Brexit tre­mors rock the world

AF­TER­SHOCKS

Hindustan Times ST (Mumbai) - HT Navi Mumbai Live - - NAVI MUMBAI - Pra­sun Son­walkar and Gau­rav Choud­hury let­ters@hin­dus­tan­times.com

Bri­tain voted to break away from the Euro­pean Union on Fri­day, shat­ter­ing the unity of a 60-year-old con­ti­nen­tal bloc, prompt­ing the exit of Prime Min­is­ter David Cameron and rat­tling the world of fi­nance and busi­ness.

Un­cer­tainty gripped Lon­don and Brus­sels as the Bri­tish pub­lic voted 52% to 48% to leave the EU in a record turnout of 72%. Amid joy and dis­may, the clearly dis-United King­dom ap­peared set for choppy wa­ters as it be­gins the process of ex­tri­cat­ing it­self from the 28-mem­ber bloc by the end of 2018.

The his­toric vote trig­gered seis­mic tre­mors in equal mea­sure in pol­i­tics and busi­ness. Global fi­nan­cial mar­kets plunged, the pound fell as much as 10% against the dol­lar, the low­est since 1985, and Cameron set in mo­tion the process of elect­ing a new leader of the rul­ing Con­ser­va­tive Party by Oc­to­ber — most likely to be for­mer Lon­don mayor Boris John­son.

In In­dia, shares fell more than 4% on the news but re­cov­ered by half af­ter au­thor­i­ties moved to calm in­vestor wor­ries. The bench­mark BSE ended 2.2% down, its big­gest sin­gle-day per­cent­age fall since Fe­bru­ary.

But the ru­pee was the worst hit, drop­ping to 68 to a dol­lar at one point, be­fore state­ments from fi­nance min­is­ter Arun Jait­ley and RBI gover­nor Raghu­ram Rajan stead­ied sen­ti­ments. Both said a solid econ­omy and planned govern­ment re­forms would al­low the coun­try to with­stand any ma­jor im­pact from Bri­tain’s vote to leave the EU.

Back in Bri­tain, its bor­ders faced be­ing re­drawn af­ter Scot­land voted to re­main in the EU and First Min­is­ter Ni­cola Stur­geon said an­other ref­er­en­dum on its in­de­pen­dence was now a dis­tinct pos­si­bil­ity. Scot­land had voted in a 2014 ref­er­en­dum to re­main in the UK.

The out­come also raised the prospect of a bor­der com­ing up be­tween the Repub­lic of Ire­land (an EU mem­ber) and North­ern Ire­land, as well as be­tween Scot­land and Eng­land even­tu­ally. The vot­ing pat­tern re­vealed a “Leave” vote in Eng­land (which has the largest pop­u­la­tion) dragged the whole of the UK out of the EU.

As re­sults trick­led in on Fri­day morn­ing, top po­lit­i­cal lead­ers, ob­servers and jour­nal­ists ran out of su­perla­tives to de­scribe the rapidly mov­ing de­vel­op­ments and strug­gled to make sense of the re­sult that re­versed the proEU de­ci­sion of Bri­tain’s 1975 ref­er­en­dum.

John­son, one of the lead­ing lights of the Vote Leave camp, was widely tipped to be the next Con­ser­va­tive leader and the next prime min­is­ter, af­ter Cameron said he would stay on till Oc­to­ber to en­sure sta­bil­ity and en­able the se­lec­tion of the next party leader. The next prime min­is­ter will lead the two-year process un­der Ar­ti­cle 50 of the Lis­bon Treaty to exit the EU.

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