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‘Brexit’ Aftershocks: More Rifts in Europe, and in Britain, Too Britain Votes to Leave E.U.; Cameron Plans to Step Down
(about 1 hour later)
LONDON — Britain’s startling decision to pull out of the European Union set off a cascade of aftershocks on Friday, costing Prime Minister David Cameron his job, plunging the financial markets into turmoil and leaving the country’s future in doubt. LONDON — Britain has voted to leave the European Union, a historic decision sure to reshape the nation’s place in the world, rattle the Continent and rock political establishments throughout the West.
The decisive win by the “Leave” campaign exposed deep divides: young versus old, urban versus rural, Scotland versus England. The recriminations flew fast, not least at Mr. Cameron, who made the decision to call the referendum on membership in the bloc to manage a rebellion in his own Conservative Party, only to have it destroy his government and tarnish his legacy. Not long after the vote tally was completed, Prime Minister David Cameron, who led the campaign to remain in the bloc, appeared in front of 10 Downing Street on Friday morning to announce that he planned to step down by October, saying the country deserved a leader committed to carrying out the will of the people.
The result presented another stiff challenge to the leaders of the other leading European powers as they confront spreading populist anger. It was seized on by far-right and anti-Brussels parties across Europe, with Marine Le Pen of the National Front in France calling for a “Frexit” referendum and Geert Wilders of the Party for Freedom in the Netherlands calling for a “Nexit.” 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.
European officials met in Brussels to begin discussing a response and to emphasize their commitment to strengthening and improving the bloc, whose numbers will drop to 27 upon Britain’s departure 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.
Manuel Valls, the French prime minister, said, “At stake is the breakup, pure and simple, of the union,” and added, “Now is the time to invent another Europe.” “I will do everything I can as prime minister to steady the ship over the coming weeks and months,” Mr. Cameron said. “But I do not think it would be right for me to try to be the captain that steers our country to its next destination.”
Germany urged calm. “Today marks a turning point for Europe,” said Chancellor Angela Merkel. “It is a turning point for the European unification process.” Despite opinion polls before the referendum that showed either side in a position to win, the outcome stunned much of Britain, Europe and the trans-Atlantic alliance, highlighting the power of anti-elite, populist and nationalist sentiment at a time of economic and cultural dislocation.
Financial markets swooned as it became apparent that the Leave forces would prevail, with the British pound and global stock prices plummeting in value early Friday as the vote tally showed the Remain camp falling further behind.
With all votes counted, Leave was ahead by 52 percent to 48 percent, an enormous snub to Britain’s elite.
The process of withdrawal is likely to play out slowly, perhaps taking years. It will mean pulling out of the world’s largest trading zone, with 508 million residents, including the 65 million people of Britain, and abandoning a commitment to the free movement of labor, capital, goods and services. It has profound implications for Britain’s legal system, which incorporates a large body of regulations that cover everything from product safety to digital privacy, and for Britain’s economy.
The main ways in which the change would be felt are on trade – Britain would lose automatic access to the European single market – and on immigration, with Britain no longer bound to allow any European Union citizen to live and work in the country. Britain will have to try to negotiate new deals covering those issues.
To those in Britain who supported remaining in Europe, the result of Thursday’s in-or-out referendum was a painful rejection, leaving the country exposed to a possible economic downturn and signaling a step away from the multiculturalism that they say has made Britain among Europe’s most vibrant societies.
To backers of leaving, the outcome was vindication of their belief that Britain could pursue an independent course in the world, free of the Brussels bureaucracy and able to control the flow of immigrants into the country.
“Dare to dream that the dawn is breaking on an independent United Kingdom,” Nigel Farage, the leader of the U.K. Independence Party, one of the primary forces behind the push for a referendum on leaving the European Union, told cheering supporters just after 4 a.m.“Dare to dream that the dawn is breaking on an independent United Kingdom,” Nigel Farage, the leader of the U.K. Independence Party, one of the primary forces behind the push for a referendum on leaving the European Union, told cheering supporters just after 4 a.m.
For Mr. Cameron, the results were a humiliating disaster, forcing him to announce his departure only 13 months after he won re-election behind a surprisingly large Conservative majority in national elections. Critics said he had led Britain out of Europe for no good reason and that the unity of the United Kingdom itself was threatened, with Scotland now more likely to try again to bolt. Withdrawing from the European Union is a lengthy process that Mr. Cameron will largely leave to his successor. It will mean pulling out from the world’s largest trading zone, with 508 million residents, including the 65 million people of Britain, and a commitment to the free movement of labor, capital, goods and services. It has profound implications for Britain’s legal system, which incorporates a large body of regulations that cover everything from product safety to digital privacy, and for Britain’s economy.
