THE BLOG
08/16/2016 05:16 pm ET Updated Aug 17, 2017

The Real World After Brexit

I recently sat in a cafe with other journalist friends in Rome to discuss ongoing global issues. Our conversation naturally included the British vote to leave the European Union.

In the course of the discussion, it was clear that despite the media's dramatic portrayal of events, Brexit is essentially what the British have always aspired to and have been working towards since the first days in 1973, following their entrance into the Common Market. Independence is clearly synonymous with the British spirit. They have never really been an active participant in the EU, which formed at the time of the Maastricht treaty in 1993, and expanded in scope from an economic community to encompass foreign and environmental affairs, justice and policy. Adopted in 1995, the Schengen open borders agreement included 26 countries in Europe, but never the UK, just as the euro currency introduced in 1999 was never implemented there. Autonomous banking regulatory systems have also remained intact.

Most of my Italian colleagues dismissed the Brexit vote as much ado about nothing, since business with the U.K. makes up for only about 3% of the Italian GDP. For Italy, the EU was always, from the beginning, viewed as a Franco-German pact and the only area they presently regard as a potential cause for concern is the possibility of trade deals being renegotiated in favor of Asian countries over previous European partners.

My personal view is that the vote has served as a wake up call to the ongoing reality that all of the EU, and in particular the UK, has been tired of dealing with the revolving door of stagnant bureaucracy in Brussels. Of course, it is also a vote against immigration and many of the obstacles and changes in society that globalization has caused. In the last decade, a charged radical debate on immigration policy has persisted, which has further manifested into a fight between the rich and anyone on the lower socioeconomic strata; the majority of whom have not benefitted from the UK's latest economic upturn. Brexit, in part, has clearly reflected the successful exploitation of base fears and anxieties, a capturing of the potency of social division in order to move Britain forward as an independent entity. Immigration also stands as the main cause for concern and debate across most of Europe. In 2014, overall immigration to the 28 EU nations totaled 3.8 million people. Although this is only a small percentage of the EU's combined population, fear associated with the rising collective anxiety about terrorism has escalated.

Both private and public debates have since ensued on how to begin negotiating Article 50, which is the means by which any country can officially leave the European Union. Once it has been initiated, the requirement is that the country will be ready to leave within two years. Within this arrangement, there is also the possibility that a new agreement could take form, benefitting both sides. This is especially the case in the area of trade, due to fear in the EU that an autonomous Britain could renegotiate deals with countries such as Japan, Australia, Canada and the US who are more interested in global agreements and don't have EU restrictions. Presently, there is pressure to put off Article 50 until after the French and German elections in 2017, to ensure the UK retains its single market access.

Of course, this is not the only issue at stake. There are approximately three million non-British citizens who reside and work in the UK. For example, a country like France cannot afford for its citizens working in the UK to return because there are not the same employment opportunities available for them in Paris. The same goes for other EU countries who have citizens working in Britain. This issue could potentially give the British more leverage when they are negotiating the terms of their exit from the EU and might hopefully lead to some much needed reforms.

In the end, the Brexit vote was among the closest in UK history, and despite all the drama, the referendum rallied more surprise and fear from across the globe than it did in Britain. So far, the most serious impacts have been the sudden fall in the global equities markets, which have rebounded, and a devaluation of the British pound, which is on its way back. The British banking sector has taken a hit, however many feel it was overvalued to begin with, and the recent slip is really more symptomatic of the financial uncertainty that has loomed for a while. As these issues evolve and the dust begins to settle, the media and pundits have begun to offer a more cautious outlook. Well respected, international publications like the Financial Times have started to frame the immediate impacts of the so-called crisis of Brexit accordingly. It will lower the GDP in the short term, but the supposed incoming economic collapse is not a reasonable possibility. In the U.S., interest rates have fallen even further, and in Germany, Italy and France, global companies are redoubling their efforts to establish themselves in the EU market.

Despite the media hysteria, today we can clearly see that the sky has not fallen. Just in the past few days, officials are indicating that the UK should not expect a Brexit to happen before 2020, as legal aspects of the vote are still unclear, and that there will be a government guarantee for funding toward in-process agricultural and scientific projects. If Brexit can serve as a lesson to the rest of Europe, it would caution countries considering a similar move to be sure of the motivations and messages behind their actions, and to put aside impulsiveness in favor of rational discourse.

On the other hand, the possibility of similar agendas of other nations threatening to leave the EU could serve to awaken leaders across the Union from their bureaucratic slumber. This is particularly the case in rigid and inflexible Brussels, where essential and frustrating reforms that have been ignored for years might be reevaluated, and along with them, the sentiments and real life concerns that inspired agendas such as that of Brexit.