In short, the UK has now voted to leave the European Union. In a closely contested vote England voted for Brexit 53% to 46%, the interesting thing is that Scotland and Norther Ireland both voted to stay by wide margins.
What Is the European Union?
The European Union – often known as the EU – is an economic and political partnership involving 28 European countries. It began after World War Two to foster economic co-operation, with the idea that countries which trade together are more likely to avoid going to war with each other.
It has since grown to become a “single market” allowing goods and people to move around, basically as if the member states were one country.
It has its own currency, the euro, which is used by 19 of the member countries, its own parliament and it now sets rules in a wide range of areas – including on the environment, transport, consumer rights and even things such as mobile phone charges.
What does Brexit mean?
It is a word that has become used as a shorthand way of saying the UK leaving the EU – merging the words Britain and exit to get Brexit, in a same way as a Greek exit from the EU was dubbed Grexit in the past.
What happens now?
For the UK to leave the EU it has to invoke an agreement called Article 50 of the Lisbon Treaty.
Cameron or his successor needs to decide when to invoke this – that will then set in motion the formal legal process of withdrawing from the EU, and give the UK two years to negotiate its withdrawal.
The article has only been in force since late 2009 and it hasn’t been tested yet, so no-one really knows how the Brexit process will work, according to BBC legal correspondent Clive Coleman.
Mr Cameron, who has said he would be stepping down as PM by October, said he will go to the European Council next week to “explain the decision the British people have taken”.
EU law still stands in the UK until it ceases being a member – and that process could take some time.
The UK will continue to abide by EU treaties and laws, but not take part in any decision-making, as it negotiates a withdrawal agreement and the terms of its relationship with the now 27 nation bloc.
What Does It Mean For Americans?
The U.S. dollar is rising sharply, which could put the brakes on U.S. exports, damaging the sales and profits of dozens of multinational companies based in the United States.
Add to that the fact that Britain is the No. 5 buyer of U.S. goods and services, totaling about $56 billion last year, according to the U.S. Census Bureau. The British pound has plummeted by the most ever in a single day, about 8 percent, to its weakest level in three decades, and that will make U.S. products substantially more expensive in the United Kingdom.
But that’s not all. The dollar has also surged by nearly 3 percent against the euro, and the EU is an even bigger export market for the United States, totaling $272 billion last year.
That spells trouble for the hundreds of U.S. companies with substantial revenue from Britain and the rest of Europe. Non-U.S. sales will now be worth less when translated back into dollars. U.S. corporate profits are already in the fourth consecutive quarter of year-over-year declines, to which the dollar’s strength over the last three years was a significant contributor. A renewed bout of dollar strength risks extending that slump.
On the upside, traveling to Britain and the rest of Europe is likely to become noticeably cheaper.