Speaking in front of 10 Downing Street early on Friday, with his wife, Samantha, standing nearby, Mr. Cameron said he would resign once a new leader had been chosen by his party, which he expected by October. He will stay now to provide stability, but a new prime minister, he said, should formally begin Britain’s withdrawal from the European Union and negotiate the terms of that divorce. One reason the City, London’s financial district, shuddered on Friday is that it is a hub for trading in euro-denominated securities, activity that may now shift to rivals like Frankfurt and Paris.
“I held nothing back,” Mr. Cameron said. His voice breaking, he said, “I love this country and I feel honored to have served it.” It was also not clear that the United Kingdom could survive withdrawal from the European Union intact. There was immediate pressure for another referendum on independence from Britain for Scotland, which voted overwhelmingly on Thursday to stay with Europe.
His statement created an immediate churn in the political waters, with speculation that the two Conservatives most likely to succeed him are Boris Johnson, the flamboyant former mayor of London who helped lead the Leave campaign, and Theresa May, the Home secretary, who supported Mr. Cameron and Remain, but concentrated on doing her job rather than campaigning. “I think an independence referendum is now highly likely,” said Scotland’s first minister, Nicola Sturgeon, who said it would be “democratically unacceptable” for Scotland to be pushed out of the European Union when a majority of Scots want to stay in.
Mr. Johnson was booed Friday morning as he left his home in London, which voted overwhelming for Remain. In a brief statement later, Mr. Johnson praised Mr. Cameron, an old friend and rival from school days, as “an extraordinary politician” and said he was sad to see him go. Keith Vaz, a Labour legislator, said: “This is a crushing decision; this is a terrible day for Britain and a terrible day for Europe. In 1,000 years, I would never have believed that the British people would vote for this.”
Mr. Johnson refused to answer questions about his own future but praised the result. “We can find our voice in the world again, a voice that is commensurate with the fifth-biggest economy on Earth,” he said. European leaders acknowledged that the British vote would further limit their ability to move forward with economic and political integration, a process that had all but stalled anyway.
But if Britain’s Treasury and Central Bank are to be believed, the economic hit the country will take from leaving the single market of the European Union will be considerable, with permanent loss of economic growth, higher unemployment and lower tax receipts. “Today marks a turning point for Europe,” Chancellor Angela Merkel of Germany said. “It is a turning point for the European unification process.”
The immediate market reaction was an effort to find a floor in the midst of so much uncertainty, said Barrington Pitt Miller, an equity research analyst at Janus Capital. But he said he expected British economic growth to be zero or negative in the short and medium term, with a secondary impact over time as London’s financial services sector, which makes up about 80 percent of the economy, begins to move staff and headquarters to Frankfurt, Paris or Dublin. In London, the maneuvering began almost immediately to succeed Mr. Cameron, who said he would stay on while his Conservative Party went through the process of settling on a new leader. Among the most prominent of the possible candidates is Boris Johnson, the former mayor of London who was a leader of the Leave campaign. He praised Mr. Cameron as an “extraordinary politician” while saying he was sad to see him go.
A lot will depend on how the European Union chooses in the end to respond – whether it is “vindictive, friendly or frightened,” he said. Britain will become the first country to leave the 28-member bloc, which has been increasingly weighed down by its failures to deal fully with a succession of crises, from the financial collapse of 2008 to a resurgent Russia and the huge influx of migrants last year.
Mr. Johnson and some in the Leave campaign argued that the other European nations value trade with Britain so much that they would negotiate a special deal after Britain’s withdrawal to let Britain remain in the single market without having to guarantee freedom of movement and labor. That seems highly unlikely, since it would only encourage other nations to pressure Brussels. But it may be that as the dust settles, some sort of association agreement with Britain could be negotiated, as Ms. Merkel suggested on Friday, though the price could be high. It was a remarkable victory for the country’s anti-Europe forces, which not long ago were considered to have little chance of prevailing.
The economy aside, the United Kingdom itself now faces a threat to its survival. Scotland voted by 62 percent to 38 percent to remain in the European Union, and the Scottish first minister, Nicola Sturgeon, said on Friday that it was “democratically unacceptable” for Scotland to be dragged out of it against its will. Another independence referendum, she said, “is now highly likely.” Financial markets, which had been anticipating that Britain would vote to stay in, started plunging before the vote tally was complete, putting pressure on central banks and regulators to take steps to guard against a spread of the damage.
Appearing before reporters in front of the flags of Scotland and of the European Union, Ms. Sturgeon, who leads the dominant Scottish National Party, said, “It is a statement of the obvious that the option of a second referendum must be on the table, and it is on the table.” Economists had predicted that a vote to leave the bloc could do substantial damage to the British economy. Mark Carney, the head of the Bank of England, sought to address those concerns on Friday, saying the bank had made extensive contingency plans and had taken “all the necessary steps” to prepare.
The threat is real, but any new vote will not come soon, because it is only two years since the last one, which the Scottish nationalists lost, and the price of oil, on which the Scottish economy largely depends, has dropped. Mr. Cameron had vowed before the vote to move quickly to begin the divorce process if Britain opted to leave. But he said on Friday that he would leave the start of the formal process to his successor, while seeking in the interim to calm the atmosphere before taking any action.
