How Russia Wins From Brexit

The EU experiment is at great risk.
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Who might be the biggest winners from Brexit? It will not be the British. They will be the biggest losers. The biggest winners will be the Russians.

The UK is likely to see higher unemployment, higher inflation, lower growth, lower foreign direct investment, greater national debt, increased taxes and less trade. It will also see a further diminishing of its clout in Europe and the world. Scotland and maybe even Wales could spin off from the UK. The UK voted to harm itself.

The EU experiment is at great risk. Denmark may vote to exit. There are rumblings in France on their potential exit. Others may follow suit. Every time there is an exit the entire EU is weakened economically, politically and strategically. Extra-EU countries, such as Norway and Iceland will also be harmed.

There are huge implications to the devolution of a trading and investment bloc like the EU. These include serious disruptions in financial markets that could lead to massive losses on stocks, bonds and commodities. Housing markets could fall into turmoil. Cross-border trade, investments and labor flows and more could be disrupted and damaged.

A less unified EU means it has less ability to stand up to the aggressive resource nationalism of Russia’s foreign energy policies. The EU is trying to have a single energy market. Without that single unified energy market, they will be more vulnerable to Russia's divide-and-conquer policy of energy export.

A more united EU could stand up better to further Russian aggression in the Baltic nations and Eastern Europe. EU efforts to mitigate the effects of Russian aggression against the Ukraine are weakened by Brexit. NATO will still be there, but the unity of purpose and the economics of NATO have a lot to do with the unity of purpose and economics of the EU.

Economically, militarily, politically and diplomatically the UK is a strategically vital country. Russia knows that. Putin and others in leadership must be toasting Brexit, and hoping for more exits from the EU.

(All opinions are Dr. Sullivan's alone.)

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