The British voted on 23 June to leave the European Union (EU). The result was confirmed early in the morning of 24 June, British time. What happens next? I have the following ten forecasts and predictions:
The economy won’t collapse
The value of pound sterling fell strongly overnight on foreign markets, but will rebound.
Part of this fall is a self-fulfilling prophecy by the chancellor, who warned that the British economy, family wealth, pensions, house prices, and public spending would collapse the morning after a vote to leave. Financial markets effectively bet against a Brexit, so must naturally adjust quickly. The prime minister spoke to reassure the markets after the votes were counted, reminding people that nothing will change in how Britain trades for years.
One benefit of the weaker pound is cheaper British exports, which will help to correct the imbalance in Britain’s trade with the EU. Additionally, British businesses will rush to expand their opportunities in the rest of the world.
Britain will remain in the European free trade area
Norway, Iceland and Switzerland already are members of the free trade area, without being members of the political union. Brexiteers repeatedly pointed to these countries as inspirations for the sort of relationship with the EU that they would prefer. Britons voted to join the free trade area in 1975, in their first chance to vote on supranational membership. The United Kingdom Independence Party always campaigned for Britain’s return to a free trade area without the political union. UKIP leader Nigel Farage said on BBC Radio 4’s Today program that he looks forward to Britain’s exit from the EU while retaining access to the free trade area.
Too many commentators mischaracterized Brexiteers as opposed to free trade or globalization, or as selfish rebels against personal failure to gain economically, but Brexiteers campaigned for Britain to negotiate free-er trade with the rest of the world, which the EU forbade, while surveys showed that a large majority of Britons wanted to remain in the free trade area, even if they wanted to leave the EU.
EU’s directive to “ever closer union” will stop, may reverse
The EU was failing before this referendum: it was weakened most dramatically in the last couple years by its own failings to control risks arising from Russian aggression and uncontrolled migrations. But the trends against the EU are longer term, since the EU became effective in the 1990s, with such fanfare but so little substantive commitment to resolve the fundamental problems of democratic deficit, political under-accountability, and accelerating social destabilization.
Just a few weeks ago, the Pew Research Center found that only about half of Europeans across all 28 members want to remain in the EU. Many countries have larger majorities in favor of exiting – including founder-state France (61 percent) – not just disaffected failures such as Greece (71 percent). More than twice as many Europeans want powers returned to national governments than want to give more powers to the EU. Austria, Denmark, Hungary, the Netherlands, Poland, and others have parties in government that are committed to national referenda. More referenda will happen; more members may exit.
The EU may survive, but its directive towards an “ever closer union” is over; it will talk more seriously about reform, which may stabilize it in its present form, but the union has peaked. Britons have made clear the reality that most European leaders chose to ignore: most Europeans want a free trade area, but they don’t want a closer political union.
United Kingdom nations will devolve further
The last referendum, in September 2014, decisively defeated the Scottish nationalists, when 55 percent of Scots voted against leaving the United Kingdom, but Scottish Nationalists successfully pointed out that Scots were alarmed by fear-mongering about Scotland’s economic prospects, while their nationalism remained strong. In the general election in May 2015, Scottish Nationalists took most Scottish seats in Parliament with a manifesto to hold another referendum. All Scottish districts voted to remain in the EU, while the vast majority of English and Welsh districts voted to leave, although these districts are irrelevant in any referendum except for administering the count.
Scottish Nationalists confirmed the day after the Brexit vote that they think this result proves Scotland’s want of another referendum on separation from Britain. The British government may grant more powers to the Scottish parliament, as it did before the last Scottish referendum to buy more votes to remain. But more devolution to Scotland will encourage more English demands for their own parliament: Scotland, Wales, and Northern Ireland have their own legislatures, but England does not. Irish nationalists (Sinn Fein) have already said that the result justifies their calls for a union of Northern Ireland with Eire, but the loyalist districts of Northern Ireland strongly voted to exit the EU.
Political science must admit repeated failings
British political scientists consistently erroneously forecasted the last general election of May 2015, mostly forecasting a strong victory for the Labour Party, even given exit polls on the day, but the Conservative Party won. They did not foreseet the strong vote to remain in the Scottish referendum on Scotland’s membership of the United Kingdom. Similarly, in the months before this referendum on the EU, most British political scientists and pollsters forecasted a vote to remain – even late last night. Worse, British political scientific commentators, like too many of my American colleagues, have mis-characterized the electorate – reducing voters to selfish economic interests and nationalist prejudices that do not empirically or ethically represent tens of millions of people.
We should also consider the woeful state of European studies in America.