Quo vadis European Union?
Yesterday 51,8% of UK voters (72% of participation) decided to back the exit from the European Union. Stock markets open this morning with huge losses, a new black Friday hits the financial markets.
The British Pound loses almost ten percent and crashes to its lowest levels in 31 years. The US dollar jumps 2,5% making US exports more expensive questioning like that the economic growth forecast of North America. Futures for the US stock markets show a 3-5% drop for today's session.
CNN Money states: "In the weeks after a vote in favor of Brexit, the S&P 500 would likely slump 5% and volatility would spike by 40%, according to a scenario analysis conducted by financial technology company FIS."
Image: Spanish Ibex this morning - Banco Santander losing 24% of its value
As many of us know, political decisions affect economies and our lives usually only on the short term. In this case I believe that the decision will have a serious mid and long term impact on the lives of the ones - like me and my family - that are living in the European Union.
As a political result of the Brexit Prime Minister David Cameron just resigned. "There will be a new Prime Minister in October". It was his decision to do this referendum and I am sure the result was not what he expected. He caused a tsunami difficult to control where damages are difficult to forecast while its ripples reach the rest of the world.
But this tsunami will not end today. It just started and its ripples will reach the coastlines of the affected countries worldwide with more or less impact during years.
First question that comes up: Who's next? Will Angela Merkel do the same in Germany a country that like UK is one of the biggest contributors to the EU? This morning voices in the Netherlands and France are asking for an exit referendum too and the UK is deeply divided as Scotland and Ireland voted to stay in the EU. Most likely they will organize a referendum lo leave the UK know and to stay in the EU.
That would definitely be the end of the EU as we know it. National currencies, the old frontiers and controls and the associated costs will come back.
Second question: What will happen to the free movement of European Citizens, people like me that moved from one european country into another and have their families? Will I have to change my nationality to stay in Spain? Will Spain - not the EU any more - allow me to do this?
Third and last question: What will happen to the economical weaker countries? How will these countries and people be able to finance its economies? Interest rates without the support from the ECB will very likely shoot through the roof.
I wish you a great day!
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Born in Germany 1967. Living since 1999 in Spain. Married and father of three. Evangelist of Stephen R. Covey's "The 7 habits of highly effective people". Humble learner who helps others to get the best out of themselves.