Brexit: what will be the consequences for both UK and EU?

Yesterday on 23 June 2016, Britons went to the polls and voted in favour of Brexit, namely to leave the European Union. As a result, David Cameron, UK Prime Minister, resigned. What will be the consequences for both UK and EU?

The bell tolls for the European Union today. Yesterday on 23 June 2016, Britons went to the polls and voted to put an end to their engagement in the European integration process once and for all.

More precisely, 51.9% voted in favour of Brexit, while 48.1% voted for remaining in the European Union.

These results will leave deep scars in the United Kingdom society. This is particularly true if we consider the results in certain regions of the country such as Scotland and Northern Ireland, where voters clearly stated their wish to stay in the European Union.

David Cameron has resigned as prime minister, although he promised to remain in post until the autumn. Now , whoever leads the country will have to guide the constitutional way out of the EU, to manage negotiations for a new trade agreement and to control the effects of the vote on the country.

While announcing his resignation, Cameron also said he would not yet trigger article 50, namely the clause in the Lisbon treaty that kicks off the two-year process of withdrawal from the EU. So what are UK plan to leave? What will be the consequences of this decision? What will be the reaction of the EU?


What is UK plans to leave?

In an article appeared on, Chris Grayling, cabinet minister and one of the leaders of the Leave campaign, was reported as saying that an informal process should be Westminster’s ambition for Brexit. According to him, the UK should start negotiations on a trade deal in exchange for a continuation of the UK’s participation in the EU budget.

Ideally, he added, bills should be introduced in order to limit the interventions of the European Court of Justice on human rights issues in Great Britain. Britain should also aim to scrap VAT on tampons and energy bills, as well as control immigration by establishing an “Australian-style points system”.

Meanwhile, externally, the government would start negotiations with third countries in order to establish trade agreements.

Internally Scots’ re-emerging claim for independence could also be a problematic point in the Government agenda. The majority of Scots and Irish voted to stay in Europe and might decided call for another referendum on independence or, in the case of Northern Ireland, to require the reunification with the Republic of Ireland.

The government will also have to face the economic impact of the vote, considering that multinationals and the City would start implementing their contingency plans and to relocate part of their activity to EU soil.


What will be the consequences of this decision?


A strong hand at the negotiation table is expected by Brussels and other EU capitals, as it is important for the European Institutions to give the impression that it is a burdensome prospect to leave the EU and prevent eurosceptic parties from banking on Brexit.

Therefore, there is no guarantee of getting a good trade partnership for Britons because EU trade partnerships of Switzerland, Norway or Albania, although claimed as a solution by Brexiters since the beginning of the campaign, they all present some downsides.

Considering that services are not included in traditional trade deals, the UK will probably have to join the free-trade zone, unless to renounce trading with the EU in a sector worth 80% of the country’s economic output. Therefore, if they accepted joining the free-trade area, Britons would still be exposed to Brussels’ rules.

Meanwhile, he continues, the new government in place will be under great pressure due to trade uncertainty and the its potential impact on the UK economy that, according to the UK Government’s estimation, would shrink by 6% in the next two years, while inflation would rise more sharply, and house prices would be 18% lower. Therefore, Westminster will probably look for a quick deal to avoid further risks.

What will be the reaction of the EU?

The aftermath of Brexit will be a challenging time for the EU. Indeed, the UK, one of the EU most influential members, worth a fifth of its economy as well as a strong military and a great deal of soft power, has broken the taboo of leaving the ever closer Union and, for the first time in its history, the European institutions must now formally organize a break up.

Contingency plans were established by both the Bank of England and European Central Bank to deal with a “Brexit shock” to sterling and the euro – at least in the short term. From today on, state leaders and the President of the three EU main institutions, such Donald Tusk, Jean-Claude Juncker and Martin Schulz, will start a series of political meetings aimed to both build the EU negotiating line with the UK and discuss the future of the EU integration.

In the meantime, Europhile circles have started again to talk of moving on to further integration. Indeed, now that the UK is officially out and there is no main opponent to the creation of an EU army, Brussels could push for this new step.  Another idea could also be to opt for a further integration of the euro zone.

The momentum created by a Brexit could be used by EU leaders to relaunch the European project, although French and German political agendas in do not favour a drastic move.  Indeed, general elections will be held in both Germany and in France in 2017. In any case, it is sure that the EU will be forced to propose some kind of solution to Europeans.

For more information on the Brexit consequences, read NEU’s selection of articles here.

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