Brexit Panic Sets In

The Dreaded Contagion Effect

Referendums are tricky in the EU. This time around, a referendum will be held in the UK, the EU’s second biggest net provider of funds — and most importantly, not a member of the single currency. The vote in all likelihood represents the biggest political decision British voters will make in their lifetime.

Feeding the Fear

The fear on both sides of the English Channel is palpable. Brexit panic has sent the pound sterling spiraling to 2009 lows against the dollar. It didn’t take long for the UK’s business elite to begin sounding the alarms: 200 CEOs, chairmen and chairwomen, representing 1.2 million employees and 33 FTSE 100 firms, put their names to a letter warning that “British business needs unrestricted access to the European market of 500 million people in order to continue to grow, invest and create jobs.” Or else.

The fear mongering has only just begun. In the coming months all manner of doom and gloom scenarios will be paraded to cajole British voters into voting the right way. Almost all of Britain’s elite institutions, including the two main political parties and, most importantly, the City of London Corporation want Britain to remain in the EU.

But the genie is already out of the bottle. Now it’s just a question of waiting to see how the popular mood in Britain evolves over the next five months of intense electioneering. By this stage in proceedings, with Europe facing rising political divisions and instability, economic upheaval, a refugee crisis and possibly even a full-blown banking meltdown, the only emotion the EU has left to play on is fear

Continue reading the article at WOLF STREET

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