Typically, in the Greek tragedy, the main protagonist of an Aeschylus, Sophocles, or Euripides’s theater commits some terrible crime without realising how foolish and arrogant he has been. Then, as he slowly realises his error, the world crumbles around him. Who was the main actor in this piece of theater called the Brexit?
David Cameron is definitely the first suspect. More than one year ago, facing difficult polls before General Election, he decided to attract the right of the conservative party promising a referendum to decide the future of the UK in Europe. At this time, it was an easy thing to give, nobody thought the “Out” could win. Unfortunately, he will not be remembered as the Prime Minister who restored growth and full employment in the UK after the 2008 crisis, but as the Prime Minister who brings chaos and uncertainties in a nation which was doing better than all its European counterparts.
Boris Johnson is our second suspect. The charismatic ex-Major of London wanted desperately become the next Prime Minister. He saw in this referendum a way to show his leadership on the Conservative party. Boris is not fundamentally a Eurosceptic, so the justification for the “Out” was more liberalism instead of the migrant fear developed by Nick Farage. Yes, the country could do better whiteout the EU. He did not believe the “Out” could win and he was shocked as David Cameron when he saw the final result. Worst, London, his City voted massively for the “In”. The majority of the Conservative PM voted for the “In”. And worst of the worst, the young voters voted massively for the “In”. He had no chance to be elected as a new leader as the majority of PM voted against his choice and in the case of a new election, he lost his elector basis.
Our third suspect is Jeremy Corbyn, the leader of the Labour Party. He did not want to make the Cameron Job and as the other suspects, he did not believe the “Out” could win. So he did nothing. He did not make an active campaign and he was expecting taking advantage of the conservative division. His miss of vision and leadership are likely to bring him out of the job and leave the Labour party in limbo.
Our last suspect is the EU. An institution which has not be able to fix any serious issues for the last ten years. They did not fix a simple case as the Greek debt which is going to coming back on the agenda in September-October. They signed an insulting deal to Democracy with Turkey about the migrants issue. The Brexit could be and should be the pretext for huge changes in an institution which is not working anymore.
Politically, the situation is chaos. David Cameron resigned and he will leave in October. The conservative and the Labour parties have no clear charismatic leaders to take over the job. Negotiation should start as soon as possible with the EU to limit the impact of the uncertainties on business, but as nobody was expected a Brexit, so nobody has an idea what to discuss. Boris Johnson wanted more liberalism and freedom for the UK and the country is going to negotiate the end of free circulation for people, goods & services, and capital: a paradox for a liberal. Nigel Farage wanted fewer mignants and the country is going to inherit of the “Calais Jungle”, 5000 migrants blocked in France. Since 1973, EU and UK have been working together, so changing rules is going to take time, ten years according to some Lawyers. More time it will take, more uncertainties it will bring and more the UK economy will suffer.
The unity of the country is not anymore guarantee. If the UK will be probably glad to see Northern Ireland leaving the Kingdom, it is a different story about Scotland. Scottish voted massively for the “In” and in the case of the second referendum, the result could be completely different that the first time. The last time Scottish voted with the head. This time the head and the heart are going to the same direction.
Economically, the equation is complicated. Short term, likely, the central bank will clean up the politicians’ mess, with Mark Carney and his colleagues probably implementing further monetary stimulus before the year is out. However, according to different surveys, it will be difficult to avoid a recession. Goldman Sachs Group and Bank of America Merrill Lynch were among those forecasting an economic contraction. Both said the impact of the vote could subtract about a cumulative 2.5 percent from the GDP. Clearly, all economists are expecting investment to go negative, but the question is what will happen to the consumer. If we have some kind of disruptive market movement, this could take the country into a full-blown referendum recession. Long term, the consequences will be driving by the speed of the negotiation between the UK and EU. If nothing is done quickly, some cities as Dublin, Edinburg (in the case of a split with the UK) could become a new destination for some sectors at the expense of London. The UK could lose a big part of its attractiveness for talent, new technology, innovation.
In this Greek tragedy, UK politicians acting selfishly, taking in consideration their own interest instead of the interest of the nation. Today, the big loser is, unfortunately, all UK.