Britain has voted to leave the European Union, forcing the
resignation of Prime Minister David Cameron and dealing the biggest blow to the
European project of greater unity since World War Two.
Global financial markets plunged on Friday as results from a
referendum showed a near 52-48 percent split for leaving a bloc that 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.
World stocks headed for one of the biggest slumps on record,
and billions of dollars were wiped off the value of European companies.
Britain's big banks took a $130 billion (93.46 billion pound) battering, with
Lloyds and Barclays falling as much as 30 percent at the opening of trade.
[MKTS/GLOB]
An emotional Cameron, who led the "Remain"
campaign to defeat, losing the gamble he took when he called the referendum
three years ago, 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,
appearing to choke back tears before walking back through the black door of No.
10 Downing Street 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. The United Kingdom itself could break apart, with politicians
in Scotland - where nearly two-thirds of voters wanted to stay in the EU -
calling for a new vote on independence.
The EU for its part will be economically and politically
damaged, facing the departure not only of its most free-market proponent but
also a member with a U.N. Security Council veto, a powerful army and nuclear
capability. In one go, the bloc will lose around a sixth of its economic
output.
The result emboldened eurosceptics in other member states,
with populist leaders in France and the Netherlands demanding their own
referendums to leave.
The vote will initiate at least two years of divorce
proceedings with the EU, the first exit by any member state. Cameron - who has
been premier for six years and called the referendum in a bid to head off
pressure from domestic eurosceptics - 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. Johnson made no comment as he left his home
to jeers from a crowd in the mainly pro-EU capital.
'INDEPENDENCE DAY'
There was euphoria among Britain's eurosceptic forces,
claiming a victory over the political establishment, big business and foreign
leaders including U.S. President Barack Obama who had urged Britain to stay in.
"Dare to dream that the dawn is breaking on an
independent United Kingdom," said Nigel Farage, leader of the eurosceptic
UK Independence Party, describing the EU as "doomed" and
"dying".
"This will be a victory for real people, a victory for
ordinary people, a victory for decent people ... Let June 23 go down in our
history as our independence day."
European politicians reacted with dismay.
"It looks like a sad day for Europe and Britain,"
said German foreign minister Frank-Walter Steinmeier.
"Please tell me I'm still sleeping and this is all just
a bad nightmare!" former Finnish Prime Minister Alexander Stubb tweeted.
The shock hits a European bloc already reeling from a euro
zone debt crisis, unprecedented mass migration and confrontation with Russia
over Ukraine. Anti-immigrant and anti-EU political parties have been surging
across the continent, placing unprecedented pressure on the centre-left and
centre-right establishment that has governed Europe for generations.
French National Front leader Marine Le Pen called for a
similar referendum in France, changed her Twitter profile picture to a Union
Jack and declared "Victory for freedom!"
Dutch far right leader Geert Wilders, also demanding a
referendum, said: "We want be in charge of our own country, our own money,
our own borders, and our own immigration policy."
U.S. presidential candidate Donald Trump, whose own rise has
been fuelled by similar disenchantment with the political establishment, called
the vote a "great thing". Britons "took back control of their
country", he said in Scotland where he was opening a golf resort.
Britain has always been ambivalent about its relations with
the rest of post-war Europe. A firm supporter of free trade, tearing down
internal economic barriers and expanding the EU to take in ex-communist eastern
states, it opted out of joining the euro single currency or the Schengen
border-free zone.
Cameron's ruling
Conservatives in particular have harboured a vocal anti-EU wing for
generations, and it was partly to silence such figures that he called the
referendum in 2013.
World leaders including Obama, Chinese President Xi Jinping,
German Chancellor Angela Merkel, NATO and Commonwealth governments had all
urged a "Remain" vote, saying Britain would be stronger and more
influential in the EU than outside.
The four-month
campaign was among the divisive ever waged in Britain, with accusations of
lying and scare-mongering on both sides and rows on immigration which critics
said at times unleashed overt racism.
It revealed deep splits in British society, with the
pro-Brexit side drawing support from millions of voters who felt left behind by
globalisation and believed they saw no benefits from Britain's ethnic diversity
and free-market economy.
At the darkest hour, a pro-EU member of parliament was
stabbed and shot to death in the street. The suspect later told a court his
name was "Death to traitors, freedom for Britain".
Older voters backed Brexit; the young mainly wanted to stay
in. London and Scotland supported the EU, but wide swathes of middle England,
which have not shared in the capital's prosperity, voted to leave.
Concerns over uncontrolled immigration, loss of sovereignty
and remote rule from Brussels appear to have trumped almost unanimous warnings
of the economic perils of going it alone.
THREAT OF UK BREAK-UP
The United Kingdom itself now faces a threat to its
survival; Scottish First Minister Nicola Sturgeon said Thursday's vote
"makes clear that the people of Scotland see their future as part of the
European Union". Her predecessor, Alex Salmond, said Scotland was now
likely to push for a second independence referendum, after voting against
seceding in 2014.
Northern Ireland's largest Irish nationalist party, Sinn
Fein, said the result intensified the case for a vote on whether to quit the
United Kingdom.
The global financial turmoil was the worst shock since the
2008 economic crisis, and comes at a time when interest rates around the world
are already at or near zero, leaving policymakers without the usual tools to
respond.
The body blow to global confidence could prevent the Federal
Reserve from raising interest rates as planned this year, and might even
provoke a new round of emergency policy easing from all major central banks,
despite their limited options.
The Bank of England pledged a huge financial backstop to
calm plunging markets. Governor Mark Carney said it was offering to provide
more than 250 billion pounds plus "substantial" foreign currency
liquidity and it was ready to take additional measures if needed.
Other central banks around the globe also intervened in
markets. The European Central Bank said it was ready to provide euro and
foreign currency liquidity if necessary.
EU affairs
ministers and ambassadors from member states gather in Luxembourg by 10 a.m.
(0800 GMT) for previously-scheduled talks that will provide the first chance
for many to react.
Left unclear is the relationship Britain can negotiate with
the EU once it leaves.
To retain access to the single market, vital for its giant
financial services sector, London may have to adopt all EU regulation without
having a say in its shaping, contribute to Brussels coffers, and continue to
allow free movement as Norway and Switzerland do - all things the Leave
campaign vowed to end.
EU officials have said UK-based banks and financial firms
would lose automatic "passport" access to sell services across Europe
if Britain ceased to apply the EU principles of free movement of goods,
capital, services and people.
-Reuters-
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