UK votes for Brexit – what happens now?
The vote to leave the European Union takes us into uncharted territory. There’s a huge amount of uncertainty about what happens next, only bolstered by the political turmoil that now runs through London and the European capitals.
So let’s take a look at what we do know.
The UK needs to trigger Article 50 of the 2009 Lisbon Treaty, which sets out the procedure for its exit from the EU. Theresa May has stated this is likely to be late this year or early next year. Some EU leaders are pressing her to do it more quickly; others, including German chancellor Angela Merkel, seem prepared to be more patient.
Article 50 is triggered either with a letter to the president of the European Council, or by an official statement at a meeting of the European Council. This sets a two-year deadline for a deal, which has to be negotiated with the remaining 27 members of the EU and approved by at least 20 countries, with 65% of the EU population or more. Any deal can be vetoed by the European parliament.
If no deal is reached within two years, an extension would have to be agreed by all 27 member states. Otherwise, the UK automatically leaves the EU and its treaties no longer apply.
The single biggest issue for UK negotiators will be how to achieve as much access as possible to the EU’s single market without having to accept its freedom of movement principles – key pledges of the Leave campaign. Both Norway and Switzerland had to allow freedom of movement to get preferential access to the single market.
There’s been huge political upheaval in the UK as a result of the Brexit vote, and how this plays out will go a long way to determining the consequences. It’s often said that financial markets hate uncertainty, and the UK and EU are currently mired in it for the foreseeable future.