Is Brexit the Many Dominoes?

Is Brexit the First of Many Dominoes? [Chart]

JEFF DESJARDINS, on June 24, 2016

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UK AND THE REST OF EUROPE BRACE FOR AN UNCERTAIN FUTURE

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Markets have been turned upside down by a surprise Brexit result and the resignation of David Cameron. While there is looming uncertainty around how this will affect the United Kingdom and Europe from an economic perspective, it might be just the tip of the iceberg in terms of long-run consequences.

A Brexit opens the door for future events that would be previously unfathomable by popular opinion, and it gives vital ammunition to groups that are seeking their own referendums for independence.

UNWILLING PASSENGERS?

As the UK ship distances itself from European docks, there are two passengers that may have been more comfortable remaining on shore.

While England and Wales voted to “Leave” with 53.4% and 52.5% respectively, Scotland and Northern Ireland were both firmly in “Remain” territory. Scotland, which previously held its own independence referendum in 2014, voted overwhelmingly to have the UK remain in the EU with a 62% vote. Northern Ireland had a similar sentiment with 55.8% voting “Remain”.

Scotland’s First Minister, Nicola Sturgeon, said today that a second independence referendum for Scotland is“highly likely”. She feels Scotland was taken out of the EU against its own will, and that Scottish independence is worth revisiting.

Meanwhile, Northern Ireland has echoed these calls, instead potentially looking at voting on a united Ireland. Northern Ireland is the only country in the UK that shares a land border with a country in the EU.


Brexit Fever Spreads: Austria and Holland are Next Up to Leave EU

JEFF DESJARDINS, on June 30, 2016

Europe’s got a fever, and the only prescription is…more referendums.

Eurasia Group, a geopolitical risk consultancy, shared this map today after analyzing EU countries for the potential of further Brexit-like events:

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It’s not the type of quantitative data we usually seek, but in this case we’ll make an exception – Eurasia Group, headed by Ian Bremmer, is the largest political consultancy in the world.

AUSTROUT OR NEXIT?

According to Eurasia’s analysis, the two countries that are most likely to have referendums on EU membership are Austria and The Netherlands.

It’s been 20 years since Austria held the referendum to initially join the EU. However, according to a pre-Brexit poll, nearly 40% of the population now wants to hold a referendum to leave.

“Europe can collapse because of the refugee crisis and uncontrolled immigration,” says Sebastian Kurz, the Austrian Foreign Minister. “Only by a speedy transformation can we prevent a wildfire. The EU needs to be rearranged. Everyone, who is for Europe, also needs to be a force in making the necessary changes.”

In other words, there must be fast, sweeping changes to their arrangement or they are out. Unfortunately, making fast, sweeping decisions is not what the European Union is known for.

The Dutch share a similar sentiment.

Despite Netherlands being a founding member of the EU and currently holding the EU presidency, a June poil showed 54% of people want a referendum to leave. So far, in a theoretical vote, the independence camp is leading with 48% of the vote, while 45% would seek to remain in the EU.

WHAT’S NEXT?

While Eurasia Group sees Austria and the Netherlands as the frontrunners for the next referendum vote, there are many other dominoes that could fall. France, Italy, and Sweden are among the key countries that have strong Eurosceptic movements.

If a Brexit result was a tinderbox that got the fire going, then any major developments in these countries could be the gasoline. Another “exit” event would make clear to everyone that there is an inevitability of failure around the Union.

Brexit negotiations and populist dissent will be in the news for some time, and markets will be volatile, extremely sensitive, and over-reactive as a result

 


Sources:

1.      Is Brexit the First of Many Dominoes? [Chart]

2.      Brexit Fever Spreads: Austria and Holland are Next Up to Leave EU