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The big news this morning is Brexit — to the surprise of many, who thought the Remain side had been shored up in recent weeks, the UK voted to leave the EU. The withdrawal won’t come for a couple of years, as negotiations and preparations are necessary, but in the meantime, Prime Minister David Cameron has resigned and the markets are in turmoil.
Brexit’s global impact is potentially massive. The UK is still one of the largest world economies and is a major centre of banking and trade, and its host to several tech and employment hubs. Its leaving the EU has will have impact on how countries negotiate trade deals, how visas are issued, the value of the pound, the stability of the UK itself (considering the Scottish and Irish voted to stay), and that of the EU. It’s a story that every business and HR leader should pay attention to in the coming weeks, months and years.
Here is your Friday (slightly more than) five:
While this vote is shocking, it didn’t come out of nowhere. Separatist, anti-EU, nationalist and even fascist groups have been gaining traction in Europe for years. And while the EU has consistently remained an attractive trading partner, that may change if more countries vote to leave the EU.
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Infighting the ruling UK Tory party has “held the EU parliament hostage” and they want the country’s exit negotiated quickly. Prime Minister David Cameron has announced that he’s resigned and that it will be up to his successor to begin those negotiations. That introduces even more uncertainty into the EU.
Scotland and Ireland both voted, by a comfortable margin, to stay in the EU. Scotland is suggesting they may hold another independence referendum, as Brexit stands to benefit their independence claims. Ireland, meanwhile, has also raised the possibility of independence with Sinn Fein — the political party with close ties to the IRA — leaders saying they don’t recognize UK leaders’ authority.
So-called Eurosceptics, who argue that the EU has weakened European economies and worked to dissolve what is unique about each individual country, have been bolstered by the Brexit vote. And thanks to the nationalist flavour to the Brexit referendum, and the prominent advocacy of UKIP, Britain’s far-right nationalist party, nationalists all over Europe have been heartened.
Markets were already volatile leading up to the Brexit vote but overnight they went wild. Expect to see this kind of volatility for years to come, as the leaving negotiations introduce tremendous uncertainty into the value of existing trade deals and immigration rules.
If you think that as an American you’re insulated from the effects of yesterday’s Brexit vote, well, think again. It’s already sent American markets into a tailspin.