Photos: Melissa Burgess/FIUSM Staff
A week after British voters decided to leave the European Union, the so-called “Brexit” referendum has left the world with more questions than clarity.
To help answer some of the questions swirling around “Brexit,” FIU’s Steven J. Green School of International and Public Affairs brought together a panel of experts on Wednesday, June 29 to explain their take on the possible geopolitical, economic, and financial implications for Britain and Europe.
The panel included special guest, David Prodger, the British Consul General of Miami; Markus Thiel, the director of Jean Monnet Center of Excellence and European & Eurasian Studies Program; Cem Karayalchin, chairman and professor in the Department of Economics; and Gwyn Davis, an associate professor in the Department of History at FIU.
With the pound plunging to its lowest level and prompting Prime Minister Cameron’s resignation, the Brexit results have already shocked global markets, roiled the stock market and thrown British politics into disarray.
In Thursday’s election, the referendum asked UK citizens if they wanted to remain or leave the EU. They voted to leave the EU with 52 percent to 48 percent.
“I am appalled of the outcome of this referendum. I cannot pretend to be anything other than appalled by it. I think it’s a serious error and the consequences are going to be catastrophic both socially and economically. It was an unnecessary referendum, but that’s just my personal opinion,” said Davis.
Prodger emphasized that at the moment, Britain is still a EU member.
The clock won’t start ticking for Brexit until the UK submits Article 50 to the EU.
Article 50 is a European treaty that must be submitted in order to leave the EU. Once the article is submitted, the divorce is expected to be a two-year process.
“What is very clear from this debate is that the UK will continue to have an incredibly strong relationship with their European partners,” said Prodger.
The panelists pointed out that the UK will face both costs and benefits from leaving the EU.
Karayalchin mentioned that there are numerous reasons why UK citizens may feel that leaving the EU is for the best, including regaining control of their regulations in trade, less meddling from EU bureaucrats in Brussels and the abysmal performance of the European economy.
“It’s not about regulation, but rather the discontent of a large number of UK citizens have, due to the economic decline. There’s a widening disparity of income gap between the lower and upper classes in the UK,” he said.
However, Karayalchin predicted an estimated loss of 3.4 percent in GDP, and will face other economic consequences including short-term and long-term damage to trade and foreign investments with the EU.
Yet throughout this historical moment, no one really knows what’s going to happen next.
Thiel, who sees Brexit as a “geopolitical earthquake”, suggested that many referendums similar to Brexit don’t always occur. So, he wondered whether the UK will end up leaving the EU at all.
Prodger responded by saying that the UK will exit the EU, as the Prime Minister Cameron considers the referendum a “mandate from the people that must be respected.”
The main concern is that allowing the UK to leave the EU may encourage the other EU countries to follow suit. Thiel acknowledged that since other EU countries have the common currency – the Euro – they may be discouraged from exiting since it would be more expensive.
Ultimately, when asked about the special relationship between the UK and the U.S., Prodger said that it would remain that same.
“The UK has been very grateful for the many kind words from our partners here in the U.S. and whatever measure we decide to take. The U.S. is one of the UK’s most successful alliances. The U.S. will remain one of our closest and most enduring partners,” he affirmed.
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