All Aboard the Brexit Train

"Brexit" has taken the global press by storm as Great Britain voted to leave the European Union after 43 years. 

The United Kingdom's decision to leave the EU is not so simple. For a member state to leave the European Union, two years of negotiations take place and those negotiations are in favor of the European Union, not the state withdrawing its membership. If the two years ends without an extension or a deal, the United Kingdom automatically reverts to World Trade Organization rules in which the UK would face tariffs on all goods it sells to the European Union. 

The decision has already shaken global markets and caused a massive drop in stocks. The value of the British pound has plunged.  It has also caused British Prime Minister David Cameron to resign. In his resignation speech Cameron asserted "I was absolutely clear about my belief that Britain is stronger, safer and better off inside the European Union." 

Interestingly, the vote was incredibly close with 52 percent voting to leave the European Union and 48 percent voting to stay. The results show a sharp regional divide within the United Kingdom as London, Scotland, and Northern Ireland all had strong pro-EU results, as did the more rural and economically disadvantaged regions in the United Kingdom. 

Many of the voters who voted to stay referenced immigration as their reasoning, saying immigrants were driving down wages and costing people jobs. 

Most economists across the world encouraged Great Britain to remain within the European Union, as did prevalent political leaders. 

Some predict the United Kingdom may break apart in light of this decision. Some in Northern Ireland have called for a referendum on unification with Ireland, who remains a European Union member state. This decision also may cause potential problems with Scotland who may hold another referendum on Scottish independence, after the 2014 vote to remain within the Untied Kingdom. 

While this decision is localized in the United Kingdom, such a decision has sent and will continue to send shock waves across the world. As the second greatest economy within the European Union, Great Britain greatly destabilized the entire European continent. 

Richard Hass, president on the Council of Foreign Relations (and interestingly the Commencement Speaker at my college graduation), has predicted "in five years, there will no longer be a United Kingdom." Chief economic advisor Mohamed A. El-Erian has predicted the European Union will continue on with a newly invigorated French-German partnership. Danielle Pletka, senior vice president for foreign and defense policy studies at the American Enterprise Institute, has predicted it could be a wake up call or 1933 all over again. She predicts other EU members may follow suit or the European Union could rise from the challenge. 

But unfortunately, only time will tell. EU laws remain in the UK until the UK formally withdraws from the EU, a process that has not been tested yet and could take years. But what's important to know is that the referendum's results are not legally binding, and Parliament still needs to pass the laws required for Britain to leave the European Union. The withdrawal agreement also has to be ratified by Parliament.

While the future of the United Kingdom and the European Union remains uncertain, one thing is for certain: such a decision will have effects that stem beyond Great Britain and Europe. In a highly globalized world, such a decision by one of the world's leading powers is a decision that the world needs to pay attention to.