Editions : July-September 2016

JOURNAL | GLOBAL PERSPECTIVES By: Stratfor

Over the coming weeks and perhaps months, the frenzy of the financial markets will dominate the world’s attention following the United Kingdom’s decision in a nationwide referendum on June 23 to leave the European Union, popularly known as “Brexit.” But what lies beyond the horizon in a post-Brexit world? We highlight the areas of the world that will be most affected by the latest phase of the European Union’s fragmentation.

Europe’s unraveling

For starters, the United Kingdom will be locked in political turmoil. Prime Minister David Cameron has announced that he will resign by October, leaving his Conservative Party to appoint a successor to formally initiate negotiations on the United Kingdom’s exit from the European Union. Naturally, the British economy will take a hit as the pound and stock markets fluctuate, as capital flees and as companies relocate to continental Europe. Renewed talk of secession in Scotland will create yet another source of political uncertainty. If the United Kingdom loses access to the European common market, its main trade partners in the European Union – Ireland, the Netherlands and Belgium – will suffer. Consequently, they will work to expedite a free trade agreement between Brussels and London. The stability of the ruling Tories needs to be monitored closely. Should the party fail to agree on a replacement for Cameron, early elections could be triggered, and by then the mood on Brexit could shift depending on the severity of the economic pain.



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