A Bad Day for Europe

No time to gloat, Boris.

Photographer: Carl Court/Getty Images

This was never supposed to happen. Three years ago, when U.K. Prime Minister David Cameron promised his country a referendum on remaining a member of the European Union, he was sure of victory. The country had other ideas. On Thursday Britain voted to quit.

It’s a momentous choice -- and not in a good way. The immediate risk to Britain’s economy is grave, because the vote creates enormous uncertainty. This is likely to persist for months, until it becomes clear what kind of new trading rules will govern Britain’s economic relationship with Europe and the rest of the world.

QuickTake Britain and the EU

Add to this the likelihood of political turmoil at home. Cameron, in effect, has just lost a national vote of confidence; he announced his resignation Friday. Most members of Parliament -- Labour and Conservative alike -- were supporters of the Remain campaign. What confidence does the electorate any longer have in them? Scotland has supported remaining in the EU, so demands for Scottish independence might surge anew. This vote will shake the U.K. to its foundations.

It may shake the European Union almost as badly. Britain is only one EU member, but among the biggest and most influential. The first country to leave the union in this fashion, it will now resolve to prove that exit works. If, against the odds, it succeeds, other EU members could be tempted to do the same.

Anti-EU sentiment is not confined to Britain. In 10 EU countries recently polled by the Pew Research Center, the union is viewed unfavorably by roughly one in two citizens. A median of 42 percent want powers returned to national governments, versus 19 percent who want more transferred to the EU. Today, the union is less popular in France than it is in Britain. An election is approaching in Spain, as is a referendum on constitutional reform in Italy. The shock of Brexit is sure to reverberate.

There’ll be time later for blame -- and there’s plenty to go around. For the moment, amid all the uncertainty, the priority must be to restore calm. This means rowing back from the rhetorical excesses of the campaigns, with each side predicting doom if the other had its way. Instead, so far as possible, the emphasis should be on continuity over discontinuity.

As Britain prepares to leave the EU, it will seek and should quickly be promised access to Europe’s market on friendly terms, akin to those enjoyed by Norway and Switzerland. This is a matter of compelling mutual interest. To make this possible, the U.K. will have to accede to an array of EU rules and regulations, with details to be decided. In coming to this new accommodation, neither side should take a maximalist position. After the bogus certitudes of the referendum debate, a spirit of compromise is called for.

To be sure, Britain’s former EU partners may be tempted to punish the U.K., and that way set an example for other would-be quitters. They should resist. First, because a punitive approach is unlikely to endear the EU to citizens elsewhere, already chafing at what they perceive to be its excesses. Second, because the U.K. and the EU can and must be close friends and allies, despite this vote. The time to start building this new relationship is now.

It’s clear that the dangers in all this outweigh the opportunities -- yet there are opportunities nonetheless, and they should be seized. Whatever posture the EU adopts toward its former partner, it should recognize the force of rising anti-EU sentiment elsewhere in the union and act to stanch it. Maybe Brexit will provide the necessary jolt. Europe’s leaders have long preferred to ignore such discontent rather than acknowledge it -- much less accommodate it.

Britain’s vote for exit shows the great cost of such complacency. To minimize the harm to its own interests, and to stop the next such vote before it happens, Europe needs to change.

(Updates with David Cameron's resignation.)

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.