UK shocks world; Brexit sends markets in freefall

LONDON – Britain voted to leave the European Union after a bitterly divisive referendum campaign, toppling the government yesterday, sending global markets plunging and shattering the stability of a project in continental unity designed half a century ago to prevent World War III.

The decision launches a years-long process to renegotiate trade, business and political links between the United Kingdom and what will become a 27-nation bloc, an unprecedented divorce that could take decades to complete.

“The dawn is breaking on an independent United Kingdom,” said Nigel Farage, leader of the UK Independence Party. “Let June 23 go down in our history as our independence day!”

The electoral commission said 52 percent of voters opted to leave the EU. Turnout was high: 72 percent of the more than 46 million registered voters cast ballots.

Polls ahead of the vote had shown a close race, but the momentum had increasingly appeared to be on the “remain” side over the last week. The result shocked investors, and stock markets plummeted around the world, with key indexes dropping 10 percent in Germany and about 8 percent in Japan and Britain.

The euro fell against the dollar and the pound dropped to its lowest level since 1985, plunging more than 10 percent from about $1.50 to $1.35 before a slight recovery, on concerns that severing ties with the single market will hurt the UK economy and undermine London’s position as a global financial center.

Bank of England Governor Mark Carney sought to reassure the markets.

“We are well prepared for this,” Carney said. “The Treasury and the Bank of England have engaged in extensive contingency planning... We have taken all the necessary steps to prepare for today’s events.”

The UK would be the first major country to leave the EU, which was born from the ashes of World War II as European leaders sought to build links and avert future hostility. With no precedent, the impact on the single market of 500 million people – the world’s largest economy – is unclear.

Germany called top diplomats from the EU’s six founding nations to a meeting Saturday, and the president of the European Council, Donald Tusk, said the bloc will meet without Britain at a summit next week to assess its future. Tusk vowed not to let the vote derail the European project.

“What doesn’t kill you, makes you stronger,” he said.

But already, far-right leaders in France and the Netherlands were calling for a similar anti-EU vote.

The referendum showed Britain to be a sharply divided nation: strong pro-EU votes in the economic and cultural powerhouse of London and semi-autonomous Scotland were countered by sweeping anti-Establishment sentiment for an exit across the rest of England, from southern seaside towns to rust-belt former industrial powerhouses in the north.

“It’s a vindication of 1,000 years of British democracy,” commuter Jonathan Campbell James declared at the train station in Richmond, southwest London. “From Magna Carta all the way through to now, we’ve had a slow evolution of democracy, and this vote has vindicated the maturity and depth of the democracy in our country.”

Others expressed anger and frustration. Olivia Sangster-Bullers, 24, called the result “absolutely disgusting.”

“Good luck to all of us, I say, especially those trying to build a future with our children,” she said.

Former London mayor Boris Johnson, who is from the same party, was the most prominent supporter of the “leave” campaign and now becomes a leading contender to replace Prime Minister David Cameron, who has resigned. The vote also dealt a blow to the main opposition Labour Party, which threw its weight behind the “remain” campaign.

“A lot of people’s grievances are coming out and we have got to start listening to them,” said deputy Labour Party leader John McDonnell.

Indeed, the vote constituted a rebellion against the political, economic and social Establishment. All manner of groups – CEOs, scientists, soldiers – had written open letters warning of the consequences of an exit. Farage called the result “a victory for ordinary people against the big banks, big business and big politics.”

Donald Trump praised the decision during a visit to one of his golf courses in Scotland, saying Britons “took back their country. It’s a great thing.” He likened the vote to the US sentiment that has propelled him to the presumptive Republican presidential nominee, saying people in the United States and the United Kingdom are angry about similar things.

“People are angry all over the world,” he said.

After winning a majority in Parliament in the last election, Cameron negotiated a package of reforms that he said would protect Britain’s sovereignty and prevent EU migrants from moving to the UK to claim generous public benefits.