If you’re one of the many Americans who thought Brexit referred to some kind of breakfast snack from Merry Olde England, you might have woken up wondering why the British pound is suddenly worth a whole lot less than it was yesterday.
See, Brexit wasn’t anything light-hearted and fun. It was a referendum vote over whether Britain should remain a part of the European Union. It took place yesterday, and the people decided to split apart.
Britain has always been the snooty big sister of the European Union, an economic partnership made up of 28 European countries. They never converted to the Euro currency, sticking instead with the pound, which had historically been stronger on the world market. Britain has also been quite disapproving of the economic hardships of nations like Greece, who have needed a boost from EU partners to stay afloat financially. Britain itself has hit some slow economic times and has implemented austerity measures to cut government spending.
The final straw has been immigration. EU residents are allowed to move and work between countries, so folks from more depressed areas have made their way to Britain. Some people see that as an unnecessary drain on national resources; leaving the EU cuts off this flow of immigrants.
The problem is, leaving the EU also cuts off the flow of multinational investment. Sacrificing the ease of traveling and working throughout the EU creates a much lower tax revenue, offsetting any gains made by no longer contributing financially to the EU.
I know. It’s all wonky as hell.
The reason Americans need to pay attention to this is that it’s having an immediate effect of global investment markets, so your retirement fund may be taking a beating. It’s also an eerie echo of the “Let’s take our country back!” anti-immigrant uproar seen among US conservatives. Analysts are warning that so-called populism is a strong enough motivator that it can lead voters to do really dumbass things, like vote for things that are in direct opposition to their own best interests.
::ahem:: Voting for Trump ::ahem::
The exit process will take up to two years to negotiate, and the referendum is technically non-binding. There is potential for change to the decision over time, especially now that Prime Minister David Cameron has stepped down. Perhaps a new voice in the room will shift opinion enough to avert a full separation.
Will we see a British reconciliation? Time will tell.