Northern Ireland, too, voted for Remain, although as usual Protestants and Roman Catholics were split. But the prospect of an open border with Ireland now becoming a hard border between the European Union and the United Kingdom will change matters and require checks of passports and goods, putting strain on the Good Friday peace agreement. In the meantime, nothing will change immediately on either side of the Channel, with existing trade and immigration rules remaining in place. The withdrawal process is expected to be complex and contentious, though under the bloc’s governing treaty it is effectively limited to two years.
In England, which voted to Leave, there are obvious strains, too. Mr. Johnson, like a number of other leaders of the push to leave the European Union, said there was no need to rush to set in motion the legal procedure — invoking a provision known as Article 50 — that would formally sever ties between Britain and the bloc. He and other advocates of leaving the European Union have been taking a go-slow posture on the mechanics of the divorce, saying Britain can get a better deal on trade if it can avoid arbitrary deadlines on the negotiations.
They can be found between the young who voted in large numbers for Remain and those over 45, who voted for Leave; between the cities and the countryside; between richer and poorer; and between better educated and less well educated. For the European Union, the result is a disaster, raising questions about the direction, cohesion and future of a bloc built on liberal values and shared sovereignty that represents, with NATO, a vital component of Europe’s postwar structure.
London itself, the glittering, expensive, multicultural and multinational global capital, with its many immigrants and liberal values, was isolated in a sea of those favoring Leave; in some sense, the vote was against the wealthy elites who live in London and rule everyone else from there. Britain is the second-largest economy after Germany in the European Union, a nuclear power with a seat on the United Nations Security Council, an advocate of free-market economics and a close ally of the United States.
Lastly, there is the chasm between political leaders, nearly all of whom backed Remain, and many of their voters, who rebuffed them. The loss of Britain is an enormous blow to the credibility of a bloc already under pressure from slow growth, high unemployment, the migrant crisis, Greece’s debt woes and the conflict in Ukraine.
Bronwen Maddox, former editor of Prospect Magazine and the new director of the Institute for Government, a research institution, commented by email that “there is a growing intolerance for representative government, which is likely to have consequences for the ability of any government to run the country.” “The main impact will be massive disorder in the E.U. system for the next two years,” said Thierry de Montbrial, founder and executive chairman of the French Institute of International Relations. “There will be huge political transition costs, on how to solve the British exit, and the risk of a domino effect or bank run from other countries that think of leaving.”
The referendum, she suggested, may have been about Brussels, but it revealed and unleashed many other forces. Those forces, she said, “have ejected the U.K. from the European Union; they may now wreak similar turmoil on the old political parties themselves.” 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 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.
Other anti-establishment and far-right parties in Europe, like the National Front of Marine Le Pen in France, Geert Wilders’s party in the Netherlands and the Alternative for Germany party will celebrate the outcome. The depth of anti-Europe sentiment could be a key factor in national elections scheduled next year in the other two most important countries of the European Union, France and Germany.
The British campaign featured assertions and allegations tossed around with little regard to the facts. Both sides played to emotion, and the most common emotion played upon was fear.
The “Remain” side, citing scores of experts and elite opinion, warned that leaving the bloc, a so-called Brexit, would mean an economic catastrophe, a plunging pound, higher taxes, more austerity and the loss of jobs.
The Leave side warned that remaining would produce uncontrolled immigration, crime and terrorism, with hordes pouring into Britain from Turkey, a country of 77 million Muslims that borders Syria and Iraq and hopes to join the European Union.
Just a week before the vote, the country was jolted by the brutal murder of a young Labour member of Parliament, Jo Cox, 41, a strong supporter of Remain. A man who prosecutors said shouted “Britain first,” “This is for Britain” and “Keep Britain independent” was charged with her murder.
In England especially, 85 percent of the population of Britain, many people fell back on national pride, cultural exceptionalism and nostalgia. Many English voters chose to believe the insistence of anti-Europe leaders like Mr. Johnson that as a great nation, Britain would be more powerful and successful outside the European Union than inside.
In Scotland and Northern Ireland, by contrast, there was a strong pro-Europe feeling that has only increased tensions within the United Kingdom itself.
Northern Ireland, which has long had an open border with the Republic of Ireland, a member of the European Union, will face a new reality. That open border will become the border between the European Union and a nonmember, and for security and economic reasons it will have to be equipped with border posts to check goods and passports.
Mr. Cameron felt pushed into announcing the referendum in 2013 by the anti-Europe wing of his own party, amplified by concerns among other Tories that U.K. Independence Party and Mr. Farage were cutting too sharply into the Conservative vote.
Still, Mr. Cameron entered the campaign with the force of economic experts, President Obama, European allies and big business behind him. But as ever, referendums are not about the question asked but the political mood at the time, and the political mood is sour.