On June 23rd, 2016 the United Kingdom said "Hasta La Vista" to being a part of the European Union. In the 1980's Greenland left the EEC which was the EU's predecessor therefore making the action of leaving the EU something that has never been done before. The UK's exit mission is currently being known as "Brexit" across the world. So what does this actually mean and how the hell did a decent chunk of what was Europe just decide it wanted to leave home and be an adult now? Well that’s the fun part.
The Brexit “win” came as a result of the “Referendum of the United Kingdom’s membership of the European Union;” however, not every member of the UK was for leaving. England and Wales both overwhelmingly voted to leave the EU with 53.4% of English voters and 52.5% of Welsh voters respectively wanting out. On the other end, Scotland and Northern Ireland supported staying in the EU. “Scotland backed Remain by 62% to 38%, while 55.8% in Northern Ireland voted remain and 44.2% voted leave.” In Scotland’s case, this forcible departure from the EU however might be a good thing. In the short time since the votes have been counted, Scottish politicians are considering allowing another referendum to have the people vote for independence from Britain. Post referendum results, the First Minister of Scotland, Nicola Sturgeon, entertained the idea that “support for independence may well increase as the reality of Brexit sinks in, on the other hand it might not: speculative polling prior to the EU referendum suggested this scenario would add only a point or two to the potential yes tally.” Therefore, if Scotland leaves the UK after the UK leaves the EU, everything will be really confusing in the most simple terms possible.
Now, while this is all very neat and interesting, most Americans are wondering, "Well what the heck does this mean for us?" First off, the Brexit decision is seriously messing with the Global economy. Americans that own stocks probably showed up this morning to work with an attitude as sour as spoiled milk due to the Nasdaq dropping more than 200 points and the S&P 500 sliding more than 54.94 points after U.S. markets opened for trading. In addition to American stocks dropping, Europe's economy took a major blow to the face. With Brexit being a go, banks aren't quite sure what is going to happen with exchange rates and monetary values in general. "The collapsing pound will drive up inflation up, crimping real incomes. Some jobs will go. Hours worked and wage growth will fall. And Britain is big enough for a recession there to have a meaningful effect on Europe’s economy. As a rule of thumb, whatever the reduction in Britain’s GDP growth, Europe’s economy will suffer a drop of about half as much." This being said, if Europe is affected heavily as will be the United States. According to Boston College economics professor Robert Murphy, "In the short term, the move by Britain will unsettle financial markets both in the U.S. and abroad, and likely lead investors to seek haven in safe assets outside of the U.K. and Europe..." This could bring down sales and profits for U.S.-based multinational companies. However, a plus about Brexit would be that "as investors shift into dollar-denominated assets, the dollar will gain strength against the euro and the pound".
All in all, Brexit can turn out to be a great or a horrible thing depending on perspective, as is everything else in life. Therefore, sit back, relax (if you can) and let's see how the UK's decision affects the rest of us.
