Britain’s landmark decision to leave the European Union last week has provoked all sorts of responses. Leaders like President Obama and French President Francois Hollande were quick to express both sadness and acceptance, while others worry that Britain’s decision threatens to undo the entire European Union.
“This is a blow to Europe and to the European unification process,” laments German Chancellor Angela Merkel.
Billionaire hedge fund legend George Soros, who had made grim predictions about Britain’s financial future before the referendum, now says the collapse of the EU “practically irreversible.” The EU’s ongoing economic struggles, combined with the failure to adequately respond to the migrant crisis, have lead to a “catastrophic scenario” that threatens to send shockwaves across the world, says Soros.
“The consequences for the real economy will be comparable only to the financial crisis of 2007-2008…Tensions among member states have reached a breaking point, not only over refugees, but also as a result of exceptional strains between creditor and debtor countries within the euro zone.”
The pound sunk to 30-year-lows the very day after the Brexit vote. The effects were felt throughout global markets, with numerous stock indices in Europe dropping 10%. The S&P 500 fell 4.59% while shares of British banks dropped 20%.
The United Kingdom might not survive its controversial decision. Scotland has already threatened to hold an independence referendum so that it can rejoin the EU as a separate entity.
Dutch politician Geert Wilders and French politician Marine Le Pen are leading the charge against further integration and demanding their countries hold referendums on EU membership. Germany believes that Austria, Finland, and Hungary could also leave.
Berlin will have to pay an additional £2.44 billion to the EU each year now that Britian has left. This and other fears have prompted the German government to propose Britain become an “associated partner country” of the EU.
Britain’s exit negotiations are expected to take up to two years.