the EU will reinforce the UK’s position within the bloc. That would put it in a strong position to support the very decentralization and subsidiarity Europe needs.
Whatever the outcome of the vote, that it is taking place is a positive thing – it will clarify the UK’s role in Europe.