October 28, 2016

Britain votes to leave EU, Cameron quits as markets dive

David Cameron who announced his exit led the remain campaign in the EU referendum. (Reuters Photo)

Britain has voted to leave the European Union, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow to the European project of greater unity since World War Two.

Global financial markets plunged on Friday as results from a referendum showed a near 52-48 percent split for leaving a bloc that Britain joined more than 40 years ago.

The pound fell as much as 10 percent against the dollar to touch levels last seen in 1985, on fears the decision could hit investment in the world’s fifth-largest economy, threaten London’s role as a global financial capital and usher in months of political uncertainty.

World stocks headed for one of the biggest slumps on record, and billions of dollars were wiped off the value of European companies. Britain’s big banks took a $130 billion battering, with Lloyds (LLOY.L) and Barclays (BARC.L) falling as much as 30 percent at the opening of trade. [MKTS/GLOB]

An emotional Cameron, who led the “Remain” campaign to defeat, losing the gamble he took when he called the referendum three years ago, said he would leave office by October.

“The British people have made the very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction,” he said in a televised address outside his residence.

“I do not think it would be right for me to be the captain that steers our country to its next destination,” he added, appearing to choke back tears before walking back through the black door of No. 10 Downing Street with his arm around his wife Samantha.

Quitting the EU could cost Britain access to the EU’s trade barrier-free single market and means it must seek new trade accords with countries around the world. The United Kingdom itself could break apart, with politicians in Scotland – where nearly two-thirds of voters wanted to stay in the EU – calling for a new vote on independence.

The EU for its part will be economically and politically damaged, facing the departure not only of its most free-market proponent but also a member with a U.N. Security Council veto, a powerful army and nuclear capability. In one go, the bloc will lose around a sixth of its economic output.

The result emboldened eurosceptics in other member states, with populist leaders in France and the Netherlands demanding their own referendums to leave.

The vote will initiate at least two years of divorce proceedings with the EU, the first exit by any member state. Cameron – who has been premier for six years and called the referendum in a bid to head off pressure from domestic eurosceptics – said it would be up to his successor to formally start the exit process.

His Conservative Party rival Boris Johnson, the former London mayor who became the most recognizable face of the “Leave” camp, is now widely tipped to seek his job. Johnson made no comment as he left his home to jeers from a crowd in the mainly pro-EU capital.


There was euphoria among Britain’s eurosceptic forces, claiming a victory over the political establishment, big business and foreign leaders including U.S. President Barack Obama who had urged Britain to stay in.

“Dare to dream that the dawn is breaking on an independent United Kingdom,” said Nigel Farage, leader of the eurosceptic UK Independence Party, describing the EU as “doomed” and “dying”.

“This will be a victory for real people, a victory for ordinary people, a victory for decent people … Let June 23 go down in our history as our independence day.”

European politicians reacted with dismay.

“It looks like a sad day for Europe and Britain,” said German foreign minister Frank-Walter Steinmeier.

“Please tell me I’m still sleeping and this is all just a bad nightmare!” former Finnish Prime Minister Alexander Stubb tweeted.

The shock hits a European bloc already reeling from a euro zone debt crisis, unprecedented mass migration and confrontation with Russia over Ukraine. Anti-immigrant and anti-EU political parties have been surging across the continent, placing unprecedented pressure on the center-left and center-right establishment that has governed Europe for generations.

French National Front leader Marine Le Pen called for a similar referendum in France, changed her Twitter profile picture to a Union Jack and declared “Victory for freedom!”

Dutch far right leader Geert Wilders, also demanding a referendum, said: “We want be in charge of our own country, our own money, our own borders, and our own immigration policy.”

U.S. presidential candidate Donald Trump, whose own rise has been fueled by similar disenchantment with the political establishment, called the vote a “great thing”. Britons “took back control of their country”, he said in Scotland where he was opening a golf resort.

Related posts