UK Votes to Exit EU: What It Means, and What’s Next

Voters were asked to answer one question: "Should the United Kingdom remain a member of the European Union or leave the European Union?"

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Britons have voted to leave the European Union, their concerns about immigration and what some saw as the EU's ever-increasing power trumping the draw of being part of a single market of 500 people and a project forged from the ashes of World War II.

Here's a look at what happens next:

Prime Minister David Cameron, head of the ruling Conservative Party, announced he would step down by October. Speaking to reporters outside his Downing Street office, Cameron said it wouldn't be right for him "to try to be the captain that steers the country to its next destination."

Former London Mayor Boris Johnson, also a Conservative, was the most prominent supporter of the "leave" campaign and now becomes a leading contender to replace Cameron. Johnson said Friday he was "sad" to see Cameron resign but didn't say whether he plans to replace him.

President Barack Obama, who had strongly urged that the U.K. remain in the EU, on Friday said both entities will remain "indispensable partners" of the U.S.

European Council President Donald Tusk said the 28-member bloc will meet without Britain at a summit next week to assess its future. Tusk vowed not to let the vote derail the European project.

"What doesn't kill you, makes you stronger," he said.

The pound suffered one of its biggest one-day falls in history Friday, plummeting more than 10 percent in six hours amid concerns that severing ties with the EU will hurt the U.K. economy and undermine London's position as a global financial center.

Authorities — including the International Monetary Fund, the U.S. Federal Reserve and the Bank of England — had warned Britain's exit would send shivers through a world economy that is only slowly recovering from the global crisis that began in 2008. Now economists will wait to see if their predictions come to pass.

Still, the most direct economic pain will be felt by the United Kingdom. Moody's Analytics estimated that global economic output would be 0.25 percent smaller after five years than it otherwise would have been, while the EU would be a full percent smaller and the U.K. 4 percent smaller.

Then there are indirect events. Stock market plunges can make people feel poorer and less likely to spend. Uncertainty can make executives put off investments in new production.

EU leaders will see Britain quitting as a dangerous precedent and a potentially fatal blow to the European project.

Some face growing euroskepticism from their own citizens and may feel the need to make a strong case domestically for why the now-27-nation bloc has a future. This could lead to reforms of how the EU works.

Future negotiations may be overshadowed by a sense of betrayal and the feeling that an example needs to be made of the U.K. to discourage others from leaving too.

The fallout could also hit Europe's fragile growth. Germany's Finance Minister Wolfgang Schaeuble recently said "it would be a miracle if a withdrawal of Britain would come without economic disadvantages."

On the other hand, a British exit, or Brexit, could spur the European Union into action. Since joining the club in 1973, Britain has shaped the bloc mainly by putting the brakes on the drive toward ever-closer political union, a project that could now be revived with gusto. 

A British exit could embolden anti-EU, anti-immigration political movements such as the Front National in France. Its leader, Marine Le Pen, is already considered likely to make the final round of presidential elections next year.

Geert Wilders, head of the anti-Islam, anti-EU Freedom Party in the Netherlands, called Friday for a referendum on the EU there, too.

And Scotland's First Minister Nicola Sturgeon said a second Scottish referendum on independence from the United Kingdom is now "highly likely." In contrast to England and Wales, a majority of voters in Scotland and Northern Ireland voted to remain in the EU. Scotland voted in 2014 to remain a part of the U.K. but that decision was seen by many as being conditional on the U.K. remaining in the euro bloc.

Britain's referendum doesn't automatically trigger an exit from the European Union, which has led a few commentators to suggest that lawmakers might simply decide to ignore or slow-ball the process. So could they?

"In legal theory that is possible. In practice that is absolutely not possible," said Alan Renwick, the deputy director of the Constitution Unit at University College London.

Renwick said an unlikely do-over in the future would only be plausible "if a party wins the 2020 election on a platform of having a second referendum and trying to go back in."

The pound and euro's drop on Friday should make British and eurozone exports cheaper overseas. American travelers heading to Britain and the rest of Europe are going to find cheaper meals, hotels, souvenirs and museum admissions because the U.S. dollar will go farther against a weaker pound and euro.

Airfare for peak summer months probably won't dip but any taxes and fees levied in Europe will be cheaper. For instance, all coach passengers leaving the U.K. for the U.S. pay 73 pounds for the Air Passenger Duty. That tax is now cheaper.

The result will trigger a new series of negotiations as Britain and the EU search for a way to separate economies that have become intertwined since the U.K. joined the bloc on Jan. 1, 1973.

Under Article 50 of the Treaty of European Union, talks would likely last two years, with the possibility for extension if all of the remaining 27 EU nations agree. But the clock starts ticking only when the U.K. notifies the EU that it wants a divorce — and some on the "leave" side have suggested that this won't occur until 2018.

However, the EU may not accept a delayed exit.

"U.K. negotiations with the European Union will prove difficult, given that EU leaders will not want to set a precedent for an easy withdrawal for other countries that could reconsider their status, such as Denmark," said Howard Archer of research firm IHS.

No matter what, the EU will face issues. Alongside economic woes, troubles with Greece and the inability to agree on how to manage a refugee emergency, a British exit would deepen Europe's existential crisis.

Copyright AP - Associated Press
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