But what about the Continent? The main change across Europe now and for the coming two years will be uncertainty, which is never a good omen for markets and hence for the general economy on the Continent.
I say two years because that is the time limit given for completion of negotiations with Britain over the terms of its departure and creation of a new framework for trade and other relations between the UK and the EU.
Many say that the UK will slip into recession, but I would predict that other key Member States of the EU will now also tip from their 1% growth into negative figures for economic growth as consumer confidence wanes. This is not "catastrophic" but it is not good.
Even the most stupid leading figures in the European Institutions are now saying that the EU must reinvent itself to emerge from this crisis stronger. They all repeat the mantra that after each crisis the EU becomes stronger. However, with the same weak and unpopular leaders who got the EU into the mess with Britain, one cannot expect bold and creative solutions. Indeed they only can think to say that the cure will be "more Europe" meaning still more centralized power in their own unelected bureaucratic ranks, taking power away from the parliaments of the Member States. Therefore it is more likely that the crisis within the EU only will grow deeper now as other countries face voter revolts and calls for referendums to leave.
JB: How will the exit affect the US and its relationship with both the UK and the remaining members of the EU?
GD: This really is a question for US policymakers. In his visit to London in late April, President Barack Obama weighed in on the side of Remain, telling the British that if they quit the EU, they could expect to find themselves 'at the back of the line' to negotiate preferential trade deals with the United States. This unstatesmanlike interference in the internal policy deliberations of a sovereign nation did not yield positive results.
In the days following the referendum, Obama has maintained a harsh tone and we may expect that if he is succeeded by Hillary Clinton, the same policy of making the British pay for their failure to heed our advice will be implemented. The end result would be a worsening of commercial and political ties with our oldest and best ally, which might tempt them to reconsider their security relationship with us. If, on the other hand, Donald Trump wins in November, we may expect to see a particular warming of relations and support for the British in the difficult period of adjustment to their new economic realities. As regards the remaining members of the EU, under Obama and then under Clinton, there will be continuing pressure for a closer political union under the leadership of Germany which, essentially, we control. This may meet with defiance from France, Denmark, Sweden and other EU countries where there is now a redoubled interest in holding their own referendums on membership in response to widespread disappointment with what the EU has become. In conditions of a Trump presidency, there would be a cooling of relations with the EU in line with his stated desire to cut US financial and manpower contributions to a region which, in terms of its Gross National Product and military expenditures, should not be so dependent on hand-outs from Uncle Sam as it is today.
JB: That's pretty clear. Anything you'd like to add before we wrap this up?
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