I'll be damned. They did it.
Britons voted decisively Thursday to leave the European Union , leading to a selloff in equity markets around the world, a sinking of the British pound, the resignation of Prime Minister David Cameron , and a great deal of uncertainty about what comes next.
Don't let anyone, europhile or euroskeptic, fool you. No one really knows what will come after the estimated two years of negotiations it will take to carry out the wishes of the British people. Some people think it will be disastrous for Britain, while others think it will open the door to a glorious new era of Rule Brittania. I suspect the result will be somewhere in the middle, and dependent wholly on the decisions British leaders make in the years to come.
If the decisions lead Britain toward a more open economy than the heavily regulated one sought by Brussels bureaucrats, its future may be bright indeed. But if they lead Britain toward a more insular existence, it will suffer. The country essentially faced a choice similar to the one Americans will face this fall: Continue the same largely unsatisfactory but knowable arrangements of today (Hillary Clinton/Remain), or take a chance on something different but undefined (Donald Trump/Leave). Unfortunately for us, we won't know how it worked out for Britain until our next president is well into his/her first term, if then.
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Of equal importance will be whether, and how, the EU itself changes after this vote. In my observation of the union over 4.5 years working in Brussels, there was much left to be desired.
The EU has long been a union that, if not completely undemocratic, was certainly one of the elites, by the elites, for the elites. On those occasions when popular votes were held in individual countries and measures rejected -- the defeats of the EU Constitution by the French and the Dutch in 2005, for instance -- the response of the elites was simply to give the people more or less the same thing in different packaging. Not coincidentally, neither the French nor the Dutch were given a chance to vote for the replacement, the Treaty of Lisbon. When the Irish rejected the treaty in 2008, they were given a few promises -- but no actual changes to the document -- and made to vote on it again the following year. This is something of a pattern in EU referendums, although it seems clear Britons' vote on Thursday, even though it was non-binding, will be considered final.
The only directly elected European institution, the European Parliament, has typically been filled with members elected based chiefly on national passions of the day. To the extent pan-European "parties" exist, they have mostly been loose coalitions based on general philosophical agreement, and not really the kind of entities that can set agendas and run multinational campaigns to enact them. In my experience, this rendered the Parliament the weakest of the EU's institutions.
The result has been similar to what we've seen here with the strengthening of the executive branch at the expense of the Congress : To a large extent, it's the bureaucrats who are in charge. The heavy economic regulation I mentioned earlier, against which Britain had long chafed, comes from the bureaucracy via the un-elected European commissioners (one is sent from each nation, and then assigned a portfolio such as trade or energy policy). The staffs they lead are the Kennedy "best and brightest" on steroids, blending from their home nations into a Brussels culture that exists on its own, at once derived from and foreign to anything their countrymen would recognize. It's not at all dissimilar to the parochial Beltway mentality in Washington.
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From here, the EU also has its choice of directions. Britain's traditional euroskepticism had long worked as a check on some of the EU's ambitions toward ever-greater union in a quasi-superstate. On the one hand, it will be tempting for those elites to move forward with the plans that had been more difficult with Britain hanging around. On the other, the same sentiment that drove Britain out of the EU exists in other countries. There will be immense pressure on other national leaders not to allow votes of the type Britain just took. But the vote also offers opportunity for their political rivals to campaign on offering just such a choice; issues such as immigration, and the effect on jobs and wages, resonate with many Europeans beyond Britain. What the EU chooses to do now may determine whether such campaign promises are attractive, or not.
A Britain-less EU will be even more dominated by France and Germany. Without the pull between Britain and the Continent, the tension in the union will probably be even more about Germany and France vs. the still-derelict "PIGS" economies of Portugal, Italy, Greece and Spain (with a consistent undercard of Western Europe vs. the Central and Eastern European nations more threatened by the nearby presence of Russia). Britain's departure takes one large, relatively anti-regulation voice out of the room, but it also removes one large, relatively strong voice regarding fiscal sanity. The EU's faux-tough love toward members that ran up large deficits at home while participating in the common currency will be harder to fake now (even though Britain had chosen not to adopt the euro). If the technocratic-management approach favored by France and Germany grows more powerful without Britain's countervailing voice, some smaller countries that often sided with Britain may find themselves growing more dissatisfied.
It is hard to imagine smaller countries being willing to leave the EU, but there are examples for them. Norway, Iceland, Switzerland and even Liechtenstein have opted all along to join only the EU's free-trade zone (EFTA), avoiding some of the deeper integration that Britons finally rejected. That arrangement is truer to the original goal of what grew from the European Coal and Steel Community into today's EU. If Britain ends up joining EFTA and growing more prosperous, we may see a devolution by other nations toward that earlier idea. That could be good for all of them.
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