So long EU, says Britain

UK stunningly votes to exit EU, Cameron quits

London/Brussels, June 24: Britain did the unthinkable as it voted to quit the European Union after 43 years of membership, throwing the world markets in a tailspin and leaving European leaders worried over how to stem a rising Eurosceptic tide. Prime Minister David Cameron, who had strongly backed the “Remain” vote, said he was quitting.

The European Union’s top leaders on Friday said they expect the UK to act on its momentous vote to leave the union “as soon as possible, however painful that process may be” and that there will be “no renegotiation”.

Britons voted 51.9 per cent for Brexit against 48.1 per cent of ‘Remain’ vote in a historic referendum on Thursday.

Britain joined the European Union on January 1 in 1973.

The pound sterling fell to its lowest level against the US dollar since 1985 — and the euro took a hit too.

England and Wales voted strongly to exit while London, Scotland and Northern Ireland backed the “Remain” vote. UK Independence Party leader Nigel Farage, who had been campaigning for 20 long years to dump the EU, called Friday result UK’s “Independence Day”.

A grim looking Cameron admitted he had lost the battle and would step down by October.

“The British people have decided to follow another path. So they need a new prime minister,” he said in a televised statement outside 10 Downing Street, the prime minister’s official residence.

Farage told cheering supporters that “this will be a victory for ordiry people, for decent people”.

Britain will be the first country to leave the 28-member EU. The process could take as long as two years after effecting article 50 of the Lisbon treaty, which is effectively Britain’s formal letter of resigtion.

The presidents of the European council, commission and parliament — Dold Tusk, Jean-Claude Juncker and Martin Schulz, respectively — and Mark Rutte, the prime minister of the Netherlands which holds the EU’s rotating presidency, said any delay in Britain’s exit would “unnecessarily prolong uncertainty”.

After emergency talks in Brussels, the four said they regretted, but respected Britain’s decision.

“This is an unprecedented situation, but we are united in our response,” they said in a joint statement.

German chancellor Angela Merkel expressed “great regret” at Britain’s decision, but said the EU should not draw “quick and simple conclusions” that might create new and deeper divisions. The union’s foundation was “the idea of peace”, she said.

French president Franã§ois Hollande in Paris said he “profoundly regrets” the Brexit vote but that the EU now had to make changes.

Hollande said the vote would put Europe to the test: “To move forward, Europe cannot act as before.”

Martin Schulz said he would speak to Merkel about “how to avoid a chain reaction” of other EU states following Britain.

“The chain reaction being celebrated everywhere now by Eurosceptics won’t happen,” he said.

The EU was the world’s biggest single market and “Britain has just cut its ties with that market. That’ll have consequences, and I don’t believe other countries will be encouraged to follow that dangerous path,” he said.

Tusk said the EU’s 27 remaining members would meet next week to assess their future without Britain,

US President Barack Obama said he respected the decision of Britons and reassured them that their special relationship with the US will remain.

“The people of the United Kingdom have spoken, and we respect their decision,” he said.

Thursday’s turnout in the referendum was 71.8 percent — the highest in a UK-wide vote since 1992. Over 30 million people voted.

The pound dropped 11 per cent to its lowest level in over three decades on Friday, wiping out earlier confidence from exit polls that suggested the ‘Remain’ camp would prevail.

The euro, seen to be vulnerable if Britain voted to leave the EU, was also down 3.2 per cent against the US dollar, which rose strongly against emerging market currencies.

A stunning slide in sterling at 3.40 a.m. saw the currency plummet below $1.40, and 20 minutes later it had breached $1.35 to levels last seen in 1985. An hour later, the pound touched a new low at $1.3224.

The UK vote spurred similar calls to exit the EU.

Dutch Freedom Party leader Geert Wilders said it was the time for a referendum in the Netherlands. “Hurrah for the British! Time for a Dutch referendum!” he tweeted.

Marine Le Pen, the leader of France’s far-right Front tiol Party, also sought a similar referendum in France. “From #Brexit to #Frexit: It’s now time to import democracy to our country. The French must have the right to choose!” she tweeted.

The Brexit vote has ushered in uncertainty for the 1.3 million Britons living in other European U countries and also the estimated three million non-British EU citizens living in the UK.

Why did those who voted to opt out of the EU do so?

There were four major issues. The first: Competitiveness; the second: Jobs; the third: Immigration; and the fourth: Sovereignty. Common Britishers think they were losing power as a country because everything gets decided in Brussels (capital of the EU), and if they get out of the EU they would be more independent. Or that they would do their own trade deals and decide their own laws -- basically, having their sovereignty back.

Moreover, because of the civil war in Iraq and Syria, the EU had decided that they would distribute the refugees all across its member States, and Britain was against it. There are two issues here: One was interl mobility, which meant that anybody could move from one part of the EU to another. In the last one year there was a lot of movement from Central and Eastern Europe, Poland and Hungary. More recently, mobility was opened up for Bulgaria and Romania. A lot of these people from Central and Eastern European countries were moving to the UK because of better job prospects. So all of that will stop.

What will be the impact on India?

There are more than 800 Indian companies in the UK. For certain companies such as the Tatas who have Jaguar Land Rover in the UK, Britain was a good market where they produced cars and sold it across the market in Europe. It was a single market. Now they will have to technically 'export' from Britain to Europe, which will raise their costs. It would not be immediate, though. Earlier, the most immediate reaction the Indian government gave was that the economy would be able to take the shock because the British pound was falling. That confidence has been shattered. The markets will stumble and settle at a new low, and then come back. Also, India has been negotiating a free trade agreement (FTA) with the EU, which has been at an impasse on the issue of negotiating bilateral investment treaties. Now that the UK is out of the EU, India may not only have to renegotiate the FTA with the union, but also have to work toward a separate agreement with the UK. To be sure though, it could take more than two years for the UK to formally exit the EU.