British Prime Minister David Cameron gambled and lost, catastrophically so. Britain is leaving the European Union. Political and economic chaos lie ahead on both sides of the English Channel. Britain and the EU are already emerging from the wreckage as vastly diminished economic and political forces because of a vote that was opportunistic and unnecessary.
Mr. Cameron resigned early Friday after the official results were announced. "I do not think it would be right for me to try to be the captain that steers our country to its next destination," he told reporters on Friday outside his Downing Street office.
Mr. Cameron spoke after Britain voted by a tight but clear margin Thursday to leave the European Union after a bitter campaign.
With all 382 voting areas reporting, Leave defeated Remain by 52 per cent to 48 per cent. The margin between the two sides was more than 1.2 million votes and turnout was more than 70 per cent of eligible voters.
The result in favour of Britain's exit from the EU – Brexit – defied the latest polls, which had predicted a narrow victory for the Remain side. The soaring markets had said the polls were right. But polls and investors can be dead wrong, and they were in this case. The market fallout has been swift and brutal. There was blood, everywhere.
Mr. Cameron's folly – his pledge after his 2015 re-election to hold an in/out referendum on EU membership – has handed the EU its first major setback since its predecessor was formed with the Treaty of Rome in 1957. Britain now becomes the first EU member to hit the road. Brexit has proven that the EU is reversible.
It may also prove that the United Kingdom is reversible too. Britain itself could break into pieces – Scotland voted strongly in favour of EU membership and has already held one referendum on independence. A second is inevitable. Scotland did not want to be dragged out of the EU by the pro-Brexit vote in England and Wales.
Mr. Cameron should be roundly condemned for calling the referendum. The British public was not demanding the vote. Nor, in the main, were Conservative Party MPs, half or more of whom were pro-EU, as was Opposition Leader Jeremy Corbyn, the majority of voters and politicians in Scotland, most young voters and most residents of London.
Mr. Cameron called the referendum to appease the Euroskeptic arm of his party, that's it. But his response to a parochial issue would gamble the entire future of Britain and the EU. The mandarins and politicians in Brussels, Berlin, Paris, Rome and other pro-EU capitals were angry from the onset. Last week, Sweden's EU minister Anne Linde said: "The whole [referendum] process is bad. Cameron has used Europe to solve domestic policy problems in what I see as an irresponsible way."
Indeed. The Brexiteers won. The only EU country that can possibly muster a wry smile about the outcome is Greece. Since Greece handed Europe the "debt crisis" in 2009, Greece's forced or voluntary exodus (Grexit) from the euro zone and the EU was considered the greatest threat to the integrity of the EU. Back then, it was unimaginable that the EU's wrecking ball would take the form of big, dreadnought Britain, not little Greece.
The Brexiteers clearly did not vote to leave the EU for economic reasons. Their initial argument that Brexit would cause little or no economic harm to Britain was thoroughly demolished by almost every economist, think tank and official institution, from the Bank of England to the International Monetary Fund, that bothered to take a view on consequences of Brexit after 43 years of EU membership.
By the end of the referendum campaign, even the Brexiteers were hard pressed to make the economic case for Brexit. So the referendum evolved into a "Take our country back" campaign – an insurrection against the EU itself and all it stood for, combined with the predictable anti-establishment vote. Shorn of the regulation-mad gnomes in Brussels and the EU leaders who insisted on an ever-closer union – read: sovereignty robbing – Britain would be able to reclaim its independence. It could secure full control of its borders – no more unwanted refugees or migrants. It could revert to its role as a great seaborne trading nation, forging trade agreements with everyone. They thought: Why be tethered largely to the sinking EU?
Their arguments were mostly hogwash, of course. The world favours big trading blocs; on its own, Britain (or what is left of it, if Scotland bolts) now faces decades of frustration as it tries to negotiate open-market agreements with dozens of countries, some of whom will put it at the back of the negotiating queue, as U.S. President Barack Obama has suggested.
Foreign investment into Britain will probably wither. The car, aviation and other big industries that built factories in Britain did so on the assumption of unfettered access to the EU. Now that Britain is on its way out, why would, say, Nissan or Airbus expand their operations in Britain? They won't. London's world-scale financial services industry could be doomed, too. British banks probably will lose their "passports" to operate freely in all EU countries. Worse, the rump EU will no doubt find a way to ensure that Frankfurt or Paris steal London's enormous euro and bond trading and clearing businesses. It is unimaginable that the EU would allow a non-EU country to dominate euro trading.
In short, there is absolutely no economic win scenario for Britain outside the EU. The Brexiteers who voted with their hearts will soon be hurting in the wallet. But any problems they created for themselves pale in comparison to what the EU now faces. The EU is suddenly a smaller place. It would be one thing to lose Greece or Portugal, quite another to lose a member state that is roughly tied with France for economic clout. Without Britain at its side, the EU also loses its most liberal economic voice and a powerful country that served a useful counterbalance to Germany. Without Britain, the EU stands to become a German-dominated state, a notion that will not sit well in the austerity-wearing Mediterranean countries like Greece, where effigies of German Chancellor Angela Merkel were burned during the peak crisis years.
The EU will die unless it reinvents itself. How it will reinvent itself is an open question. With Euroskeptic Britain gone, the rump EU could find it easier to complete the grand European economic and political integration project, including the launch of EU bonds and an EU army. But the opposite is more likely to happen. The EU states have been growing less enamoured with the EU since the 2008 crisis. Some are bound to hold British-style in/out referendums. The governments of the Netherlands and Denmark lately have lost referendums related to EU matters.
Britain's exit is bound to embolden the rising anti-EU forces throughout the bloc, from France's right-wing, xenophobic Front National to Germany's Alternative fuer Deutschland. Where it will end, nobody knows. The pity is that, as a concept, the EU is a wondrous thing. It has helped to spread democracy to Eastern Europe. It has created the world's largest open market and established high environmental and educational standards. It has the world's toughest – and best – anti-trust regulators. And it all could disappear because one man, David Cameron, decided to bet the future of Europe to try to cure a problem of zero interest beyond his nasty Conservative Party.
Editor's Note: An earlier version of this article incorrectly said Scotland did not want to be dragged out of Britain by the pro-Brexit vote. In fact, Scotland did not want to be dragged by England out of the EU.