Britain Quits EU, Cameron Quits Britain

Britain has voted to leave the European Union, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow since World War Two to the European project of forging greater unity.

The Dow Jones Average plunged 520 pts at the open as Gold rose more then $50 on Friday as results from a referendum defied bookmakers’ odds to show a 52-48 percent victory for the campaign to leave a bloc Britain joined more than 40 years ago.

The pound fell as much as 10 percent against the dollar to touch levels last seen in 1985, on fears the decision could hit investment in the world’s fifth-largest economy, threaten London’s role as a global financial capital and usher in months of political uncertainty. The euro slid 3 percent.

World stocks saw more than $2 trillion wiped off their value, with indices across Europe heading for their sharpest one-day drops ever. Britain’s big banks took a $100 billion battering, with Lloyds, Barclays and RBS falling as much as 30 percent at one point. [MKTS/GLOB]

The United Kingdom itself could now break apart, with the leader of Scotland – where nearly two-thirds of voters wanted to stay in the EU – saying a new referendum on independence from the rest of Britain was “highly likely”.

An emotional Cameron, who led the “Remain” campaign to defeat, losing the gamble he took when he promised the referendum in 2013, said he would leave office by October.

“The British people have made the very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction,” he said in a televised address outside his residence.

“I do not think it would be right for me to be the captain that steers our country to its next destination,” he added, choking back tears before walking back through 10 Downing Street’s black door with his arm around his wife Samantha.

Quitting the EU could cost Britain access to the EU’s trade barrier-free single market and means it must seek new trade accords with countries around the world. A poll of economists by Reuters predicted Britain was likelier than not to fall into recession within a year.

The EU for its part will be economically and politically damaged, facing the departure of a member with its biggest financial centre, a U.N. Security Council veto, a powerful army and nuclear weapons.

The world’s biggest trading bloc — which rose out of the ashes of two world wars, fascist and communist totalitarianism to unite a continent of prosperous democracies — will lose around a sixth of its economic output.

“It’s an explosive shock. At stake is the break up pure and simple of the union,” French Prime Minister Manuel Valls said. “Now is the time to invent another Europe.”

‘VICTORY FOR FREEDOM’

The result emboldened eurosceptics in other member states, with French National Front leader Marine Le Pen and Dutch far-right leader Geert Wilders demanding their countries also hold referendums. Le Pen changed her Twitter profile picture to a Union Jack and declared “Victory for freedom!”

The vote will trigger at least two years of divorce proceedings with the EU, the first exit by any member state. Cameron, in office since 2010, said it would be up to his successor to formally start the exit process.

His Conservative Party rival Boris Johnson, the former London mayor who became the most recognisable face of the Leave camp, is now widely tipped to seek his job.

 

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