A new day has dawned in Europe and change is in the air. Where Brexit is going is not clear for Article 50 which permits a member state to withdraw has never been tested. We know that the process of withdrawal will take a minimum of two years but in all likelihood substantially more if indeed it ever happens. It is up to GB to trigger the process and that is not likely until a new Prime Minister is in place.
Why did Brexit succeed and how were so many commentators wrong in their predictions? From the bookmakers to the financial community few seemed convinced that Brexit would be reality. It seems that there was failure to attribute sufficient importance to domestic political agendas and aspirations. Do a majority in Britain really want to exit the EU ? Not so sure. Already there are some who say that they regret their votes. So why did a majority vote Brexit ?
1. Departure of Cameron. What better way to get him to resign than vote for Brexit? It was clear that he had to go in case of Brexit and it only took a matter of hours for this to happen.
2. Departure of Scotland from GB. What better way to set in motion a new process for independence than vote for Brexit? Probably the majority of Scots favor the EU. Brexit sets in motion another reason to withdraw from GB. The rumblings are already there.
3. Reinforce the prospects of the Labour Party. What better way to put Labour on the high road than vote Brexit which is closer to Tory political thinking? This is a clear example of "say one thing and do another."
4. Reduce financial regulation. London must keep the banks in the City and a new prime minister will have to give serious thought as to how make it more attractive for the banks to stay. Why are the banks are already talking about departure? There will be serious competition between the EU and GB to court the banks. The banks stand to gain from this political wrangling.
No doubt there are other agendas that caused voters who are well disposed to the EU to vote Brexit. What comes next? Will this decision be reversed ? Possibly but it is politically difficult to reverse a democratic vote. One thing is certain. The horse is out of the barn and it will take a major effort to attract him back. This major political event is followed closely from both sides of the Channel which has so longseparated England from the Continent.
Brexit is a source of concern for business and YA advises clients on the potential impact. Events like this create opportunities as well as risks.