Brexit: What You Need to Know

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Well, they did it. British voters decided to “declare their independence” from the European Union. But before we start talking in grand terms about self determination, there are some points to keep in mind. This is not Britain’s “July 4, 1776 moment.” This was a non-binding referendum that will require multiple years of negotiations between The UK and Brussels. But before those negotiations even start, there will likely be months of internal discussions in Whitehall to figure out what comes next. Here is how I see it playing out:

  • At some point in the next three months, Britain will formally invoke Article 50, which will begin the exit negotiations. Once invoked, this process should take two years.
  • At this point, Britain’s access to the European market becomes ambiguous. Nothing will officially change until the exit is complete. If Britain were to negotiate a trade deal similar to what the Swiss enjoy, that is — at least in theory — an entirely separate set of negotiations that cannot even formally start until after the exit arrangements have been made. Of course, this is Europe, where all treaties seem to be flexible and open to interpretation.
  • The EU will probably stop short of brutally punishing the UK for leaving as doing so would hurt the EU just as badly. No one wants to see the European nationals working in London’s banks to get booted out, and no one wants to see British expatriates in Europe sent packing.

Bottom line, no one really knows what this will look like, and there promises to be a lot of muddle and a lot of making up the rules as we go.